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HomeMy WebLinkAboutAudited Comprehensive Annual Financial Report (CAFR) FYE 06/30/2018STAFF REPORT CITY OF PALM DESERT PALM DESERT HOUSING AUTHORITY FINANCE DEPARTMENT MEETING DATE: January 24, 2019 PREPARED BY: Jose Luis Espinoza, CPA, Assistant Finance Director REQUEST: Receive and file the City of Palm Desert audited financial report for the fiscal year ended June 30, 2018 Recommendation By Minute Motion, that the City Council receive and file the audited Comprehensive Annual Financial Report (CAFR) for the City of Palm Desert for the fiscal year ended June 30, 2018. Strategic Plan Obiective Not applicable. Committee Recommendation The Audit, Investment and Finance Committee received the City of Palm Desert audited reports at their January 22, 2019 meeting, and recommended that the report be received and filed by the City Council. Background Lance, Soll & Lunghard, LLP performed and completed the annual independent audit for the fiscal year ended June 30, 2018, for the City of Palm Desert, which includes the Palm Desert Housing Authority, in accordance with generally accepted auditing standards. In the auditor's opinion, the basic financial statements present fairly, in all material respects, the financial position of the City of Palm Desert as of June 30, 2018, and the results of its operations and the cash flows of its proprietary funds for the year then ended in conformity with accounting principles generally accepted in the United States of America. In conducting their audit, the auditors test the City's internal controls. Attached is the Report on Internal Controls over Financial Reporting and on compliance and other matters based on an audit of Financial Statements performed in accordance with Government Auditina Standards. The CAFR was submitted for the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement \\srv-fil2k3\groups\Finance\Niamh Ortega\Staff Reports\Audit staff reports\Audit Staff Reports 2018\SR - Council audit 2018 CAFR.docx Staff Report Receive and file CAFR for Fiscal Year ended June 30, 2018 January 24, 2019 Page 2of2 Program's requirements, as it has for the past 21 years. For the City's General Fund, the actual ending revenues of $60.85 million were $0.06 million more than the final budgeted revenues of $60.79 million. Sales and transient occupancy taxes continue to be the top two revenue generators for the City totaling $36.65 million, or 58.58 percent of the total General Fund actual revenues. The General Fund actual ending expenditures of $54.47 million were $2.49 million less than the final budget of $57.35 million. Staff requests that the City Council receive and file the audited financial statements for the fiscal year ended June 30, 2018. Fiscal Analvsis There is no fiscal impact associated with this action. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER NSA Robert W. Hargreaves et M. Moore J net M. Moore C Lauri Aylaian City Attorney Director of Finance Director of Finance City Manager ATTACHMENTS: 1. City of Palm Desert audited financial report for fiscal year ended June 30, 2018 2. Auditor's letter to City Council 3. 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 4. Appropriations Limit Worksheet no. 6 JLE:nmo G:\Finance\Niamh Ortega\Staff Reports\Audit staff reports\Audit Staff Reports 2018\SR - Council audit 2018 CAFR.docx LS[Zo 000 ��• CPAs AND AD iS D9S 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 Mayor and Members of the City Council City of Palm Desert, California 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 governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Palm Desert, California (the City), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 14, 2018. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the 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 effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City'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 there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination 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 control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PrimeGlobal LSL:*::: To the Honorable Mayor and Members of the City Council City of Palm Desert, California Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City'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 City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. ze-W-4;'o� Brea, California December 14, 2018 •000 LS[ •000 •• P.As AND ADVISORS December 14, 2018 To the Honorable Mayor and Members of the City Council City of Palm Desert, California We have audited the financial statements of the governmental activities, the business -type activities, discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Palm Desert, California (the City) for the year ended June 30, 2018. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated December 14, 2018. Professional standards also require that we communicate to you the following information related to our audit. Sianificant Audit Findinas Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. As described in Note 1 to the financial statements, the City changed its accounting policies related to other postemployment benefits other than pension reporting by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 75, Accounting and Financial Reporting for Post -Employment Benefits Other Than Pensions in fiscal year 2017-2018. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the government -wide statement of activities and the proprietary funds statement of revenues, expenses and changes in net position. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate(s) affecting the City's financial statements were: Management's estimates of its net pension liability and net other postemployment benefits liability are based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the net pension liability and net other postemployment benefits liability in determining that they are reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. PrimeGlobal LSL:o::: To the H- 1 ­onorable Mayor and Members of the City Council City of Palm Desert, California Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. No misstatements were found. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 14, 2018. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management discussion and analysis, budgetary comparison schedule for the general fund and major special revenue funds as listed in the table of contents, schedule of changes in net pension liability and related ratios, schedule of plan contributions - Pension, schedule of changes in net OPEB Liability and related ratios, and schedules of contributions - OPEB, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. LSUP 00 To the Honorable Mayor and Members of the City Council City of Palm Desert, California We were engaged to report on combining and individual nonmajor fund financial statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. New Accountinq Standards The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2017-2018 audit: GASB Statement No. 75, Accounting and Financial Reporting for Post -Employment Benefits Other Than Pensions. GASB Statement No. 81, Irrevocable Split Interest Agreements. GASB Statement No. 85, Omnibus 2017. GASB Statement No. 86, Certain Debt Extinguishment Issues. The following Governmental Accounting Standards Board (GASB) pronouncements are effective in the following fiscal year audit and should be reviewed for proper implementation by management: Fiscal year 2018-2019 GASB Statement No. 83, Certain Assets Retirement Obligations. GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowing and Direct Placements. Fiscal year 2019-2020 GASB Statement No. 84, Fiduciary Activities. Fiscal year 2020-2021 GASB Statement No. 87, Leases. LSL9'0::: To the Honorable Mayor and Members of the City Council City of Palm Desert, California Restriction on Use This information is intended solely for the use of City Council and management of City and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Brea, California LSU'a� 00 INDEPENDENT ACCOUNTANTS' REPORT ON AGREED -UPON PROCEDURES APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS To the Honorable Mayor and Members of the City Council City of Palm Desert We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet No. 6 (or other alternative computation) of the City of Palm Desert, California, for the year ended June 30, 2018. These procedures, which were agreed to by the City of Palm Desert and the League of California Cities (as presented in the publication entitled Agreed -Upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution), were performed solely to assist toe City of Palm Desert in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. The City of Palm Desert's management is responsible for the Appropriations Limit Worksheet No. 6 (or other alternative computation). This agreed -upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: 1. We obtained the completed Worksheets No. 1 through No. 7 (or other alternative computations) and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council. Finding: No exceptions were noted as a result of our procedures. 2. For the accompanying Appropriations Limit Worksheet No. 6, we multiplied line A, last year's limit, by line D, ratio of change, and agreed the resulting amount to line E, this year's limit. Finding: No exceptions were noted as a result of our procedures. 3. We compared the current year information presented in the accompanying Appropriations Limit Worksheet No. 6 to the other worksheets described in No. 1 above. Finding: No exceptions were noted as a result of our procedures. 4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year. Finding: No exceptions were noted as a result of our procedures. ,51' PrIMAGlobal *0 LSU,o::: To the Honorable Mayor and Members of the City Council City of Palm Desert, California We were not engaged to and did not perform an audit, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines. This report is intended solely for the use of the City of Palm Desert, California and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. However, this report is a matter of public record and its distribution is not limited. 4;V-4;Ooo Brea, California June 18, 2018 CITY OF PALM DESERT 2017-2018 APPROPRIATIONS LIMIT CALCULATION A. 2016-2017 APPROPRIATIONS LIMIT: $ 119,049,408 B. 2017-2018 CHANGE IN PER CAPITA PERSONAL INCOME 3.69% C. 2017-2018 CHANGE IN POPULATION: 1.56% D. RATIO OF CHANGE (1.0369 X 1.0156): X 1.05307564 E. 2017-2018 APPROPRIATIONS LIMIT: $ 125,368,032 ($119,049,408 X 1.05307564) COMPREHENSIVE ANNUAL FINANCIAL REPORT of the CITY OF PALM DESERT, CALIFORNIA For the Fiscal Year ended June 30, 2018 Prepared by the Finance Department City Treasurer/Director of Finance Janet M. Moore Assistant Finance Director Jose Luis Espinoza, CPA Finance Staff (in alphabetical order by positions and last names) ACCOUNTING TECHNICIAN II ACCOUNTING TECHNICIAN 11 MANAGEMENT ANALYST II James Bounds Diana Leal Jenny Weill AccouNIING TECI INICIAN I I Eloracio Celaya AUMINIS'I'RA'I'IVI�' SECRI I'ARY N iamh Ortega SENIOR FINANCIAL. ANALYST Anthony I lernandez ACCOUNTING TECHNICIAN 11 DF.PUCY CITY TREASURER SENIOR MANAGEMENT ANALYST Sharon Christiansen Thomas Metz Veronica Tapia THIS PAGE INTENTIONALLY LEFT BLANK CITY OF PALM DESERT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal................................................................................ GFOA Certificate of Achievement for Excellence in Financial Reporting List of Principal Officials.......................................................................... Organizational Chart ............................................................................... FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT .................................................. MANAGEMENT'S DISCUSSION AND ANALYSIS ................................ BASIC FINANCIAL STATEMENTS Statement of Net Position................................................................. Statement of Activities...................................................................... Balance Sheet — Governmental Funds ............................................ Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................................................... Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds ......................................... Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities............................................................. Statement of Net Position — Proprietary Funds ................................ Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds .................................................. Statement of Cash Flows — Proprietary Funds ................................. Statement of Fiduciary Net Position — Fiduciary Funds ................... Statement of Changes in Fiduciary Net Position — Fiduciary Funds Notes to Basic Financial Statements ................................................ Page Number 1 5 .17 .18 .22 .25 .26 .28 .29 30 31 32 33 35 CITY OF PALM DESERT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS Page Number REQUIRED SUPPLEMENTARY INFORMATION Miscellaneous Plan — Agent Multiple -Employer Schedule of Changes in the Net Pension Liability and Related Ratios.......................................................................98 Miscellaneous Plan- Agent Multiple — Employer Schedule of Plan Contributions .........................99 Schedule of Changes in the Net OPEB Liability and Related Ratios...........................................100 Schedule of Contributions — OPEB..............................................................................................101 Budgetary Comparison Schedule by Department — General Fund..............................................102 Budgetary Comparison Schedule — Measure A...........................................................................104 Budgetary Comparison Schedule — Prop A Fire Tax...................................................................105 Budgetary Comparison Schedule —Housing Asset Fund.............................................................106 Budgetary Comparison Schedule — Housing Authority................................................................107 Note to Required Supplementary Information..............................................................................108 SUPPLEMENTARY SCHEDULES Combining Balance Sheet — Other Governmental Funds............................................................110 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Other Governmental Funds..............................................................................111 Combining Balance Sheet — Other Special Revenue Funds.......................................................116 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Other Special Revenue Funds...................................................................122 Budgetary Comparison Schedules — Special Revenue Funds: TrafficSafety..........................................................................................................................127 GasTax..................................................................................................................................128 HousingMitigation Fees.........................................................................................................129 Community Development Block Grant...................................................................................130 ChildCare Program...............................................................................................................131 Public Safety Police Grants...................................................................................................132 NewConstruction Tax............................................................................................................133 PlannedDrainage..................................................................................................................134 Parks and Recreational Facilities...........................................................................................135 TrafficSignals........................................................................................................................136 Fire Facilities Restoration......................................................................................................137 Recycling................................................................................................................................138 CITY OF PALM DESERT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS Energy Independence Loan............................................................... AirQuality Management..................................................................... AquaticCenter................................................................................... Cannabis Compliance........................................................................ El Paseo Assessment District............................................................ Landscape and Lighting Districts No. 1-17........................................ Former RDA Low Income Housing .................................................... Combining Balance Sheet — Other Capital Projects Funds ............ Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Other Capital Projects Funds ......................... Budgetary Comparison Schedules — Capital Project Funds: Capital Properties...................................................................... Capital Projects Reserve............................................................ DrainageFacilities..................................................................... Economic Development............................................................ Parks and Recreational Facilities ............................................... Art in Public Places.................................................................... Signalization............................................................................... CapitalGolf............................................................................... Buildings..................................................................................... Balance Sheet — Other Debt Service Fund ...................................... Statement of Revenues, Expenditures and Changes in Fund Balances — Other Debt Service Fund ............ Budgetary Comparison Schedule — Debt Service Fund: City Highland Undergrounding................................................... Combining Statement of Net Position — Internal Service Funds ...... Combining Statement of Revenues, Expenses and Changes In Fund Net Position — Internal Service Funds .......................... Combining Statement of Cash Flows — Internal Service Funds....... Combining Statement of Assets and Liabilities — All Agency Funds Page Number ..139 ..140 ..141 ..142 ..143 ..144 ..145 ...148 152 156 157 158 159 160 161 162 163 164 Combining Statement of Changes in Assets and Liabilities — All Agency Funds................................................................................................176 CITY OF PALM DESERT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS STATISTICAL SECTION Page Number Description of Statistical Section.........................................................................................................179 Financial Trends: NetPosition by Component..........................................................................................................181 Changesin Net Position................................................................................................................182 Fund Balances of Governmental Funds.......................................................................................185 Changes in Fund Balances of Governmental Funds....................................................................186 Graphs — Changes in Fund Balances of Governmental Funds....................................................187 Supplemental Historical General Fund Revenues.......................................................................188 Supplemental Graph — Historical General Fund Revenues.........................................................189 Supplemental Historical General Fund Expenditures......... .......................................................... 190 Supplemental Graph — Historical General Fund Expenditures....................................................191 Supplemental Historical General Revenue and Expenditures Per Capita...................................193 Revenue Capacitv Assessed Value and Estimated Actual Value of Taxable Property..............................................194 Historical Net Assessed Taxable Values Citywide and Graph — Assessed Valuation Growth........................................................................................195 Supplemental FY 2018 and 2017 Breakdown of Basic 1 % Property Tax Rate Not In Redevelopment Project Area..........................................................................196 Property Tax Rates Direct and Overlapping Property Tax Rates................................................197 Principal Property Taxpayers.......................................................................................................198 Property Tax Levies and Collections............................................................................................199 Supplemental Top 25 Sales Tax Generators and Graph — Historical Sales Tax Trends........................................................................................200 Supplemental Taxable Sales by Category ...................................................................................201 Supplemental Principal Sales Tax Remitters...............................................................................202 Debt Capacitv Ratios of Outstanding Debt by Type.............................................................................................203 Ratios of General Bonded Debt Outstanding...............................................................................204 Supplemental Special Assessment Information...........................................................................205 Direct and Overlapping Government Activities Debt....................................................................206 Legal Debt Margin Information.....................................................................................................207 Pledged -Revenue Coverage........................................................................................................208 Demographic and Economic Information: Demographic and Economic Statistics.........................................................................................209 PrincipalEmployers......................................................................................................................210 Supplemental Miscellaneous Statistics........................................................................................211 Operating Information: Full -Time Equivalent City Government Employees by Function/Program...................................212 Operating Indicators by Function/Program...................................................................................213 Capital Asset Statistics by Function/Program..............................................................................214 CITY OF PALM DESERT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS Page Number SUPPLEMENTAL REDEVELOPMENT AGENCY STATISTICAL SECTION Redevelopment Agency Project Areas Map.................................................................................216 Tax Allocation Bond Issue Information.........................................................................................217 Historical Tax Increment — Redevelopment Property TaxTrust Fund Summary ......................................................................................................218 THIS PAGE INTENTIONALLY LEFT BLANK I I I Y Of PRIM 9ESERi 73-5 I❑ FRED WARiNG ❑Ri►E PALM DESERT, CALIFORNIA 9226o-2.5 78 TEL: 760 346--o61 r i nfa(S ci tyo Fpa I mde sect. orR December 14, 2018 Residents of Palm Desert, Honorable Mayor and Members of the City Council The Finance Department is pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Palm Desert for the fiscal year ended June 30, 2018. The financial statements are prepared in accordance with generally accepted accounting principles (GAAP) and the Governmental Accounting Standards Board (GASB). We believe the data, as presented, is accurate in all material respects and is presented in a manner that fairly represents the financial position and changes in financial position of the City as measured by the financial activity of each of its funds. We also believe that all disclosures necessary to enable the reader to fully understand the City's financial activities have been presented. Responsibility for the accuracy, completeness and reliability of the information contained in this report rests with the City. The City of Palm Desert conducts an annual audit, which is performed by an independent certified public accountant. The independent audit of the City's financial statements for fiscal year ended June 30, 2018 was conducted by Lance Soll & Lunghard, LLP. The auditor's unmodified ("clean") opinion on the basic financial statements is included in the Financial Section of this report. This is the most favorable opinion. As part of the City's annual audit engagement, the auditors reviewed the City's internal control structure as well as compliance with applicable laws and regulations. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute assurance, that the financial statements are free of any material misstatements. The results of the City's annual audit for fiscal year ended June 30, 2018 provided no instances of material weaknesses in connection with the internal control structure or significant violations of applicable laws and regulations. As recipients of federal, state and county financial resources, the City may be required to undergo an annual single audit. However, for the fiscal year ended June 30, 2018, the City is not required to have a single audit performed. Management's discussion and analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. Residents of the City of Palm Desert, Honorable Mayor and Members of the City Council December 14, 2018 PROFILE OF THE CITY OF PALM DESERT Located in Riverside County in the geographical center of the Coachella Valley, Palm Desert was incorporated on November 26, 1973, as a General Law City. On November 4, 1997, voters overwhelmingly approved Measure LL adopting a city charter. Under the provisions of the charter, the City of Palm Desert has full authority over its own municipal affairs including: bidding and contracting procedures; regulation of parks, libraries, and other facilities; certain fees; imposition of taxes; municipal zoning; salaries of officials and employees; municipal utilities; and municipal election procedures. The City operates under a Council -Manager form of government. The City Council consists of five members elected by the residents of the City. Council terms are four years and elections occur in November during even - numbered years. Each December, the City Council selects the Mayor from among its members for a one-year term. The City Council appoints the City Manager and the City Attorney. The City operates as a "contract city," primarily utilizing agreements with other governmental entities, private firms, and individuals to provide many services. Contracted services include: police protection through the County of Riverside; fire protection through Cal -Fire; animal control; road maintenance and construction services; legal services; landscape maintenance; and recreation program services. The City is a member of the California Joint Powers Insurance Authority that provides insurance coverage for the City. Waste and recycling services are provided under a franchise agreement with Burrtec Waste and Recycling Services. The City provides traditional municipal, public enterprise, and housing services as follows: Municipal Services Public improvements, infrastructure and maintenance Public art and community promotion Planning, zoning, building and engineering Housing and community development Code enforcement and inspections Economic development, business support and energy conservation Legislative, city clerk, visitor's services, public information, general administration, fiscal services, human resources, and risk management Building permitting, inspections and services Public Enterprise Services Golf course Office complex Internal service Blended & Discrete Comtsonent Units PD Housing Authority PD Financing Authority PD Recreational Facilities Corporation ii Residents of the City of Palm Desert, Honorable Mayor and Members of the City Council December 14, 2018 The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General, Special Revenue, Debt Service, and Capital Project Funds are included in the annual appropriated budget. Budgetary amounts for Debt Service, Capital Projects, and certain Special Revenue Funds are adopted annually; however, these budgets are considered to be long-term in nature. The City also maintains an encumbrance accounting system of purchase orders and contracts at the fund level as a means of accomplishing budgetary control. At each fiscal year end, open encumbrances are carried over to the new fiscal year. Purchase orders are reviewed to ensure that funds are available and that requests are properly authorized prior to being released to vendors. The adopted budget for fiscal year 2017-2018 was prepared in accordance with accounting principles generally accepted in the United States of America. As reflected in the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. LOCAL ECONOMY The City comprises an area of approximately 26 square miles and, as of January 1, 2018, has a population of 52,769 according to data provided by the California Department of Finance. In addition to permanent residents, approximately 20,000 seasonal residents make Palm Desert their home for three to six months each year. The City has cultivated a sound foundation of general fund revenues including sales tax, transient occupancy tax, licenses and permits, property tax, and investment earnings. Tourism and sales tax are the City's main revenue sources. Due to the timing of Palm Desert's incorporation in 1973, the City receives less than 7 percent of the post -Proposition 13 property taxes; therefore, the City relics heavily on sales tax and transient occupancy tax. As a community where economic, environmental, social, and cultural development flourishes, Palm Desert is a much sought-after place to visit and reside. As the first city in riverside County to create a public art program, Palm Desert is home to numerous cultural attractions including: the McCallum Theatre for the Performing Arts, a 1,127-scat theater that hosts a wide variety of A -list entertainers, touring theatrical productions, and arts -related educational programs, The Living Desert Zoo and Gardens, a 1,200-acre facility containing a wide array of plants and animals from desert regions around the world; and the Palm Desert Art in Public Places program, a museum without walls, featuring more than 150 works of art on permanent display throughout the city. Palm Desert's active, five-star accredited Chamber of Commerce has more than 1,125 members who work to promote, support, and enhance business prosperity, civic vitality, and the quality of life within their community. Noted for its extensive array of retail options, including the world-famous upscale shopping destination of El Paseo, Palm Desert is home to a variety of malls and retail centers including Westfield Palm Desert, Desert Crossing, The Gardens on El Paseo, and El Paseo Village. The internationally acclaimed Desert Willow Golf resort, one of the nation's premier municipal courses, boasts 36 holes of championship golf and stunning scenery in close proximity to first-class hotel accommodations and fine dining. In addition to being the home of the Coachella Valley's only community college, College of the Desert, Palm Desert is the location of satellite campuses for both the University of California, Riverside, and California State q,BITMYO, the region's only public, four-year university. 11i Residents of the City of Palm Desert, Honorable Mayor and Members of the City Council December 14, 2018 The State of California Employment Development Department Labor Market Information Division reported that the City of Palm Desert had an unemployment rate of 5.0% compared to Riverside County, which had a rate of 4.8%. The City's balanced foundation of tourism, culture, and education has strengthened the City's labor force. LONG-TERM FINANCIAL PLANNING 1n June 2018 the City Council approved a total of $23.39 million in funding for various capital improvement projects for the fiscal year of 2018-2019. Projects include resurfacing streets, sidewalk repairs and construction, accessibility improvements, street widening, improving drainage areas, park improvements, and improvements at Desert Willow Golf Resort and Parkview Office Complex. Certificates of Awards for Outstandine Financial ReDorting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Palm Desert for its comprehensive annual financial report for the fiscal year ended Stine 30, 2017. This was the 21st consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgments The preparation of this report is attributable to the efficient and dedicated staff of the Finance Department who are individually recognized on the title page. The Mayor and the City Council are credited for their support in planning and conducting the operations of the City in a prudent, responsible and progressive manner. Recognition is also given to all employees of the City of Palm Desert who continue to serve our community with commitment and dedication throughout the year. Our greatest appreciation goes to you, the residents of Palm Desert, for your continued support, input, and guidance in helping us serve you better, thus preserving our city's quality of life and reputation for innovation and leadership. Respectfully submitted, Lauri Aylaian City Manager J LE: jle Ja t Moore Director of Finance IV G� Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Palm Desert California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2017 Executive Director/CEO v CITY OF PALM DESERT List of Principal Officials as of June 30, 2018 City Council - Manager Form of Government CITY COUNCIL SABBY JONATHAN Mayor SUSAN MARIE WEBER Mayor Pro-Tempore JAN C. HARNIK KATHLEEN KELLY Council Member Council Member CITY ADMINISTRATION LAURI AYLAIAN City Manager City Attorney - Best, Best & Krieger, LLP Director of Finance/City Treasurer GINA NESTANDE Council Member Robert W. Hargreaves Janet M. Moore SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY LAURI AYLAIAN Executive Director Vi B u u \\ \\ \) �c k& E¥ E: e CL }7 0 j) 0 2 L- [ § =CL /cL ) @# § q ° c � I vii THIS PAGE INTENTIONALLY LEFT BLANK CPAs AND ADVISORS INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of Palm Desert. California Report on the Financial Statements We have audited the accompanying financial statements of governmental activities, the business -type activities, discretely presented component unit, each major fund, and the aggregate remaining fund information of City of Palm Desert, California, (the City) as of and for the year ended June 30, 2018, and the related notes to the financial statements. which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based an our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment. including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. PrimeGlobal L S L CPAs A140 ADoSOPE To the Honorable Mayor and Members of the City Council City of Palm Desert. California Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the discretely presented component unit. each major fund, and the aggregate remaining fund information of the City of Palm Desert, California, as of June 30, 2018, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 18 to the financial statements, in 2018 the City adopted new accounting guidance.. GASB Statement No. 75, Accounting and Financial Reporting for Post -Employment Benefits Other Than Pensions. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary comparison schedules for the general fund and major special revenue funds as listed in the table of contents, the schedule of changes in net pension liability and related ratio, the schedule of contributions, the schedule of changes in net OPEB and related ratios, and the schedule of contributions be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements: is required by the Governmental Accounting Standards 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. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements. and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves. and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In ❑ur opinion. the combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. L L••6• !! To the Honorable Mayor and Members of the City Council City of Palm Desert, California The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we d❑ not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 14, 2018 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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 the results of that testing, and not to provide an opinion on internal 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 City's internal control over financial reporting and compliance- rea. California December 14, 2018 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF PALM DESERT MANAGEMENT'S DISCUSSION AND ANALYSIS Our discussion and analysis of the City of Palm Desert's financial performance for the fiscal year ended June 30, 2018 provides: a comparison of current year to prior year ending results based on the government -wide financial statements; an analysis of the City's overall financial position and results of operations to assist users in evaluating the City's financial position; a discussion of significant changes that occurred in the funds; and significant budget variances. In addition. it describes the activities during the year for capital assets and long-term debt. We end our discussion and analysis with a description of known facts, decisions, and conditions that are expected to have a significant effect on the financial position or results of operations. Please read it in conjunction with the transmittal letter and the City's financial statements. FINANCIAL HIGHLIGHTS • The City's total assets and deferred outflows exceeded its liabilities and deferred inflows by $793,31 million (net position). ■ The City's governmental activities net position decreased $15.36 million, and the net position of the business -type activities increased $0.06 million. • During the year, the City's revenues were $88.89 million and expenses were $91.47 million in its governmental activities, excluding transfers, compared to fiscal year 2017, where revenues were $88.51 million and expenses were $86.61 million. ■ In the City's business -type activities, expenses were $0.36 million less than the $10.05 million generated in golf course green fees, merchandise sales, rental income and other revenues compared to the prior year, where business -type activities revenues were $0.28 million more than its expenses. ■ The City's governmental activities program revenues and general revenues increased by $0.38 million, while program expenses increased $4.86 million. ■ Business -type activities revenues increased $0.64 million, from $9.41 million to $10.05 million. Expenses increased from the $9.13 million to $9.69 million. ■ The City kept its General Fund expenditures within spending limits by $2.49 million. The revenues available for expenditures were over budget by 60.06 million. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Position and Statement of Activities (on pages 17, 18 and 19) provide information about the activities of the City as a whole and present a long-term view of the City's finances. The fund financial statements start on Page 22. For governmental activities, these fund statements tell how these services were financed in the short term as well as what remains for future spending. The fund financial statements also report the City's operation in more detail than the government -wide statements by providing information about the City's most significant funds and other funds. The remaining fiduciary fund statement provides financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government. REPORTING THE CITY AS A WHOLE The Statement of Net Position and the Statement of Activities Our analysis of the City as a whole begins on page 17. One of the most important questions asked about the City's finances is, "Is the City as a whole better off or worse off as a result of the year's activities?" The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that answers this question. These statements include all assets and liabilities of the City using the accnial basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City's net position and changes in them. Net position is the difference between total assets and deferred outflows of resources less liabilities and deferred inflows, which is one way to measure the City's financial health, or financial position. Over time. increases or decreases in the City's net position are an indication of whether its financial health is improving or deteriorating. Other non -financial factors should be considered, however. such as changes in the economy that could cause a decrease in consumer spending. In the Statement of Net Position and the Statement of Activities, we separate City activities as follows. Governmental activities — Most of the City's basic services are reported in this category, including general administration (city manager, city clerk, finance. etc.), housing and redevelopment, public safety (police and fire protection), public works, parks & recreation. and culture departments. Property taxes, sales tax, transient occupancy tax, user fees, interest income, franchise fees, state and federal grants, contributions from other agencies, and other revenues finance these activities. Business -type activities — The City charges a fee to customers to cover all or most of the cost of certain services it provides. The City's municipal golf course, Desert Willow, and the City's Parkview Office Complex activities are reported in this category. Component unit activities — The City includes one separate legal entity in its report — the Palm Desert Recreational Facilities Corporation. Although legally separate, this "component unit" is important because the City is financially accountable for it. REPORTING THE CITY'S MOST SIGNIFICANT FUNDS Fund Financial Statements: The fund financial statements provide detailed information about the most significant funds and other funds, not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other resources. The City has three types of funds: governmental, proprietary and fiduciary. Governmental funds — Most of the City's basic services are reported in governmental funds, which focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called n7odified accrual accounting. which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short -terra view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. The differences of results in the Governmental Fund financial statements to those in the Government -wide financial statements are explained in a reconciliation following each Governmental Fund financial statement. fi Proprietary funds — When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. The City's enterprise funds are the same as the business -type activities we report in the government -wide statements, but provide more detail and information such as a statement of cash flows. Fiduciary funds — Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statement because the resources of those funds are not available to support the City of Palm Desert operations. The accounting used for fiduciary funds is much like that used for proprietary funds. 111IMESI r■IRMI:iN�119:11= Reporting the City's Fiduciary Responsibilities: The City is the trustee, or fiduciary, for the Successor Agency to the Palm Desert Redevelopment Agency's (Successor Agency) private -purpose trust fund and for certain agency funds held on behalf of developers and its employees' retiree service stipend fund. The City's fiduciary activities are reported in separate Statements of Net Position, Statement of Changes in Net Position, Statement of Assets and Liabilities, and Statement of Changes in Assets and Liabilities. We exclude these activities from the City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. THE CITY A5 A WHOLE During the fiscal year ending June 30, 2018, the City's combined net position decreased $15.30 million from $808.61 million to $793.31 million. A separate review of the net change in the governmental and business -type activities is provided for the reader. Our analysis focuses on the net position (Table 1) and changes in net position (Table 2) of the City's governmental and business -type activities. rA TABLE 1 NET POSITION (IN MILLIONS) As of June 30, 2018 and 2017 Governmental Business -Type Activities Activities Total 2018 2017 2018 2017 2018 2017 Current and restricted assets $ 344.26 $ 349.47 $ 6-62 $ 5.96 $ 350.88 $ 355.43 Capital assets 438.18 449.04 70.60 70.33 508.78 519.37 TOTAL ASSETS 782.44 798.51 77.22 76.29 859.66 874.80 Deferred outflows of resources $ 12.62 $ 9.10 $ - $ - $ 12.62 $ 9.10 Lang -term liabilities outstanding 48.49 43.34 1.49 0.50 49.98 43.84 Other liabilities 24.88 25.76 1.01 1.13 25.89 26.89 TOTAL LIABILITIES 73.37 69.10 2.50 1.63 75.87 70.73 Deferred inflows of resources $ 3.10 $ 4.56 $ - $ - $ 3.10 $ 4.56 Net position: Net investment in capital assets 438.18 449.04 69.11 69.83 507.29 518.87 Restricted 197.36 197.82 - - 197.36 197.82 Unrestricted 83.05 87.09 5.61 4.83 88.66 91.92 TOTAL NET POSITION $ 718.59 $ 733.95 $ 74.72 $ 74.66 $ 793.31 $ 808.61 = 1,200 1,000 800 600 400 6 200 C Table 1 - Graph Total Assets & Liabilities 2018 2017 2018 2017 2018 2017 Governmental Business -Type Total Activities Activities ■ Total Assets Total Liabilities n The City's governmental activities net position decreased $15.36 million. The City's net position is made up of three components: Net investment in capital assets; restricted net position; and unrestricted net position. For governmental activities, unrestricted net position, which represents the part of net position that can be used to finance day-to-day operations, accounted for 11.56 percent of the overall total net position. Unrestricted net position decreased $4.04 million from $87.09 million in 2017 to $83.05 million in 2018. At first glance, an assumption can be made that the City did not fare as well as last year. However, when you analyze the figures. the General Fund had a positive net change of $6.38 million. The main reason for the decrease was the restatement of net position from $733.95 million to $720.87 million, a $13.08 million decrease. The City implemented GASB No. 75, which required the City to record its net OPEB liability, which was $4.12 million. In 2017, the City had $9.43 million as a Net OPEB Assets, representing the difference between the Annual Required Contribution and actual contribution (see Note 18). The decrease of $0.46 million in restricted net position was due to the following: restricted capital projects decreased by $0.22 million from $110.16 million in 2017 to $109.94 million in 2018. During the year, capital restricted funds were expended for street resurfacing, drainage improvements, and street improvements. Restricted special projects decreased by $0.24 million, the majority of which is attributable to the cost of maintaining the City's affordable apartment complexes at a high standard and the cost of the City's fire protection services. Investment in capital assets decreased $10.86 million. The decrease is attributed to current year depreciation of $12.01 million. The calculation of investment in capital assets includes outstanding debt used to purchase or construct the City's capital assets. The City's governmental activities total assets and deferred outflow of resources combined decreased $12.55 million from $807.61 million in 2017 to $795.06 million in 2018. The decrease is mostly attributable to the $9.43 million decrease in the net OPEB Assets. Other major changes that affected total assets and deferred outflow combined were the capital assets decrease of $10.86 million and a $3.52 million increase in deferred outflow of resources which is due to the $2.31 million pension plan deferred outflows (see Note 8d) and $1.21 million OPEB deferred outflows (see Note 12h). Total liabilities and deferred inflows combined increased by $2.81 million from 573.66 in 2017 to $76.47 million in 2018. The increase is due to OPEB liability of $4.12 million discussed above. The net position of the business -type activities saw a slight increase of $0.06 million, from $74.66 million to $74.72 million. The main factor for the increase in net position was overall increase in gross revenues which increased by $0.64 million from the previous year. During the 2017-18 fiscal year, the regional golf market recognized a 7.4 percent increase in the overall revenue per available golf round. Desert Willow's dynamic pricing strategy increased it's revenue per available round by 11.3 percent. Total liabilities increased $0.87 million from $1.63 million in 2017 to $2.50 million in 2018. The increase in debt obligation for the new lease of golf course maintenance equipment {see Note 6) is the major factor for the increase in total liabilities. 140t TABLE 2 CHANGES IN NET POSITION (IN MILLIONS) As of June 30. 2018 and 2017 Govemmerdal Business -Type Activities Activities Total 2018 2017 2018 2017 2018 2017 REVENUES. Program Revenues' Charges for services $ 24.25 $ 22.68 5 9.68 5 8.78 $ 33.93 $ 31.46 Operating grants and contributions 8.56 7.93 - - 8.56 7.93 Capital grants and contributions 2.44 7.71 0.17 0.60 2.61 8.31 General Revenues Property taxes 11.51 10.85 - - 11.51 10.85 Transient occupancy tax 17.30 15.24 17.30 15.24 Sales tax 18.25 18.39 18.25 18.39 Othertaxes 3.09 3.15 - - 3.09 3.15 Investment earrings 1.90 1.04 0.07 0.03 1.97 1.07 Gain on sale of capital assets 0.02 - - - 0.02 - Other revenues 1.57 1.52 0.13 - 1.70 1.52 TOTAL REVENUES 88.89 88.51 10.05 9.41 98.94 97.92 EXPENSES: General government 18.47 15.71 - - 18.47 15.71 Housing and redevelopment 9.61 10.95 9.61 10.95 Public safety 36.54 34.94 36.54 34.94 Parks, recreation and culture 8.24 9.85 8.24 9.85 Public works 18.35 14.89 18.35 14.89 Interest on long-term debt 0.26 0.27 - - 0.26 0.27 Golf Course -Desert Willow - - 8.76 8.24 8 76 8.24 Office Complex-Parkview - - 0.93 0.89 0.93 0.89 TOTAL EXPENSES 91.47 86.61 9.69 9.13 101.16 95.74 INCREASE (DECREASE) IN NET POSITION BEFORE TRANSFERS t2.58j 1.90 0.36 028 (2.22) 2.18 Transfers 0.30 0.30 (0.3o) (0.30) - INCREASE [DECREASE] IN NET POSITION (2.28) 2.20 0.06 (0.02) (2.22) 2.18 BEGINNING NET POSITION, AS RESTATED 720.87 731.75 74.66 74.68 795.53 806.43 ENDING NET POSITION $ 718.59 $ 733.95 $ 74.72 $ 74.66 $ 793.31 $ 808.61 10 800 700 600 500 400 300 200 100 Table 2- Graph Changes in Net Position 2018 2017 Governmental Activities Governmental Activities 80 70 60 50 40 30 20 10 2018 2017 Business -Type Activities � Beginning Net Position � Total Revenues —*--Ending Net Position o Total Expenses Total revenue (excluding transfers) increased from $88.51 million to $88.89 million. Factors that contributed to the changes in revenues are as follows: • Transient occupancy tax increase from $15.24 million in 2017 to $17.30 million in 2018, an increase of $2.06 million. • In 2018, the City accounted for $1.90 million in investment earnings compared to $1.04 million in 2017, an increase of $0.86 million. • The City's combined general property taxes and sales tax increased by $0.52 million from $29.24 million in 2017 to $29.76 million in 2018. These increases were offset by: • A decrease of $5.27 million in capital contributions and grants from $7.71 million in 2017 to $2.44 million in 2018. In 2017, the Successor Agency made a capital contribution of $3.55 million to be used for capital expenditures, no such contribution was made in 2018. Total expenses increased from $86.61 million to $91.47 million, a 5.61 percent increase. The primary reason forthe increase was in the public work function that increased 3.46 million. The increase is attributed the City spending $4.30 million more on street resurfacing than in the prior year. Additional factors in the change in amount of expenses for the year include, general government increased $2.76 million, which was largely due to the City's additional pension payment of $1.70 million. Public safety increased $1.60 million attributed to the increase in police costs from $19.83 million to $20.51 million and the increase in fire protection services from $12.10 million to $13.50 million. 11 1010 The following schedule represents the net cost of providing services: General government Housing and redevelopment Public safety Parks, recreation and culture Public works Interest on long term debt Total 2018 Governmental Activities Net (Expense) Revenue 0% 1 R% "Co/ 4% 44% Business -type Activities Governmental Activities Net (Expense) Revenue (In Millions) JV 70 2018 ($13.82) (1.96) (25,62) (4.97) (9.59) (0.26) ($56.22) 2017 Governmental Activities Net (Expense) Revenue 14% 6% 1 0/. 25% 2017 ($11.51) (2.67) (23.99) (6.55) (3.30) (0.27) ($48.29) General government ■ Housing and redevelopment ■ Public safety ■ Parks, recreation & culture ■ Public works ■ Interest on long term debt In the business -type activities, total revenues increased by 6.8 percent from $9.41 million to $10.05 million, a $0.64 million increase. The overall increase was related to the dynamic pricing structure implemented at the Desert Willow Golf Resort. Total green fees were $0.72 million more than the previous year. Desert Willow Golf Resort management continued to utilize a strategic pricing structure, which allowed the golf resort to retain the course utilization, which optimized the green fee revenue during periods that were traditionally under-utilized and sold at a discount. The overall rounds mix and play remained consistent with the previous years. The Parkview Office Complex revenues increased slightly. The rental market remained soft during the fiscal year; the tenant mix remained unchanged. Operating expenses for business -type activities increased by $0.56 million from $9.13 million to $9.69 million. The increase was directly related to increased golf course rounds, increased interest from a $1.50 million dollar loan from the City of Palm Desert General Fund, and new golf course equipment lease of $1.39 million. Both Desert Willow and the City continued to implement effective and efficient methods to control costs without impacting service. 12 THE CITY'S FUNDS On Page 22, the governmental funds balance sheet is shown. The combined fund balance of $$299.93 million increased from $295.05 million, or 1.65 percent. This total includes the General Fund balance of $90.37 million, which increased by $6.38 million from the prior year. The City's General Fund balance has a non -spendable balance of $10.51 million, committed balance of $59.67 million, assigned balance of $15.49 million, and 54.70 million of unassigned fund balance. The change in the General Fund's balance was due to growth in transient occupancy tax and investment earning. Other major fund balance changes are noted below: ■ The Prop A Fire Tax Special Revenue Fund: The fund balance decreased $0.41 million. The City transferred $3.67 million to cover the shortage. ■ The Housing Asset Fund: The fund balance had a decrease of $0.21 million. The housing asset fund reimbursed the housing authority for costs associated with improvements to the Authority owned affordable apartment complexes. • Measure A Special Revenue Fund. the fund balance increased from $21.55 million to $21.97 million. Projects budgeted at $29.98 million are at their early stage which resulted in non - spending of available funds. ■ Housing Authority Fund: This fund had a minor decrease of $0.26 million from $20.24 million to $19.98 million. • Capital Properties Fund: The fund balance decreased $0.40 million from $69.15 million to $68.75 million. The decrease was due to the capital project expenditures. More detailed information about the combined fund balance reserves is presented in Note 9 to the financial statements. General Fund Budgetary Highlights Based upon recommendations from the staff, the City Council revised the budget several times during the year. Adjustments were made on a monthly basis as City staff requested additional appropriations to cover the cost of projects that either had change orders for additional work, or were underestimated. At mid -year, no adjustments were requested as department budgets met current demands. At year-end, budgets were adjusted for unanticipated approved expenditures. All amendments that either increase or decrease appropriations are approved by the City Council. For the City's General Fund, the actual ending revenues of 560.85 million were $0.06 million more than the final budgeted revenues of $60.79 million. Sales and transient occupancy taxes continue to be the top two revenue generators for the City, totaling $36.65 million or 58.58 percent of the total General Fund actual revenues. The General Fund actual ending expenditures of $54.47 million were $2.49 million less than the final budget of $56.96 million. There were changes in the original budget compared to the final budget during the year. The original expenditure budget was $56.27 million compared to the final budget of $56.96 million, a $0.69 million increase. An additional $1.70 million was appropriated to reduce the City's pension liability, which represents the major change between original budget and final budget. 13 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets At the end of 2018, the City had $508.78 million invested in a broad range of capital assets including land, streets, bridges, drainage systems, traffic lights, parks, buildings, artwork, vehicles, golf courses and equipment (See Table 3). This amount represents a net decrease (including additions and deductions) of $10.59 million over the prior year, due mainly to depreciation. TABLE 3 CAPITAL ASSETS AT YEAR-END (NET OF DEPRECIATION, IN MILLIONS) For the years ended June 30, 2018 and 2017 Governmental Business -Type Activities Activities Total 2018 2017 2018 2017 2018 2017 Land $ 79.29 $ 79.45 $ 53.31 $ 53.31 $ 132.60 $ 132.76 Construction -in -progress 2.51 2.02 - - 2.51 2.02 Buildings and improvements other than buildings 99.92 105.69 15.67 16.40 115.59 122.09 Machinery and equipment 2.70 2.79 1.62 0.62 4.32 3.41 Infrastructure & right-of-way 253.76 259.09 - - 253.76 259.09 TOTALS $ 438.18 $ 449.04 $ 70.60 $ 70.33 $ 508.78 $ 519.37 700 600 ° 500 E 400 C 12 300 c 200 0 100 Table 3 - Graph Capital Assets at Year -End [Net of Depreciation in Millions] 2018 2017 2018 2017 2018 2017 Governmental Business -Type Total Activities Activities t Land ■ Construction in Progress ■ Buildings and improvements ■ Equipment ■ Infrastructure • Totals 14 This year's major additions included (in millions): Street improvements $ 0.44 Park and recreation improvements 0.15 Equipment and software purchases 0.71 Land acquisitions 0.10 1.41 The City's fiscal year 2019 adopted capital budget calls for an additional $23.39 million to be spent, plus continuing capital projects of $58.16 million from prior year, with the majority being spent an street, infrastructure and golf course improvements. Projects will be funded with existing bond proceeds or funds that have been designated by an outside party for specific use. More detailed information about the City's capital assets is presented in Note 1 g and Note 5 to the financial statements. Debt At year-end. the City's governmental activities had $48.49 million in bonds, claims, compensated absences, OPEB liability and pension liability versus $43.34 million last year, an increase of $5.15 million as shown in Table 4. The major increase was the City's pension liability that grew from $37.55 million to $38.97 million, which was the result of PERS changing the discount rate from 7.65 percent to 7.15 percent. In addition, a new GAS13 standard required cities to report any OPEB liability. The City OPEB liability was $4.12 million. TABLE 4 OUTSTANDING DEBT AT YEAR-END (1N MILLIONS) For the years ended June 30, 2018 and 2017 Governmental Business -Type Activities Activities Total 2018 2017 2018 2017 2018 2017 Compensated absences payable $ 2.39 $ 2.58 $ - $ - $ 2.39 5 2.58 Capital leases - - 1.49 0.50 1.49 0.50 Claims and judgements payable 0.36 0.40 - 0.36 0.40 Special assessments debt with government commitment 1.36 1.41 - 1.36 1.41 Limited Obligation Improvement bonds 129 1.40 1.29 1.40 OPEB liability 4.12 - - 4.12 - Pension liability 38.97 37.55 - - 38.97 37.55 TOTALS $ 48.49 $ 43.34 $ 1.49 $ 0.50 $ 49.98 S 43.84 15 The City was able to meet its current year debt obligation in a timely manner. Bonds that were issued in prior years have been used to finance various capital projects. The City's business -type activities debt increased $0.99 million from $0.50 million to $1.49 million_ Debt in the business -type activities is for capital leasing of equipment. The City's golf course uses leasing as an alternative to purchasing golf carts and maintenance equipment to maintain a cash flow to operate the day-to-day activities. The increase in the City's business -type activities debt was directly related to entering a new golf course equipment lease in the amount of $1.39 million. The City's business -type activities were able to meet their current year debt obligation in a timely manner. More detailed information about the City's Fong -term liabilitles is presented in Note 6 to the financial statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS In preparing the budget for fiscal year 2019, management focused three core principles: 1) maintain the level of service expected by residents, businesses, and visitors; 2) review standards of infrastructure maintenance and operation and adjust standards to provide quality City facilities in fine with budget considerations, including but not limited to parks, roads, and buildings; and 3] invest in infrastructure and technology to address deferred maintenance and outdated hardware/software that resulted from necessary cost-cutting measures in previous years. The following economic factors were considered by management: Goals of the strategic plan as top priority. Increase in healthcare and retirement costs. • Increase in police and fire protection services. The 2019 budget is a reflection of the City's commitment to the residents of Palm Desert. The City's conservative approach has provided for a consistently high level of services. The City has made a commitment to allocate resources for public safety, cultural/social programs, and necessary infrastructure improvements. Copies of the City's 2018-2019 Financial Plan can be obtained by contacting the City's Finance Department or by visiting the City's website at www.citvofoalmdesert.oro. CONTACTING THE CITY'S FINANCIAL MANAGEMENT This financial report is designed to provide our residents, taxpayers, customers, investors, and creditors with a general overview of the City's finances and to show the City's accountability forthe money it receives. If you have questions about this report or need additional financial information, please contact the Finance Department at the City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert, California 92260-2578, or (760) 346-0611. 16 CITY OF PALM DESERT STATEMENT OF NET POSITION JUNE 30, 2018 Component Primary Government Unit Palm Desert Recreational Governmental Business -Type Facilities Activities Activities Total Corporation ASSETS: Cash and investments $ 176,991,043 $ 7,613,487 $ 184,6D4,530 $ 120,150 Receivables: Accounts 2,350,390 98,972 2.449.362 2,877 Notes 1,369,200 - 1,36%200 - Accrued interest 6,282,188 - 6,282,188 Loans 9,817,074 - 9,817,074 - Internal balances 2,000,000 (2,000,000) - - Prepaid costs 192.991 94,446 287,437 16.368 Deposits 15,393,231 - 15,393,231 - Due from other governments 5,333,143 - 5,333.143 - Inventories 4,868 199,741 204,609 47,624 Property held for resale 61,516 - 61,516 - Due from component unit 285,000 608,947 893.947 - Restricted assets: Cash with fiscal agent 96.804,305 - 96,804,305 - Advanees to Successor Agency 27,366,140 - 27,366,140 - Capital assets, not being depreciated 202,902,112 53,304,965 256,207,077 - Capital assets, net of depreciation 235.281,958 17,300,162 252,582,120 - TOTAL ASSETS 782,435,159 77,220,720 859,655,879 187,019 DEFERRED OUTFLOWS OF RESOURCES: Deferred outflows from pensions 11 A10,531 - 11,410,531 - Deferred outflows from OPEB 1,217,465 1,217,465 - Total Deferred outflows of Resources 12,627,996 - 12,627,996 - LIABILITIES: Accounts payable 7,993,501 787,222 8,780,723 38,922 Accrued liabilities 286,450 52,135 338.585 12,059 Accrued interest 84,239 - 84,239 - Due to primary government - - - 893,947 Unearned revenue 15,623,162 138,564 15,761,726 79,452 Deposits payable 892,664 27,829 920,493 - Long-term liabilities: Due within one year 451,000 562,498 1,013,498 - Due in more than one year 4,954,009 930,832 5,884,841 Net OPEB liability 4,120,584 - 4,120,584 Net pension liability 38,965,978 - 38,965,978 - TOTAL LIABILITIES 73,371,587 2,499,080 75,870,667 1,024,380 DEFERRED INFLOWS OF RESOURCES: Deferred inflows from pensions 3,054,378 - 3,054,378 - Deferred inflows from OPEB 49.049 - 49,049 Total Deferred Inflows of Resources 3,103,427 - 3,103,427 - NET POSITION: Net investment in capital assets 438,184,070 69,111,797 507.295,867 - Restricted for: Special projects 87,404,989 - 87,404,989 - Capital projects 109,944,375 - 109,944,375 - Unrestricted (deficit) 83,054,707 5o609,843 88.664,550 (837,361) TOTAL NET POSITION $ 718,588,141 $ 74,721,640 $ 793,309,781 $ (837,3611 See Notes to Financial Statements 17 CITY OF PALM DESERT STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2018 Functions/Programs Primary Government: Governmental activities: General government Housing and redevelopment Public safety Parks, recreation and culture Public works Interest on long-term debt Total governmental activities Business -type activities: Desert Willow Golf Course Parkview Office Complex Total Business -Type Activities Total Primary Government Component Unit: Palm Desert Recreational Facilities Corp. Proqram Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants $ 18,467,097 $ 2.388,260 $ 874,490 $ 1.386,262 9.605.756 7,551,760 - 92,273 36,543,050 10,801,436 84,196 35,084 8,240,115 821,824 2,211,563 237,136 18,358,907 2,685,831 5,385,632 691,866 259,250 - - - 91,474,175 24,249,111 81555,881 2,442,621 8,763.220 8,432,273 930,615 1,250,456 9,694,035 9,682,729 $ 101,168,210 $ 33,931,840 167,670 - 167,670 $ 8,555,881 $ 2.610.291 $ 2,742,877 $ 3,030,343 $ - $ General Revenues: Taxes: Property taxes, levied for general purpose Transient occupancy taxes Sales taxes Franchise taxes Investment earnings Miscellaneous Gain on sale of capital assets Transfers Total general revenues and transfers Change in net position Net position - beginning of year Restatement of Net Position Net position - beginning of year, as restated Net position - end of year See Notes to Financial Statements 18 Net {Expenses] Revenues and Changes in Net Position Component Primary Government Unit Palm Desert Recreational Governmental Business -Type Facilities Activities Activities Total Corporation $ (13,818,085) $ $ (13,818,085) $ (1,961,723) (1,961,723) (26,622, 334) (25,622, 334) (4,969,592) - (4,969,592) (9,595,578) - (9,595,578) (259,250) - (259,250) - (56,226,562) - (56,226,562) - - (163,277) (163,277) - - 319,641 319,641 - - 156,364 156,364 - (56,226,562) 156,364 156,070,198) - $ - $ - $ - $ 287,466 11,512,243 - 11,512,243 - 17,295,857 17,295,857 - 18,245,029 18,245, 029 - 3,097,521 3,097,521 1,901,536 74,873 1,976,409 1,573,106 131,175 1,704, 281 - 17,274 - 17,274 - 300,000 (300,000) - - 53,942,566 (93,952) 53,848,614 - (2,283,996) 62,412 (2,221,584) 287,466 733,953,668 74,659,228 608,612.896 (1,124,827) (13,081,531) - (13,081,531) - 720,872,137 74,659,228 795,531,365 (1,124.827) $ 718,588,141 $ 74,721,640 $ 793,309,781 $ (837,361) See Notes to Financial Statements 19 THIS PAGE INTENTIONALLY LEFT BLANK 20 FUND FINANCIAL STATEMENTS 21 CITY OF PALM DESERT BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2018 Special Revenue Funds Prop A Fire Housing General Measure A Tax Asset Fund ASSETS: Pooled cash and investments $ 79,377,363 $ 21,309,404 $ 2,718,350 $ 8,552,903 Receivables. Accounts 1 Assessments Notes 1,368,000 - - 1,200 Interest 2,501,225 - - 1,111,702 Loans 14,978 - - 6,420,276 Prepaid costs 154,316 - - 476 Deposits - 15,393,231 - _ Due from other governments 3,611,229 660,745 611,638 - Due from other funds 3.638.000 - - 4,531,000 Inventories _ Property held for resale _ _ _ 61,516 Due from component unit 285,000 _ _ Restricted assets: Cash and investments with fiscal agent - - - 22,977.137 Advances to Successor Agency 9.236,000 - - 4.711.140 TOTAL ASSETS $ 102,051,96D $ 37,363,380 $ 3,329,988 $ 49,367,350 Liabilities, Deferred Inflows of Resources and Fund Balances LIABILITIES: Accounts payable $ 4.781,718 $ 130 $ 1,434,921 $ - Accrued liabilities 203,839 - _ _ Unearned revenues 2,198 15.393,231 - Deposits payable _ _ Due to other funds 1.847,200 - TOTAL LIABILITIES 6,834,955 15,393,361 1,434,921 - DEFERED INFLOWS OF RESOURCES: Unavailable revenue 4,846,457 - - 1,052,054 4,846,457 - - 1 p052,054 FUND BALANCES: Nonspendable 10,509,094 - _ 476 Restricted - 21,970,019 1,895.067 47,314,820 Committed 59,666,638 - _ _ Assigned 15,492, 508 Unassigned 4,702,308 - _ _ Total Fund Balances 90,37075" 217970,019 1.895,067 47,315,296 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 102,051,960 $ 37,363,380 $ 3,329,988 $ 48,367,350 See Notes to Financial Statements 22 CITY OF PALM DESERT BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2018 Special Revenue Capital Funds Projects Funds Other Total Housing Capital Governmental Governmental Authority Properties Funds Funds ASSETS: Pooled cash and investments $ 17,725,742 $ 15.718 $ 36,233.193 $ 165,932,673 Receivables: Accounts 3,932 - 480,609 2,350,390 Assessments - 1,227,632 1,227,632 Notes - - - 1,369,200 Interest 33 81.269 2,587,959 6,282,188 Loans - - 3,381,820 9,817,074 Prepaid costs - - 1.250 156,042 Deposits - - 15,393.231 Due from other governments 449,531 5,333.143 Due from other funds 500,000 8,669.000 Inventories - 4,868 4,868 Property held for resale - - 61,516 Due from component unit - - - 285,000 Restricted assets: Cash and investments with fiscal agent 3,006,404 68.800.391 2,020,373 96,804,305 Advances to Successor Agency - - 13,419.000 27,366,140 TOTAL ASSETS $ 20,736,111 $ 68,897,378 $ 60,306,235 $ 341,052,402 Liabilities, Deferred Inflows of Resources and Fund Balances LIABILITIES: Accounts payable $ 144,139 S 142,630 $ 1,440,533 $ 7,944,071 Accrued liabilities 73,303 - 9,308 286,450 Unearned revenues 13,098 214,635 15,623,162 Deposits payable 527.568 365.096 892.664 Due to other funds - - 4,821,800 6,669,000 TOTAL LIABILITEES 758,108 142,630 6,851,372 31,415,347 DEFERED INFLOWS OF RESOURCES: Unavailable revenue - - 3,807,260 9.705.771 - 3,807,260 9,705,771 FUND BALANCES: Nonspendable - - 1,250 10,510,820 Restricted 8.102,515 68.754,748 21,511,957 169,549,126 Committed 11.875,488 - 4,876,333 76,418,459 Assigned - 23.258,053 38,750,571 Unassigned - - - 4.702.308 Total Fund Balances 19,978,003 68,754,748 49,647,603 299,931,284 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 20,736,111 $ 68,897,378 $ 60,306,235 $ 341,052,402 See Notes to Financial Statements 23 THIS PAGE INTENTIONALLY LEFT BLANK 24 CITY OF PALM DESERT RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2018 Total fund balance for governmental funds $ 299.931,284 Amounts reported for governmental activities in the Statement of Net Position are different because Capital assets net of depreciation have not been Included as financial resources in the govenmental fund activity. 436,029,572 Deferred outflows related to pension and OPEB related items are not included in the governmental fund activity' Pension Contributions made after the measurement date $ 5,396,908 Changes in assumptions 4.911,815 Net Difference between projected and actual earning on plan investments 1,101.808 11,410,531 OPEB Contributions made after the measurement date 1,217,465 Deferred inflows related to pension and OPEB related items are not included in the governmental fund activity' Pension Changes in assumptions (130,710) Differences between expected and actual experiences (2,923,668) (3,054,378) OPEB Net Difference between projected and actual earning on plan investments (49,049) Long-term debt, claims and judgements, net OPEB, and net pension liability are not the governmental fund activity: Bonds (2,658,000) Claims and judgments (360,237) Net OPEB liability (4,120,584) Net pension liability (38,965.978) (46.104.799) Interest on long-term debt is not accrued in governmental funds. but rather is recognized as an expenditure when due. (84,239) Unavailable revenues are not reported as revenues in governmental funds and thus has the effect of decreasing fund balances. For the City as a whole, however, the collection of these receipts increases the net position in the Statement of Net Position and results in revenues in the Statement of Activities. 8.478.139 Internal service funds are used by management to charge the costs of certain activities, such as equipment and compensated absences to individual funds. The assets and liabilities of the internal service fund must be added to the Statement of Net Position. 10,813,615 Net Position of Governmental Activities $ 718,588,141 See Notes to Financial Statements 25 CITY OF PALM DESERT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUN£ 30, 2018 REVENUES: Taxes Special assessments collected Licenses and permits Intergovernmental revenues Rental income Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current - General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay ❑ebt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANNCING SOURCES (USES): Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR Special Revenue Funds Prop A Fire Housing General Measure A Tax Asset Fund $ 52,936,454 $ 2,765.692 $ 5,909,280 S - - 2,237,916 1.144,404 - _ 1,443.808 200,450 1,188,743 - 161,038 - _ _ 1,659,248 - _ _ 1,237,562 254,693 21,772 470,234 149,576 - - - 509,309 75,000 62,247 45,748 59,241,399 3,295,835 9,419,958 515,982 17,836,155 22,668,601 - 13.476,152 - 1835,946 6,490,461 2,871,D83 - - - - - 722,168 161,225 - 19,579 - 49,992,388 2,871,083 13,495,731 722,168 9,249,011 424,752 (4,075,773) (206,186) 1,610,83❑ 3,668,540 - (4,475,837) - _ _ (2,865,007) - 3,668,540 - 6,384,004 424,752 (407,233) (206,186) 83,986,544 21,545,267 2.302,300 47,521,482 $ 90,370,548 $ 21,970,019 $ 1,895p067 $ 47,315,296 See Notes to Financial Statements 26 CITY OF PALM DESERT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2018 Special Capital Revenue Projects Funds Funds Other Total Housing Capital Governmental Governmental Authority Properties Funds Funds REVENUES: Taxes $ $ - $ 295,433 $ 61,906.859 Special assessments collected - 1,207,330 3,446.246 Licenses and permits - 181,645 1,326,049 Intergovernmental revenues 632,541 - 2,217,162 5,682,704 Rental income 6,514,594 - - 6,675,632 Charges for services - - 1,235,573 2,894,821 Investment earnings 264,030 640,924 737,677 3,626,892 Fines and forfeitures - - 12,794 162,370 Miscellaneous 121,443 - 2,072,795 2,886,542 TOTAL REVENUES 7,532,608 640,924 7,960,409 88,607,115 EXPENDITURES: Current: General government - - 1.444,947 19,281,102 Public safety - - 102,903 36,247,656 Parks, recreation and culture - 667,245 1,964,522 6,467,713 Public works - 79,748 3,742,560 12,183,852 Housing and redevelopment 7,243,409 - 557,224 8,522,801 Capital outlay 10,424 291,221 432,973 915,422 Debt service: Principal retirement - - 150,000 150,000 Interest and fiscal charges - 260,971 260,971 TOTAL EXPENDITURES 7,253,833 1p038,214 0,656,100 84,029,517 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 278,775 (397,290) (695,691) 4,577,598 OTHER FINANNCING SOURCES (USES): Transfers in - - 1,333,982 6,613,352 Transfers out (536,434) - (1,301,081) (6,313,352) TOTAL OTHER FINANCING SOURCES (USES) (536,434) - 32,901 300,000 NET CHANGE IN FUND BALANCES (257,659) (397,290) (662,790) 4,B77,598 FUND BALANCES - BEGINNING OF YEAR 20,235,662 69,152,038 60.310,393 295,D53,686 FUND BALANCES - END OF YEAR $ 19,978,003 $ 68,754,748 $ 49,647,603 $ 299,931,284 See Notes to Financial Statements 27 CITY OF PALM DESERT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2018 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the statement of activities are different because' Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. Capital outlay Gain/(loss) on sale and disposal of capital assets Depreciation Repayment of debt principal is an expenditure in the governmental funds. but the repayment reduces long-term liabilities in the statement of net position. Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore. are not reported as expenditures in governmental funds: Net change in accrued interest for the current period Net change in claims and judgments for the current period Pension obligation and OPEB expenses are expenditures in the governmental funds, but reduce the Net Pension Liability and Net OPEB Liability in the statement of net position Pension expense OPEB expense Unavailable revenues are not reported as revenues in governmental funds and thus has the effect of decreasing fund balances. For the City as a whole, however_ the collection of these receipts increases the net position in the Statement of Net Position and results in revenues in the Statement of Activities. Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities. Change in Net Position of Governmental Activities $ 4.877,598 $ 915.422 (252,796) (11,558.228) (10.895.602) 150.000 1,721 38.446 40.167 2.402.162 697,005 3.099.167 819.946 (375.272) $ (2,283,996) See Notes to Financial Statements 28 CITY OF PALM DESERT STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2018 Business -Type Activities - Enterprise Funds Major Fund Other Fund Governmental Parkview Activities - Desert Willow Office Total Internal Golf Course Complex Enterprise Funds Service Funds ASSETS: CURRENT ASSETS: Cash and investments $ 2,803.640 $ 4,809,847 $ 7,613,487 $ 11,058,370 Receivables- Accounts 48,119 50,853 98,972 - Prepaid costs 94,272 174 94,446 36,949 Inventories 199.741 - 199,741 - Due from component unit (PDRFC) 608,947 - 608,947 - TOTAL CURRENT ASSETS 3.754,719 4,860,874 8,615,593 11,095.319 CAPITAL ASSETS: Nondepreciable 53,304,965 - 53.304,965 224.011 Depreciable, net 10,749,583 6,550,579 17,300,162 1,930,487 CAPITAL ASSETS, NET 64,054,548 6,550,579 70,608,127 2,154,498 TOTAL ASSETS $ 67,809,267 $ 11,411,453 $ 79,220,720 $ 13,249.817 LIABILITIES: CURRENT LIABILITIES: Accounts payable $ 757,794 $ 29,428 $ 787,222 $ 49,430 Accrued liabilities 52,135 - 52,135 - Unearned revenues 129,654 8,910 138,564 Deposits payable - 27,829 27,829 Due to other funds 2,000,000 - 2,000,000 - Compensated absences - - - 300,000 Capital leases 562.498 - 562,498 - TOTAL CURRENT LIABILITIES 3.502.081 66,167 3,568,248 349,430 NONCURRENT LIABILITIES: Compensated absences - - - 2,086.772 Capital leases 930,832 - 930,832 - TOTAL NONCURRENT LIABILITIES 930p832 - 930,832 2,086,772 TOTAL LIABILITIES 4,432,913 66,167 4,499,080 2.436.202 Net Position: Net investment in capital assets 62,561,218 6.550,579 69,111,797 2,154,498 Unrestricted 815,136 4,794,707 5,609,843 8.659,117 Total Net Position 63,376.354 11,345,286 74,721,640 10,813,615 Total Liabilities, Deferred Inflows of Resources, and Net Position $ 67,809.267 $ 11.411,453 $ 79,220.720 $ 13,249,817 See Notes to Financial Statements 29 CITY OF PALM DESERT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2018 Business -Type Activities - Enterprise Funds Major Fund Other Fund Governmental Parkview Activities - Desert Willow Office Total Internal Service Golf Course Complex Enterprise Funds Funds OPERATING REVENUES: Fees and rentals $ 7.098.349 $ 1.250,456 S 8,348,805 $ Miscellaneous 125,728 5,447 131.175 Merchandise sales 1,333.924 1,333,924 TOTAL OPERATING REVENUES 8,558,001 1,255.903 9.813t904 - OPERATING EXPENSES: General and administrative 2,405,293 200,410 2,605.703 Cast of merchandise 555.763 - 555,763 - Maintenance and operations 4,578,672 367,603 4,946,275 78,934 Depreciation and amortization 1,062,033 362.802 1A24,835 453,019 TOTAL OPERATING EXPENSES 8,601,761 930.815 9,532,576 531,953 OPERATING INCOME [LOSS] (43,760) 325,088 281,328 (531.953) NONOPERATING REVENUES (EXPENSES) Interest revenue 16,326 58,547 74,873 139,407 Interest expense (161,459) - (161,459) - Gain on disposal of capital assets - - 17.274 TOTAL NONOPERATING REVENUES (EXPENSES) (145,133) 58,547 (86,586) 156,681 INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS & TRANSFERS (188,893) 383.635 194.742 (375,272) CAPITAL CONTRIBUTIONS 167,670 - 167,670 TRANSFERS OUT - (300.000) (300.000) CHANGE IN NET POSITION (21,223) 83,635 62,412 (375,272) NET POSITION - BEGINNING OF YEAR 63,397,577 11.261.651 74.659,228 11,188,887 NET POSITION - END OF YEAR $ 63,376,354 $ 11,345,286 $ 74,721,640 $ 10,813,615 See Notes to Financial Statements 30 CITY OF PALM DESERT STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2018 Major Fund Other Fund Governmental Total Activities - Desert Willow Parkview Enterprise Internal Service Golf Course Office Complex Funds Funds CASH FLOWS FROM OPERATING ACTIVITIES: Receipts From customers S 8,980,556 S 1.254.520 S 10,235.076 5 Payments to suppliers (7,632,052) (564,471) (8,196.523) (59.181) Cash paid to employees for services - - - (196.947) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,348,504 690,049 2,038.553 (266,128) CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES: Interest paid on loan (50.000) - (50,000) Cash received from other funds 1,500.000 1.500.000 Cash paid to other funds - (300,000) (300.000) NET CASH PROVIDED (USED) BY NONCAPITAL AND RELATED FINANCING ACTIVITIES 1,450,000 (300,000) 1,160.000 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchases of capital assets (121,834) (11,522) (133.356) (495.066) Principal paid on leases (405.834) (405.834) Interest paid on leases (111,459) (111.459) - Proceeds from sales of capital assets - - 17,819 NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (639,1271 (11,6221 (650,649) (478,247} CASH FLOWS FROM INVESTING ACTIVITIES: Interest and dividends 16,326 58.547 74.873 139,407 Net Cash Provided (Used) by Investing Activities 16,326 68,647 74,873 139.407 NET INC REA$E (DECREASE) IN CASH AND CASH EQUIVALENTS 2,175,703 437,074 2,612.777 (694,968) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 627.937 4.372.773 5.000.710 11,653,338 CASH AND CASH EQUIVALENTS - END OF YEAR 5 2,803.640 $ 4,809,847 3 7,613,487 S 11,058.370 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED] BY OPERATING ACTIVITIES: Operating income (loss) $ (41760) $ 325.088 $ 281,325 $ (531.9531 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 1.062,033 362,802 1.424,835 453.019 Changes in assets and liabilities: (Increase) decrease in receivables, net 73.626 (21) 73,605 - (Increase) decrease in prepaid costs (35,825) 297 (35.528) (13,269) (Increase) decrease in inventories 65.720 65,720 (Increase) decrease in due from component unit 356.010 356,010 - Inerease (decrease) in accounts payable and accrued liabilities (122,219) 3,246 (118.973) 33.022 Increase (decrease) in deposits payable 1,975 1,975 - Increase (decrease) in unearned revenue (7,081) (3.338) (10.419) Increase (decrease) in compensated absences - - (196.947) Total Adjustments 1,392,264 364,961 1,767,225 275,825 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 1,348.504 $ 690,049 S 2,038,653 $ (256,1281 NONCASH ITEMS: Capital Contributions $ 167,670 S 5 167.670 $ - Capital Lease 1 399 284 1.399.284 See Notes to Financial Statements 31 CITY OF PALM DESERT STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2018 Assets: Pooled cash and investments Receivables Accounts Assessments Accrued interest Prepaid casts Due from other governments Restricted assets: Cash and investments with fiscal agents Capital assets: Capital assets, not being depreciated Capital assets, being depreciated Total Assets Deferred Outflows of Resources: Deferred charge on refunding Total Deferred Outflows of Resources Liabilities: Accounts payable Deposits payable Lang -term liabilities: Due in one year Due in more than one year Advances from City of Palm Desert Interest payable Advances from Housing Authority Total Liabilities Deferred Inflows of Resources: Deferred charge on refunding Total Deferred Inflows or Resources Net Position: Held in trust Total Net Position Private -Purpose Trust Fund Successor Agency to the Palm Desert Redevelopment Agency Agency Private- Funds Purpose Trust Fund S 11,367,398 $ 19.038,309 1,875 - 53,894,172 - 15,197 25.781 - 1,836,915 69.468 50 4,682,972 23,556,767 34.933,959 898,151 $ 70,031,082 $ 80,289,932 S 52,612 $ 52,612 $ - $ 423,159 70.031,082 200,000 17,210,000 239,474,246 - 22.655,000 7,442.195 4.711,140 $ 70,031,082 $ 292,115,740 $ 650,958 $ 650,958 $ (212,424.154) $ (212,424,164) See Notes to Financial Statements 32 CITY OF PALM DESERT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2018 ADDITIONS: Taxes Investment income Gain on disposition and transfer of property Other TOTAL ADDITIONS DEDUCTIONS Housing and development Interest Depreciation TOTAL DEDUCTIONS CHANGES IN NET POSITION NET POSITION - BEGINNING OF YEAR 2T ^I�� I�IiO�iIlixel9 :"_ Private -Purpose Trust Fund Successor Agency to the Palm Desert Redevelopment Agency Private - Purpose Trust Fund 31,863,474 292,418 1,891,106 125 A 50 34,172,148 3,650,937 9,295,985 31,622 12,978,544 21,193,604 (233,617,758) (212,424,1541 See Notes to Financial Statements 33 THIS PAGE INTENTIONALLY LEFT BLANK 34 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies a. Description of the Reporting Entity The City of Palm Desert was originally incorporated on November 26, 1973, as a General Law City. In December 1997, Measure LL was enacted following a vote by Palm Desert residents, which adopted a City Charter. The City operates under a Council -Manager form of government and provides the following services: public safety {;police and fire), highways and streets, public improvements, community development (planning, building and zoning) and general administrative services. The City has defined its reporting entity in accordance with accounting principles generally accepted in the United States of America which provides guidance for determining which governmental activities, organizations and functions should be included in the reporting entity. The Basic Financial Statements present information on the activities of the reporting entity, which include the City of Palm Desert (the primary government) and its component units, entities for which the government is considered financially accountable. Accounting principles generally accepted in the United States of America require that the component units be separated into blended or discretely presented units for reporting purposes. The following criteria were used in determination of blended component units: appointment of the governing board and fiscal dependence. Although legally separate entities, blended component units are, in substance, part of the City's operations. Therefore, they are reported as part of the primary government. Discretely presented component units are reported in a separate column in the basic financial statements to emphasize that they are legally separate from the City. Blended Component Units Following are descriptions of legally separate component units for which the City is financially accountable that are blended with the Primary Government. The governing bodies of these component units are substantially the same with operational responsibility as the City and provides a financial benefit. The Palm Desert Housing Authority (Housing Authority) was established by the City Council in January 1998, and is responsible for the administration of providing affordable housing in the City. The Housing Authority transactions are reported in the governmental funds balance sheet as a major fund. The Palm Desert Financing Authority (Financing Authority) was formed on January 26, 1989. The purpose of the Financing Authority is to issue debt and loan the proceeds to the City and Agency. The Financing Authority's capital related transactions are reported in the governmental fund financial statements in the capital projects funds, and the collection of assessments and payments of debt service is recorded in the fiduciary funds. The City Council of Palm Desert is the governing body for the Housing Authority and Financing Authority. 35 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies (Continued) Separate financial statements are not issued for the Housing Authority and Financing Authority, Discretely Presented Component Unit The Palm Desert Recreational Facilities Corporation (Corporation) was incorporated on February 25, 1997. The purpose of the Corporation is to lease, operate and manage a restaurant and bar in the Desert Willow Golf Course in Paim Desert, California. The Board of Directors of the Corporation appoints an executive director to administer operations. The Corporation is in a separate column to emphasize that it is legally separate from the City and is financially accountable to the City. The two -member board governing the Corporation is appointed by the City Council, the City has authority to approve the Corporation's budget, and the City must approve any debt issued. Complete financial statements of the Component Unit can be obtained from the City's administrative offices. b. Basis of Presentation: Government -Wide Financial Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Expenses reported for functional activities include allocated indirect expenses. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 36 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies (Continued) Fund Financial Statements The accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self -balancing accounts that constitute its assets, liabilities, deferred inflows of resources, fund equity, revenues and expenditures/expenses- Funds are organized into three major categories: governmental, proprietary and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operation fund of the City or meets the following criteria: a. Total assets plus deferred outflows of resources, liabilities plus deferred inflows of resources, revenues or expenditures/expenses of that individual governmental or enterprise fund are at least 10% of the corresponding total for all funds of that category or type: and b. Total assets plus deferred outflows of resources, liabilities plus deferred inflows of resources, revenues or expend itureslexpenses of the individual governmental fund or enterprise fund are at least 5% of the corresponding total for all governmental and enterprise funds combined. c. The government has determined that a fund is important to the financial statement user. The funds of the financial reporting entity are described below: Governmental Fund Types General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue resources (other than major capital projects) that are legally restricted to expenditures for specified purposes - Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term obligation principal, interest and related costs. Capital Projects Funds - Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities. 37 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies (Continued) Proprietary Fund Types Enterprise Funds - The Enterprise Funds account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the City Council is that the costs (expenses including depreciation) of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges. The Primary Government's Enterprise funds consist of the Parkview Office Complex and the Desert Willow Golf Course. Desert Willow Golf Course is operated by a management company. The discretely presented Component Unit's fund consists of the Palm Desert Recreational Facilities Corporation, also operated by a management company. Internal Service Funds - The Internal Service Funds account for financial transactions related to replacement of City -owned vehicles and equipment and to fund compensated absences. These services are provided to other departments or agencies of the City on a cost reimbursement basis. Fiduciary Fund Types Private -Purpose Trust Fund The Successor Agency to the Palm Desert Redevelopment Agency Private Purpose Trust Fund is used to account for the activities of the Successor Agency to the Palm Desert Redevelopment Agency. Aaencv Funds The Aaencv. Special Assessment and Treasurers 1911 Bond Act Funds are used to account for assets held by the City in a custodial capacity as a trustee or as an agent. These assets include deposits placed with the City by developers, individuals and groups to obtain future services, as well as deposits from assessment district's property owners. These deposits are reduced by payments and/or refunds to individuals or entities at some future time. Agency funds are custodial in nature and do not involve measurement of results of operations. The City's Retiree Service Stipend Fund. is used to account for assets held to pay for the retiree service stipend. The major funds are as follows: Governmental Funds The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. 38 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies (Continued) The Measure A Special Revenue Fund - In 1988, Riverside County voters approved a half -cent sales tax, known as Measure A, to fund a variety of highway improvements, local street and road maintenance, commuter assistance and specialized transit projects. This fund is used to collect this tax, and pursuant to the provision of Measure A (Ordinance No. 88-1 and Ordinance No. 02-001 of the County of Riverside) it is restricted for local street and road expenditures only. The Prop A Fire Tax Special Revenue Fund is used to account for all revenues derived from tax collected within the City for upgrading fire protection and prevention. Its use is restricted to obtaining, furnishing, operating and maintaining fire protection and prevention services (currently under contract with Riverside County Fire Department) equipment or apparatus. This fund is reported as a major fund because the tax collected is a voter approved measure. The Housinq Asset Fund is used to account for any funds generated from housing assets of the former Redevelopment Agency to be used for projects that benefit low and moderate income families. The Housing Authority Soecial Revenue Fund is used to account for revenues and expenditures related to rental units owned by the Housing Authority, established in January, 1998. The Caoital Properties Capital Proiects Fund is used to account for the cost of city owned properties that will either be sold or for the construction of public facilities, and the proceeds of bond funds for capital related properties. Proprietary Fund The Desert Willow Golf Course Fund is used to account for the fees collected and expenses incurred in connection with operating the municipal golf course in the City of Palm Desert. c. Measurement Focus and Basis of Accounting Measurement focus is a term used to describe which transactions are recorded within the various financial statements. Basis of accounting refers to when transactions are recorded regardless of the measurement focus applied. On the government -wide Statement of Net Position and the Statement of Activities, both governmental and business -like activities are presented using the economic resources measurement focus. The accounting objectives of the economic measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position and cash flows. All assets, deferred outflows of resources, liabilities and deferred inflows of resources (whether current or noncurrent) associated with their activities are reported. In the fund financial statements, the "current financial resources" measurement focus or the "economic resources" measurement focus is used as appropriate: 39 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies (Continued) 1. All governmental funds utilize a "current financial resources" measurement focus. Only current financial assets. deferred outflows of resources, current liabilities and deferred inflows of resources are generally included on their balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period. 2. The proprietary fund and private purpose trust fund utilize an "economic resources" measurement focus. Proprietary fund and private purpose trust fund equity are classified as net position. 3. Agency funds are not involved in the measurement of results of operations: therefore, measurement focus is not applicable to them. Basis of Accounting In the government -wide Statement of Net Position and Statement of Activities, both governmental and business -like activities are presented using the accrual basis of accounting. Under the accrual basis of accounting. revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange -like transactions are recognized when the exchange takes place. In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when "measurable and available". Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. Revenues that are susceptible to accrual include property taxes and special assessments that are levied for and due for the fiscal year and collected within 60 days after year-end. Licenses. permits, fines, forfeits, charges for services and miscellaneous revenues are recorded as governmental fund type revenues when received in cash because they are not generally measurable until actually received. Revenue from taxpayer assessed taxes, such as sales taxes, are recognized in the accounting period in which they became both measurable and available to pay liabilities of the current period. Grants and similar items are recognized as soon as all eligibility requirements imposed by the provider have been met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However debt service expenditures as well as expenditures related to compensated absences and claims and judgments. are recorded only when payment is due. Interfund activity has been eliminated from the general government function for the government -wide financial statements except for charges between the government's Desert Willow Golf Course and Parkview Office Complex funds and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues for the various functions considered. The accrual basis of accounting is followed by the proprietary fund and private purpose trust fund. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic assets are used. 40 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies (Continued) Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund's principal ongoing operations. The principal revenue of the Desert Willow Golf Course and Parkview Office Complex Enterprise Funds are charges to customers for use of the golf course and rental fees. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses. d. Deferred Outflowsllnflows of Resources In addition to assets, the statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferrers outflows of resources, represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expenselexpenditure) until that time. The City has the following items that qualify for reporting in this category: • Deferred amount on refunding. A deferred amount on refunding results from the difference in the carrying value of the refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. • Deferred outflows related to pensions and OPEB. This amount is equal to employer contributions made after the measurement date of the net pension liability and net ❑PEB liability. ■ Deferred outflows related to pensions resulting from the difference in projected and actual earnings on investments of the pension plan fiduciary net position. These amounts are amortized over five years. • Deferred outflows of resources related to pensions arising from a change in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plan, which is 3.0 years. In addition to liabilities, the statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources revenue) until that time. The City has the following items that qualify for reporting in this category: ■ Deferred inflows from unavailable revenue, which arises under a modified accrual basis of accounting is reported only in the governmental fund balance sheet. The governmental funds report unavailable revenues from the following sources rent, investment income, grants, notes receivables collections and reimbursements. These amounts are unavailable and recognized as an inflow of resources in the period that the amounts become available. 41 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies (Continued) Deferred inflows related to pensions for differences between expected and actual experience. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plan, which is 3.0 years. • Deferred inflows from pensions resulting from changes in assumptions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions through the plan. which is 3.0 years. Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The recognition period differs depending on the source of the gain or loss Net difference between projected and actual 5 years earnings on OPEB plan investments All other amounts Expected average remaining service lifetime (EARL) (5.44 years at June 30. 2017 measurement date) e. Net Position Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City's practice to consider restricted - net position to have been depleted before unrestricted - net position is applied. f. Capital Assets and Depreciation Capital assets, which include property, plant. equipment and infrastructure assets (e.g., roads. traffic signals, drainage systems and similar items), are reported in the applicable governmental or business -type activities column in the government -wide financial statements. Capital assets are defined by the City as assets with an initial cost of more than $500 and an estimated life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The City has reported general infrastructure assets acquired in prior and current years. The cost of normal maintenance and repairs that d❑ not add to the value of the asset or materially extend asset lives are not capitalized. 42 IN III WK4122A 16 111*1=1 NOTES TO BASIC FINANCIAL STATEMENTS JCONTINUEaj JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies (Continued) Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated useful lives: Buildings 40 years Improvements other than buildings 20 years Machinery and equipment 5 to 8 years Infrastructure 20 to 75 years g. Appropriations Limit Under Article XIII-B of the California Constitution (the Gann Spending Limitation Initiative). the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or returned to the taxpayers through revised tax rates, revised fee schedules or other refund arrangements. For the fiscal year ended June 30, 2018, proceeds of taxes did not exceed appropriations. h. Investments Investments are reported in the accompanying financial statements at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments. i. Cash and Investments For purposes of the statement of cash flows, the City has defined cash and investments to include cash on hand, demand deposits, investments held in various instruments, and investments held in the California Local Agency Investment Fund (LAIF). California Asset Management Program (CAMP) and Riverside County Treasurer's Pooled Investment Fund. j. Employee Compensated Absences It is the government's policy to permit employees to accumulate earned but unused vacation and sick leave (compensated absences). Vacation pay and sick leave, which are expected to be liquidated with expendable available resources, are reported as expenditure and liability of the governmental fund that will pay it only if they have matured, for example, as a result of employee resignations or retirements. Compensated absences in the amount of $2,386,772, are reported in the Compensation Benefits Internal Service Fund. k. Property Held for Resale The land held for resale is recorded in the Housing Asset Fund as property held for resale at the lower of cost or market. At June 30, 2018, the cost of the property held for resale for various housing properties in Palm Desert totaled $61,516. 43 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 1: Summary of Significant Accounting Policies (Continued) I. Inventories, Prepaid Costs and Deposits Inventory in the amount of $199,741 and $47,624. for the Desert Willow Golf Course Enterprise Fund (Primary Government) and Palm Desert Recreational Facilities Corporation (Component Unit), respectively, are reported at lower of cost or market. Inventory in the amount of $4.868 in the Other Governmental Funds are also reported at lower of cost or market. Inventory and prepaid costs are recorded as an expenditure when consumed rather than purchased. Certain payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid costs in the government -wide and fund financial statements. The Measure A Special Revenue Fund has a deposit in the amount of S15,393.231 with another governmental agency to pay for future construction of a City project. m. Property Tax Calendar Property taxes are assessed and collected each fiscal year according to the following property tax calendar. Lien date: January 1 Levy date: July 1 to June 30 Due date' November 1 - 1st Installment March 1 - 2nd Installment Delinquent date: December 10 - 1 st Installment April 10 - 2nd installment Under California law, property taxes are assessed and collected by the counties up to 1 % of assessed value. plus other increases approved by the voters. The property taxes go into a pool and are then allocated to the cities based on complex formulas prescribed by state statutes. The City accrues only those taxes, which are received within 60 days after the year-end. The City is a participant in the Teeter Plan under the California Revenue and Taxation Code. The County of Riverside has responsibility for the collection of delinquent taxes and the City receives 100% of the levy. n. Restricted Assets Certain proceeds of debt issues, as well as certain resources set aside for their repayment. are classified as restricted assets on the balance sheet because they are maintained in separate trustee bank accounts and their use is limited to applicable bond covenants. In addition, funds have been restricted for future capital improvements by City resolution. o. Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District's California Public Employees' Retirement System (CaIPERS) plans (Plans) and additions toideductions from the Plans' fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this purpose. benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 44 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 1 Note 2: Summary of Significant Accounting Policies (Continued) p. Other Postemployment Benefits (OPEB) For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and the OPEB expense have been determined by an independent actuary. For this purpose. benefit payments are recognized when currently due and payable in accordance with the benefit terms. Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date Measurement Date Measurement Period q. Use of Estimates June 3o, 2017 June 30, 2017 June 30, 2016 to June 30, 2017 The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, include amounts that are based on management's best estimates and judgments. The financial statements include estimates for the value of the capital assets (infrastructure), depreciation expense, the fair value of investments, the amounts reported for the net pension liability and related items (Note 8), the amounts reported for the net pension liability, net OPEB liability and related items (Note 12), and claims payable (Note 6). Accordingly, actual results could differ from the estimates. r. New Accounting Pronouncement— GASS 75 In June 2015, the GASS issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The Statement establishes new accounting and financial reporting for OPEB provided to the employees of state and local governments. Statement No. 75 replaces the requirements of Statements No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple -Employer Plans, for OPEB. GASS Statement No. 75 is effective for periods beginning after June 15. 2017 and was implemented by the City for the fiscal year ending June 30, 2018. Cash and Investments As of June 30. 2018, cash and investments were reported in the accompanying financial statements as follows: Governmental activities $ 273,795,348 Business -type activities 7,613,487 Component unit 120,150 Fiduciary funds 58,645,446 Total cash and investments $ 340,174,431 45 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) .TUNE 30, 2018 Note 2: Cash and Investments (Continued) Cash and investments at June 30, 2018, consisted of the following: Primary Government Demand accounts Petty cash Investments Total cash and investments - Primary Government Component Unit Demand accounts Fiduciary Funds Demand accounts Pooled with primary government Investments Total cash and investments - Fiduciary Funds $ (2,812,107) 22,750 284,198,192 $ 281,408,835 $ 120,150 $ 17,688,778 11,367,398 29, 589, 270 $ 58,645,446 The City of Palm Desert maintains a cash and investment pool that is available for use for all funds. Each fund type's position in the pool is reported on the combined balance sheet as cash and investments. The City has adopted an investment policy, which authorizes it to invest in various investments. Deposits At June 30, 2018, the carrying amount of the deposits was $26,364,219, and the bank balance was $28,382,756. The $2,018,537 difference represents outstanding checks, deposits in transit and other reconciling items. The California Government Code requires California banks and savings and loan associations to secure an Entity's deposits by pledging government securities with a value of 110% of an Entity's deposits. California law also allows financial institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of total deposits. The City Treasurer may waive the collateral requirement for deposits that are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655.. the placement of securities by a bank or savings and loan association with an Agent of Depository has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the Total governmental agency. 46 C�3t�'�i]�J►�►����7�9�:it NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 2: Cash and Investments (Continued) Investments Under provision of the City's investment policy and in accordance with the California Government Code, the following investments are authorized: • United States Treasury bills, notes, bonds or certificates of indebtedness ■ United States government -sponsored agency obligations, participations or other instruments ■ Banker's Acceptances issued by commercial banks • Commercial Paper issued by general corporations • Negotiable Certificates of Deposits, issued by a nationally or state -chartered bank, a savings association, a federal association or by a state -licensed branch of a foreign bank ■ Time Certificates of Deposit issued by qualified public depositories. • Repurchase Agreements sold by authorized brokers ■ Medium -term Notes issued by corporations organized and operating in the United States, or by depository institutions operating in the United States and licensed by the United States or by any state • Money Market Mutual Funds that are registered with the SEC under the Investment Act of 1940 ■ State of California Local Agency Investment Fund (LAIF) that is managed by the State Treasurer's Office • Structured Notes in the form of callable securities or "STRIPS" issued by the United States Treasury, Federal Agencies or government -sponsored enterprises • Local Government Investment Pools GASB Statement No. 31 The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. The City Treasurer is authorized under state and municipal law to invest in various types of securities that meet specified credit quality standards, based upon credit risk ratings assigned by Standard and Poors (S&P), Fitch, or by Moody's Investor Services (Moody's)- Permissible City investments include medium -term notes that are rated "A" or higher at time of purchase: commercial paper that is rated "A-1" or the equivalent; money market mutual funds that are rated "AAA"; and United States Government and Federal Agency securities (the quality of United States Treasury securities is not analyzed since they are not deemed to have credit risk). Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required, when applicable, by the California Government Code, the City's investment policy, or debt agreements, and the rating by Standard and Poor's, Fitch and Moody's as of year-end for each investment type. CV1 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 2: Cash and investments (Continued) Primary Government Minimum Total as of Legal Im/estment Type June 30, 2018 Rating Aaa AAA Other Unrated California Local Agency Imestment Fund $ 900.544 N/A S 5 - $ 5 900,544 California Asset Management Program 58,259,364 N/A 58.259,364 Riverside County Treasurer's Pooled Imestment Fund 68.385.716 NIA 68,385.716 - Medium -Term Corporate Notes 7,466.985 A 1.968,624 5.498.361 Commercial Paper 73,420.540 A11P1 - 73.420.540 - Held by Fiscal Agent: Money Market Deposit Account 73,931.314 NIA - 73.931.314 California Local Agency Imestment Fund 1.833.729 NIA - - 1.833.729 Total $ 284.198.192 $ 70,354,340 $ 58.259.364 5 78.918,901 5 76.655,587 The ratings for the "Other' category above are as follows: Irnestment Type Aa P-1 Total Medium -Term Corporate Notes $ 5,498,361 $ - $ 5.498.361 Commercial Paper - 73.420.540 73.420.540 Total $ 5,498,361 $ 73,420,540 $ 78,918,901 48 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2818 Note 2: Cash and Investments (Continued) Fiduciary Funds Minimum Total as of Legal Investment Type June 30, 2018 Rating Aaa AAA Unrated Califomia Local Agency Imestment Fund $ 701 NIA $ $ - $ 701 California Asset Management Program 5,492 NIA 5,492 - Riwrside County Treasurers Pooled Investment Fund 53,339 NIA 53.339 - - Imestment in City Bonds - Successor Agency RDA 1.290.000 NIA - 1,290.000 Held by Fiscal Agent: Money Market Deposit Accounts Successor Agency RDA 23, 556.767 NIA 23, 556,767 Money Market Deposit Accounts Assessment District 2,128,077 NIA 2,128,077 Califomia Local Agency Imestment Fund - Assessment District 2,554,894 NIA - 2.554,894 Total $ 29, 589, 270 $ 53,339 $ 5,492 $ 29, 530,439 Custodial Credit Risk The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for the investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. As of June 30, 2018, none of the City's deposits or investments were exposed to custodial credit risk. 49 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 2: Cash and investments (Continued) Concentration of Credit Risk The City's investment policy imposes restrictions on the percentage the City can invest in certain types of investments, which the City is in compliance. As of June 30, 2018, in accordance with GAS Statement No. 40, if the City has invested more than 10% of its total investments in any one issuer then they are exposed to concentration of credit risk. The City is not invested in any one issuer that is more than 10% of its total investments. The City's Investment policy imposes the following restrictions on the maximum percentage it can invest in a single type of investment. Portfolio Single Issuer Issuer Maximum Maximum United States Treasury Bills, Notes, Bonds 100% NIA United States Govemment-Sponsored Agency Securities 100% 30% Banker's Acceptances 40% 30% Commercial Paper 25% 10% Negotiable Certificates of Deposit 30% NIA Time Certificates of Deposit 15% NIA Repurchase Agreements 20% NIA Medium -Term Corporate Notes 30% 10% Money Market Mutual Funds 20% NIA Local Agency Investment Fund (LAIF) $50MIAcct NIA Structured Notes (STRIPS) 20% NIA Local Gmemment Investment Pools 75% NIA NIA - Not Applicable The City's policy is more conservative than state law, which has no issuer concentration limits on federal agency debt. Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy states that the City shall not invest in securities with maturities exceeding five years and the weighted -average maturity of the City portfolio shall not exceed 540 days. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. 50 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 !Vote 2: Cash and Investments (Continued) As of June 30, 2018. the City had the following investments and maturities: Primary Government. Less Than 6 months - 1 year - Over Investment Type 6 months 1 year 3 years 3 years California Local Agency Investment Fund California Asset Management Program Riverside County Treasurers Pooled Investment Fund U.S. Government Sponsored Agency Securities Medium -Term Corporate Notes Commercial Paper Held by Fiscal Agent: Money Market Deposit Accounts California Local Agency Investment Fund Total Investments Fiduciary Funds Investment Type California Local Agency Investment Fund California Asset Management Program Riverside County Treasurer's Pooled Investment Fund Investment in City Bonds - Successory Agency RDA Held by Fiscal Agent: Money Market Deposit Accounts - Successory Agency RDA Money Market Deposit Accounts - Assessment District LAIF - Assessment District Total Investments s 900,544 $ $ $ 58.2 59.364 68.385,716 5,498,361 1.968,624 58.652,890 14,767,650 - 73,931,314 - 1,833,729 - - $ 267,461.918 $ 14,767,650 $ 1,968,624 $ Fair Value $ 900,544 58.259,364 68,385,716 7,466,985 73.420,540 73,931.314 1,833,729 $ 284.198.192 Less Than 6 months - 1 year - Over Fair 6 months 1 year 3 years 3 years Value $ 701 s $ $ - S 701 5.492 - 5,492 53,339 - 53,339 107,000 314.000 869.000 1.290.000 23,556,767 - - 23.556.767 2.128.077 - 2,128,077 2.554.894 - 2,554.894 s 28,406.270 S $ 314,000 S 869.000 $ 29,589.270 Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. 51 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 2: Cash and Investments (Continued) Investment in California Asset Management Program The California Asset Management Program (CAMP) is a public joint powers authority which provides California Public Agencies with investment management services for surplus funds and comprehensive investment management. accounting and arbitrage rebate calculation services for proceeds of tax-exempt financings. The CAMP currently offers the Cash Reserve Portfolio, a short-term investment portfolio, as a means for Public Agencies to invest these funds. Public Agencies that invest in the Pool (Participants) purchase shares of beneficial interest. Participants may also establish individual. professionally managed investment accounts (Individual Portfolios) by separate agreement with the Investment Advisor. Investments in the Pools and Individual Portfolios are made only in investments in which Public Agencies generally are permitted by California statute. The CAMP may reject any investment and may limit the size of a Participant's account. The Pool seeks to maintain, but does not guarantee, a constant net asset value of $1.00 per share. A Participant may withdraw funds from its Pool accounts at any time by check or wire transfers. Requests for same -day wire transfers must be made by 11:00 a.m. that day. Fair value of the Pool is determined by the fair value per share of the Pool's underlying portfolio. Investment in Riverside County Treasurer's Pooled Investment Fund The City is a voluntary participant in the Riverside County Treasurer's Pooled Investment Fund (Pooled Fund). The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro -rats share of the fair value that the Riverside County Treasurer's Office has provided for the entire Pooled Fund (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based upon the accounting records that the Riverside County Treasurer's Office maintains, which are recorded on an amortized cost basis. Fair Value Measurements The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative inputs used to measure the fairvalue of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets in active markets that the City has the ability to access. Level 2: Inputs to the valuation methodology include: ■ Quoted prices for similar assets in active markets; • Quoted prices for identical or similar assets in inactive markets; ■ Inputs other than quoted prices that are observable far the asset: • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. 52 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2818 Note 2: Cash and Investments (Continued) Level 1 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect the City's own assumptions about the inputs market participants would use in pricing the asset (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the City's own data. The asset's level within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The determination of what constitutes observable requires judgment by the City's management. City management considers observable data to be that market data which is readily available, regularly distributed or updated, reliable, and verifiable, not proprietary, and provided by multiple independent sources that are actively involved in the relevant market. The categorization of an investment within the hierarchy is based upon the relative observability of the inputs to its fair value measurement and does not necessarily correspond to City management's perceived risk of that investment. The methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. When available, quoted prices are used to determine fair value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy. When quoted prices in active markets are not available, fair values are based on evaluated prices received by City's asset manager from third party service provider. The following is a description of the recurring valuation methods and assumptions used by the City to estimate the fair value of its investments. For a large portion of the City's portfolio, the City's custodian applies their leveling methodology across all securities in a specific sector (i.e. U.S. Government Sponsored Agency Securities). Inputs to their pricing models are based on observable market inputs in active markets. The Successor Agency Former RDA's investment in City bonds is not tradable and is categorized in Level 3. When valuing Level 3 securities, the inputs or methodology are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. 53 CITY OF PALM DESERT DOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 2: Cash and Investments (Continued) Primary Government Quoted Observable Unobservable Prices inputs Inputs Investment Type Level 1 Level 2 Level 3 Total Medium -Term Corporate Notes S $ 7.466.985 S S 7,466.985 Commercial Paper 73.420,540 73.420.540 Negotiable Certificates of Deposit _ - Total Leveled Investments $ 5 80.887.525 5 80.887.525 Califomia Local Agency Investment Fund' 900,544 California Asset Management Program' 58259.364 Rverside County Treasurers Pooled Investment Fund' 68.385.716 Held by Fiscal Agent. Money Market Deposit Accounts' 73.931.314 California Local Agency Investment Fund' 1-833,729 Total Investment Portfolio $ 284,198,192 Fiduciary Funds Quoted Observable Unobservable Prices Inputs Inputs Investment Type Level 1 Level 2 Level 3 Total Investment in City Bonds - Successor Agency Former RDA S S S 1,290,000 5 1.290,000 Total Leveled Investments 5 5 5 1,290,000 S 1,290,000 California Local Agency Investment Fund' 701 California Asset Management Program" 5.492 Riverside County Treasurers Pooled Investment Fund` 53,339 Held by Fiscal Agent: Money Market Deposit Accounts" - Successor Agency Former RDA 23,556.767 Money Market Deposit Accounts' - Assessment District 2,128.077 LAIF' - Assessment District 2,554,894 Total Investment Portfolio $ 29-589,270 Not subject to fair value measurements 54 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 3: Receivables Primary Government's Governmental Funds Notes and Loans Receivable On August 8, 2006. the City Palm Desert issued $3,165,000 of Limited Obligation Bonds. The proceeds of the Bonds were used to finance the construction of the utility undergrounding and pay the cost of issuance. The debt service on the bonds is to be paid by assessments secured on the property tax rolls of those properties benefiting from the improvements. Bond maturities began September 2, 2007, and continue annually through 2036. The interest rates of the bonds range from 3.85% to 5.15%. The City of Palm Desert is the only bondholder on record for the bonds and reports a receivable in the general fund that corresponds to the outstanding principal on the bonds. As of June 30. 2018, the receivable balance was $1,368,000. The City entered into several individual loan agreements with residents of the Highlands Utility U n d e rg rou n d i n g Assessment District No. 04-01. The loans were issued by the City to pay off the principal of the respective properties assessment. In turn, the residents agreed to pay to the City the full cost of the loan amount plus any accrued interest at a rate of 5.35%. The full amount of the loan along with all accrued interest is due and payable at the earliest of September 2. 2036 or any change in ownership of the property. As of June 30, 2018, the total receivable from the Highlands Deferral Loan Program was $14,978. Pursuant to Health and Safety Code 34176(b), the housing assets of the former RDA have been transferred to the Housing Asset Fund as the successor housing entity. The Housing Asset Fund has a loan receivable for the construction of a multi -family affordable housing development dated June 14. 2001, with a balance of $6,419,855 due from the Palm Desert Development Company. The loan is secured by a Deed of Trust with assignment to property, rent and fixtures on the housing development located in Palm Desert- Interest is earned and due annually at a rate of 1% per annum from the date on which the final certificate of occupancy is issued. Principal on the loan is based on the applicable agency's percentage of positive net cash flow derived from the operations of the Development. The Housing Asset Fund has $421 in home improvement loans and an additional notes receivable of $1,200. Payments of interest and principal are due monthly on these loans. The Community Development Block Grant Special Revenue Fund has $15,613 in a home improvement loan. On August 28, 2008 the City Council approved through resolution the Energy Independence Program (EIP), which is supported by Assembly Bill AB811. The EIP program allowed the City to create the funding mechanism to assist the residents and businesses entering into a loan agreement with the City and providing the money for the borrowers to acquire and install energy efficient improvements. Assembly Bill AB811 allows the City to lien the properties through annual property tax assessments for a period not to exceed 20 years. To date, 279 residents and business owners entered into loan agreements with the City and have completed their improvements through the EIP program, as of June 30, 2018, 105 loans have been repaid. The loans are payable in two annual installments for a period of 5 years to 20 years at an interest rate of 7% annually. On June 30, 2018, the outstanding loans receivable through the EIP Program was $3,366,207. 55 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 3: Receivables (Continued) Pursuant to Health and Safety Code 34176(b), the housing assets of the former RDA have been transferred to the Palm Desert Housing Authority as the successor housing entity. The Housing Authority has loans for several other projects, all of which are secured by a deed of trust. A valuation allowance equal to the loan balance has been recognized since there is a significant possibility that these loans will either become uncoilectible or forgiven by the Housing Authority at a future date if all the terms of the loans have been met. Detailed information for these loans is as follows: Loan Balance Interest Maturity Special Provisions Project Name Outstanding Rate Date Secured By of Loan Self -Help Housing S 429.000 7.25% 30 years Deed of Trust Program or 2024 Loan balance and interest due upon maturity, unpaid balance of loan or interest will bear an interest rate of 12% Horne Improvement $ 340,692 NIA NIA Deed of Trust Loan is payaoie upon cnange or Loans ( 1) transfer of title. refinancing or upon the death of the borrower. Restrictive covenants are placed against property to maintain affordability for up to 45 years in exchange for favorable loan terms. Portola Palms S 104,865 3.00% 30 years Deed of Trust Loan balance and interest will be Mobilehome Park from date forgiven at maturity if debtor does of loan not breach the terms and conditions of either the unit regulatory agreement or note. Desert Rose ( 1) $ 2A52,457 3.00% 30-45 Deed of Trust Loan will be forgiven at maturity years" unless the debtor is in violation of from date the unit regulatory agreement or of loan the deed of trust. Falcon Crest (1) S 5,649,429 3.00% 30-45 Deed of Trust Loan is payable upon change or years" transfer of title. refinancing or from date upon the death of the borrower, of ban Acquisition. $ 190.510 3-00% 30-45 Deed of Trust Loan is payable upon change or Rehabilitation. Resale years Assignment of transfer of title, refinancing or from date Rent upon the death of the borrower. of ban Restrictive covenants are place against property to maintain affordability from up to 45 years in exchange for favorable loan terms. " All properties acquired from the former Red eve lopn-ent Agency after June 2009 will have a 45 year restrictive covenant. (1) Portion of deferred loans are from funding sources other than Housing Authority. 56 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 4: Interfund Receivables, Payable and Transfers Due To/From Other Funds The composition of interfund balances as of June 30, 2018, was as follows: Due To Due From Amount General Fund Other Governmental Funds $ 2,138,000 Desert Willow Golf Course 1,500.000 Housing Asset Fund General Fund 1,547,200 Other Governmental Funds 2,683,800 Other Govemmental Funds Desert Willow Golf Course 500,000 $ 8,569,000 The General Fund advanced $2,138,000 to the Energy Independence Special Revenue Fund to payoff the bonds used to fund energy efficiency and loaned $1,500,000 to Desert Willow Golf Course to fund the daily operations, including the daily operations of the restaurant. The Housing Asset Fund amounts are related to the advances due from the Successor Agency (former Redevelopment Agency) per AB 1484. The Golf Capital Projects Fund advanced $500,000 to Desert Willow Golf Course for operations during the construction phase of the clubhouse and kitchen expansion. Due TolFrom Component Unit Due From Component Unit Major Funds: General Fund Desert Willow Golf Course $ 285,000 608,947 $ 893.947 The receivable by the General Fund is for rent owed by the Palm Desert Recreational Facilities Corporation (PDRFC), and the receivable by the Desert Willow Golf Course represents funds loaned to PDRFC for operation. 57 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 4: Interfund Receivables, Payable and Transfers (Continued) Interfund Transfers The composition of interfund transfers as of June 30, 201S. was as follows: Transfers In Prop A Fire Tax Other Special Governmental Transfers Out General Fund Revenue Fund Funds Totals General Fund 5 - S 3.668.540 $ 807,298 S 4,475,838 Housing Authority Special Revenue Fund Other Governmental Funds Enterprise Fund Parkmew Office Complex Totals 9.750 1-301,080 - 300.000 - S 1.610,830 5 3,668.540 526,684 536.434 - 1.301.080 300kO0 S 1333,982 $ &611352 Transfers are used to: 1. Transfer revenues to provide for capital projects. 2. Transfer revenues to provide for additional resources to pay for expenditures. 3. Transfer to cover future cost of assets. 58 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 5: Capital Assets A summary of changes in capital assets at June 30, 2018, was as follows: Primary Government — Governmental Activities Balance at Balance at June 30, 2017 Transfers Additions Deletions June 30, 2018 Capital assets, not being depreciated Land $ 79,452,532 5 Right-of-way 121,078,691 Construction -in -progress 1.885,789 Internal Service Fund - Construction -in -progress 130,668 Total capital assets, not being depreciated 202,547,680 Capital assets, being depreciated: Buildings 144,174,975 Improvements other than buildings 60,140,409 Machinery and equipment 10,478,840 Infrastructure 241, 725, 688 Equipment- Internal service fund 6.217,457 Total capital assets. being depreciated 462,737,369 Less accumulated depreciation for: Buildings (60, 568,116) Improvements other than buildings (38,060,540) Machinery and equipment (9,667,904) Infrastructure (103,7157190) Equipment - Internal service fund (4,236,129) Total accumulated (216,247,879) depreciation Capital assets, being depreciated, net 246,489,490 Capital assets, net - Governmental Activities $ 449,037,170 5 $ 85,097 $ (248,680) $ 79,288,949 16,954 - 121,095,645 (38,256) 445.974 - 2,293.507 93.343 224,011 (38, 256) 641-368 (248, 680) 202, 902,112 144,174,975 154.567 (24.699) 60,270,277 38.256 212,830 (1557589) 10,574,337 - - 241,725,688 - 402,723 (255,442) 6,364,738 38,256 770,120 (435,730) 463,110,015 (3,499,729) - (64,067,845) - (2,418,434) 20,583 (40,458,391) - (295,470) 155.589 (9,807,785) (5344,595) 595) - (109,059, 785) (453,019) 254,897 (4,434,251) (12,011,247) 431,069 (227,828,057) 38,256 (11,241,127) (4,661) 235,281,958 - $(10,599,759) $ (2537341) $ 438,184.070 59 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 5: Capital Assets (Continued) A summary of changes in capital assets at June 30. 2018, was as follows: Primary Government — Business -Type Activities Balance at July 1. 2017 Additions Deletions Capita assets, not being depreciated: Land Total capital assets, not being depreciated Capital assets. being depreciated. - Buildings and improvements Machinery and equipment Total capital assets, being depreciated Less accumulated depreciation for. Buildings and improvements Machinery and equipment Total accumulated depreciation Total capital assets being depreciated. net Capital assets. net - Business -Type Activities Balance at June 30, 2018 $ 53 304.965 $ $ $ 53.304.965 53.304.965 53.304,965 27.340.012 159.863 27.499.875 6.630.388 1.540.446 (1,547,296) 6.623.538 33.970.400 1.700.309 (1,547.296) 34.123.413 (10.939,629) (890.925) - (11.830.554) (6,006,083) (533.910) 1,547.296 (4,992,697) (16,945.712) (1,424,835) 1.547,298 (16,823,251) 17.024.688 275.474 17.300.162 $ 70.329.653 $ 275.474 $ S 70.605.127 Depreciation expense was charged to functionslprograms of the primary government as follows: Governmental Activities: General government Housing and redevelopment Public safety Public works Parks, recreation and culture Depreciation expenses for internal service funds is charged to various functions based on usage of capital assets Total depreciation expense - governmental activities Business -Type Activities: Parkview Office complex Desert Willow Golf Course Total depreciation expense - business -type activities $ 2,085,099 1,706,242 107,145 5,891,456 1,768,286 453,019 $ 12,011,247 $ 362,802 1,062, 033 $ 1, 424, 835 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 6: Long -Term Liabilities The following is a summary of long-term liability transactions of the City for the year ended June 30, 2018. Primary Government — Governmental Activities Special assessment debt with gowmment commitment Limited obligation improvement bonds Claims and judgments payable Compensated absences payable Total Balance June 30, 2017 $ 1,410,000 $ 1,398,000 398.683 Balance Due Within Additions Reductions June 30. 2018 One Year S (42.000) S 1,368.000 $ 44,000 (108, 000) 1,290,000 107.000 367.025 (405,471) 360.237 2,583,719 1,309,296 (1,506,243) 2,386,772 300,000 S 5,790,402 S 1,676,321 S (2,061,714) $ 5,405,009 $ 451,000 Debt service payments for the special assessment debt with government commitment, tax allocation bonds and notes payable are made from debt service funds and a special revenue fund. The City historically allocates costs to liquidate liabilities for compensated absences and pension liability based on the allocation of the employees earning the respective benefits and their respective payroll expense to various fund across the City. Primary Government — Business -type Activities Balance Balance Due Within June 30, 2017 Additions Reductions June 30, 2018 One Year Capital leases S 499,881 $ 1,399,284 $ (405,835) 5 1,493.330 S 562.498 Special Assessment Debt with Government Commitment Hiahlands Underoroundina Assessment District No. 04-01, Limited ❑bliciation Improvement Bonds. Series 2006 On August 8, 2006, the City Palm Desert issued $3,165,000 of Limited Obligation Bonds. The proceeds of the Bonds were used to finance the construction of the utility undergrounding and pay the cost of issuance. The debt service on the bonds is to be paid by assessments secured on the property tax rolls of those properties benefiting from the improvements. In the event that assessment collections are insufficient to pay the debt service, the City has a potential obligation to provide additional funds to pay the debt service, therefore these bonds are reported as special assessment debt with government commitment. Bond maturities begin September 2, 2007, and continue annually through 2 036 . The interest rates of the bonds range from 3.85% to 5.15%. The City of Palm Desert is the only bondholder on record of the bonds and the City does not own the constructed assets. 61 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 6: Long -Term Liabilities (Continued) The future debt service requirements on the Highlands Undergrounding Assessment District No. 04-01, Limited Obligation Improvement Bonds, Series 2006 are as follows: Year Ending June 30, Principal Interest Total 2019 $ 44,000 $ 68,895 $ 112,895 2020 47,000 66,653 113,653 2021 49,000 64,265 113,265 2022 52,000 61,727 113,727 2023 54,000 59,037 113,037 2024-2028 315,000 249,650 564,650 2029-2033 404,000 157,899 561,899 2034-2037 403,000 42,874 445,874 Total $ 1,368,000 $ 771,000 $ 2,139,000 Limited Obligation Bonds Limited Obliaation Improvement Bonds Series 2009A (Taxable] On January 29, 2009, the City issued $2,015,000 Limited Obligation Improvement Bonds Series 2009A (Taxable). The proceeds of the Bonds were used to fund the City's Energy Independence Program. Concurrent with the issuance of the Bonds, the City entered into a bond purchase agreement with the Agency whereby the Agency agreed to purchase the Bonds equal to par value. The Series 2009A (Taxable) bonds consist of $2,015,000 Serial Bonds with interest at 3% payable semiannually on September 2 and March 2. Bond maturities commenced September 2, 2010, and continue annually through September 2, 2029. The future debt service requirements on the Limited Obligation Improvement Bonds Series 2009A (Taxable) are as follows: Year Ending June 30, Principal Interest Total 2019 $ 63,000 $ 21,825 $ 84,825 2020 64,000 19,920 83,920 2021 58,000 18,090 76,090 2022 59,000 16,335 75,335 2023 61,000 14,535 75,535 2024-2028 318,000 44,220 362,220 2029-2030 136,000 4,050 140,050 Total $ 759,000 $ 138,975 $ 897,975 62 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 6: Long -Term Liabilities (Continued) Limited Obligation Improvement Bonds Series 2009E (Taxable) On September 2, 2009, the City issued $1,136,000 Limited Obligation Improvement Bonds Series 2009B (Taxable). The proceeds of the Bonds were used to fund the City's Energy Independence Program. Concurrent with the issuance of the Bonds, the City entered into a bond purchase agreement with the Agency whereby the Agency agreed to purchase the Bonds equal to par value. The Series 2009B (Taxable) bonds consist of $1,136,000 Serial Bonds with interest at 3% payable semiannually on September 2 and March 2. Bond maturities commenced September 2, 2010, and continue annually through September 2, 2029. The future debt service requirements on the Limited Obligation Improvement Bonds Series 2009B (Taxable) are as follows: Year Ending June 30, Principal Interest Total 2019 $ 44,000 $ 15,270 $ 59,270 2020 45,000 13,935 58,935 2021 43,000 12,615 55,615 2022 45,000 11,295 56,295 2023 46,000 9,930 55,930 2024-2028 219,000 29,235 248,235 2029-2030 89,000 2,715 91,715 Total $ 531,000 $ 94,995 $ 625,995 Claims and Judgments Payable Estimates for all workers' compensation and general liabilities up to the self -insured levels have been recorded as long-term liabilities. At June 30, 2018, total estimated workers' compensation and general liability claims payable, including a provision for incurred but not reported claims, were $141,272 and $218,965, respectively, for a total claims and judgments payable of $360,237. Changes in claims liabilities during the past two years are as follows. Claims payable - Beginning of year Incurred claims (including IBNR) and changes in estimates Claims payments Claims payable - End of year June 30, 2017 $ 324,332 503,647 (429,296) $ 398,683 June 30, 2018 $ 398,683 367,025 (405,471) $ 360,237 63 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 6: Long -Term Liabilities (Continued) Business -type Activities — Capital Leases Obligations under capital leases are as follows De Lange Landen Public Finance LLC - The present value of the minimum lease payment on the Club Car cart fleet equipment was capitalized at $976.366 using an interest rate of 2.99%. Lease is payable in 48 months, commencing on October 1, 2014: scheduled in 24 periods during the months of February through July of each year of the lease. Payments are $33,671. There are no payments scheduled from August through January of each year. Interest accrues each month. The lease agreement was executed on August 11, 2014. $ 274,175 GPSI Leasing, LLC - The present value of the minimum lease payment on the GPSI Visage Goff Cart GPS System was capitalized at $303,530 using an interest rate of 16.66%. On December 27, 2013 GPSI lease was amended to extend for an additional 31 months and lower the payment to $7,044. The amended lease was payable in 48 monthly installments of $7,044 beginning January 1, 2014. On August 4, 2017 GPSA lease was amended to extend the Initial term of the lease to expire on December 26, 2018. All other attributes of the original lease as amended on December 27. 2013 remained the same. 19.650 PNC Equipment Finance LLC - The present value of the minimum lease payment on the Toro golf course maintenance equipment was capitalized at $1,399,284 using an interest rate of 2.95%. Lease is payable in 60 monthly installments of $25,078 beginning on October 1, 2017. The lease was executed on June 21, 2017, 1,199,505 Present value of net minimum lease payments Less: current portion 1,493,330 (562,498) $ 930,832 The following is a schedule, by year, of future minimum lease payments and present value of the net minimum lease payments for capital leases as of June 30, 2018: Year Ending June 30, 2019 2020 2021 2022 2023 Total Less: amounts representing interest Present value of net minimum lease payments The assets acquired through capital lease are as follows: Machinery and equipment Less: accumulated depreciation Minimum Lease Payments $ 620,468 300,933 300,933 300,933 75,233 1,598.500 (105,170) $ 1,493,330 5 2,878,011 (1, 634, 085) 64 $ 1,243, 926 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 7: Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. Pursuant to changes in August 1996, of IRC Section 457, in January 1997, the City established a trust in which all assets held by Nationwide Retirement Solutions, Inc. (NRS) and ICMA Retirement Corporation (ICMA) were placed. The City does not have fiduciary responsibility for the plan assets held by NRS and ICMA. The assets, all property and rights purchased with such amounts and all income attributable to such amounts are held in trust for the exclusive benefit of the participants and the beneficiaries. The assets are no longer the property of the City, and as such, are no longer subject to the claims of the City's general creditors. As a result, the assets in the amount of $15,438,281 held by NRS and ICMA of the 457 Plan are not reflected in the City's financial statements. Note 8: Pension Plan a. General Information about the Pension Plan: Plan Description All qualified permanent and probationary employees are eligible to participate in the City's Miscellaneous Plan, agent multiple -employer defined benefit pension plans administered by the California Public Employees' Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plan are established by State statute and City resolution. CaIPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CaIPERS website. Benefits Provided CaIPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees' Retirement Law. The Plan's provisions and benefits in effect at June 30, 2018, are summarized as follows: Hire date Benefit formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of eligible compensation Required employee contribution rates Required employer contribution rates Prior to January 1, 2013 2.7% @ 55 5 years of service monthly for life 50-67 2.0% - 2.7% 7%-8% 35.067% On or after January 1, 2013 2.0% @ 62 5 years of service monthly for life 52-67 1.o%- 2.5% 6.25% 35.067% 1:1.1 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 8: Pension Plan jContinued] Employees Covered At June 30, 2018, the following employees were covered by the benefit terms for all P€ans: Inactive employees or beneficiaries currently receiving benefits 149 Inactive employees entitled to but not yet receiving benefits 75 Active employees 111 Total 335 Contributions Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually an an actuarial basis as of June 30 by CaIPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. b. Net Pension Liability The City's net pension liability for the Plan is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of Plan is measured as of June 30. 2017, using an annual actuarial valuation as of June 30, 2016 rolled forward to June 30, 2017 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. Actuarial Assumptions The total pension liabilities in the June 30, 2016 actuarial valuations were determined using the following actuarial assumptions: Valuation date Measurement date Actuarial cost method Actuarial assumptions: Discount rate Inflation Payroll Growth Projected Salary Increase Investment Rate of Return Mortality rate table " June 30, 2016 June 30, 2017 Entry age normal 7.15% 2.75% 3.00% Varies by Entry Age and Service 7.50 Net of Pension Plan Investment and Administrative Expenses; includes inflation Derived using CalPERS- membership data for all funds All other actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the period from 1997 to 2011. including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at the CaIPERS website under Forms and Publications. CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 8: Pension Plan (Continued) Discount Rate The discount rate used to measure the total pension liability was 7.15% for the Plan, To determine whether the municipal bond rate should be used in the calculation of a discount rate for the plan, CaIPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing of the Plans, the tests revealed the assets would not run out. Therefore, the current 7.15% discount rate is appropriate and the use of the municipal bond rate calculation is not deemed necessary. The long term expected discount rate of 7.15% is applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report called "GASB Crossover Testing Report" that can be obtained from the CaIPERS website under the GASB 68 section. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CaIPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the CaIPERS Board effective on July 1, 2014. New Strategic Real Return Real Return Asset Class Allocation Years 1 - 10 (1) Years 11+ (2) Global Equity 47,00% 4.90% 5.38% Global Fixed Income 19.00% 0.80% 2.27% Inflation Sensitive 6.00% 0 60% 1 39% Private Equity 12.00% 6.60% 6.63% Real Estate 11.00% 2.80% 5.21% Infrastructure and Forestland 3.00% 3,90% 5.36% Liquidity 2.00% -0.40% -0.90% Total 1DO. 00% (1) An expected inflation of 2.5% used for this period- (2) An expected inflation of 3.0% used for this period. 67 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 8: Pension Plan (Continued) c. Changes in the Net Pension Liability The changes in the net pension liability for the year ended June 30, 2018, with a measurement date of June 30, 2017. for the Miscellaneous Plan are as follows: Balance at June 30, 2016 (Valuation Date) Changes in the Year: Service Cost Interest on the Total Pension Liability Difference between Expected and Actual Experience Changes in Assumptions Contributions - Employer Contributions - Employee Net Investment Income Benefit Payments including Refunds of Employee Contributions Administrative expense Net Changes Balance at June 30, 2017 (Measurement Date) Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (Asset) $ 115.826.117 $ 78.278.246 $ 37.547,871 2.204.265 2,204.265 8.558,529 - 8,558.529 (1,895.482) - (1,895.482) 7.367,723 - T367,723 - 5,303,371 (5,303,371) 828,467 (828,467) 8.800.663 (8,800,663) (5.401.531) (5,401,531) - - (115.573) 115.573 10,833.504 9,415,397 1,418.107 $ 126,659,621 S 87,693,643 S 38,965,978 Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City for the Plan, calculated using the discount rate for the Plan, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: 1 % Decrease 6.15% Net Pension Liability $ 56,816,307 Current Discount hate 7.15% Net Pension Liability $ 38, 965, 978 1% Increase 8.15% Net Pension Liability $ 24,279,287 Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued CalPERS financial reports. Changes of Assumptions In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent- L.M Id III Was] 2111112►4111a91�1:1:ir NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 8: Pension Plan (Continued) d. Pension Expense and Deferred ❑utflowsllnflows of Resources Related to Pensions For the year ended June 30, 2018, the City recognized pension expense of $3,479,313, At June 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Pension contributions subsequent to measurement date $ 5,396.908 $ - Difference between actual and expected experience - (2,923,668) Change in Assumptions 4,911,815 (130,710) Net difference between projected and actual earnings on pension plan imestments 1,101,808 Total $ 11,410,531 $ (3,054,378) $5,396,908 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2019. Other amounts reported as deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ending June 30 Amount 2019 $ 164,082 2020 2,970,042 2021 461,800 2022 (636,679) 2023 Thereafter - Total $ 2,959,245 e. Payable to the Pension Plan At June 30, 2018, the City had no outstanding amount of contributions to the pension plan required for the year ended June 30, 2018. Note 9: Fund Balances In the fund financial statements, reserves segregate portions of fund balances that are either not available or have been earmarked for specific purposes. The various reserves established as of June 30, 2018, were as follows: 69 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 9: Fund Balances (Continued) Capital Special Revenue Funds Projects Funo Other Prop AFre Housing Housing Capital Governmental General Fund Measure A Tax Asset Fund Authority Properties Funds Total NonapendapPe: Advances S 8.971.800 S - 5 - 5 - 5 5 - 5 - 5 8.971.800 Loans and notes receivable 1.382 978 - - - - T 382 978 Prepaid casts T54.315 - - 476 - - 1.250 156 042 To tal Non s pe n da b le f0,509,09d - 476 - - 1.250 10.510,820 Restricted for: Capital projects Assessment districts rrprovements - - 2030638 203Q638 Captal bond projects - - 4.944.279 68.754,748 - 73.699.027 Total capital projects - - - 4.944,279 - 68.754.746 2,030.638 75.729.665 Debi service - - 91.368 91.358 Low income housing Protects and progra ins - - - 42.370.541 - - 2.865.798 45.229.339 Apar9rrents _ - - 8.102.515 - 6,102,515 Tonal k>w ricome housing - - 42.370.541 8.102.515 - 2,858 798 53.331.854 FLCec fac:ties Park fac9,ties Childcare f auMres - - - - - - - - 1.416.407 1.332.028 1,416.407 1132,828 Goy facil4ies - - - - 1.656.520 1.656.520 Total pubic !aches - - - - - - 4.405.755 4.405.755 Fiblic set" Fire facilities - 5.895 - - - 1-105.171 1.114 066 Fire operation - - 1.889. f 72 -- - 1,869.172 Police programs & equpmeno - _ - - 94-630 94.630 Total public safety - 1.895.067 - - 3.097.868 Special programs Community projects - - - - 31.510 31.510 Recycling projects - - - - 2.494.126 2.494.126 Special district advertising - - Air quality projects - - - - - - - - 63.586 127.342 63,586 127.342 Landscaping and lighting - - - - - 3.242.212 3.242.212 An construclian 8 rrpruvements - - - - - 1.383 878 1,383,878 Total s pedal programs - _ - - 7,342-854 7-342,654 Street related purposes Cans truction 6 rrprovemerns - 15 652.497 - - - - 15652.497 Slr bet resurfacing - - - - - 1.576.768 1.578.768 Faulrtles maintenance reserve g 317 522 - - 6.317.522 Drainage projects - - - - - - 1.592.857 1.592.$57 Traffic signals projects - - - TOtal streel rotated purposes - 21.970.019 - - - 410.318 410,318 - - - 3.579.943 25.549.962 Total Fes tricted - 21.970.019 1,895,067 47.314.920 8.102.515 68.754.748 21.511.957 769,549,726 Com in itte d t o: Aquatic Center - - - - - 2.134 436 2 134 436 Capital assel replacerrerit - - - - t 8?5 46B - - 11 875,488 Capilal krprovement Projects Reserve 12,297.563 - - Faoklies hilainlenance Reserve 15.541.441 - - - 12.297.553 Liability Reserve 4.0D0,000 _ - - - t5.541.441 glher Fund Stability Reserve 33300,D00 - - _ _ 4, 0D0000 Emergency/Contigency Reserve 11,602,479 - - - - - 3 300 000 Employment 8enefns Reserve - 8.925.165 - - - - - - 11,602.479 Econwric DevelopmenVi-and Acquiliao Resery 4,000.000 - - - - 8.925.165 Energy loan program - - - 4 000000 Total Corn m itteit - 59,666,638 - - - - - 77,875,468 - 2.741.897 4,876,333 2.741.897 76,418,4" Assigned to: General fund operating reserve 14.502.403 Capital protects - - - 14.502403 Facilities rnainlenance reserve - - - - 2.197,824 2.197.824 City capital outlay projects - - - - Total capital projects - - 6,400A00 5.400.000 Property acquisition - - - - 8.597-824 8.697.824 Comrrunny contingency - 444.000 - - - 420.387 420.387 public facilities - _ _ - 444.000 City facilities 51.035 - - parks facftes - - - - - 51 035 Facilities mantenance reserve - - - - - 3,8t2.000 3,812.035 Publfades - - - - - 3,380,100 3,360,178 Golf f Golf facilities - - - - 737,115 737.119 Total public }actliles 51,035 _ - 3,502.1m 3,502,886 Special programs _ - - 11,412.163 11.463.218 Library - - professional services - 487,649 - - - - - 667 255 667 255 Tonal special programs 487.649 - - - - - 487.649 Stireel related purposes - - - 667.255 1.154.904 Street mainle mance 7,421 - Facililies rreinlenance reserve - - - - - 7.421 Traffic signals projects - - _ - - - - 2 160 4T4 2.160414 Total street related purposes 7.421 - Total Assigned - 75,492,508 - - - - 2, f 60 414 2,167,635 LFiass igned - 4,702.306 - - - - - 23,258.Ofi3 38,750,571 Totals S 90,370,548 S 21,970.019 S 1.895.067 - - - S 47,315,296 S 19,975,003 S 66,754.748 - S 49,647,603 S 4.702,308 299,931,284 70 CITY ❑F PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 9: Fund Balances (Continued) The fund balances reported on the fund statements now consist of the following categories: Nonspendable - This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted - This classification includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers or through enabling legislation. Committed - This classification includes amounts that can be used only for the specific purposes determined by a formal action of the City Council. The City considers the adoption of a resolution to institute a formal action of City Council for the purpose of establishing, modifying ❑r rescinding committed fund balances. Assigned - This classification includes amounts to be used by the government for specific purposes but d❑ not meet the criteria to be classified as restricted ❑r committed. This includes amounts that are assigned through adoption of a resolution by City Council. The Council may delegate the ability of an employee or committee to assign uses of specific funds, for specific purposes. Such delegation of authority occurred on September 2711, 2018 and will be in effect for future fiscal years. Unassigned - This classification includes the residual balance for the government's general fund and includes all spendable amounts not contained in other classifications. In other funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed ❑r assigned. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, the City's policy is to apply restricted fund balance first. When an expenditure is incurred for purposes for which committed, assigned or unassigned fund balances are available, the City's policy is to apply committed fund balance first, then assigned fund balance, and finally unassigned fund balance. Note 10: Risk Management a. ❑escription of Self -Insurance Pool Pursuant to Joint Power Agreement The City of Palm Desert is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 116 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self -insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The Authority began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors which operates through a nine -member Executive Committee. 71 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 10: Risk Management (Continued) b. Self -Insurance Programs of the Authority Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for self-insurance programs is based an an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk -sharing pool. Primary Liability Program In the liability program, claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30.000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750.000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $$750.000 to $50 million. are distributed based on the outcome of cast allocation within the first and second loss layers. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs of covered claim for subsidence losses have a sub -limit of $40 million per occurrence. Workers' Compensation The City of Palm Desert also participates in the workers' compensation pool administered by the Authority. In the workers' compensation program claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50.000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2017-18, the Authority's pooled retention is $2 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members. 72 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 10: Risk Management [Continued] c. Purchased Insurance Property Insurance The City of Palm Desert participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. The City of Palm Desert's property is currently insured according to a schedule of covered property submitted by the City of Palm Desert to the Authority. The City of Palm ❑esert's property currently has all-risk property insurance protection in the amount of $243.753.167. There is a $10,000 deductible per occurrence except for non -emergency vehicle insurance, which has a $2,500 deductible. Crime Insurance The City of Palm Desert purchases crime insurance coverage in the amount of $10,000.000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. Special Event Tenant User Liability Insurance The City or Palm Desert further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City of Palm Desert according to a schedule. The City of Palm Desert then pays for the insurance. The insurance is facilitated by the Authority. d. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were no significant reductions in pooled or insured liability coverage in the fiscal year 2017-18. 73 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 11: Unearned Revenues and Deferred inflows of Resources Unearned Revenues Major Govemmental Funds General Fund has received $2,198 in advance rent payments. - Measure A Soecial Revenue Fund has $15,393.231 in funds received from the Successor Agency that are deemed unearned until expenditures are incurred related to construction of interchange. Housing Authoritv Soecial Revenue Fund has other amounts reported as unearned revenues include $13,098 for prepaid rents. Other Governmental Funds Soecial Revenue Funds $105,807 of grant funds are deemed unearned until expenditures are incurred in the Public Safety Police Grants Fund. $12,141 of grant funds are deemed unearned until expenditures are incurred in the Recycling Fund. $33,646 represents the unused portions of prepaid aquatic fees in the Aquatic Center Fund. Capital Projects Fund Capital Projects Reserve fund has $63,041 of unearned revenue represents deposits for street improvements and public facilities, as the funds have not been spent as of June 30, 2018. Business -type Activities The balance of $129,654 represents the unused portions of prepaid golf fees and value of unredeemed gift certificates. The balance of $&910 represents the unearned rent for the Parkview Office. Component Unit The balance of $79,452 represents the unused portions of prepaid banquets. 74 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 11: Unearned Revenues and Deferred Inflows of Resources (Continued) Deferred Inflows of Resources Major Governmental Funds General Fund On March 13. 1997, the former Redevelopment Agency (Agency) purchased land from the City for the purpose of developing a second golf course financed by a note in the amount of $2,055,000. The note has no specific due date. Recognition of the revenue from the sale has been reported as deferred inflows of resources until it becomes available. On March 13, 1997, the City entered into an agreement with subsequent amendments on June 4, 1997, May 18. 2004, and May 12, 2009, with the Palm Desert Recreational Facilities Corporation (Corporation) for the use of property at the City's Golf Resort (Desert Willow). Payment is due when the Corporation's revenues exceed its expenses. At June 30, 2018, the Corporation owed the City rent totaling $285,000, which will be recognized as revenue by the City when the rent is paid by the Corporation. The City entered into several individual loan agreements with residents of the Highlands Utility Undergrounding Assessment District No. 04-01. The residents agreed to pay to the City the full cost of the loan amount plus any accrued interest at a rate of 5.35%- The full amount of the loan along with all accrued interest is due and payable at the earliest of September 2, 2036, or any change in ownership of the property. As of June 30. 2018, $38,628 in interest has been accrued. Recognition of the interest revenue has been reported as unavailable until it becomes due. Interest receivable in the amount of $48,802 on the advance from the General Fund to the Energy Independence Special Revenue Fund, and $495,618 on investments purchased, and $1,662,480 on advances to the Successor Agency is reported as unavailable revenue. Other accounts receivable for reimbursement of court fees in the amount of $19.952, outstanding lien in the amount of $49,562, traffic light reimbursements in the amount of $83,440, county abandoned vehicle reimbursement in the amount of $17,224 and Transient Occupancy tax from hotels in the amount of $90,751 are not available at year end. Housing Asset Fund Uncollected interest on notes receivable of $32,579 due from the Palm Desert Development Company has been reported as unavailable. Interest in the amount of $1,019,475 on advances to the Successor Agency is reported as unavailable revenue. V" CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 11: Unearned Revenues and Deferred Inflows of Resources (Continued) Other Governmental Funds Special Revenue Funds The Community Development Block Grant Special Revenue Fund has $15,613 in a home improvement loan as unavailable. The New Construction Tax Special Revenue Fund has $117,720 in interest on advances to the Successor Agency is reported as unavailable. Interest accrued on loans of $148,595 on loans receivable through the City's EIP Program is reported as unavailable (see Note 3). Caoital Projects Funds The Capital Projects Reserve Capital Projects Fund has $1,440,000 in interest on advances to the Successor Agency is reported as unavailable. The Parks and Recreational Facilities Capital Projects Fund has $857,700 in interest on advances to the Successor Agency is reported as unavailable. Debt Service Fund Assessment receivables in the amount of $1,227,632 represent future assessments to be received from property owners in Highlands Undergrounding Assessment Districts 04-1 to pay for long-term obligations incurred in making capital improvements in the Assessment District, Recognition of the revenue from the assessments has been deferred until it becomes available - Once received, the monies will be used to make annual debt service payments. Note 12: Other Post -Employment Benefits a. Plan Description In addition to the pension benefits described in Note 8, the City provides other post -employment benefits (OPEB) through the California Employers' Retiree Benefit Trust Fund (CERBT), an agent multiple -employer defined benefit healthcare plan administered by the California Public Employees' Retirement System (CaIPERS). All full-time or part-time employees who meet the eligibility requirements for this program may continue their medical coverage through the CaIPERS Health Plan and receive reimbursement from the City for a portion of the costs for the coverage. Separate financial statements for the CERBT may be obtained by writing to CaIPERS at Lincoln Plaza North, 400 Q Street, Sacramento, California 95811, or by visiting the CaIPERS website at www. calpers.ca. aov. 76 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 12: Other Post -Employment Benefits (Continued) Empiovees Hired Prior to January 1. 2008 Eligibility for the stipend requires retirement simultaneously from the City and CalPERS on or after age 5a with at least 10 consecutive years of service with the City. Eligible employees must be covered under the CalPERS Health Plan at the time of retirement and elect to participate in the stipend program within 30 days of retirement. The City's contribution towards the coverage is based on years of service as follows: Consecutive Years of Service City's Contribution With the City at Retirement Percentage 10 years of service 50% 11 years of service 55% 12 years of service 60% 13 years of service 65% 14 years of service 70% 15 or more years of service 75% Emplovees Hired On or After January 1. 2008 Eligibility for the stipend requires retirement simultaneously from the City and CalPERS on or after age 50 with at least 15 consecutive years of service with the City. Eligible employees must be covered under the CalPERS Health Plan at the time of retirement and elect to participate in the stipend program within 30 days of retirement. The stipend is discontinued when the retiree reaches Medicare eligibility age. The City's contribution towards the coverage will be applied to the lowest cost plan and is based on age at retirement and consecutive years of service with the City as outlined in the following table: Consecutive Years of Service at Retirement Age 15 16 17 18 19 20 21 22 23 24 25+ 50 0% 5°/0 10°/0 15°/0 20°/0 25% 30°/0 35°/0 40°Io 45% 50% 51 10% 15% 20% 25% 30% 35% 40% 45% 50% 50% 50% 52 20% 25% 30% 35% 40% 45% 50% 50% 50% 50% 50% 53 30% 35% 40% 45% 50% 50% 50% 50% 50% 50% 50% 54 40% 45% 50% 50% 50% 50% 50% 50% 50% 50% 50% 55+ 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% Employees with at least 5 years of service, not meeting the eligibility requirements for the stipend program, who retire simultaneously from the City and CalPERS are eligible to continue medical coverage through the CalPERS Health Plan. The City is required to pay the CalPERS minimum employer contribution ($128 in 2017 and $133 in 2018) for these employees. 77 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 12: Other Past -Employment Benefits (Continued) EmDlovees Hired On or After Jan uary 1. 2015 Employees are not eligible for either of the defined retiree health benefits plan, but are instead enrolled in the City's ICMA Retirement Health Savings Account. Employees have a mandatory 1% contribution to the Retirement Health Savings Plan and the City matches the 1% contribution. In addition, an employee can participate in the ICMA 401A Governmental Money Purchase Plan with a maximum pre-tax dollar contribution of 10%, with the City maximum match of 2%_ As of June 30, 2017, the date of the most recent actuarial valuation, the City's plan has 110 active employees. EmDlovees Covered - Plan membership, at June 30, 2017, membership consisted of the following: Inactive plan members or beneficiaries 103 Active plan members 110 b. City Contributions to the Plan City contributions to the Plan occur as benefits are paid to retirees and/or to the OPEB trust. c. Net OPEB Liability The City's Net OPEB Liability was measured as of June 30, 2017 and the Total OPEB Liability used to calculate the Net OPEB Liability was determined by an actuarial valuation as of June 30, 2017. Standard actuarial update procedures were used to project/discount from valuation to measurement dates. Actuarial assumptions. The total OPEB liability was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Inflation 2.75% Salary Increase 3.25% per annum Assumed Wage Inflation 3% per annum Investment Rate of Return 6,73% per annum Healthcare cost -trend rates Assumed to start at 7.50% and grade down to 5.00% for years 2024 and thereafter. Retirement Age The City offers the same plans to its retirees as to its active employees, with the general exception that upon reaching age 65 and becoming eligible for Medicare, the retiree must join one of the Medicare Supplement coverages offered under PEMHCA. Mortality Mortality rates used were those published by CAPERS, adjusted to back out 20 years of Scale BB to central year 2008, then projected using the MacLeod Watts Scale 2017 applied generationally. 78 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 12: Other Post -Employment Benefits (Continued) d. Discount Rate GAS 75 requires a discount rate that reflects the following: a) The long-term expected rate of return on OPEB plan investments — to the extent that the OPEB plan's fiduciary net position (if any) is projected to be sufficient to make projected benefit payments and assets are expected to be invested using a strategy to achieve that return: b) A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AAIAa or higher — to the extent that the conditions in (a) are not met. e. Changes in the Net OPEB Liability The changes in the Net OPEB liability for the Plan are as follows. Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Balance at June 30, 2016 (Measurement Date) $ 16,980,271 $ 12,198.460 $ 4,781,811 Changes recognized for the measurement period. Service Cost 346,417 - 346,417 Interest 1.144.106 - 1,144,106 Expected Investment Income - 841.020 (841,020) Employer Contributions 1,255,960 (1,255,960) Administrative Expenses (6,541) 6,541 Benefit Payments (653,187) (653,187) - Investment Experience - 61,311 (61,311) Net Changes in Fiscal Year 2016-2017 837.336 1,498,563 (661,227) Balance at June 30. 2017 (Measurement Date) $ 17,817,607 $ 13,697,023 $ 4,120,584 f. Sensitivity of the Total OPEB Liability and Net OPEB Liability to Changes in the Discount Rate The following presents the Total DPEB liability and Net DPEB liability. as well as what the total OPEB liability and net OPEB liability would be if they were calculated using a discount rate that is 1-percentage point lower t5.73 percent) or 1-percentage-point higher (7.73 percent) than the current discount rate: Discount Rate - 1 % Current Discount Rate Discount Rate +1 % (5.73%) (6.73%) (7.73%) Total OPEB Liability $ 20,159,568 $ 17,817,607 $ 15,876,175 Net OPEB Liability 6,462,545 4.120,584 2,179,152 79 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 12: Other Post -Employment Benefits (Continued) g. Sensitivity of the Total OPEB Liability and Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the Total OPEB liability and net OPEB liability, as well as what the Total OPEB liability and net OPEB liability would be if they were calculated using healthcare cost trend rates that are 1-percentage-point lower (6.50 percent decreasing to 4.00 percent) or 1-percentage-point higher (9.50 percent decreasing to 7.00 percent) than the current healthcare cost trend rates: Total OPES Liability Net OPEB Liability 1 % Decrease (6,50% decreasing to 4.00%) $ 15,65T265 1,960.242 Trend Rate (7.50% decreasing to 5.00%) $ 17,817.607 4.120.584 1% Increase (8.50% decreasing to 6. 00%) $ 20, 763,124 7.066,101 h. OPEB Expense and Deferred ❑utfiowsllnfiows of Resources Related to OPEB For the fiscal year ended June 30. 2018, the City recognized OPEB expense of $643,782. As of fiscal year ended June 30, 2018, the City reported deferred outflows and inflows of resources related to OPEB from the following sources - Difference between projected and actual return on OPEB plan investments Contributions made subsequent to the measurement date Tota I Deferred Outflows Deferred Inflows of Resources of Resources S 5 1.217.465 $ 1,217,465 $ 49.049 49,049 The City will recognize the Contributions Made Subsequent to the Measurement Date in the next fiscal year. In addition, future recognition of the deferred resources is shown below: Measurement Deferred Period ended Outflowsf(Inflows) June 30: of Resources 2015 5 (12,262) 2019 (12, 262) 2020 (12.262) 2021 (12,263) 2022 - Thereafter - Total $ (49,049) CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Nate 13: Special Assessment Debt Below is a summary of the changes in the special assessment bonds payable: Balance at Payments and Balance at Due Within July 1, 2017 Additions Reductions June 30. 20 18 One Year 2003 Assessment Revenue Bonds S 1,695.000 $ $ 170,000 $ 1.525,000 S 170.000 AD 98-1 Limited Obligation Refunding Bonds 130.000 65,000 65.000 65,000 CFD 2005-1 Special Tax Bonds Series 2006A 30,085,000 - 890,000 29.195.000 935,000 AD 2004-2 Limited Obligation Improvement Bonds 22.575.000 640,000 21,935,000 670,000 2008 Special Tax Refunding Bonds 1,630.000 1.630.000 - - Total $ 56,115.000 5 S 3.395.000 $ 52.720.000 $ 1.840,000 The City has Special Assessment Bonds Payable issued under the 1911 and 1915, Special Improvement Acts and the 1982 Mello -Roos Community Facilities Act (1982 Bonds), The City has no iiabiIity to 1911 Act bondholders until assessments have been collected from the property owner. Such liability is then recorded in the Agency Funds. Therefore, the 1911 Bonds are not recorded as liabilities in the accompanying financial statements. The City also has no liability to the 1915 Act bondholders or the bondholders of bonds issued under the 1982 Mello -Roos Community Facilities Act until assessments are collected on the tax rolls. However, the City may take certain actions to assume secondary liability for all or part of 1915 Act Bonds and the 1982 Bonds until such time as foreclosure proceedings are consummated. Special assessment bonds payable, as described below. and are not recorded as long-term liabilities, as these obligations do not constitute a debt or obligation of the City. 81 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 13: Special Assessment Debt (Continued) 2003 Assessment Revenue Bonds In June 2003, the Palm Desert Financing Authority issued $4,423,000 in 2003 Assessment Revenue Bonds. The proceeds were used to purchase three series of limited obligation improvement bonds issued by the City in connection with the financing and refinancing of certain improvements of benefit to property within the City's Assessment District No. 94-2 (Sunterrace), Assessment District No. 94-3 (Merano) and Silver Spur Ranch Utility Undergrounding Assessment District No. 01-01. These bonds were issued under the 1915 Improvement Bond Act to provide funds for public improvements in the respective assessment districts. Debt service requirements to maturity are as follows. - Year Ending June 30, Principal Interest Total 2019 $ 170,000 $ 76,229 $ 246,229 2020 175,000 67,344 242,344 2021 180,000 58,069 238,069 2022 100,000 50,719 150,719 2023 110,000 45,206 155,206 2024-2028 640,000 130,271 770,271 2029 150,000 4,031 154,031 Total $ 1,525,000 $ 431,869 $ 1,956,869 As of June 30, 2018, the principal amounts to be repaid by each assessment district to pay off the loans from the Financing Authority are as follows: Assessment District 94-3 Assessment District 01-1 $ 265,000 1,270,000 $ 1,535,000 Assessment District 98-1 Limited Obligation Refunding Improvement Bonds The bonds were issued in an original amount of $2,955,000 in February 2004, to redeem and defease the outstanding limited obligation improvement bonds of Assessment District No. 98-1, which were issued in 1998. The bonds are secured by unpaid assessments on parcels within the District. Under the 1915 Act, annual assessments on the unpaid assessments sufficient to meet the scheduled debt service requirements are to be included on the regular county tax bills for the assessed parcels for which there are unpaid assessments. Interest rates vary from 1.5% to 5A % with interest payable semi-annually on March 2 and September 2, with principal maturing annually on September 2. 82 CITY OF PALM DESERT MOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 13: Special Assessment Debt (Continued) Debt service requirements to maturity are as follows: Year Ending June 30, Principal Interest Total 2019 $ 65,000 $ 1,658 $ 66,658 Total $ 65,000 $ 1,658 $ 66,658 Community Facilities District No. 2005-1 The bonds were issued in an original amount of $50,000,000 in May 2006, to construct and acquire certain public facilities of benefit to the District, provide for the establishment of a reserve account, provide capitalized interest, and pay the costs of issuance of the bonds. The bonds are secured by and payable from a pledge of net taxes derived from special taxes to be levied by the District on real properties within the boundaries of the District from the net proceeds of any foreclosure actions brought following delinquency in the payment of the special taxes, and from amounts held in certain funds under the indenture. Interest rates vary from 4.0% to 5.5% with interest payable semi-annually on March 1 and September 1, with principal maturing annually on September 1, In May 2007, the 2007 Bonds were issued in the amount of $17,915,000 pursuant to the Bond Indenture in May 2006, as supplemented by a First supplemental Indenture in May 2007, to provide construct and acquire certain public facilities of benefit to the District, provide capitalized interest, and pay the costs of issuance of the 2007 Bonds. The bonds are secured by and payable, on parity with the bonds issued in May 2006 for $50,000,000, from a pledge of net taxes derived from special taxes to be levied by the District on real properties within the boundaries of the District from the net proceeds of any foreclosure actions brought following delinquency in the payment of the special taxes, and from amounts held in certain funds under the indenture. On March 1, 2016, a combined total of $20,885,000 of the outstanding bonds were called. Interest rates vary from 3.875% to 5.20% with interest payable semi-annually on March 1 and September 1, with principal maturing annually on September 1. Debt service requirements to maturity are as follows Year Ending June 30, Principal Interest Total 2019 $ 935,000 $ 1,533,500 $ 2,468,500 2020 980.000 1,485,625 2,465,625 2021 1,030,000 1,435,375 2,465,375 2022 1,080,000 1,382.625 2,462,625 2023 1,140,000 1.325,700 2,465,700 2024-2028 6,635,000 5.643,617 12,278,617 2029-2033 8,680,000 3,610,479 12,290,479 2034-2037 8,715,000 990,414 9,705,414 Total $ 29,195,000 $ 17,407,335 $ 46,602,335 83 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 13: Special Assessment Debt (Continued) Section 29 Assessment District (No 2004-02), Limited Obligation improvement Bonds, Series 2007 In March 2007, the City of Palm Desert issued $29,430,000 Limited Obligation Improvement Bonds. The proceeds of the Bonds will be used to finance certain infrastructure improvements within the City's Section 29 Assessment District (No. 2004-02). The debt service on the bonds is to be paid by assessments secured on the property tax rolls of those properties benefiting from the improvements. The bonds consist of Serial Bonds in the amount of $6,870,000 with interest ranging from 4.00% to 4.70% payable semiannually on March 2 and September 2. Bond maturities begin September 2, 2009, and continue annually through 2019. Term bonds in the amount of $2,525,000 carry an interest rate of 4.75% and mature September 2, 2022. Term bonds in the amount of $5,110,000 carry an interest rate of 5.05% and mature September 2, 2027. Term bonds in the amount of $14,925,000 carry an interest rate of 5.10% and mature September 2, 2037. Debt service requirements to maturity are as follows: Year Ending June 30, Principal Interest Total 2019 $ 670,000 $ 1,086,913 $ 1,756,913 2020 700,000 1,054, 885 1,754,885 2021 735,000 1,020, 979 1,755, 979 2022 765,000 985,354 1,750,354 2023 800,000 948,185 1,748,185 2024-2028 4.660, 000 4,080,324 8,740,324 2029-2033 5,960,000 2,739,975 8,699,975 2034-2038 7,645,000 1,013,753 8,658,753 Total $ 21,935,000 $ 12,930,368 $ 34,865,368 2008 Special Tax Refunding Bonds In December 2007, the City of Palm Desert Communities Facilities District No. 91-1 (Indian Ridge Public improvements) issued $10,935,000 of Special Tax Refunding Bonds, Series 2008 to refund and defease all the outstanding $16,260,000 principal amount of the Palm Desert Financing Authority 1997 Revenue Bonds. These bonds were issued pursuant to the provisions of the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California. These Special Tax Refunding Bonds were paid off during the current fiscal year. Bond Reserve Requirements At June 30, 2018, the fund balance reserve requirements and actual reserve balances were as follows: Assessment District 98-1 2003 Financing Authority Revenue Bonds CFD 2005-1 Special Tax Bonds Assessment District 29 Requirement Actual $ 66,658 $ 68,651 222,372 234.011 2,468,500 2,559,689 1,756,913 1,806,018 84 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 14: Other Disclosures The Palm Desert Recreational Facilities Corporation has a deficit of $837,361, which will be eliminated by increasing revenues through banquet reservations and outings directly related to the expansion of the outside dining terrace and the kitchen. The Fiduciary Private -Purpose Trust Fund has a deficit of $212,424,154, which will be funded through future property taxes collected by the County under the direction of the State. The State of California is the responsible body for the elimination of this deficit. s Note 15: Construction and Other Significant Commitments Construction Commitments Primary Government Project General Fund Parks I Recreation City Owned Buildings Improvements Street Improvements ADA Compliance Assistance Program CDBG Building & Safety Microfilm Conversion Governmental Software Implementation Promotion Advertising 1 Rebranding Urban Plan Hotel Feasibility Misc. Non -Construction Measure A Street Improvements Prop A Fire Fund City Owned Buildings Improvements Capital Properties San Pablo Improvements Presidents Plaza Parking Lot Improvements Other Governmental Funds Parks 1 Recreation City Owned Buildings improvements Street Resurfacing Street Improvements Recycle Projects CDBG Governmental Software Implementation Alessandro West I mprovement Project Drainage Improvements El Paseo Art Exhibit Landscape and Lighting Misc. Non -Construction Current Year Prior Year Remaining Spent Spent Commitment $ 41,510 $ - $ 129,376 4,430 9.000 51,035 - - 7,421 141,500 - - 957 - - 58.916 5,457 - 10,194 54,306 - 8.664 20,554 - 6,446 6,810 14,535 28,655 192,485 - 102,942 14,880 - 16,452 - - 5,895 283,429 607,726 - - 606.120 9,032 4,056 - 164,587 1,264,776 - 465,823 780 - 19,763 16,950 48,050 90,068 - 77,890 92,379 - 64,884 5,032 12.904 37,999 162,659 129,716 221,113 - 36,416 9,000 11,060 - 2,415 15,692 - 2,408 $ 2,287,313 $ 202,571 $ 2,905,263 85 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 15: Construction and Other Significant Commitments (Continued) Fiduciary Funds Current Year Prior Year Remaining Protect Spent Spent Commitment El Paseo Revitalization $ - S 3.709 S 131.714 Sewer Rent Payment 93,115 - 2,898.211 $ 93,115 S 3.709 S 3,029,925 Note 16: Dissolution of California Redevelopment Agencies and Wind -Down by Successor Agencies Pursuant to AB X1 26 (adopted by the California Legislature in June 2011) and the State Supreme Court's decision in California RedeveloprnentAssociation, et at v. Ana Matosantos. et al., 53 Cal. 4th 231 (2011), all redevelopment agencies in the State were dissolved as of February 1, 2012, and a successor agency was established for each former redevelopment agency to wind -down the affairs of its former redevelopment agency. Certain actions of each successor agency must first be approved by its oversight board, composed of seven -members representing taxing entities- 0 n August 25, 2011, the City Council adopted Resolution No. 2011-76. pursuant to Health and Safety Code ("HSC") Section 34172, electing for the City to serve as the successor agency ("SARDA") to the former Palm Desert Redevelopment Agency (the "Dissolved RDA"). Although the Board of Directors of the SARDA is comprised of the same individuals as the City Council, HSC Section 34173(g) expressly affirms that the SARDA is a separate public entity from the City,and that the liabilities of the Dissolved RDA shall not be transferred to the City nor shall the assets of the Dissolved RDA become assets of the City. The City elected on February 9, 2012 to have the Palm Desert Housing Authority serve as the Housing Successor. Under HSC Section 34176, the Housing Successor assumed the housing functions of the Dissolved RDA. The Housing Authority (as the Housing Successor) submitted to the State Department of Finance ("DOF") a list of housing assets to be transferred by the SARDA to the Housing Successor. On August 31, 2012, the DOF issued a letter indicating that the DOF did not have any objection to such housing asset list. The housing assets (per the housing asset list), obligations. and activities of the Dissolved RDA were transferred to the Housing Successor and are reported in the Housing Asset Fund beginning in fiscal year 2011-2012. However, outstanding bonds ("Housing Bonds"), secured by a pledge of moneys which would have been deposited into the Dissolved RDA's low and moderate income housing fund (known as the "Housing Set Aside"), remain as the SARDA's enforceable obligations. See also "Stipulated Judgment" below. All other assets, obligations, and activities of the Dissolved RDA have been transferred and are reported in a fiduciary fund {private -purpose trust fund) in the financial statements of the City. Upon dissolution of the Dissolved RDA, the County Auditor -Controller (''CAC") is charged with establishing a Redevelopment Property Tax Trust Fund (the "RPTTF") for the SARDA and depositing into the RPTTF the amount of property taxes that would have been redevelopment property tax increment had the Dissolved RDA not been dissolved. 0 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 16: Dissolution of California Redevelopment Agencies and Wind -Down by Successor Agencies (Continued) The SARDA is required to prepare an annual recognized obligation payment schedule (the "ROPS") approved by the oversight board setting forth the amounts due for enforceable obligations from each July 1 through the following June 30. The ROPS is submitted to the CAC and the DOF for consideration. The CAC only makes payments to the SARDA from the RPTTF based on the ROPS amount approved by the DOF. SARDA was required to conduct due diligence reviews of both the low and moderate income housing fund and all other funds by October 15, 2012 and January 15, 2013, respectively, to compute the funds (cash) which were not needed by the SARDA to be retained to pay for existing enforceable obligations or were otherwise restricted, and therefore, must be remitted to the CAC. The SARDA paid a total amount of $40,988,399 to the CAC based on the due diligence reviews per the DOF's determination. The DOF issued a Finding of Completion on May 15, 2013 after SARDA made the payments required as a result of the due diligence reviews. The Finding of Completion allows the placement of loan agreements between the Dissolved RDA and the City (which were previously voided by operation of law upon the Dissolved RDA's dissolution) on the RODS. On February 23, 2015, the Oversight Board approved Resolution OB-114, making the finding to reestablish the City loans as enforceable obligations of the SARDA. DOF subsequently approved this action on April 10, 2015. When the repayments begin, 20% of each repayment amount will be allocated to the Housing Asset Fund. At June 30, 2018, the long-term advances totaled $22,655,000 (the "Advances"). In the financial statements $9,236,000 is reported in the General Fund and $13,419.000 is reported in Other Governmental Funds. An offset of 20% has been reported as due to other funds in the respective funds totaling $4,531.000, which is based on principal only. See further discussion under Note 17. Pursuant to HSC Section 34191.4(b), unpaid interest on the remaining principal amount of the Advances shall be calculated at a simple rate of 3%. No interest on the Advances has been paid since December 31, 2010. Based on the 3% simple rate. the unpaid accrued interest on the Advances as of June 30, 2018 totaled $5.097,375. The State Controller of the State of California was directed to review the propriety of any transfers of assets between the Dissolved RDA and other public bodies that occurred after January 1, 2011. The State Controller completed its review on March 14, 2013 and did not identify any unallowable transfers of assets that occurred between the Dissolved RDA and the City or other public agencies. The SARDA's use and disposition of all properties held (Long Range Property Management Plan ("LRPMP"), was approved by the DOF on June 2, 2014- The LRPMP allowed the SARDA to transfer property used for government purposes with a cost basis of $6,390,263 to the City. Stioulafed Judgment On May 15, 1991, the Riverside County Superior Court entered a final judgment incorporating the terms of a Stipulation for Entry of Judgment ("Original Stipulation") in Case No. 51124 and a Stipulation for Entry of Judgment pursuant to Settlement Agreement and Mutual Release ("Settlement Agreement") in Case No. 51124, among the Dissolved RDA, the City, the Western Center on Law and Poverty, Inc., California Rural Legal Assistance, and others. On June 18, 1997 and on September 20, 2002, the Riverside County Superior Court amended the judgment. incorporating Stipulations Amending Stipulation for Entry of Judgment. 87 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 16: Dissolution of California Redevelopment Agencies and Wind -Down by Successor Agencies (Continued) The judgment, as amended (the "Judgment"), generally required the Dissolved RDA to use 20% of its tax increment revenues, and additional tax increment revenues if necessary, to develop. rehabilitate, or otherwise financially assist affordable housing units and to meet certain housing needs of the City. Before dissolution, the Dissolved RDA used its Low and Moderate Housing Set -Aside to fulfill its obligations under the Judgment (including the payment of debt service on the Housing Bonds issued to finance and refinance affordable housing projects that satisfied the requirements of both the Judgment and the relevant Redevelopment Law provisions). While the low and moderate income housing fund has been eliminated upon the dissolution of the Dissolved RDA and the requirement to deposit the Housing Set -Aside into such fund, the SARDA continues to recognize the Judgment as its enforceable obligation. On its RODS, the SARDA has included line items designated as "Stipulation Judgment Case No. 51124." listing the amounts necessary to fulfill its obligations under the Judgment (after taking into account the amounts already listed for the repayment of the Housing Bonds). While the DOF originally approved such line items. the DOF changed its position beginning with BOPS 14-15A (i.e., covering the period commencing July 1, 2014). On August 14, 2014. the SARDA filed an action. SARDA to the Palm Desert Redevelopment Agency v. Michael Cohen, Sacramento Superior Court Case No. 34-2014-00167698 (the "Successor Agency Lawsuit"), seeking to compel the DOF to permit payment of the affordable housing obligations mandated by the Judgment. Subsequently, in view of the fact that there were similar cases pending in the California Court of Appeal (Third District), the SARDA voluntarily dismissed its action without prejudice pending resolution of those other cases. To date, none of the other cases has resulted in a decision that would compel the DOF to permit payment of the obligations under the Judgment as an enforceable obligation. Note 17: Successor Agency Disclosures The assets and liabilities of the Dissolved RDA (except for those transferred to the Housing Successor and reported in the Housing Asset Fund) have been transferred to the SARDA. The SARDA is acting in a fiduciary capacity for the assets and liabilities. Disclosures related to these transactions are as follows. - Advances To/From the City of Palm Desert The composition of advances as of June 30. 2018. was as follows: Advances From Advances To Amount General Fund Successor Agency 5 9,236,000 Other Governmental Funds Successor Agency 13,419,000 Housing Asset Fund Successor Agency 4,711,140 $ 27, 366,140 The advances from the General Fund and Other Governmental Funds were made to the Dissolved RDA for capital improvements. The Dissolved RDA's Low Moderate Housing Fund made advances to the Dissolved RDA for the purpose of covering the SERAF payment. Both SERAF and City Ci: CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 17: Successor Agency Disclosures (Continued) Loans were approved by both the Oversight Board and DOF as enforceable obligations of the SARDA. The initial repayments of the SERAF loan have been included and approved with the 15-16A BOPS period. The advances repayable to City Funds are to be repaid with a defined schedule over a reasonable term of years, are subject to a formula distribution pursuant to HSC Section 34191.4, and have a lower priority for repayment relative to the repayment of SERAF loans. The advances related to the borrowing for the SERAF payment have a priority over repayment of the other advances. 20% of the repayment of the other advances not related to the SERAF advances shall be deducted and transferred to the Housing Asset Fund (Housing Authority, as Housing Successor). Balance at July 1, 2017 Capital assets, not being depreciated: Land $ 35.501.118 3 Total capital assets, not being depreciated 35,501.118 Capital assets. being depreciated: Buildings and improvements 1.264,879 Total capital assets. being depreciated 1.264,879 Less accumulated depreciation for Buildings and improvements (335,106) Total accumulated depreciation (335,106) Total capital assets being depreciated, net 929,773 Capital assets, net $ 36,430,891 $ Tax Allocation Bonds Balance at Additions Deletions June 30. 2018 5 (567,159) $ 34,933,959 (567.159) 34,933,959 1,254,879 1,264.879 (31,622) (366,728) (31,622) (366,728) (31,622) 898.151 (31,622) $ (567,159) 3 35.832.110 A summary of changes in tax allocation bonds at June 30, 2018, was as follows: Balance Additional July 1, 2017 Accretion Project Area No. 1 2007A TARRBs, $32,600,000 $ 3.680.000 $ - $ Project Area No. 2 2003 TARBs, $15,745,000 15,745.000 - 2017 Tax Allocation Refunding Bonds 2017 A TAR5a, $52.390.0GO 52.390,000 2017 B TARBs. $140,130,000 140,130,000 2017 H-A TARBs, S7,355.000 7,365.000 2017 H-B TARBs. $45, 815, 000 45, 815, 000 - Subtotal 265.125.000 Add: Unamortized bond premium 8.707.357 Less: Unamortized bond discount (2,276,267) - Total $ 271.556.100 $ $ Repayments/ Balance ❑ue Within Reductions June 30, 2018 One Year (3,680,000) $ - 15.745,000 - (1,385.000) 51,005.000 2,740.000 (2,045.000) 138.085.000 6.545.000 (355.000) 7.010,000 365.000 [6.770,000] 39,045,000 7.560.000 [14,235.000] 250.890.000 17.210.000 771,586 7,935,781 - (134.732) (2,141,535) (13,598.146) $ 256.684,246 $ 17,210.000 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 !Vote 17: Successor Agency Disclosures (Continued) The tax allocation revenues bonds issued before 2011 (i.e., before the dissolution of the Dissolved RDA) were issued by the Palm Desert Financing Authority, the proceeds of which were loaned to the Dissolved RDA for financing or refinancing redevelopment projects. Pursuant to the bond documents. the Authority's bonds were secured by the Dissolved RDA's (and after dissolution, are secured by the Successor Agency's) repayment of the loans, and the repayment of the loans were secured by tax increment (after the Dissolved RDA's dissolution, are secured by certain moneys deposited in the RPTTF, see Notes 16) and other funds as provided in the bond documents. In January 2017, the Successor Agency issued four series of bonds: (i) the Tax Allocation Refunding Bonds, 2017 Series A, in the aggregate principal amount of $52.390.000 (the "2017A Bonds"), (ii) the Taxable Tax Allocation Refunding Bonds, 2017 Series B, in the aggregate principal amount of $140.130,000 (the "2017B Bonds"), (iii) the Tax Allocation Refunding Bonds, 2017 Series H-A, in the aggregate principal amount of $7,365,000 (the "2017H-A Bonds"), and (iv) the Taxable Tax Allocation Refunding Bonds, 2017 Series H-B, in the aggregate principal amount of $45.815,000 (the "2017H-B Bonds"). As further described below, the 2017 refunding refunded all of the outstanding tax allocation revenue bonds, except for the Project Area No. 1 2007A Bonds and the Project Area No. 2 2003 Bonds. None of these bonds or any interest thereon are a debt of the City, the State of California or any of its political subdivisions (except for the Successor Agency), and none the City, the State of California nor any of its political subdivisions (except for the Successor Agency) is liable on the bonds, nor in any event shall the bonds and interest thereon be payable out of any funds or properties other than those provided under the respective bond documents. The remaining outstanding the Project Area No. 2 2003 Bonds are. Project Area No. 1 2007A Bonds {prior to the final pay-off in June 2018) were. insured by MBIA Insurance Corporation ("MBIA"). On February 18. 2009, MBIA announced the restructuring of its financial guaranty insurance operations into two separately capitalized sister companies, with one entity (MBIA Illinois) assuming the risk associated with its US municipal exposures, and the other (MBIA Corp) insuring the remainder of the portfolio. Effective March 19, 2009, MBIA Illinois was renamed National Public Finance Guarantee Corporation ("NPFGC" ). Some (but not all) of the maturities of each series of the 2017 Bonds are insured by Build America Mutual Assurance Company. Tax Allocation Refunding Revenue Bonds (Proiect Area No. 1. as amendedi 2007 Series A On January 9, 2007. the Palm Desert Financing Authority issued $32,600,000 Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended) 2007 Series A. The Palm Desert Financing Authority loaned the bond proceeds to the Dissolved RDA. The proceeds of the bond were loaned to refinance a portion of the outstanding obligations of the Dissolved RDA, fund various redevelopment capital projects within Project Area No. 1, as amended, and pay the costs associated with the issuance of the bonds. The Series A bonds consist of $32,600,000 Serial Bands with interest rates ranging from 3.50% to 5.00% payable semiannually on October 1 and April 1. Bond maturities began April 1. 2008. and continue annually through 2018. The 2007 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended) were paid off as of June 30, 2018- .o] CITY OF PALM DESERT NOTES TO BASIC FINANCIAL. STATEMENTS (CONTINUED) JUNE 30, 2018 Note 17: Successor Agency Disclosures (Continued) 2003 Series Tax Allocation Revenue Bonds (Proiect Area No. 2) On March 26, 2 00 3, the Palm Desert Financing Authority issued $15,745,000 of Tax Allocation Revenue Bonds (Project Area No. 2) 2003 Series. The Palm Desert Financing Authority loaned the bond proceeds to the Dissolved RDA to fund various redevelopment capital projects in Project Area No. 2. Interest rates on the bonds vary from 4.5% to 5.0% per annum payable semi-annually on February 1 and August 1, with principal maturing as follows: $ 875,000 Serial Bonds August 1, 2023 910,000 Serial Bonds August 1, 2024 2,485,000 Term Bonds August 1, 2026 11,475,000 Term Bonds August 1, 2033 The future debt service requirements on the 2003 Series Tax Allocation Revenue Bonds (Project Area No. 2) are as follows: Year Ending June 30, Principal Interest Total 2019 $ - $ 769,006 $ 769,006 2020 - 769,006 769,006 2021 - 769,006 769,006 2022 - 769,006 769,006 2023 - 769,006 769,006 2024 - 2028 5,675,000 3,264,041 8.939,041 2029 - 2033 8,175,000 1,536,876 9,711,876 2034 1,895,000 47,375 1,942,375 $ 15,745,000 $ 8,693,322 $ 24,438,322 2017 Series A Tax Allocation Refunding Bonds On January 31, 2017, the Successor Agency issued the 2017A Bonds, in the principal amount of $52,390,000. The proceeds from the 2017A Bonds were utilized to refund the Project Area No. 1 2002A Bonds, Project Area No. 1 2003 Bond, Project Area No. 1 2004 Bonds, the Project Area No. 2 2002A Bonds, and the Project Area No. 4 1998 Bonds and pay certain costs associated with the issuance of the bonds. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of ($3,569), which is reported as a deferred inflow of resources in the accompanying financial statements and amortized over the remaining life of the refunding debt. The agency completed the refunding to reduce its total debt service payments by $9247,916 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $7,627,413. 91 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS {CONTINUED) JUNE 30, 2018 Note 17: Successor Agency Disclosures (Continued) Interest rates on the bonds vary from 2.00% to 5.00% per annum payable semi-annually on April 1 and October 1, commencing April 1, 2017, with principal maturing annually on October 1. As of June 30, 2018, the outstanding principal balance on the bonds is $51,005,000, The future debt service requirements on the 2017A Bonds are as follows: Year Ending June 30, Principal Interest 2019 $ 2740,000 $ 2,427,050 2020 2,730,000 2,331,350 2021 2,875,000 2,204,875 2022 3,060,000 2,056,500 2023 3,195,000 1,900,125 2024 - 2028 24,995,000 6,385,625 2029-2030 11,410,000 841,250 Total $ 51,005,000 $ 18,146,775 2017 Series B Tax Allocation Refundin❑ Bonds Total $ 5,167,050 5,061,350 5,079,875 5,116, 500 5,095,125 31,380,625 12,251,250 $ 69,151.775 On January 31, 2017, the Successor Agency issued the 2017B Bonds, in the principal amount of $140,130,000. The proceeds from the 2017E Bonds were utilized refund the Project Area No. 1 2006A Bonds, the Project Area No. 2 2006A Bonds, the Project Area No. 2 2006D Bonds, the Project Area No. 3 2003 Bonds, the Project No. 3 2006A Bonds, the Project Area No. 3 2006B Bonds, the Project Area No. 3 2006C Bonds, the Project Area No. 4 2001 Bonds, the Project Area No. 4 2006A Bonds, and the Project Area No. 4 2006B Bonds and pay certain costs associated with the issuance of the bonds. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of ($414,197), which is reported as a deferred inflow of resources in the accompanying financial statements and amortized over the remaining life of the refunding debt. The agency completed the refunding to reduce its total debt service payments by $22,311,587 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $13,310,309. Interest rates on the bonds vary from 1.25% to 4.25% per annum payable semi-annually on April 1 and October 1, commencing April 1, 2017, with principal maturing annually on October 1. As of June 30, 2018, the outstanding principal balance on the bonds is $138,085,000. 92 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 17: Successor Agency Disclosures (Continued) The future debt service requirements on the 2017B Bonds are as follows: Year Ending June 30, 2019 2020 2021 2022 2023 2024 - 2028 2029 - 2033 2034 - 2038 2039 - 2042 Total Principal $ 6,545,000 8.685,000 8,325,000 8,780,000 9,405,000 35, 820,000 30,135,000 27,755, 000 2,635, 000 Interest $ 4,500,828 4,360,800 4,180,294 3,971,400 3,726, 844 14,844, 841 9,533,322 2,783,431 229,606 Tota I S 11,045,828 13,045,800 12,505,294 12,751,400 13,131,844 50,664,841 39.668, 322 30,538,431 2,864,606 $ 138,085,000 $ 48,131,366 5 186,216,366 2017 Series H-A Tax Allocation Refunding Bonds On January 31, 2017, the Successor Agency issued the 2017H-A Bonds, in the principal amount of $7,365,000. The proceeds from the 2017H-A Bonds were used to refund the 2002 Housing Bonds and pay certain costs associated with the issuance of the bonds. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $58,238, which is reported as a deferred outflow of resources in the accompanying financial statements and amortized over the remaining life of the refunding debt. The agency completed the refunding to reduce its total debt service payments by $1,332,840 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $1,063,959. Interest rates on the bonds vary from 2.0G% to 5.00% per annum payable semi-annually on April 1 and October 1, commencing April 1, 2017, with principal maturing annually on October 1. As of June 30, 2018, the outstanding principal balance on the bonds is $7,010,000. The future debt service requirements on the 2017 Series H-A Tax Allocation Refunding Bonds are as follows: Year Ending June 30. 2019 2020 2021 2022 2023 2024 - 2028 2029 - 2032 Principal $ 365,000 S 380,000 395,000 415,000 430,000 2,515,000 2,510,000 Interest Total 310,194 $ 675,194 297,119 677,119 279,644 674,644 259,394 674,394 238,269 668,269 835,718 3,350,718 186,784 2,696,784 Total $ 7,010,000 $ 2,407,122 $ 9,417,122 NQ CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 17: Successor Agency Disclosures (Continued) 2017 Series H-B Tax Allocation Refundino Bonds On January 31, 2017, the Successor Agency issued the 2017H-B Bonds, in the principal amount of $45,815,000. The proceeds from the 2017 H-B Bonds were used to refund the 2007 Housing Bond and pay certain costs associated with the issuance of the bonds. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of ($353,876), which is reported as a deferred inflow of resources in the accompanying financial statements and amortized over the remaining life of the refunding debt. The agency completed the refunding to reduce its total debt service payments by $3,419,425 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $1,617,843. Interest rates on the bonds vary from 1.25% to 3.00% per annum payable semi-annually on April 1 and October 1, commencing April 1, 2017, with principal maturing annually on October 1. As of June 30, 2018, the outstanding principal balance on the bonds is $39,045,000. The future debt service requirements on the 2017H-B Bonds are as follows Year Ending June 30, Principal Interest Total 2019 $ 7,560,000 $ 849,150 $ 8,409,150 2020 7,680,000 710,925 8,390,925 2021 5,735,000 569,606 6,304,606 2022 5,860,000 428,175 6,288,175 2023 6,015,000 268,556 6,283,556 2024 6,195.000 92,925 6,287,925 Total $ 39,045,000 $ 2,919,337 $ 41,964,337 Note 18: Restatement of Net Position In the current fiscal year, the City implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Due to this implementation, the City restated governmental activity net position, as of the beginning of the fiscal year, by the amount of $13,081,531 due to the following: Net Position - beginning of year $ 733,953,668 Decrease in Net OPEB assets (9,432,358) Increase in OPEB liability (4,781,811) OPEB contribution made after measurement date 1,132,638 Changes to beginning Net Position (13,081,531) Net Position - beginning of year, as restated $ 720,872,137 94 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2018 Note 19. Subsequent Events On August 13th. 2018, the City Council, acting as the as governing body of the Successor Agency to the Palm Desert Redevelopment Agency (SA RDA) executed a Purchase and Sale Agreement to sell SARDA owned Desert Willow Lot Pad E. to the City of Palm Desert for the appraised value of $2,670,000. The goals of this comprehensive disposition strategy are to implement the requirements of the Long Range Property Management Plan (LRPMP) and to maximize the property's economic development opportunities that align with the City's Strategic Plan. =1 THIS PAGE INTENTIONALLY LEFT BLANK 0 REQUIRE❑ SUPPLEMENTARY INFORMATION 97 CITY OF PALM DESERT MISCELLANEOUS PLAN -AGENT MULTIPLE -EMPLOYER SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) TOTAL PENSION LIABILITY Service Cost Interest Difference between Expected and Actual Experience Changes in Assumptions Benefit Payments. Including Refunds of Employee Contributions Net Change In Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending (a) PLAN FIDUCIARY NET POSITION Contributions - Employer Contributions - Employee Net Investment Income Benefit Payments Incfuding Refunds of Employee Contributions Administrative Expense Net Change in Fiduciary Net Position Plan Fiduciary Net Position - Beginning Plan Fiduciary Net Position - Ending (b) Plan Net Pension Liabilityl(Assets) - Ending (a) - (b) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability Covered Payroll Plan Net Pension Liabilftyl(Asset) as a Percentage of Covered Payroll 2015 2016 2017 2018 $ 2.156.598 S 2.125,437 $ 2.076.964 $ 2.204.265 7.991.591 8,223.320 8,327.823 8.558.529 - (2.378,254) (4,259,317) (1,895,482) - (2,091,348) - 7.367,723 (4 849.320) (4,597.025) C4,801.252) {5.401.531) 5.298,869 1,282,130 1,344,218 10,833,504 107,900,900 113,199/769 114``481,899 115 826,117 S 113,199,769 $ 114,481,899 S 115.826,117 $ 126U9,621 S 3.320.450 S 4,065.411 $ 4.257.322 $ 5,303.371 995.504 878.171 870.981 828.467 11.290,314 1,682,498 448,184 8,800,663 (4,849,320) (4,597,025) (4.801,252) (5,401,531) (87.279) {47.263) (115.573) 10.756.948 1,941,776 27,972 9,415,397 64,851,550 76,608 498 77,550,274 T8JJ278,245 $ 75.608,498 S 77,550,274 $ 78,278,246 S 87,693,643 S 37.591.271 $ 36.931.626 $ 37,647,871 S 38,965,978 66.79°Ia 67.741 67.581 69,241 S 11.110,759 3 11,448,621 S 11,342,713 S 10,684,238 338.33 I 322.59 % 331.031 364.71 I (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only four years are shown. Notes to Schedule: Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30. 2016 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) Chances of Assumptons: In 2017. the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.} In 2014. amounts reported were based on the 7.5 percent discount rate. See Notes to Required Supplementary information 98 CITY OF PALM DESERT MISCELLANEOUS PLAN - AGENTMULTiPLE-EMPLOYER SCHEDULE OF PLAN CONTRIBUTIONS A$ OF JUNE 30, FOR THE LAST TEN FISCAL YEARS {1j Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered Payroll Contributions as a Percentage of Covered Payroll 2016 2016 2017 2018 $ 3.393.171 $ 3.585,082 $ 3,550,127 $ 4.219.764 (4,065,411) (4,257,322) (5,303.371) (5,396,908) $ (672.240) $ (672.240) $ (1,753,244) $ 11,177,1441 $ 11,448,621 $ 11,342,713 $ 10,684.238 $ 12.033,485 35.51 % 37.53% 49.64% 44.85% (1) Historical information is required only for measurement for which GASB 68 is applicable. Fisca! Year 2015 was the first year of implementation. therefore only four years are shown. Note to Schedule Valuation Date: Methods and assumptions used to determine contribution rates: Actuarial cost method Amortization methodlpenod Asset valuation method Inflation Salary increases Payroll growth Investment rate of return Retirement age Mortality June 30. 2015 Entry age normal Level percentage of payroll, closed Market value 2.75% Varies by entry age and service 3.00% 7.15% net of pension investment and administrative expenses, including inflation. The probabilities of retirement are based on the 2010 CaIPERS Experience Study for the period from 1997 to The probabilities Of retirement are based on the 2010 CaIPERS Experience Study for the period from 1997 to 2007. Pre -retirement and post -retirement mortality rates include 5 years of projected mortality improvement using Scale AA published by the Society of Actuaries. See Notes to Required Supplementary Information 99 CITY OF PALM DESERT SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1 ) Total OPES Liability 2018 Service cost $ 346,417 Interest on the total OPEB liability 1,144,106 Benefit payments (653,187) Net change in total OPEB liability 837,336 Total OPEB liability - beginning 16,980,271 Total OPEB liability - ending (a) $ 17,817,607 Plan Fiduciary Net Position Contribution - employer $ 1,255,960 Net investment income 902,331 Benefit payments (653,187) Administrative expense (6,541) Net change in plan fiduciary net position 1,498,563 Plan fiduciary net position - beginning 12,198,460 Plan fiduciary net position - ending (b) $ 13,697,023 Net OPEB Liability/(Assets) - ending (a) - (b) $ 4,120,584 Plan fiduciary net position as a percentage of the total OPEB liability 76,87% Covered -Employee payroll $ 10,584,400 Net OPEB liability as a percentage of covered payroll 38,93% (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. 100 Cali i'L�I�;ZI�uLI�Y�:�l SCHEDULE OF CONTRIBUTIONS - OPEB AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2018 Actuarially Determined Contribution $ 520,620 Contribution in Relation to the Actuarially Determined Contributions (1,217,465) Contribution Deficiency {Excess} $ (696.845) Covered -Employee payroll $ 10,749,431 Contributions as a percentage of covered payroll 4.84% (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. Notes to Schedule: "Actuarial methods and assumptions used to set the actuarially determined contribution for Fiscal Year 2018 were from the June 30, 2017 actuarial valuation. Methods and assumptions used to determine contributions: Actuarial Cost Method Amortization Valuation Method/Period Asset Valuation Method Inflation Payroll Growth Investment Rate of Return Healthcare cost -trend rates Retirement Age Mortality Change Since the Prior Valuation: Entry Age Normal Level percent of payroll over a closed roiling 15-year period Market value of assets 2.75% 3% per annum, in aggregate 6.73% per annum 7.50%; Medical plan premiums and claims costs by age are assumed to increase once each year. The required PEMHCA minimum employer contribution (MEC) is assumed to increase annually by 4.5%/ Tier 1 employees - 2.50% @55 and Tier 2 employees - 2,00% @62 The probabilities of Retirement are based on the 2014 CatPERS Experience Study for the period of 1997 to 2011. Mortality rates used were those published by CaIPERS, adjusted to back out 20 years of Scale 8B to central year 2008, then projected using the MacLeod Watts Scale 2017 applied generationally. None. The beginning of measurement period liabilities were developed based on a roll back of the July 2017 valuation results. This methodology produces no liability gains or losses between the beginning of the measurement period and the measurement date. 101 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERAL FUND YEAR ENDED JUNE 30, 2018 Variance with Final Budget Budget Amounts Actual Positive Oriqcoal Final Amounts [Negative] Budgetary Fund Balance. July 1 5 83. 1 6.544 $ 83.986.544 S 83.986.544 $ Resources (Inflows): Taxes Property taxes 6.304.500 6.904.500 6.726.940 (177,560) Property transfer tax 550.000 550,000 664.822 114,822 Property tax in lieu 4.035.000 4,035.000 4.051.058 16.058 Timeshare mitigation fee 1.615.000 1.615.000 1,543.762 (71.238) Sales tax 18.800.000 18.630,000 18.627.704 (2,296) Business license tax 1.275.000 1,275,000 1,154.275 (120,725) Job valuation fees 30.000 30.000 18,253 (11.747) Transient occupancy tax 13.650.OD0 16,930.000 17,o19,034 89,034 Franchises 3.250.000 3.250,000 3.097,521 (152:479) Penalties and interest on taxes 35.000 35.000 33.085 {1.915) Total Taxes 49.544,500 53,254,500 52.936.454 (318.046) Licenses and Permits Building permits 579,600 974.600 975.308 708 Grading permits 15.000 15.000 73.665 58.665 Encroachment permits 95.000 95,000 60.567 (34.433) Miscellaneous permits 1.500 1.500 1.155 (345) Business regulatory permits 35,o00 35.000 31.134 (3,866) Golf cart permits - 1, 1. 900 Valet parking permits 5D0 500 75 675 75 175 Total Licenses and Permits 726.600 1.121.600 1.144.404 22.804 Intergovernmental State mandate cost - 12.167 12.167 Motor vehicle in -lieu fees 21,000 21.000 26.709 5,709 Monthly parking bail 7,500 7.500 16,278 8,778 Reimbursement RDA costs 750.000 750.000 842.562 92,562 Other reimbursements 745.000 745`000 546.092 (198.908) Total Intergovernmental 1.523.500 1.523,e66 1,443,808 (79.692) Rental income 160.000 160.000 161,038 1,038 Charges for Services Subdivision fees 200.000 200.000 165.393 (34,607) Zoning fees 120,000 120.000 66.177 (53,823) Plan check fees 450,000 450.000 691.096 241,096 Sale of maps and publications 3,500 3,500 6.706 3.206 Microfilm fees 10.000 10.000 6,727 (3,273) Vehicle impact fee 480,000 480,000 584.487 104.487 Other fees 65,000 65,000 138.662 73,662 Total Charges for Services 1.328.500 1.328.500 1.659,248 330.748 Investment Earnings Interest income 502.500 902.500 996.680 94,180 Interest on notes receivable 175.000 175,000 240,882 65.882 Total investment Earnings 677.500 1.077.500 1.237,562 160,062 Fines and Forfeitures Vehicle code fines 20.000 20,000 58.527 38.527 Municipal court fines 20.000 20,000 2,795 (17.205) VICR fees 75,000 75,000 88.254 13,254 Total Fines and Forfeitures 115.000 115.000 149.576 34,576 Miscellaneous Code compliance 13,000 13,000 88,648 75,648 Strong motion instrument fee 10,000 10,000 - (10,000) Special investigation fee 3.500 3,500 185 (3,315) Certificate of compliance fee 1,675 1,675 900 (775) Nuisance abatement tax 30,000 30,000 - (30.000) Abandoned vehicle abatement 50,000 50,000 75.902 25,902 Fire inspection service 225,000 225,000 88.249 (136.751) Other revenue 75,000 75,000 255``425 180,425 Total Miscellaneous 408,175 408.175 509,309 101.134 Transfers in 1.802,500 1.802,500 1 610,830 (191,670) Amounts Available for Appropriations 140,272,819 144.777,819 141,838,'773 60,954 See Notes to Required Supplementary information 102 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERALFUND YEAR ENDED JUNE 30, 2018 Charges to Appropriation (Outflow): General Government City Council City Clerk Legislative Advocacy Elections City Attorney Legal Special Services City Manager Community Services Finance Independent Audit Human Resources General Services Information Technology Unemployment Insurance Insurance Retiree Funding Contributions to other Agencies Community Promotions Marketing Visitors Info Center Economic Development Center Planning & Community Development Total General Government Public Safety Police Services Animal Regulation Traffic Safety Building and Safety Total Public Safety Parks, Recreation and Culture Civic Center Paris Park Maintenance Landscaping Service Civic Center Park - Improvement Total Parks, Recreation and Cuiture Public Works Administration Street Maintenance Street Resurfacing Curb & Gutter Parking Lot Corporate Yard Auto Fleet! Equipment Public Bldg - OprlMaint. Portola Comm Center Storm Water Permit Total Public Works Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original' Final Amounts (Negative) 282.296 282,296 228,757 53,539 867.485 909,485 909,299 186 36.200 36,200 36,180 20 500 500 394 106 260.000 260,000 251,365 8,635 260.000 310,000 255,026 54,974 559.486 567,227 542.124 25.103 451.145 451,145 389,013 62,132 1.691.600 1.691.600 1,667,081 24.519 85.000 85,000 47,733 37,267 832,047 962.852 899.325 63,527 3,365,400 5.219,365 4,977.560 241,805 958.042 978,101 834,001 144,100 10,000 17.000 16,996 4 558.439 558.439 405.471 152.966 - 250,000 250.000 - 657,500 662,500 547.518 114.982 1.085,000 1,179,881 1.179,305 576 1,303.000 1.222,540 1.177,746 44.794 182,225 182,225 157,183 25,042 964,950 768,945 754.376 14,569 2.444.185 2,322,921 2.309,702 13,219 16, 884.500 18.918, 222 17.836.155 1,082,067 21.955,729 20,555,729 20.506,082 49.647 245.000 245,000 233,933 11.067 253,600 355,659 348,852 7,807 1.790,300 1,690, 300 1.579,734 110,566 24,244,629 22,847,688 22,668,601 179.087 1.109.311 1,148,489 1,105,936 42,553 1.057,686 1.063.754 826,089 237,665 1,868,214 1,947,609 1,817,582 130,027 254,500 279,500 86,339 193,161 4,289,711 4,439,352 3,835,946 603,405 2,537,263 2,453,263 2,333,897 119,366 2,188,600 2.088.600 2,020.797 67,803 - 192.136 2,760 189,376 25.000 35.000 - 35.000 50,000 50,000 11,923 38,077 64,500 68,600 68,508 92 362,000 262.000 223.704 38.296 785,500 785,500 675,740 109.760 75,000 117,000 116,014 985 60,000 60,000 37,118 22.882 6,147,863 6.112.099 5,490.461 621,638 - 162,000 161.225 775 4,698.540 4.478.540 4.475,837 2,703 56,265,243 56,957,901 54,468.225 2,489,676 $ 84,007,576 $ 87,819,918 $ 90,370,548 $ 2,550,630 See Notes to Required Supplementary Information 103 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE MEASURE A YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Intergovernmental Investment earnings Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Actual Original Final Amounts $21,545,267 $ 21,545,267 $21,545,267 2,660,000 2,660,000 2,765,692 3,165,000 3,165,000 200,450 73,000 73,000 254,693 - - 75,000 27,443,267 27,443,267 24,841,102 6,077,000 29,986,596 2,871,083 6,077,000 29,986,696 2,871,083 $ 21,366,267 $ (2,543,329) $ 21,970,019 Variance with Final Budget Positive (Negative) 105,692 (2,964,550) 181,693 75,000 (2,602,165) 27,115,513 27,115,513 $ 24,513,348 See Notes to Required Supplementary Information 104 1011Was] Ra21Riyi■91:61=1:411 BUDGETARY COMPARISON SCHEDULE PROP A FIRE TAX YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Assessments Intergovernmental Charges for services Investment earnings Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Ori inal Final $ 2,302,300 $ 2,302,300 5,560,960 2,115,800 1,050,000 10,000 20,000 3,668,540 14,727,600 12,825, 300 50,000 12,875,300 $ 1,852,300 5,560,960 2,115.800 1, 050,000 300,000 10,000 20,000 3,668,540 15,027,600 13,454,251 50,000 13,504,251 Actual Amounts 5 2, 302, 3D0 5,909,280 2,237,916 1,188,743 21,772 62,247 3,668, 540 15,390,798 13, 476,152 19,579 13,495,731 Variance with Final Budget Positive (Negative) 348,320 122,116 138,743 (300,000) 11,772 42,247 363,198 (21,901) 30,421 8,520 $ 1,523,349 $ 1,895,067 $ 371,718 See Notes to Required Supplementary Information 105 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE HOUSING ASSET FUND YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Investment earnings Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Housing and redevelopment Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $47,521,482 $47,521,482 $47,521,482 $ - 80,000 80,000 470,234 390,234 - - 45,748 45,748 47,601,482 47,601,482 48,037,464 435,982 475,300 1,026,300 722,168 304,132 476,300 1,026,300 722,168 304,132 $ 47,126,182 $46,575,182 $ 47,316,296 $ 740,114 See Notes to Required Supplementary Information 106 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Rents Intergovernmental Investment earnings Miscellaneous Amounts Available for Appropriations Charges to Appropriation [Outflow]: Housing and redevelopment Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 20,235,662 $ 20,235,662 $ 20,235.662 $ - 6,446,228 6,446,228 6,514,594 68,366 - - 632,541 632,541 70,000 70,000 264,030 194,030 - - 121,443 121,443 26,751,890 26,751,890 27,768,270 1,016,380 7,720,418 13,487,677 7,243,409 6,244,268 - 1,772,248 10,424 1,761,824 532,870 532,870 536,434 (3,564) 8,253,288 15,792,795 7,790,267 8,002,528 $18,498,602 $ 10,959,095 $19,978,003 $ 9,018,908 See Notes to Required Supplementary Information 107 CITY OF PALM DESERT NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED JUNE 30, 2018 BUDGETS AND BUDGETARY ACCOUNTING The City used the following procedures in establishing the budgetary data reported in the financial statements: 1. Before the beginning of the fiscal year, the City Manager submits to the City Council a proposed budget for the year commencing the following July 1. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is subsequently adopted through passage of a resolution- 4- Expenditures for the General Fund cannot exceed amounts budgeted at the departmental level, which is the legal level of control. For other funds, expenditures cannot exceed the total amount budgeted for each fund, which is the legal level of control. The City Manager is authorized to transfer appropriations (without council approval) between an object of a General Fund Department. The City Council approves all other changes. Annual appropriation amounts lapse at year-end- 5- Encumbrances and continuing appropriations are rebudgeted as of July 1, by Council action. 6. Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds except for certain special revenue funds and capital projects funds, which adopt project length budgets and debt service funds that are not budgeted as effective budgetary control is achieved through debt indenture provisions. The following funds did not have legally adopted budgets during the current fiscal year: Other Governmental Funds Library Assessment District No. 94-3 Merano Silver Spur Ranch Highlands Undergrounding CFD University Special Assessment District Assessment 29 Illy.] ❑THER GOVERNMENTAL FUNDS COMBINING STATEMENTS 109 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS JUNE 30, 2018 ASSETS: Pooled cash and investments Receivables: Accounts Assessments Loans Interest Prepaid costs Due from other governments Due from other funds Inventories Restricted assets: Cash and investments with fiscal agents Advances to Successor Agency TOTAL ASSETS Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues Total Deferred Inflows of Resources FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Public safety Capital Projects Debt service Street related purposes Low income housing Public facilities Special programs Committed to: Aquatic center Energy loan program Assigned to: Capital projects Property acquisition Public facilities Special programs Street related purposes TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Special Capital Revenue Projects Funds Funds $ 21.763.069 $ 14,270,347 475,999 4,610 3,381.820 - 266,315 2,321,644 1,250 - 442,772 2,132 - 500,000 4,868 - - 2,020,373 654,000 12, 765, 000 $ 26,990,093 $ 31,884,106 Total Other Debt Service Governmental Fund Funds $ 199,777 $ 36, 233,193 - 480,609 1.227,632 1,227,632 - 3,381,820 - 2,587,959 - 1,250 4,627 449,531 - 500,000 - 4,868 2,020, 373 - 13,419,000 $ 1,432,036 $ 60,306,235 $ 1,246,667 $ 190,356 $ 3,510 $ 1,440,533 9,308 - - 9,308 151,594 63,041 - 214,635 148,140 107,430 109,526 365,096 2,268,800 2.553,000 - 4.821,800 3,824,509 2,913,827 113,036 6,851,372 281,928 2,297.700 281,928 2,297.700 1,250 - 1.202.801 - - 2,030,638 3,579,943 - 2,858,798 - 4,405, 755 - 5,958, 776 1,383,878 2,134,436 - 2,741,897 - - 8,597,824 - 42D,387 - 11,412,183 - 667,255 - 2,160.414 22,883,656 26,672,579 $ 26,990,093 $ 31,884,106 110 1.227,632 3,807,260 1,227,632 3,807,260 1,250 1.202,801 2,030,638 91,368 91,368 - 3,579,943 - 2,858,798 - 4,405,755 - 7,342,654 - 2,134,436 - 2,741,897 - 8,597,824 - 420,387 - 11,412,183 - 667.255 - 2.160,414 91,368 49,647,603 $ 1,432,036 $ 60,306,235 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2018 REVENUES: Taxes Special assessments collected Licenses and permits Intergovernmental revenues Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR Special Capital Total Other Revenue Projects Debt Service Governmental Funds Funds Fund Funds $ 295,433 $ $ - $ 295,433 1,072,061 135.269 1,207.330 - 181,645 - 181.645 2,082,629 134,533 - 2,217,162 1.235,573 - - 1,235,573 517,250 218,460 1,967 737,677 12,794 - - 12,794 33,750 2,039,045 - 2.072,795 5,249,490 2,573,683 137,236 7,960,409 997,600 424,743 22,604 1,444,947 83,205 19,698 - 102,903 1,459.940 504.582 - 1,964,522 3,470,473 272,087 - 3,742,560 557,224 - - 557,224 284,629 148,344 - 432,973 108,000 - 42,000 150,000 189,980 - 70,991 260,971 7,151,051 1,369,454 135,595 8,656,100 (1,901,561) 1,204,229 1,641 (695,691) 1,265,361 68,621 - 1,333,982 (13.917) (1,287,164) - (1,301,081) 1,251,444 (1,218,543) (650,117) (14,314) 23,533,773 26,686,893 $ 22,883,656 $ 26,672,579 $ - 32,901 1,641 (662.790) 89,727 50,310,393 91,368 $ 49,647,603 ill THIS PAGE INTENTIONALLY LEFT BLANK 112 OTHER GOVERNMENTAL FUNDS - SPECIAL REVENUE Special Revenue Funds are used to account for proceeds of specific revenue sources other than expendable trust that are legally restricted to expenditures for specific purposes. Traffic Safety Fund - Traffic and court fines are collected in these funds. A transfer from this Fund to the General Fund is made at the end of the fiscal year by council action to be applied toward the eligible expenditures permitted by law. Gas Tax Fund - Portions of the tax rate per gallon levied by the State of California on all gasoline purchases are allocated to cities throughout the State. These funds are restricted to expenditure for transit and street -related purposes. Housing Mitigation Fee Fund - This fund is used to account for fees collected from construction of commercial and office buildings for low and moderate income mitigation purposes to be used strictly for projects and programs that benefit the low and moderate income households. Community Development Block Grant Fund - This fund is used to account for the receipts and expenditures of CDBG funds received from the U.S. Department of Housing and Urban Development. Child Care Program Fund — This fund is used to collect funds from developers for the purpose of providing child care programs. Public Safetv Police Grants Fund - This fund is used to account for grants received from the U.S. Department of Justice under the Local Law Enforcement Block Grant Program for the purpose of purchasing equipment related to public safety. New Construction Tax Fund - This fund is used to account for tax collected upon application to the City for a building permit from every personfentity for the construction of any new building, addition or trailer space in the city according to a fee schedule. Its use is restricted for the acquisition and development of public facilities such as parks, playgrounds and public structures. Planned Drainaae Fund - This fund is used to account for off -site drainage fees based on an established fee schedule collected prior to approval of the final map in the case of land being subdivided or prior to the issuance of a building permit in the case of construction or improvement of subdivided land. Parks and Recreational Facilities Fund - This fund is used to account for fees collected for residential and subdivision developments collected either at the time grading permits are paid or prior to the approval of the final map. Its use is restricted for expenditures related to park development. maintenance and equipment. Traffic Sianals Fund - This fund is used to account for fees collected for residential, commercial and industrial developments either at the time grading permits are paid or prior to the approval of the final map. Its use is restricted for expenditures related to the acquisition and maintenance of traffic signals. Fire Facilities Restoration Fund — This fund is used to collect funds from developers for the purpose of construction, restoration and purchase of equipment for fire stations within the City. Recvclinq Fund - This fund is used to account for resources resulting from lower landfill tipping fees which have been reduced to zero in 2013, and State grant funds. Funds will be utilized for purposes of promoting recycling and recycling related activities. 113 OTHER GOVERNMENTAL FUNDS - SPECIAL REVENUE (CONTINUED) Enerpv Independence Loan Fund — This fund is used to provide funding for the AB811 Energy Loans and collect assessments from those AB811 loans through property tax collections. The assessments collected will be used to service debt issued and to provide additional funding for the AB811 loans. Air Qualitv Management Fund. — This fund accounts for receipts from South Coast Air Quality Management District, sixty percent of which is disbursed to the Coachella Valley Association of Governments. Aquatic Center Fund — This fund is used to account for revenues and expenditures for the City's aquatic facility. Cannabis ComDliance Fund — This fund is used to account for revenues and expenditures for the City's cannabis compliance activity. El Paseo Assessment District Fund. — This fund is used to collect assessments on all business establishments located within the boundaries set for the El Paseo Parking and business improvement area based on a fee schedule established for the various types of businesses. Proceeds from all charges are used for the promotion of business activities in the area. Various Landscape and Liahtina District Funds, — These funds are used to account for expenditures and receipts of property taxes and service fees levied to the property owners in the various landscaping and lighting districts, which were formed to provide landscaping and street lighting maintenance. Individual landscaping and lighting funds are set up for Districts No 1 through 17. Former RDA Low Income Housing Fund. — This fund is used to account for the management and operation of the City's housing assets. 114 THIS PAGE INTENTIONALLY LEFT BLANK 115 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2018 Comm unity Housing Development Traffic Safety Gas Tax Mitigation Fee Block Grant ASSETS: Pooled cash and investments 5 $ 2.136,045 $ 2.858.798 5 31.510 Receivables. Accounts Loans 15,613 Interest Prepaid costs _ Due from other governments 664 195.065 204.965 Inventories Advances to Successor Agency _ _ - TOTAL ASSETS 5 664 $ 2,331,110 $ 2,858,798 $ 252,D88 Liabilities, Deferred Inflows of Resources, and Fund Balances - LIABILITIES: Accounts payable S S 755,006 S $ 204.965 Accrued liabilities Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES 755,006 204,965 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues - 15.613 Total Deferred Inflows of Resources - 15,613 FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Public safety _ - Street related purposes 664 1,576,104 Low income housing - - 2-858.798 Public facilities Special programs 31.510 Committed to: Aquatic center Energy loan program - - TOTAL FUND BALANCES 664 1,576,104 2,858,798 31,510 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 664 $ 2,331.110 $ 2,858,798 $ 252,088 116 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2018 (CONTINUED) New Child Care Public Safety Construction Planned Program Police Grants Tax Drainaqe ASSETS: Pooled cash and investments $ 1,332,828 $ 100,172 $ 1.133.320 $ 1.620.210 Receivables Accounts - - - Loans - Interest 117,720 Prepaid costs - - - Due from other governments 25,000 Inventories - - Advances to Successor Agency - - 654.000 - TOTAL ASSETS $ 1,332,828 $ 125,172 $ 1,905.040 S 1,620,210 Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable $ $ 10,985 S 5 27,353 Accrued liabilities - - Unearned revenues 105,807 Deposits payable - Due to other funds - 130,800 - TOTAL LIABILITIES 116,792 130,800 27,353 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues - 117.720 - Total Deferred Inflows of Resources - 117,720 FUND BALANCES: Nonspendable: Prepaid costs - Restricted for: Public safety 8,380 - Street related purposes - 1,592.857 Low inoome housing - Public facilities 1,332,828 1,856,520 Special programs - Committed to: Aquatic center Energy loan program - - - - TOTAL FUND BALANCES 1,332,828 8,380 1.656,520 1,592,867 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 1,332,828 S 125,172 S 1,905,040 S 1,620,210 117 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2018 Parks and Recreational Traffic Fire Facilities Facilities Signals Restoration Recycling ASSETS: Pooled cash and investments $ 1,419, 507 $ 410,318 $ 1,108,171 $ 2,478, 570 Receivables. Accounts - - 58,439 Loans Interest Prepaid casts Due from other governments inventories Advances to Successor Agency _ - _ TOTAL ASSETS $ 1,419,507 $ 410,318 $ 1,108,171 $ 2,537,009 Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable 5 3.100 $ $ $ P9,991 Accrued liabilities _ 751 Unearned revenues 12,141 Deposits payable _ Due to other funds _ TOTAL LIABILITIES 3,100 _ 42.883 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues _ Total Deferred Inflows of Resources _ FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Public safety - 1 108 171 Street related purposes 410,318 - Low income housing _ _ Public facilities 1.416.407 _ Special programs - 2.494,126 Committed to: Aquatic center Energy loan program _ TOTAL FUND BALANCES 1,416,407 410,318 1,108,171 2,494,126 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 1,419,507 $ 410,318 $ 1,108,171 $ 2,537,009 118 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2018 (CONTINUED) Energy Independence Air Quality Aquatic Cannabis Loan Management Center Compliance ASSETS: Pooled cash and investments $ 1,513.690 $ 123.166 $ 1,924,678 $ 233,250 Receivables - Accounts - 16.705 399.715 1.140 Loans 3,366,207 - Interest 148,595 Prepaid costs - Due from other governments Inventories 4.868 Advances to Successor Agency - - - TOTAL ASSETS $ 5,028,492 S 139,871 $ 2,329.261 $ 234,390 Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable $ 5 12,529 $ 161,179 $ Accrued liabilities - - Unearned revenues - 33.646 - Deposits payable - 148.140 Due to other funds 2,138, 000 - - - TOTAL LIABILITIES 2,138,000 12,529 194,825 148,140 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues 148.595 - - - Total Deferred Inflows of Resources 148,595 - - FUND BALANCES: Nonspendable: Prepaid costs - Restricted for: Public safety 86.250 Street related purposes - - Low income housing Public facilities - - Special programs 127,342 - Committed to: Aquatic center - - 2,134,436 Energy loan program 2,741,897 - - TOTAL FUND BALANCES 2,741,897 127,342 2,134,436 86,250 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 5.028,492 $ 139.871 S 2,329.261 $ 234,390 119 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2018 Landscape EI Paseo and Lighting Former RDA Total Other Assessment Districts Nos. Low Income Special District 1 - 17 Housing Revenue Funds ASSETS: Pooled cash and investments S 69.535 $ 3.260,744 $ 8,557 $ 21.763,069 Receivables: Accounts - - - 475.999 Loans 3,381,820 Interest - 266,315 Prepaid casts 1.250 - 1,250 Due From other governments - 17,078 442,772 Inventories - 4,868 Advances to Successor Agency - - - 654,000 TOTAL ASSETS $ 70,785 $ 3,277,822 $ 8,557 $ 26,990,093 Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable $ 5.949 $ 35,610 $ - $ 1,246.667 Accrued liabilities - - 8,557 9,308 Unearned revenues - 151.594 Deposits payable 148,140 Due to other funds - - - 2.268,800 TOTAL LIABILITIES 5,949 35,610 8,557 3,824,509 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues - - - 281,928 Total Deferred Inflows of Resources - 281.928 FUND BALANCES: Nonspendable: Prepaid casts 1,250 - 1,250 Restricted for: Public safety - - 1.202,801 Street related purposes - - 3,579,943 Low income housing - - 2,858,798 Public facilities - - - 4.405.755 Special programs 63.586 3,242,212 5,956,776 Committed to: Aquatic center - - 2,134,436 Energy loan program - - 2,741.897 TOTAL FUND BALANCES 64,836 3,242.212 - 22,883,656 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 70,785 $ 3,277,822 $ 8,557 $ 26,990,093 120 THIS PAGE INTENTIONALLY LEFT BLANK 121 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2018 Housing Community Mitigation Development Traffic Safetv Gas Tax Fee Block Grant REVENUES: Taxes 5 $ S 30,975 $ Special assessments collected _ Intergovernmental revenues 1,463,fiO4 405.876 Charges for services Investment earnings 59 24,227 34,599 178 Fines and forfeitures 12,794 - - _ Miscellaneous - - 26.699 7,000 TOTAL REVENUES 12,853 1,487,831 92,273 413,054 EXPENDITURES: Current: General government - - - 405,876 Public safety Parks, recreation and culture Public works 2,264,826 - Housing and redevelopment - 30,540 Capital outlay Debt service: Principal retirement - Interest and fiscal charges TOTAL EXPENDITURES - 2,264,826 30,540 405,876 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 12,853 (776,995) 61,733 7,178 OTHER FINANCING SOURCES (USES) Transfers in Transfers out (11633) TOTAL OTHER FINANCING SOURCES (USES) (13.633) NET CHANGE IN FUND BALANCES (780)- (776,995) 61,733 7,178 FUND BALANCES - BEGINNING OF YEAR 1,444 2,353,099 2,797.065 24,332 FUND BALANCES - END OF YEAR $ 664 $1,576,104 $22858.798 $ 31,510 122 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2018 REVENUES: Taxes Special assessments collected Intergovernmental revenues Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR [CONTINUED] Public New Child Care Safety Police Construction Planned Program Grants Tax Drainage S 43,649 S S 158.147 $ 7,330 83,291 - 15,804 905 12,274 21,852 59,453 84,196 170,421 29,182 81,685 335,517 1,606 98,807 83,291 - 434,324 59,453 905 170,421 (405,142) 59,453 905 170,421 (405.142) 1,273,375 7,475 1.486,099 1,997.999 $ 1,332,828 $ 8,380 $ 1,656,520 $ 1,592,867 123 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2018 REVENUES: Taxes Special assessments collected Intergovernmental revenues Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES {USES} Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR Parks and Fire Recreational Traffic Facilities Facilities Signals Restoration Recycling 3 17,054 S 16,512 $ 21,766 S - - 9,091 - - 345.834 1702 4,912 13,318 31,757 51 34,936 21,424 35,084 386,733 300,458 - 18,879 780 - 227,065 66.700 78,876 66,700 780 625,278 (31,764) 20,644 35,0a4 (238,545) (284) (284) (31.764) 20,644 35,084 (238.829) 1.448,171 389,674 1,073,087 2.732.955 $ 1,416,407 $ 410,318 $ 1,108,171 $ 2,494,126 124 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2018 REVENUES: Taxes Special assessments collected Intergovernmental revenues Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTALREVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR (CONTINUED) Energy Independence Air Quality Aquatic Cannabis Loan Management Center Compliance $ 5 - $ $ - 120,767 - - 802,946 86,793 283,086 1,092 18,878 977 283,086 121,859 821,824 87,770 5,516 54,028 - - - - 1,520 1.441.061 - 38,640 108,000 189,980 - 303,496 54,028 1,479,701 1,520 (20,410) 67,831 (657,877) 86,250 - 657,877 - - 657,877 - (20.410) 67,831 - 86,250 2.762.307 59.511 2,134,436 - $ 2,741,897 $ 127,342 $ 2,134,436 $ 86,250 125 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2018 REVENUES: Taxes Special assessments collected Intergovernmental revenues Charges for services investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current- General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR Landscape El Paseo and Lighting Former RDA Total Other Assessment Districts Nos. Low Income Special Revenue District 1 - 17 Housing Funds $ - $ - $ 5 295.433 245.387 826.674 1,072,061 2,082,629 - 1.235.573 35,450 517,250 - 12,794 - 33,750 245,387 862,124 61249,490 $ 231.722 997.600 - 83,205 1,459.W 642.285 - 3,470,473 - 526.684 557.224 - - 284,629 108.000 189,980 231,722 642,285 526,684 7,151,051 13,665 219.839 (528.684) (1,901,561) - 80,800 526.684 1,265,361 - (13,917) 80,800 13,665 300,639 51,171 2.941,573 64,836 $ 3,242,212 $ 626,684 1,261,444 (650.117) 23,533,773 $ 22,883,656 126 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE TRAFFIC SAFETY YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Investment earnings Fines and forfeitures Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 1,444 $ 1,444 Variance with Final Budget Actual Positive Amounts (Negative) $ 1,444 $ - 100 100 59 (41) 135,000 135,000 12,794 (122,206) 136,544 136,544 14,297 (122,247) 135,000 135,000 13,633 121,367 135,000 135,000 13,633 121,367 $ 1,544 $ 1,544 $ 664 $ (880) 127 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE GAS TAX YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 2,353,099 $ 2,353,099 1,381,145 1,859,892 2,000 2,000 3,736,244 4,214,991 1,500,000 2,778,747 11500,000 2,778,747 $ 2,236,244 $ 1,436,244 Variance with Final Budget Actual Positive Amounts (Negative) $ 2,353,099 $ - 1,463,604 (396,288) 24,227 22,227 3,840,930 (374,061) 2,264,826 513,921 2,264,826 513,921 $ 1,576,104 $ 139,860 128 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE HOUSING MITIGATION FEE YEAR ENDED J U N E 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Investment earnings Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Housing and redevelopment Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Oripinal Final Amounts (Negative) $ 2,797,065 $ 2,797,065 $ 2,797,065 $ - 111,900 111,900 30,975 (80,925) 15,000 15,000 34,599 19,599 - - 26,699 26,699 2,923,965 2,923,965 2,889,338 (34,627) 310,000 310,000 30,540 279,460 310,000 310,000 30,640 279,460 $ 2,613,965 $ 2,613,965 $ 2,858,798 $ 244,833 129 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE COMMUNITY DEVELOPMENT BLOCK GRANT YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Investment earnings Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 24,332 $ 24,332 $ 24,332 $ - 294,000 294,000 405,876 111,876 - - 178 178 - - 7,000 7,000 318,332 318,332 437,386 119,054 294,000 415,669 405,876 9,793 294,000 415,669 405,876 9,793 $ 24,332 $ (97,337) $ 31,510 $ 128,847 19111 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CHILD CARE PROGRAM YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,273,375 $ 1,273,375 $ 1,273,375 $ - 68,700 68,700 43,649 (25,051) 4,000 4,000 15,804 11,804 1,346,076 1,346,075 1,332,828 (13,247) - 1,079,440 - 1,079,440 - 1,079,440 - 1,079,440 $1,346,075 $ 266,635 $ 1,332,828 $ 1,066,193 131 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY POLICE GRANTS YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 7,475 5 7,475 100,000 100,000 107,475 107,475 100,000 100,000 100,000 100,000 $ 7,475 $ 7,475 Variance with Final Budget Actual Positive Amounts (Negative) $ 7,475 $ - 83,291 (16,709) 905 905 91,671 (15,804) 81,685 18,315 1,606 (1,606) 83,291 16,709 $ 8,380 $ 905 132 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE NEW CONSTRUCTION TAX YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Investment earnings Amounts Available for Appropriations Budgetary Fund Balance, June 30 Budget Amounts Actual Original Final Amounts $ 1,496,099 S 1,486,099 $ 1,486,099 288,300 288,300 158,147 6,000 6,000 12,274 1,780,399 1,780,399 1,656,520 $ 1,780,399 $ 1,780,399 $ 1,656,520 Variance with Final Budget Positive (Negative) (130,153) 6.274 (123,879) $ (123,879) 133 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE PLANNED DRAINAGE YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $1,997,999 $ 1,997,999 75,000 75,000 3,100 3,100 2,076,099 2,076,099 80,000 1,515,113 - 100,000 80,000 1,615,113 $1,996,099 $ 460,986 Variance with Final Budget Actual Positive Amounts (Negative) $ 1,997,999 $ - 7,330 (67,670) 21,852 18,752 2,027,181 (48,918) 335,517 1,179,596 98,807 1,193 434,324 1,180,789 $ 1,592,857 $ 1,131,871 134 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATIONAL FACILITIES YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $1,448,171 $ 1,448,171 $ 1.448,171 $ - 475,000 475,000 17,054 (457,946) 9,600 9,600 17,882 8,282 1,932,771 1,932,771 1,483,107 (449,664) 175,000 295,000 66,700 228,300 175,000 295,000 66,700 228,300 $ 1,757,771 $ 1,637,771 $ 1,416,407 $ (221,364) 135 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE TRAFFIC SIGNALS YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 389,674 $ 389,674 $ 389,674 $ - 50,000 50,000 16,512 (33,488) 1,300 1,300 4,912 3,612 440,974 440,974 411,098 (29,876) 175,000 350,000 780 349,220 175,000 350,000 780 349,220 $ 265,974 $ 90,974 $ 410,318 $ 319,344 136 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE FIRE FACILITIES RESTORATION YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Ori inal Final $1,0K,087 $ 1,073,087 83,700 83,700 3,500 3500 1,160,287 1,160,287 1,000,171 1,000,171 $1,160,287 $ 160,116 Actual Amounts $ 1,073,087 21,766 13,318 1,108,171 Variance with Final Budget Positive (Negative) $ 1,108,171 $ (61,934) 9,818 (52,116) 1,000,171 1,000,171 948,055 137 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE RECYCLING YEAR ENDED JUNE 30, 2018 Variance with Final Budget Budget Amounts Original Final Actual Positive Amounts (Negative) Budgetary Fund Balance, July 1 $ 2,732,955 $ 2,732,955 $ 2,732,955 $ - Resources (Inflows): Intergovernmental - - 9,091 9,091 Charges for services 140,000 140,000 345,834 205,834 Investment earnings 10,000 10,000 31,757 21,757 Miscellaneous - - 51 51 Amounts Available for Appropriations 2,882,955 2,882,955 3,119,688 236,733 Charges to Appropriation (Outflow): General government 494,875 544,388 300,458 243,930 Parks, recreation and culture 30,000 30,000 18,879 11.121 Public works 140,000 340,000 227,065 112,935 Capital outlay 185,000 205,000 78,876 126,124 Transfers out 40,000 40,000 284 39,716 Total Charges to Appropriations 889,875 1,159,388 626,562 533,826 Budgetary Fund Balance, June 30 $1,993,080 $ 1,723,567 $ 2,494,126 $ 770,659 138 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE ENERGY INDEPENDENCE LOAN YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Investment earnings Amounts Available for Appropriations Charges to Appropriation jOutflow): General government Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,762,307 $ 2,762,307 $ 2,762,307 $ - 542.500 542,500 283,086 (259,414) 3,304,807 3,304,807 3,045,393 (259,414) 10,000 10,000 5,516 4,484 108,000 108,000 108,000 - 189,980 189,980 189,980 - 307,980 307,980 303,496 4,484 $ 2,996,827 $ 2,996,827 $ 2,741,897 $ (254,930) 139 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE AIR QUALITY MANAGEMENT YEAR ENDED JUKE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Investment earnings Arnounts Available for Appropriations Charges to Appropriation (Outflow): General government Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 59,511 5 59,511 64,000 64,000 300 300 123,811 123,811 50,750 50,750 7,000 7,000 57,750 57,750 $ 66,061 $ 66,061 Variance with Final Budget Actual Positive Amounts (Negative) $ 59,511 $ - 120,767 56,767 1,092 792 181,370 57,569 54,028 (3,278) - 7,000 54,028 3,722 $ 127,342 $ 61,281 140 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE AQUATIC CENTER YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Charges for services Investment earnings Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Parks, recreation and culture Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 2,134,436 $ 2,134,436 Variance with Final Budget Actual Positive Amounts (Negative) $ 2,134,436 $ - 795,550 795,550 802,946 7,396 7,000 7,000 18,878 11,878 680,000 680,000 657,877 (22,123) 3,616,986 3,616,986 3,614,137 (2,849) 1,432,550 1,432.550 1,441,061 (8,511) 50,000 66,191 38,640 27,551 1,482,650 1,498,741 1,479,701 19;040 $ 2,134,436 $ 2,118,245 $ 2,134,436 $ 16,191 141 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CANNABIS COMPLIANCE YEAR ENDED J U N E 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Charges for services Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) - 100,000 85,793 (13,207) - - 977 977 - 100,000 87,770 (12,230) - 100,000 1,520 98,480 - 100,000 1,520 98,480 - $ - $ 86,250 $ 86,250 142 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE EL PASEO ASSESSMENT DISTRICT YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (inflows): Assessments Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 5 51,171 $ 51,171 $ 51,171 5 - 250,000 250,000 245,387 (4,613) 301,171 301,171 296,558 (4,613) 250,000 250,000 231,722 18,278 250,000 250,000 231,722 18,278 $ 51,171 $ 51,171 $ 64,836 $ 13,665 143 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE LANDSCAPE AND LIGHTING DISTRICT NOS 1 -17 YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Assessments Investment earnings Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $2,941,573 $ 2,941,573 830,381 830,381 1,400 1,400 100,000 100,000 3,873,354 3,873,354 869,055 876,557 869,055 876,557 $ 3,004,299 $ 2,996,797 Variance with Final Budget Actual Positive Amounts (Negative) $ 2, 941, 573 $ - 826,674 (3,707) 35,450 34,050 80,800 (19,200) 3,884,497 11,143 642,285 234,272 642,285 234,272 $ 3,242,212 $ 245,415 144 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE FORMER RDA LOW INCOME HOUSING YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Housing and redevelopment Capital outlay Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 532,870 532,870 526,684 (6,186) 532,870 532,870 526,684 (6,186) 531,870 531,870 526,684 5,186 1,000 1,000 - 1,000 532,870 532,870 526,684 6,186 Budgetary Fund Balance, June 30 145 THIS PAGE INTENTIONALLY LEFT BLANK 146 OTHER GOVERNMENTAL FUNDS - CAPITAL PROJECTS Capital Projects Funds are used to account for the acquisition and construction of major capital facilities, except for those financed by certain Special Revenue and Enterprise funds. Capital Proiects Reserve - This fund is used to account for resources and expenditures for capital improvement projects that are related to the acquisition and development of public facilities, infrastructure and equipment. Drainage Facilities Fund - This fund is used to account for resources and expenditures for planned capital improvement projects that are under the Master Drainage Plan. Economic Development - This fund is used to account for fagade enhancement projects for Palm Desert businesses utilizing funds from the sales of certain City -owned properties. Parks and Recreational Facilities Fund - This fund is used to account for resources and expenditures for capital improvement projects that are related to park development, maintenance and equipment. Art in Public Places Fund - This fund is used to account for fees collected from residential, commercial and public facilities development except for street and drainage projects. Its use is restricted for acquisition, installation, improvement and maintenance of artwork to be displayed in the City, the administration of the program and community public art education programs. Sipnalization Fund - This fund is used to account for resources and expenditures for capital improvement projects that are related to the acquisition and maintenance of traffic signals. Capital Golf Fund - This fund is used to offset the cost of capital improvements, equipment purchases, perimeter maintenance, pay off assessments and other nonrecurring costs that will arise as a result of Desert Willow Golf Course Resort. Funding sources for the Golf Course Maintenance Fund are collections from the IROC and Standard Vacation Ownership, Inc. time-share project. Buildinqs Fund - This fund is used to account for resources and expenditures for capital improvement projects that are related to the improvement and maintenance of public facilities and structures. Library Fund - This fund is used to account for resources and expenditures for capital improvement projects that are related to the purchase of library resources for the Multi -Agency Library. Special Assessment District Funds - This fund is used to account for the construction of public improvements from proceeds resulting from the creation of various assessment Districts. Assessment District No. 94-3 Merano Silver Spur Ranch Highlands Undergrounding CFD University Special Assessment Assessment 29 147 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS JUNE 30, 2018 ASSETS: Pooled cash and investments Receivables: Accounts Interest Due from other governments Due from other funds Restricted assets Cash and investments with fiscal agents Advances to Successor Agency TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES: LIABILITIES: Accounts payable Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES: Restricted for: Capital Projects Special programs Assigned to: Capital projects Property acquisition Public facilities Special programs Street related purposes TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Capital Parks and Projects Drainage Economic Recreational Reserve Facilities Development Facilities $ 2,708,487 $ 2,056.935 $ 737,119 S 85.380 1.440,000 857,700 2.132 _ 8.00D,000 - 4.765.000 $ 12,150,619 $ 2,056,936 $ 737.119 $ 5,708.080 S 29,357 $ 131 $ $ _ 63,041 _ _ 1,600.000 - 953,000 1,692,408 131 953,000 1,44Q,000 - 857,700 1,440,000 - 857,700 8.597,824 420,387 _ _ - 737,119 3,897.380 2,056, 605 _ 9,018,211 2,066,805 737,119 3,897,380 $ 12,150.619 $ 2,056,936 $ 737,119 $ 5,708,080 148 CITY of PALM DESERT COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS JUNE 30, 2018 ASSETS: Pooled cash and investments Receivables. Accounts Interest Due from other governments Due from other funds Restricted assets: Cash and investments with fiscal agents Advances to Successor Agency TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES: LIABILITIES: Accounts payable Uneamed revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES: Restricted for; Capital Projects Special programs Assigned to: Capital projects Property acquisition Public facilities Special programs Street related purposes TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES (CONTINUED) Art in Public Places Signalization Capital Golf Buildings $ 1,50D,372 $ 1D3.609 $ 3,031,517 S 3,378,392 4,610 - 14, 959 500,000 $ 1,500,372 $ 103,609 6 3,551,086 $ 3,378,392 $ 9,064 £ $ 48,200 $ 103,594 107.430 116,494 48,200 103,594 1,383.878 3.502.886 3.274.798 - 103.609 1,383,878 103,609 3,502,886 3,274,798 $ 1,500,372 $ 103,609 $ 3,551,086 $ 3,378,392 149 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS JUNE 30, 2018 Assessment District No. 94• Silver Spur Highlands Library 3 Merano Ranch Undergrounding ASSETS: Pooled cash and investments $ 667.255 S - $ 604 S 21 Receivables: Accounts Interest 261 Due from other governments Due from other funds Restricted assets Cash and investments with fiscal agents 182.051 Advances to Successor Agency _ - - - TOTAL ASSETS $ 667,255 $ 182,312 $ 604 $ 21 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES: LIABILITIES: Accounts payable 5 5 $ $ Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES , FUND BALANCES: Restricted for: Capital Projects 182,312 604 21 Special programs _ - Assigned to: Capital projects Property acquisition _ Public facilities _ Special programs 667.255 _ Street related purposes - TOTAL FUND BALANCES 667,255 182,312 604 21 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 667,256 $ 182,312 $ 604 $ 21 150 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS JUNE 30, 2018 ASSETS: Pooled cash and investments Receivables: Accounts Interest Due from other governments Due from other funds Restricted assets: Cash and investments with fiscal agents Advances to Successor Agency TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES: LIABILITIES: Accounts payable Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF 'RESOURCES: Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES: Restricted for: Capital Projects Special programs Assigned to: Capital projects Property acquisition Public facilities Special programs Street related purposes TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES CF❑ University Total Other Special Capital Projects Assessment Assessment 29 Funds S S 655 $ 14,270,347 - 4,610 8,724 2,321,644 - 2,132 - 500.000 1.838.322 2.020.373 12, 765, D00 5 1,847,046 5 655 $ 31,884,106 8 5 190,356 63,041 - 107.430 2,553,000 2,913,827 2,297,700 2,297,700 1,847,046 655 2.030.638 1,383,878 - 8.597.824 420.387 11,412,183 667,255 2,16D,414 1,847,046 655 26,672,579 $ 1,847,046 $ 655 $ 31,884,106 151 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2018 REVENUES: Licenses and permits Intergovernmental revenues Investment earnings Miscellaneous TOTAL REVENUES EXPENDITURES - Current General government Public safety Parks, recreation and culture Public works Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR Capital Parks and Projects Drainage Economic Recreational Reserve Facilities Development Facilities 65,110 - 69,423 - 35,252 25,158 8,595 1,043 100,362 25,158 78,018 1,043 7.879 - 75,000 - 24,853 - _ 270.206 1,881 103,617 - _ 406,355 11881 75,000 - (305,993) 23,277 3,018 1,043 (305.993) 23,277 9,324,204 2.033.528 $ 9,018,211 $ 2,056,805 68,621 68,621 71,639 1,D43 665,480 3.896.337 $ 737,119 $ 3,897,380 152 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2018 (CONTINUED) Art in Public Places Signalization Capital Golf Buildings REVENUES: Licenses and permits $ 181.645 $ 3 $ Intergovernmental revenues - Investment earnings 19.729 1,266 57,941 42,742 Miscellaneous 825 - 2,038,219 - TOTAL REVENUES 202,200 1,266 2,096,160 42,742 EXPENDITURES: Current. General govemment - - - 341.864 Public safety - - 19,698 Parks, recreation and culture 107,013 372,916 - Public works - - - Capital outlay - 44.727 TOTAL EXPENDITURES 107,013 - 372,916 406.289 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 95,187 1,266 1,723,244 (363,547) OTHER FINANCING SOURCES (USES) Transfers in - - - Transfers out (159,664) (1,127,500) TOTAL OTHER FINANCING SOURCES (USES) (159.664) (1,127,500y - NET CHANGE IN FUND BALANCES (64,477) 1,266 595,744 (363,547) FUND BALANCES - BEGINNING OF YEAR 1,448,355 102,343 2,907,142 3.638,345 FUND BALANCES - END OF YEAR $ 1,383,878 S 103,609 S 3.502,886 $ 3,274,798 153 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2018 Assessment District No. 94- Silver Spur Highlands Library 3 Merano Ranch Undergroundinq REVENUES: Licenses and permits S S $ $ Intergovernmental revenues _ Investment earnings 2.186 8 - Miscellaneous TOTAL REVENUES 2,186 8 EXPENDITURES: Current. General government Public safety Parks, recreation and culture Public works Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 2,186 8 OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) _ NET CHANGE IN FUND BALANCES - 2,186 8 - FUND BALANCES - BEGINNING OF YEAR 667,255 180,126 596 21 FUND BALANCES - END OF YEAR S 667,255 $ 182,312 $ 604 $ 21 154 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2018 REVENUES: Licenses and permits Intergovernmental revenues Investment earnings Misoellaneous TOTAL REVENUES EXPENDITURES: Current' General govemment Public safety Parks, recreation and culture Public works Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES [USES] Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR CFD University Special Total Other Assessment Assessment Capital District 29 Projects Fund $ S $ 181.645 134,533 24,531 9 218.460 - - 2,039,045 24,531 9 2,673.683 424,743 19,698 504,582 272,087 148.344 - 1,369,454 24,531 9 1,204,229 68.621 (1,287,164) 24,531 1,822.515 S 1,947,046 $ (1,218,543) 9 (14,314) 646 26,686.893 655 $ 26,672,579 155 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CAPITAL PROPERTIES YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Parks and recreation Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 69.152,038 $ 69,152,038 250,100 250,100 69,402,138 69,402,138 - 667,245 5,020,000 13,020,000 1,765,000 10,000,000 6,785,000 23,687,245 $ 62,617,138 $46,714,893 Variance with Final Budget Actual Positive Amounts (Negative) $ 69,152,038 $ - 640,924 390,824 69,792,962 390,824 667,245 - 79, 748 12, 940, 252 291,221 9,708,779 1,038,214 22,649,031 $ 68,754,748 $ 23,039,855 MI CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CAPITAL PROJECTS RESERVE YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Public safety Parks, recreation and culture Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 9,32.4.204 $ 9,324,204 2,370,000 14,000 11,708,204 75,000 4,500 870,000 65,000 1,014,500 $10,693,704 2,370,000 14,000 11,708,204 120,188 75,000 282,291 1,398,407 2,157,611 4,033,497 $ 7,674,707 Actual Amounts $ 9,324,204 65,110 35,252 9,424,566 7,879 24,653 270.206 103,617 406,355 $ 9,018,211 Variance with Final Budget Positive (Negative) (2,304,890) 21,252 (2,283,638) 112.309 75,000 257.638 1,128,201 2,053,994 3,627,142 $ 1,343,504 157 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE DRAINAGE FACILITIES YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $2,033,528 $ 2,033,528 4,000 4,000 2,037,528 2,037,528 476,292 10,000 - 486,292 $ 2,037,528 $ 1,551,236 Variance with Final Budget Actual Positive Amounts (Negative) $ 2,033,528 $ - 25,158 21,158 2,058,686 21,158 1,881 474,411 - 10,000 1,881 484,411 $ 2,056,805 $ 505,569 158 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE ECONOMIC DEVELOPMENT YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance. July 1 Resources (Inflows): Intergovernmental Investment earnings Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Total Charges to Appropriations Budgetary Fund Balance, June 30 Budqet Amounts Original Final $ 665,480 $ 665,480 3,000 3,000 668,480 668,480 200,000 623,620 200,000 623,620 $ 468,480 $ 44,860 Variance with Final Budget Actual Positive Amounts (Negative) $ 665,480 $ - 69,423 69,423 8,595 5,595 68,621 68,621 812,119 143,639 75,000 548,620 75,000 548,620 $ 737,119 5 692,259 159 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATIONAL FACILITIES YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Parks, recreation and culture Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 3,896,337 $ 3,896,337 500 500 3,896,837 3,896,837 - 20,000 20,000 $ 3,896,837 $ 3,876,837 Actual Amounts $ 3,896,337 1,043 3,897,380 Variance with Final Budget Positive (Negative) $ 3,897,380 $ 543 543 20,000 20,000 20,543 160 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE ART IN PUBLIC PLACES YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Licenses and permits Investment earnings Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Parks, recreation and culture Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts ❑ri_gqinal Final $1,44$,355 $ 1,448,355 205,700 205,700 6,000 6,000 1,660,055 1,660,055 149,950 200,000 349,950 $1,310,105 170,808 200,000 370,808 Actual Amounts $ 1,448,355 181,645 19,729 826 1,650,555 107,013 159,664 266,677 Variance with Final Budget Positive (Negative) (24, 055) 13,729 826 (9,600) 63,795 40,336 104,131 $ 1,289,247 $ 1,383,878 $ 94,631 161 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE SIGNALIZATION YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 102,343 $ 102,343 300 300 102,643 102,643 - 35,000 - 35,000 $ 102,643 $ 67,643 Variance with Final Budget Actual Positive Amounts (Negative) $ 102,343 $ - 1,266 966 103,609 966 - 35,000 - 35,000 $ 103,609 $ 35,966 162 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CAPITAL GOLF YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Investment earnings Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Parks, recreation and culture Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,907,142 $ 2,907,142 $ 2,907,142 $ - 30,000 30,000 57,941 27,941 1,948,606 1,948,606 2,038,219 89,613 4,885,748 4,885,748 5,003,302 117,554 782,840 803,053 372,916 430,137 1,127,500 1,127.500 1,127,500 - 1,910,340 1,930,553 1,500,416 430,137 $ 2,975,408 $ 2,955,195 $ 3,502,886 5 547,691 163 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE BUILDINGS YEAR ENDED JUNE 30, 2018 Budgetary Fund Balance, July 1 Resources (Inflows): Investment earnings Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Public safety Capital outlay Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 3,638,345 5 3,638,345 $ 3,638,345 $ - 17,500 17,500 42,742 25,242 3,655,845 3,655,845 3,681,087 25,242 509,100 302,373 341,864 (39,491) 165,000 165,000 19,698 145,302 45,000 572,360 44,727 527,633 719,100 1,039,733 406,289 633,444 Budgetary Fund Balance, June 30 $ 25936,745 $ 25616,112 $ 3,274,798 $ 658,686 164 ❑THER GOVERNMENTAL FUNDS — ❑EBT SERVICE FUND Citv Highlands Underaroundinq Fund — This fund is used to account for the resources and payment for debt related to Highlands Undergrounding. 165 CITY OF PALM DESERT BALANCE SHEET OTHER DEBT SERVICE FUND JUNE 30, 2018 ASSETS: Pooled cash and investments Receivables Assessments Due from other governments TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES: LIABILITIES: Accounts payable Deposits payable TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES: Restricted for: Debt service TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES City Highland Undergroundinq $ 199,777 1,227,632 4,627 $ 1,432,036 Total Other Debt Service Fund $ 199,777 1, 227,632 4,627 $ 1,432,036 $ 3,510 $ 109,526 113,036 1,227,632 1,227,632 91,368 91,36E 3,510 109,526 113,036 1.227,632 1,227.632 91,368 91,368 $ 1,432,036 $ 1,432,036 CITY OF PALM DESERT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER DEBT SERVICE FUND YEAR ENDED JUNE 30, 2018 REVENUES: Special assessments collected Investment earnings TOTAL REVENUES EXPENDITURES: Current: General government Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCES - BEGINNiNG OF YEAR FUND BALANCES - END OF YEAR City Highlands Undergrounding $ 136,269 1,967 137,236 22,644 42.000 70,991 135,595 1,641 89,727 $ 91,368 $ Total Other Debt Service Fund 135,269 1,967 137,236 22,604 42,000 70,991 136,595 1,641 89,727 91,368 167 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CITY HIGHLAND UNDERGROUNDING YEAR ENDED JUNE 30, 2018 Budget Amounts Original Final Budgetary Fund Balance, July 1 $ 89,727 $ 89,727 Resources (Inflows): Assessments 133,991 133,991 Investment earnings 200 200 Amounts Available for Appropriations 223,918 223,918 Charges to Appropriation (Outflow): General government 21,000 22,700 Debt service' Principal retirement 42,000 42,000 Interest and fiscal charges 70,991 70,991 Total Charges to Appropriations 133,991 135,691 Budgetary Fund Balance, June 30 $ 89,927 $ 88,227 Variance with Final Budget Actual Positive Amounts (Negative) $ 89,727 $ - 135,269 1,278 1,967 1,767 226,963 3,045 22,604 96 42,000 - 70, 991 - 135,595 96 $ 91,368 $ 3,141 168 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for services provided t❑ other departments or agencies of the City on a cost reimbursement basis. Equipment Replacement -- This fund is used to account for financial transactions related to replacement of City -owned vehicles and equipment. Compensation Benefits Fund — This fund is used to account for funding of compensated absences. 10 169 CITY OF PALM DESERT COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2018 ASSETS: CURRENT ASSETS: Cash and investments Prepaid costs TOTAL CURRENT ASSETS CAPITAL ASSETS: Nondepreciable Depreciable, net CAPITAL ASSETS, NET TOTAL ASSETS LIABILITIES: CURRENT LIABILITIES: Accounts payable Compensated absences TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES: Compensated absences TOTAL NONCURRENT LIABILITIES: TOTAL LIABILITIES NET POSITION: Invested in capital assets Unrestricted TOTAL NET POSITION Equipment Compensation Replacement Benefits 5 8,616,983 $ 2,441,387 36,949 - 8,653,932 2,"1,387 Total $ 11,058.370 36,949 11.095,319 224,011 224,011 1,930,487 1, 930,487 2,154,498 - 2,154,498 $ 10,808,430 $ 2,441,387 $ 13,249,317 S 49,430 $ $ 49,430 - 300.000 300.000 49,430 300,000 349,430 2,086.772 2.086.772 - 2,086,772 2,086,772 49,430 2,386,772 2,436,202 2,154,498 - 2,154,498 8.604,502 54.615 8,659.117 $ 102759,000 $ 54,615 $ 10,813,615 170 COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2018 Equipment Compensation Replacement Benefits Total OPERATING EXPENSES: Maintenance and operations S 78,934 $ - $ 78,934 Depreciation and amortization 453.019 - 453,019 TOTAL OPERATING EXPENSES 531,953 - 531,953 OPERATING LOSS (531,953) (531.953) NONOPERATING REVENUES: Interest revenue 105,819 33,588 139,407 Gain on disposal of capital assets 17,274 - 17,274 TOTAL NONOPERATING REVENUES 123,093 33,588 156,681 CHANGE IN NET POSITION (408.860) 33,588 (375,272) NET POSITION - BEGINNING OF YEAR 11,167.860 21,027 11,188,887 NET POSITION - END OF YEAR $ 10,759,000 $ 54,615 $ 10,813,615 171 CITY OF PALM DESERT COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Payments to suppliers Cash paid to employees for services NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchases of capital assets Proceeds from sales of assets NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Interest and dividends NET INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR CASH AND CASH EQUIVALENTS - END OF YEAR RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating loss to net cash provided (used) by operating activities: Depreciation and amortization (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Increase (decrease) in compensated absences Total Adjustments NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Equipment Compensation Replacement Benefits Total $ (59.181) $ $ (59,181) - (196.947) (196,947) (59,181) (196,947) (256,128) (496,066) (496,066) 17.819 17,819 (478,247) - (478,247) 105.819 33,588 139.407 (431,609) (163,359) (594,968) 9.048,592 2,604,746 11,653,338 $ 8,616,983 $ 2,441,387 $ 11,058,370 $ (531,953) $ - $ (531,953) 453.019 - 453,019 (13,269) (13,269) 33,022 33,022 - (196,947) (196.947) 472,772 (196,947) 275,825 $ (59,1811 $ (196,9471 $ 1266,128) 172 AGENCYFUNDS Agency Funds are used to account for assets held by the city as an agent for individuals, private organizations, other governments and/or funds. AQencv Fund - This fund is used to account for deposits placed with the City by developers, individuals and groups to obtain future services. Deposits are reduced by disbursements and/or refunds to the depositors when the cost of services is determined. Treasurers 1911 Bond Act - This fund is used to account for the assets held on behalf of the assessment district's property owners until they are remitted to the bondholders. Retiree Service Stipend Fund - This fund is used to account for assets held to pay for the retiree service stipend. Special Assessment Funds - These funds are used to account for the collection of special assessments and the future payment of debt service related to bonds issued. 173 THIS PAGE INTENTIONALLY LEFT BLANK 174 CITY OF PALM DESERT COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS JUNE 30, 2018 Assets: Pooled cash and investments Receivables: Accounts Assessments Accrued interest Due from other governments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Deposits payable Total Liabilities Retiree Treasurers Service Agency 1991 Bond Act Stipend Fund $ 1,948,057 $ 268,804 $ 1,325,341 1,875 - 47,008 $ 1,996,940 $ 268,804 $ 1,325,341 Special Assessment Funds Totals $ 7,825,196 $ 11,367,398 - 1,875 53, 894,172 53.894,172 15,197 15,197 22,460 69,468 4,682.972 4,682.972 $ 66,439,997 $ 70,031,082 $ 1,996,940 $ 268,804 $ 1,325,341 $ 66,439,997 $ 70,031,082 $ 1,996,940 $ 268,804 $ 1,326,341 $ 66,439,997 $ 70,031,082 175 CITY OF PALM DESERT COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2018 Balance Balance July 1, 2017 Additions Deductions June 30, 2018 AGENCY ASSETS: Pooled cash and investments $ 3,092,350 5 2.964.144 $ 4.108.437 S 1,948,057 Receivables. Accounts - 1,875 - 1,875 Due from other governments 47,703 47,008 47,703 47.008 TOTAL ASSETS $ 3,140,053 $ 3,013,027 $ 4,156,140 $ 1,996,940 LIABILITIES: Deposits $ 3.140,053 $ 3.013,027 S 4.156,140 $ 1,996,940 TOTAL LIABILITIES $ 3,140,063 $ 3,013,027 $ 4.156,140 $ 1,996,940 TREASURERS 1911 BOND ACT ASSETS: Pooled cash and investments $ 270,664 S $ 1,860 S 268,804 TOTAL ASSETS $ 270t664 $ - $ 1,860 $ 268.804 LIABILITIES: Deposits payable $ 270,664 $ $ 1.860 $ 268.804 TOTAL LIABILITIES $ 270p664 $ $ 1,860 $ 268,804 RETIREE SERVICES STIPEND FUND ASSETS; Pooled cash and investments $ 2.278.600 $ 283,687 $ 1,236,948 $ 1.325,341 TOTAL ASSETS $ 2,278,600 $ 283,687 $ 1,236,946 $ 1,325,341 LIABILITIES: Deposits payable $ 2,278.600 $ 283.687 $ 1,236,946 $ 1,325,341 TOTAL LIABILITIES $ 2,278,600 $ 283,687 $ 1,236,946 $ 1,325,341 176 CITY OF PALM DESERT COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2018 SPECIAL ASSESSMENT FUNDS ASSETS: Pooled cash and investments Receivables: Assessments Accrued interest Due from other govemments Restricted assets: Cash and investments with fiscal agents TOTAL ASSETS LIABILITIES: ❑eposits payable TOTAL LIABILITIES TOTAL - ALL AGENCY FUNDS ASSETS: Pooled cash and investments Receivables: Accounts Assessments Accrued interest Due from other governments Restricted assets: Cash and investments with fiscal agents TOTAL ASSETS LIABILITIES: ❑eposits payable TOTAL LIABILITIES Balance Balance July 1, 2017 Additions Deductions June 30, 2018 $ 8,311,961 $ 6,687,879 $ 7,174,644 $ 7,825,196 57,387,797 - 3,493,625 53,894,172 7,685 15,197 7,685 15,197 310,849 22,459 310,848 22,460 5.454.155 323,032 1,094,215 4,682,972 $ 71,472,447 $ 7,048,567 $ 121081,017 $ 66,439.997 $ 71,472,447 $ 7.048,567 $ 12,081.017 $ 66,439.997 $ 71,472,447 $ 7,048,567 $ 12,081,017 $ 66,439,997 $ 13.953.575 $ 9.935,710 $ 12,521,887 $ 11,367.398 - 1.875 - 1,875 57,387,797 - 3,493,625 53,894,172 7,685 15,197 7,685 15,197 358,552 69.467 358,551 69.468 5.454,155 323,032 1,094,215 4,682,972 $ 77,161,764 $ 10,345,281 $ 17,475,963 $ 70,031,082 $ 77,161,764 $ 10.345,281 5 17,475,963 $ 70,031.082 $ 77,161,764 $ 10,345,281 $ 17,476,963 $ 70,031,082 177 THIS PAGE INTENTIONALLY LEFT BLANK 178 DESCRIPTION OF STATISTICAL SECTION CONTENTS June 30, 2018 This part of the City of Palm Desert's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the city's overall financial health. Contents Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source. Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it preforms. Sources: Unless otherwise noted, the information in theses schedules is derived from the comprehensive annual financial reports for the relevant year, The City implemented GASS Statement 34 in 2001; schedules presenting government -wide information include information beginning in that year. 179 THIS PAGE INTENTIONALLY LEFT BLANK 180 City of Palrn Desert Net Position by Component Last Ten Fiscal Years (Accrual Basis of Accounting) Governmental Activities 2018 2017 2016 2015 2014 Net Investment in capital assets Restricted Unrestricted Total Governmental Activities Net Position Business -Type Activities Net Investment in capital assets Restricted Unrestricted Total Business -type Activities Net Position Primary Government Net Investment in capital assets Restricted Unrestricted Total Primary Government Net Position 438,184.070 449,037,170 197.349.364 197,824,604 83,054,707 87,091,894 718. 588.141 733,953, 668 69.111,797 69.829,772 5 609 843 74,hI L0 4 829 456 74,,lii,�& 507,295,867 518,866,942 19 7, 349, 364 197, 824, 604 88,664,550 91,921,350 793,309,781 808,612, 896 459,644,720 473,722,694 466,246,732 193,298,431 135. 900. 520 14 0 , 460, 5 75 78.812.066 71,530,456 105,537,785 731,755,217 (3) 881,153,670 (2) 7'12,245,092 70,202,487 71,129,743 72,009,184 4 479 575 74,62,U2 4,302 958 75,432,%l 3 920 382 75,iiOi6 529.847,207 544,852,437 538.255,916 193,298,431 135,900, 520 140,460,575 83,291.641 75. 8 33 , 414 109,458.167 806,437,279 756,586,371 788,174,658 Governmental Activities 2013 2012 2011 2010 2009 Net Investment in capital assets 465.756.1 72 475,457,375 302,757.128 304.702.414 302,507.877 Restricted 132, 741, 798 119,736,419 147,648,424 143,394, 780 159,157,317 Unrestricted 103,603,715 107,622,257 107,314,002 110918 145 113 883,303 Total Governmental Activities Net Position 702,101,686 702,816,051 t+t 567,719,654 559:015,3�39 575,,v48,497 Business -Type Activities Net Investment in capital assets 72,892,200 73,375,634 74,043,419 67,902,786 68,263,719 Restricted - - - - - Unrestricted 3,682.061 3.901.816 4.068.623 4 391 160 4686899 Total Business -type Activities Net Position 76,5742261 77,277,450 78,192,042 72,293,946 72,950,fi18 Primary Government Net Investment in capital assets 538,648,372 548,833,Oo9 376,800,547 372,605.200 370,771,596 Restricted 132,741,798 119,736,419 147,648,424 143, 394.780 159,157.317 Unrestricted 107,285,776 111.524.073 111 ``382.625 115, 309,305 118.570,202 Total Prima Government Net Position 778,675,946 780,093,501 635,831,596 631,309,285 648,49%115 (1) On Febrrtury 1, 2012 the Slate aj C'cohjnrnta dissolved the ('try uy'Palm Desere Redevelopment Agency as parr of The Stattewide dissolution ofall City Redevelopmeril Agencies, which in turn crertied rho SriccessorAgency to the Redevelopment Agency of the Ory of Palm Desert. (2) The implementation of GASB Sratemenr No. 68 and Statement No. 71 rertelred in a prior year ressruremenl decrease rJ 537.73 million in the governmental aclivitics net positons. (3) Tire City Is C:apiial Properties C.'upiral Project Fund received 565,566, 963 and I& Housing Asset Fund reveived 56,571,706 fair a combined uual of 572.138.669 of eapacd hand rn)vrvds iransferred f von the Siwcessor Agency. 181 City of Palm Desert ('hanges in Net Position Last Ten Fiscal fears (Accrual Basis of:%ccountjrig) Expenses 2016 2017 2D16 2015 2014 --,,,1, „ �i General government Public safety Housing & Redevelopment (1) Parks, recreation and culture Publiewofks Payments to other agencies „-•Zip 18.467.097 35.543.050 9,605.756 8.240.115 18,358.907 15 70a.064 34,943.220 10.954,630 9.850,200 14.892.145 - 14.836.881 34.009.984 8.162.859 9.223.126 47,044,197 Ik 16.337,393 32.077,635 11.666.724 8.598.242 19.144.213 - 19 194.343 29.339,106 7.852.611 8.327,402 21.123.197 Interest on long term debt - Total Governmental activities Expenses Business -Type Activities: Desert Vvillow Golf Course Office Complex - Parkview Total Business -Type Activities Total primary government expenses Program Revenues Governmental Activities Charges for services General govemmenI Housing & Redevelopment Public safety Parks, recreation and culture Public works Operating grants & contributions Capital grants & contributions Total Governmental Activities Program Revenues Business -Type Activities Charges for Service: Desert WMow Golf Course Office Complex - Parkvnevt Capital grants & contribut ons Total Business -type activities program revenue Total Primary Government program revenue Net (Expense) I Revenue Governmental activities Business -type activities Total Primary Government Net Expense General Revenues & Other Changes in Net Position Governmental Activittes Taxes: (CombinedlNet Pass -through) Investment Earnings Contributions not restricted for specific purpose Gain(toss) on sates of capital assets Miscellaneous Refunding of special assessment debt Transfers in I (Out) Gain on Transfer to Successor Agencyl Extraordinary Gain (4) Total Governmental activities Net Revenues Business -Type Activities: Investment Earnings Gain(loss) on sales of capital assets Transfers Out Total Business -type activities Total primary government in Net Position nental Activities: s-Type Activities: 259.250 271,603 289,000 294.258 237,053 91.474.175 86,619.852 113,566.047 $8,119.465 86,073,712 8,763,220 8.243.515 8.165.183 8.433.267 8,452,661 930.815 891125 1.005.918 934,296 922.341 9,694.035 S.136,W 9.171.101 9.307.563 9.374.342 7.551,760 6,861.450 7,029,595 7.971.265 6.851,603 10.801.436 10.603.708 10.606.464 9.987.891 10.239,886 821.824 793,527 772.801 772.728 729,075 2.685, 831 2.327, 521 2.186.153 1,832, 241 2.180.877 8.555,681 7.931.900 9.496,520 7,512.894 9.745,609 2.442.621 7,710.355 10,639.715 19,297,015 21.086.051 35.247.613 39,324.109 43,116,371 49,402,427 52,985,382 8,432.273 7,497.664 7240,866 7.864.676 7,804,9D4 1.250.456 1, 284,462 1,280, 230 1.306.042 1,254.521 167,670 605.186 111,942 47,768 94,076 9.M,399 9.387,312 8,633,038 9,248.466 9,153,601 45.098,012 47,711,421 51,749.409 58,710.913 62,138,803 (56.226.562) (48,295.743) (70.449.676) (38.656.038) (33,088,330) 156,364 (56,070,198) 250,672 (48,045,071) ��538, �,,'' ��1i9.077jj (220.841J7r (70,987,T39j (3�,T7ii,115y (33,309,171 50.150.650 47,62B,454 44347.151 41,931,997 39.952.738 1.901.536 1,041.232 2.074.934 494.452 358.674 17.274 2.145 24.292 11.720 488,319 1,573,1% 1,522,363 1.828,677 1.726,007 1,994,506 300.000 300.000 237.500 437,500 437,5D0 - 72.138,669 _ 2.566 50,494,194 121,061,223 ".601'676 43,231,737 ,873 26,4941 24,924 11,774 13,646 .175 r133 - - 47,938 300,000,,jjjj ��7�7,500 It?i,57 437``�00 377,' �437.WO�,'73,54 23,854) 614 S0, �0,� 120,8�8, �! 44, �13,1i b7,883 (2,2893,996) 2.198.451 50,601.547 5,945,638 10,143,407 62,412 (22.834) (750.639) (496.865) (644.695) 12,221,584) 2.175,617 49,860.909 5.448,773 9.429.712 (1)( -cry Al, ,hang J Nn• nruutrcr to a hrch It reporlr YDA exjwnd hires. RDA and Hurrsing e4we' ithrV-1 u+c being reported corder Hornig d R -,An, aupmew". (2) Required pay4terNmade to tlm Sxtle of('ahfornia. For FY 2010 nas $25,326, 215 and FY 2011 µas 35,253,397 (jJ On February 1. 2012 The Scare nj( irllfumlu dtxsnhrd the ( 0r of Palnt lkrerl Rede-lopntenl ARemy as parr ofrlm Slaleµ-rde drssalitiam dull City Redevelopment Apmcrer, %hlch m arm creased the &,ccnss Agetx y fit the R vkwk pntenrARenc) r f the t •rty ufPaltn Ik:cert. (a) The Ctly� Capital Prri rites C aprral Projecl Fund recenyd S65.S66, 963 and she Homing Asset 1-und n eliva? 56,571. 706 jrrr a c miN and meal of 572,138,669 ofcapiral1 u dpmceevk lransferred fmn+lhe Steceyssor ARenc}•. 182 Cin• or Palm Desert Changes in Net Position Continued Last Ten Fiscal fears (AccruaI Basis of Arcountinp) Expenses 2013 2012 (3) 2011 (2) 2010 (2) 2009 Governmental Activities: General government Public safety Housing & Redevelopment (1) Parks. reorealion and culture Public works Payments to other agencies Interest on long term debt Total Governmental Activities Experises Business -Type Activities - Desert Willow Golf Course Otfrce Complex - ParWew Total Susine55-Type Activities Total primary government expenses Program Revenues Governmental Activities Charges for services General government Housing & Redevelopment Public safety Parks, recreation and culture Publi o works Operating grants & contributions Capital grants & contributions Total Governmental Activities Program Revenues Business -Type Activities Charges for Service: Desert Willow Goff Course Office Complex - Parkview Capital grants & contributions Total Business -type activities program revenue Total Primary Government program revenuo Not (Expense) I Revenue Governmental Activities Business -type activities Total Primary Govemment Net Expense General Revenues & Other Changes in Net Position Governmental Activities: Taxes: (ComtrinedlNet Pass -through) Investment Earnings Conlibutions not restricted for specific purpose Gain{lass] on sales of assets Miscellaneous Refunding of special assessment debt Transfers In 1(Out) Gain on Transfer to SuocessorAge ncylExtraordinary Gain(4) Total Governmental Activities Net Revenues Business -Type Activities: Investment Earnings Gain(loss) on sales of capital assets Transfers Out Total Business -type activities Total primary government 3Itange in Net Position Govemmenlal Aclivities: business -Type Activities: 16.375,295 17,387•ueC 1r•182,987 16,701.292 17.328.291 28,614.153 28.037.453 25.601.668 27.027.643 27.670.237 6.944.033 10.519,663 15.976.383 16.220.066 16,760,877 8.752.623 6,033,019 7,337,403 7,312.679 7.210.706 16.316.237 17.407.751 16.984.334 19,900,937 22.036.017 - 16.994,265 39.418.936 63.320.650 39,085,940 253,381 10,971,707 18.989.167 20.069.813 20.128.441 77, 255, 722 101, 350, 938 142, 490.878 110,883,080 150, 220,509 8,655,754 5.471.567 7,946.063 7.832.690 7.804.266 984.811 f •031,178 851.786 875.394 852.746 9.640,565 9.502,745 8,807,849 8.708.084 8.657.011 86,896,287 it6,853,683 151,298,727 179,261,i64 158,877,520 1.833.923 1.805,442 1,921.573 2,127.138 7,574,059 5,308,858 5.034.002 4,935.422 4.986.066 - 11,147,297 9,041.801 9.825.352 9.431,478 9,396.435 898.222 728,721 768.786 618,440 803.218 768.775 826.251 762.015 706.374 701.125 5.876,028 7,411.902 5.675,777 6.558,892 5.582,470 7.733.439 2.309.678 2.255,393 2\\722.312 5,048.666 33.666,442 27,197,797 26,144,318 27,i50,700 29,105,973 14C:41.81!S 7.635.352 7.338,640 7,054.263 6.872,935 1.215.860 1.222,971 1.217.985 986.056 958,942 660,685 236.419 - - - 9,371,364 9.094.742 8.556.625 8,044``319 7831,§17 42.937,506 36.262.539 34.700.943 35,1 5,019 36, 3Sr Il {43,689,28Dj] (80``163.141) (116.346.5150) (143.402.380) (121.114.536) {43.958,481j (90,01,1441 (116197,7841 (144, 146 (121,9I 916 0� 38.742.060 73,105.614 114,880,586 120.872.421 123,650.887 318.9% 1.102.309 2,158,5W 2.916.753 6.161.309 - 791.256 762.588 644.603 613.648 3.894.203 5,638.881 3.169.977 2.382.206 2,912.180 437.500 440.000 (6,046,761) 53,237 (5,661.521) - 144,011.578 - - - 43,392,759 225.289.638 114,924,946 126.369,222 127,676,503 MM 3,512 13,411 22.559 62.330 $7,590 {437500) 440000} 6.046,761 (53.237) 5.661.521 +433�88 42fi�89 6.069,320 9,093 5.749.111 42, �r8,7'I1 2' 863,049 120.994.266 126.078,315 133.426.014 4.923.977 1999,710� 144,261,9051 4,395,482 (t1,1�89,83Uf 11,485,944 (I)C'Ny ha, clhurmd rho' ah,+ww'r on which et repartk RDA expendmires. RDA aW Hrursiwg expendira s arc heong reprMLdlonxkr "Rowing h Redetwrywnewr". {?f Regxrred paymenr mode to the Siam uji'alrfumfo. Fu F-Y 2010 was 523.326.215 am/ FY 2011 wm SS.233.347- fat On February 1, 2012 the Stare of C ahfurntathssuhed the City• of l'alm Desere RedeMopmew Agency as part of the Srafexide Jlssnhinon of all City Redemlupmew Agrncies, n-hwh in tuna created the %fLLvssorAgency to the Redetelopaxpa Agemy ofthe C'try ofYalm Lkaen. {4) Me Ctry's L iaprral properltes C'apual protect Fund recetted 563.366.963 and the FFrrtr.eo g Asset Flmd re viwd 36.571,706 fora cwnhuied mial of S 72.138.669 ofcapual b:wd pm evz c imarfermd freer the ,Frecessor Agency. WN THIS PAGE INTENTIONALLY LEFT BLANK 184 City of Palm Desert Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) General Fund: 2018 2017 Nonspendable 10,509,094 9,067,979 9,528,630 Restricted - - - Committed 59,665,638 - - Assigned 15,492.508 658.817 991,853 Unassigned 4,702,308 74.259.748 71,842,172 Total General Fund 90,370,548 83,986.544 82.362,655 All other Governmental Funds: Nonspendable 1,726 Restricted 169549,126 Committed 16,751,821 Assigned 23.258.063 Unassigned I - Total all other Governmental Funds 209.560,736 10, 312,261 7.745.320 1,771,278 4,425,423 67,727,130 66,203,203 79,810,669 78,373,946 1,276 3,052 348 6,713 (5) 171,G44,474 165,411.544 (6) 106,261,212 114,194,435 (5) 16,771,055 16,573,834 16.952.887 21,644,068 23.250.337 23,776,468 24,172,531 24,429,824 211,067,142 206,064,898 147,386,978 160,275,040 JGeneral Fund: 2013 2012 2011 2010 2009 Nonspendable Restricted Committed Unassigned Total General Fund All other Governmental Funds: Nonspendable Restricted Unassigned , Total all other Governmental Funds 7,678,250 3,224,761 65, 311,919 76,214.930 49,319,200 76, 725.388 15,649.703 14,144,969 155.839,260 2.926,739 3,297,152 69,438, 971 75.662,862 2.939.850 o) 9-676.961 f>> 4.501.159 66, 776,414 74,217,423 39.525,247 40.925,918 69, 065, 451 230, 623, 054 20, 289. 309 17.285.733 17, 552, 726 19, 375, 999 146,432,733 w 308,210,704 4,044.421 63, 847,586 77.568,968 41,050.481 260,163,043 f3 8,871.910 (3) 16,432.292 f41 326,517,726 (4) 11,629,384 3,654, 300 59,066, 988 74,350,672 23,361,744 296.323,735 4,559,739 (2) 23,812,325 (2,392) 348,055,151 (1) RAJA made rwyme f on m1wnces from the city. (2) Start qj new Energy program that turned re -%edema fimds, jur energy e,(jictency. (3) Housing Asset fetnd lransjer jar Cop ial Asset replacement to the Hanstng Awhoruy. (4) On Vebmary 1, 2012 the Stare of C:altforma diem!ved the Crry of Aalm Drserr Redevelopment Agency as part of the Statewide dissolution Ofall Ory Redevelopment Agencies, which in tlrrn created the Successor Agency to the Redevelopment Agency of the City ofl'alm llesem (5) Advances to the Successor Agency reclasstfted from Nonspendable to ResfrictedjorSpecral Revenue 1 unde- (6) The Cuy's Capful Properties f :apual Prgyect Fund received S65,566,963 and the Homing Asset Eund received S6,571,706 for a combined total of S72,138.669 of capital bruinprareeds rraneferred from the Sitecessor Agency- 185 0ly of Palm Orson Changes in Fund Bat [anees of Governmental Funds -ast Ten Fiscal fears fv1o+Gtivd 1.. r u.d It a6q of Accounting) . 61.909839 59.466.545 56,735.503 52,571,369 60,464,511 ssessments Cplledted 3.445.246 3318.114 3,296,705 3.068.768 3.486.220 S permits 1.326.049 1.678.709 2.057,843 1.757.250 2.262.907 mmenlal revenues 5,682.704 7.249.515 15,429.238 18.981.304 7,380.744come 6.675.632 6.439458 5.9%. 80 5.660762 5,626.850 for ser*4,s 2.894.821 2,356.363 2.082.843 IA 19.464 2,165.020 tat Earnings 3,626,892 2.086.224 1.837.319 1242,652 864.653 orfeilures 162.170 155,276 295.26E 224,612 231.768 edus I 2.866542 2.594.433 2.317.499 2,377,923 3.539.552 ons from other govemmenl - 3.550.991 - 9.168 10.749.218 ons from property owners 7.868 - 420.590 evenues 68,807,115 89r675,626 89,956,567 87,703,280 $7,192.233 ures- government 19.281.102 16.807293 16,783.055 15.467.746 17.070.816 8 redevelopmenl 8.522.801 9.239.660 8-438,849 9.349.021 6.650,178 Paw hrough-agreement Public safety 36,247,6% 34.674.418 33.750.347 31-819,214 29,139,735 Parks, recrealron 8 culture 6.487.713 7,157.821 8.831.534 6.236-717 5.802.941 Public works 12.153.852 0.794.694 t1.031.584 13,082.388 12.741.764 Contributions to properly owners - - 19.584.487 49 2.350,187 Capital outlay 915,422 2.169,035 7.071.738 19,339,987 6,273.822 Debt service. Principal rehrement 150.D00 237,000 257,000 4.944.000 674.000 Inte rest atad 6 scar cha rge s 26D.971 277.814 296.3% 240.219 242.495 Total Expenditures 84,029,517 79,437,955 101,845,630 100A79,34111 80,945,93E Excess(de6ciency of Revenues overtunder) expenditures 4.577.698 9.437.,673 [11.089�63] 12,776,061J 8,246.295 Other financing sources (uses) Transfers in 6,613,352 9.406.888 6.030,706 6,132,859 4.861.551 Transfem out (6,313,352) (12,218,428) (6,075,206) (6,971,359) (5,424,051) Bond Premiums Bonds issuedlCapitel Acoreetioo on bonds Payment refunded bond escrow agent _ Extraom inary Gain l(Loss) (2) - - 72.130.669 - Safe of Prop" 225.000 2.163.222 911.001 Total Oth er fins ncing sources (uses) 300,DD0 (2,811,S4W) 72.319.189 1,324,722 Net Change In Fund Balance •4.877,586 5.626 133 61.229.906 f11.451-3391 8.594.796 Debt service as a percentage of noncapital expenditures 0.5% 0.7% 0 61je 8.4% 1.2% Taxes Special assessments collected Licenses 8 permits Intergovcmmenta l revenues Rental income Charge s for sevice 5 Investment Earnings Fines 8 forfeitures Miscellaneous Contributio its ftm other gore rin"nt Contribu lid ms from properly owne rs Total Revenues General govemmenl Housing 8 redeveropmerit Pass•through-agreemenl Public safe ty Parks, recrealion 8. cutium Public works C unuibutlo its to properly owners Capital outlay lebt service' Principal retirement Interest and 5scal charges Total Expenditures Excess{deficiency of Revenues over(under) expenditures Me financing sources (uses) Transfers in Transfers out Bond Premiums Bonds issued+Cs pkal Accreatlon on bonds Payment refunded bond escrow agent Extraordinary Gain! (Loss) (2) Sate of property 'otal Other financing sources (uses) Nei Change In Fund Balance M6t service 25 a Percentage of rloneapital 9xpenditia I'2013 2012 (1) 2011 201D 2009 50.768 200 82 901.921 124,672.M 130.555,949 134.060.681 3.654.337 3.232.923 3262.163 3-182,549 2,759.444 1,566.796 1.041.834 1,089.543 782.271 1.383.778 5,097,B92 6.637.426 7.605.282 8.700.234 9.543.551 5.367.630 5.146.499 5.011.205 5.023.770 5.050.479 $98.222 728.721 701.481 618.440 803,218 373.012 1.459,142 3.102.649 4.681.243 8.322.808 242,56E 276.452 310,840 343.054 315.284 9-028,698 6,614,924 3.095.689 3.374.309 3.479,370 77,017,355 106.249,542 148,650,914 157,361,819 165,718,613 14.028.252 15, 551.883 15.273.085 19.294.744 18.950.675 5,650,fi66 8-942.097 18,033.576 13.612.720 14.359.340 - 16.994.265 39,418.936 63,320,650 39,065.941 25,299.876 27.551-113 26.824.434 26.882-787 26.906.123 6,152.449 3,685,334 3.845,901 4.534-605 5.1229W 9.819.591 11,306M 1 11.256.499 13,971.797 16.241.963 2,788,676 9,675.227 14.205.889 6-333521 22-346.953 318.001) M32,707 22,914,,\707 15,25p0,`707 12`,7}776`8,`707 67,322,� 9 113,i26,�62 169,149)il 182, ii48 142 9NS 11,,274.539 24.453,724 69,9%597 59,960.402 60.088.670 111,010,55M (24.013,724) [70,555,597) 159.520,402) (67,649.434) - - 6.361.000 - • - - - 2,015,000 - (155.895.962) - �263939 (155,455,962) (580,000) $ 9.958.595 f15o.332.5321 f21.658.5671 f18.319.1295 t7,048.3761 0.!% 18.6% 26.4% 19.8% 21.1% !1/ On Fr, r-m , L M12 the gar vJCohfornra rkxroh,rJ the Ciry of "a" Ihnrr R.nlnrloyanrra AgMn ' ru purr of rhr 5da-1k 4W-„n1n1 ofoll C+gRrdnalopmnrAgmcirs,xhuhm;-,moream!rhr.S++ccrssorAgrrcerroPh, Rrd-l"rwAgrnynfrhrCayofPat 1lrren Far nrnrx mforma+mr on the r6SW1 -ofrhe RDA ple wsrr hufr 16-d 17 l?/ 77w 041. C'rrpii 1 Preprrt,es C•apltrd Prrgrcr iisxii cenrd365-566.963 mid rhr N +u+nR A. 1 Fund rrc d $6.371. 7(M fr,r n rnmhired total ofS 77.13E-669 frfquklh,mrlpruerr,6 trnn.sf-edfmin fhr Sinrrsrur ARrncy 186 City of Palm Desert Graphs - Changes in Fund Balances of Governm enta Is Funds Last Ten Fiscal Years (ModlTied Accrual Basis ofAc ounsing) Total Revenues >;3an,nm,noo nL'mG�J.iiAn I i S250•0ll0•11011 s2m.0m.1 Ml .kti.,il.z�ra oihc. l'� SISO.nIIUAi i o iMa.in[xmmeix.l a..�.� SIOn,nnn•n(M) - s5o.w.(p) u ..,,••A reran. Sn - _..- ee 7r 7r 7� 7c � r Total Expenditures v o 0 o v a }N }H }H }H} Lr (1) (im h ned Odw'.e u c—f Inurmn frrnkd nu r v e•, nsrsrn enr earning.,, and ehruNes for sl-m-9 (1) Mlscrlhrrnmlu C rhrr it a cvmhinafon of finis aril fonfieOmms, mrsM1 meunc eumnhllrumf (ram olhcrgokvm wmre- and amrnf w ms from pnyx m ownrn (3) flehr Ejwmhwn, Is a e—d-wf— of churgcr wrrl pnnrrpur rc•e—r (a) PaW work, r-, a c•nmf�rrmrrun nfp,d l..,ngsuml cvulrnhrmnus to prryreny rmnrn Note. Graphs excludes Oihcr Anancing .sourcex aril uses o .... ilnvYharimncn[ a Ekd r.awm,e, i rl .0 yxld •utl.l ■PWi. xrx�.lil ar.r��. arm 187 City of Palm Desert Supplemental - Historical General Fund Revenues (including Transers In) Last Ten Fiscal Years FY jW018 2017 20iti enue Type: I s Tax $ 18,627,704 S 18.505,449 $ 18,994,779 S 17,565,134 $ 17,258,958 sient tccupancy Tax 17,019,034 15,054,259 11,252,997 10,799,680 9,855,509 perty lj(3) 10,777,998 10,157,813 10,461,595 9,710,990 9,041,428 Investment 1,237,562 644,341 725,015 416,656 405,456 Transfer In 1,610,830 1,472,852 1,390,258 2,179,472 1,373,786 franchises 3,097,521 3,146,702 3,095,873 3,102,431 3,007,215 State Subventions (1 j (3) 38,876 23,101 59,317 155,049 22.089 Building & Grading Permits 1,048,973 1,247,390 1,216,115 1,279,706 1,695,303 Reimbursments (4) 1,389,654 1,407,811 1,589,511 1,604,707 1,809,323 Business License Tax 1,154,275 1,11&183 '1,269,082 1,t60,207 1,169,316 Timeshare Mitigation Fee 1,543,762 1,467,028 1,500,683 1,483,158 1,333,586 Plan Check Fees 691,096 431,115 592,818 505,370 662,893 Property Transfer Ta- 664,822 690,975 491,060 558.965 530,556 Other Revenues (2) 1.951,122 2,185,703 2,189,063 1,713,758 I,932,009 'total General Revenue S 60,852,229 I S 57,552,722 I S ` 54,828,166TTS 52,235,283TS 50,097,427 FY 2013 Revenue Type: Sales Tax $ 16,764,809 $ 15,836,953 $ 14,680,578 S 13,273,793 $ 14,474,933 Transient Occupancy Tax 1 9,188,981 8,085,225 7,421,769 6,848,132 7,030,048 Property Tax (3) 9,529,018 7,976,494 8,341,728 8,707,567 8,776,917 Investment Earnings 126,206 408,661 793,461 1,766,868 2,142,915 Transfer In 2,127,655 2,240,703 2,691,634 4,747.672 2,684.568 Franchises 2,892,805 2,856,679 2,771,594 2,705,902 2,818,729 State Subventions (1 ) (3) I 26,691 23,759 236,211 151A89 173,448 13uiIding & Grading Permits 1,206,935 750,442 783,031 575,852 950,805 Reimbursments (4) 1,868,804 2,535,977 1,971,505 2,488,378 3,263,247 Business License Tax 1,149,551. 1,076,541 1,085,411 1,071,997 1,258,688 Timeshare Mitigation Fee 1,292,859 1,110,227 1,192,490 1,483,220 949,871 Plan Check Fees 500,698 275,728 317,332 224,325 389,770 Property 'Transfer Tax 520,393 485,040 399,280 455,580 324,817 Other Revenucs (2) 1,961,314 1,399,669 1,475,154 1,567,651 1,601,947 Total General revenue S 49,156,718 S 45,063,098 1 S 44,161,178 S 46,068,426 S 46,840,703 (1) State Subventions is any combination of motor vehicle and o -haghivay in -lie us, and subvennons from slate. (2) Other Revenues is any combination of miscellaneous penalties and interest, permits, grants, parking bails, fees, sales of maps and publications, vehicle and court fines, rental income and other revenues. (3) The State of California reprogramed motor vehicle fees, the City now receives this as property taxes. (l) Reimbursements is a combination of RDA costs and other reimbursements, due to dissolution in February 2012 the RDA reimbursement is limited and applies to existing projects. iO3 $70.000.000 $60,000,000 $50.000,000 $40,000.000 $30,000,000 $20.000.000 $10,000.000 $0 City of Palm Desert Supplemental Graph - Historical General Fund Revenues (Including Transfers In) Last Ten Fiscal Years rA rD t2 V r2 N C C O G G O 4 N N eV N N N N lL lL LL LL LL LL LL (I) Combined Other is any combination of transfers, franchises, state subvention* building and grading permits, reimbursements, business license taxes, timeshare mitigationfees, plan checkfees, property transfer taxes. It also may include any combination of miscellaneous bails, fees, fines, grants, incomes, penalties, permits, sales and !axes. *state Subventions is any combination of motor vehicle and off -highway in-lieus, and subventions from state. O a N i LL ■Cumhined Other (1) ■Interest ■Property Tax ClTransiens Occupancy Tax ■ Sal es Tax 189 City of Palm Desert Supplemental - Historical General Fund Expenditures (Including Transfers Out) Last Ten Fiscal Years Public Safety (1) City Administration (2) Public Works Administration Community Promotions Street Maintenance Building Safety Street Resurfacing Public Works (4) ❑ther Expenditures (3) Expenditures FYI 2018 .. 2017 f 2016 VW2015 $ 21,088,867 $ 20,424,249 $ 20,15 1.237 $ 18,784,117 $ 11,460,325 8,238,228 7,97 L706 7,561,255 2,333,897 2,637,630 2,664,871 2,645,443 1,179,305 1,062,611 791.565 749,631 2,020,797 2,418,451 2,709,328 2,631,590 1,579,734 1,849,442 1,888,290 1,847,798 2,760 25,326 1,081919 998.463 1,133,007 970,877 1.004.989 1,067,837 13,669,533 18,302,019 14,010,275 14,512,426 $ 54,468,225 1$ 55,928,8331S 52,276,1801S 50,798,560 1 S 17.306.342 7,413,578 2,556,967 618.138 2,806,168 1,783,918 4,466 1,018,435 14,430,399 47,938,411 1 FYI 2013 1 2012 1 2011 1 2010 1 2009 .1 Expenditure: Public Safety (1) S 17,002,291 $ 16,532,894 $ 16,047,991 S 15,671,095 $ 16,266,052 City Administration (2) 7,180,519 7,670.377 8,023.314 8,556.627 10,076,543 Public Works Administration 2,528, I31 2,527,817 2,380,255 3,021,319 3,720,106 Community Promotions 575,119 526,904 497,366 990,505 1,798,860 Street Maintenance 2,353,655 2.446,854 2,522,117 2,565.567 2,183,445 Building Safety 1,517.937 1,538.506 1,523.748 1,756,589 2,082,996 Street Resurfacing 1,179,743 2,332,968 2,268,901 708,006 1,115,721 Public Works (4) d1,505,018 1,056,998 1,354,255 1,278,983 1,552,242 Other Expenditures (3) 14,762,237 8,984,441 12,894.776 8,301.439 13,513,354 Total Expenditures S 48,604,650 $ 43,617,659 5 47,512,723 S 42,850,130 5 52,309,319 J (1) Parblic Safety is any combination ofanimal regulation, police services, and traffic safely expenditures, this does not include the cost for Fire Services. Fire Services are reported in a dierent fund. (2) City Administration is any combination of community services, auditing, City attorney, City clerk, City council and City manager, information technology, elections, finance, general services, human resources, insurance, legal special services, legislative advocacy and unemployment insurance expenditures. (3) Other Expenditures is any combination of acquisitions, committees, contributions, community, retiree health development, marketing, inlerf rnd transfers, parks, recreation and culture, extraordinary loss and visitor center, included in the transfer out is transfer to the Fire fund for its shor fall. (4) Public Works is a combination of curb & gutter, parking lot, storm drain, auto fleet, corporate yard equipment, building maintenance, Poriola Community center, storm water permit. i'iDII] City of Palm Desert Supplemental Graph- Historical General Fund Expenditures (Including Transfers Out) Last Ten Fiscal Years $60,000,000 - $50,000,000 - $40,000,000 530,000,000 - S20,000,0U1. 510,000,000 ECG, N-d OU-f I UWA. W\ -6. Adm mfararn,n MCm Admuusuuwnfi, MINN—I' daY i A l rn ,c VI a M N G (1) "Combined 0(her" is any combination uf.sirecf maintenance, building .sufely, street resurfacing rant public works. It may also he arquisttions, centers, crxnmwees, contributions, community &velopment, marketing, tnierfund eramyer.%. parkv, recreafion and culture, vrsnor center. (2) Coy Administration is any conrhinaenm r f commumty .services, audding, City attorney, City clerk, C'ify cr+unctl am! Cory manager, informufnon technology, elections, finance, general services, hununn resources, insurance, legal special services, legislative udvocucy and unemployment easntrance expemhtures. (3) Other FNvndaures is any cwnbinatrrm of acquisitions, crrrnnrittees, contributions, community, retiree health development, marketing, interfind transfers, pork-s, recreufion and culture, extraordinary lass and vcsuor center, included in the truns/er out is transfer to the Fire find for tits .shoriph'. (4) Public Works is a combination of curb & gutter, parking hit, .seorm dram, auto fleet, corrwaiv yard equipment, bruldnng maintenance, Poriola Community center, .slarm water permit. 191 THIS PAGE INTENTIONALLY LEFT BLANK 192 City of Palm Desert Supplemental Historical General Revenue and Expenditures Per Capita Last Ten Fiscal Years FY , . MM I otal General Revenue (2) S 59,241,399 $ 56,079,870 $ 53,437,908 $ 50,055,811 $ 49,723,641 opulation (1) 52,769 50,740 49,335 51,053 50,417 Revenue Per Capita 1,123 11105 1,083 $ 990 $ %6 FY 200 2012 2011 2010 2009 Total General Revenue (2) $ 47,029,063 $ 42,822,395 $ 41,469,544 $ 41,320,754 $ 44,156,135 Population (1) 49,949 49,471 49,111 52,067 51,509 General Revenue Per Capita 5 942 S 866 S 844 $ 794 $ 857 FY 2018 1 2017 2016 1 2015 Total General Expenditures (2) $ 49,992,388 $ 48,427,111 $ 48,134,252 $ 46,302,187 $ 44,183,659 Population (1) 52,769 50,740 49,335 51,053 50,417 General Expenditures Per C a ita 947 954 976 S 907 $ 876 FY 2013 2012 2011 — 2010 ,l [ otal General Expenditures (2) $ 42,155,428 $ 49,949 42,099,903 $ 49,471 41,833,291 49,111 $ 42,499,812 52,067 $ 48,696,321 51,509 Population (1) General Expenditures Per Capita S 844 S 851 S 852 S 816 $ 945 (1) Population figures are as ofJanuary start offiscal year. (2) Interfund Transfers Input and extraordinary loss (gain) are not included in total. Sources: Population figures from State Department of Finance, City of Palm Desert Finance Departmen 193 City of Palm Desert Assessed Value and Esitmated actual N alue ofTarable Propet•t% Last Ten Fiscal fears scal YQVP�' Residential Commercial Industrial Institutional Vacant Land Less: Tax Total Taxable Total Direct Estimated Actual Ended June 30 Property P Y Proee4y Property Exempt Assessed Value Tax Rate Taxable Value (1) 2018 10,757,283.204 2,554,854.761 59.762.684 388,457,449 (313.754.093) 14.940•671.116 1.000D0 14,445,331.683 2017 10,555,732.091 2.434.816.656 59.318.962 379.073.252 (306.174.550) 14.579.740.457 100000 14,095,158..994 2016 10.174.360.142 2,358,860.033 56,840.001 412.090.006 (312,620,004} 14.210.001198 1.00000 13.743.682.041 2015 9.636,181,445 2,290,456.630 54.211.991 420.142.932 (298,165,952) 13,552.997,813 1.DD000 13.086.962.9D5 2014 9,043-372.632 2.247.924.054 64.595.519 426,330.424 (297.139.386) 12.919.103.760 1.0O000 12.453.921.285 2013 ;' 8.621.493.305 2,239,836.432 62.565,263 462.982,950 (300.313.265) 12.513.052,593 100000 12.064,845,537 2012 8,594,403.021 2,198,729.088 50.25U65 452.309.984 1268.975.823y 12,564,166.215 1.00000 12.123,771,853 2011 8.982.4D3.643 2,179,940,D65 52.528,676 564.683.270 (288,907.720) 13.132.169.069 1.00000 12.707.884.566 2010 9,21O.638.643 2.419.511,046 54.988•BB7 426.163,878 (274.944.437) 13.747.221,855 1.DD000 13.334.233.975 2009 9,376,213.346 2,13D,957,579 127.857.455 667,700.041 (255,714.909) 14,206,383,860 7.00900 13,8D8.181,235 Ill 1::10nw+edAel tnl Taxable 1'cdue Net Taxahk 1'ulne Notes: Pmprijiv Trues in Rn rwle C'ottnty are strhject to the Stwe ofC aGfornw's Prapos+l+on 13, Janvsdiann lnurnn tv x•hnh alluas napprrrts4[r of rcwtproperty• wdy u hen thrre,.s a Ownkr+n urmrslnp or ncis crnvn ctrrw &rates pl we- hw1her, the pruprmufm htmtts pruperty assess,nent inc vane ro nu mu" than tvr,I?%1 prn-ent mw+w111. !'rx pert}'+s assessed pt nne h+nuhrd prrrenl (IOt1Sbl al++s fury ++krrkrt �r11rn a1 rhr nme alnrx• cwaitra[rrnrt wchrrngr m rn�vn rslnp. The trtr m+e is um (1%) penl-nt nfthe ,nl+tr. .Gntrce= Rnwrsnk C'rntnty A.srrr,w+r Art, HDL Coven h Cone 194 City of Palm Desert Historical Net Assessed Taxable Values Citywide Graph - Assessed Valuation Growth Last Ten Fiscal Years Net Assessed Valuation - Historical Comparison Value in Millions FY 2009 to FY 2018 $20,000 $15,000 $10,000 $5,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Percent Increase in Assessed Valuation FY 2009 to FY 2018 20,00% 15,00% 10-00% 5,00% 0,00% -5.00% Historical Malor Additions Annexations FY Retail Centers FY Cook Street Area 88189 Town Center Mall 83/84 Country Club #28 93194 Desert Springs Marriott 86/87 Price Club/Costco 93/94 One Eleven Town Ctr 88189 Palm Desert CC #29 94195 Mervyn's Center 92193 Palm Desert Greens 04/05 Desert Crossing 95196 Suncrest 04105 Lucky's/Albertson Deep Canyon 96/97 Remodel 111 Town Ctr (Best Buy) 97198 Gardens on El Paseo 98199 Remodel Westfield Mall (Sears, Barnes & Noble) 04105 Sears Automotive 04105 Lowes Home Improvement 05106 Walmart 1 Sams Supercenters 05106 Kohls 07108 Golfsmith Extreme 08109 El Paseo Village 09110 Best Buy & Ulta 11112 Remodel Westfield Mall (Dick's/H&M1Restaurants) 12113 PGA Tour Superstore 12113 Total Wine & More 13114 Tesla Motors 15116 Source: Riverside Counrv.4ssessor ehru HDL C'oren & Cone 195 City of Palm Desert Supplemental FY 2018 and 2017 Breakdown of Basic 1% Property Tax Rate Not In Redevelopment Project Area axing Agency County Free Library County Structure Fire Protection City of Palm Desert (1) Desert Sands Unified School District 1 Desert Community College 1 Riverside County Reg. Park & Open Space Riverside County Office of Education Desert Hospital Coachella Valley Public Cemetary Coachella Valley Recreation & Park Coachella Valley Mosquito & Vector Control Coachella Valley County Water Coachella Valley County Water Imp. District 80 Coachella Valley County Water Storm Water Unit General Purpose Basic I% FY 2018 Rate 28.177327% 2.728242% 5.873086% 0.000000% 36.221587% 7.526714% 0.426231 % 4.094919% 1.996808% 0.339927% 2.071624% 1.369698% 2.736607% 2,972906% 3.464324% 100.000000% FY 2017 Rate 28.177327% 2,728242% 5.873086% 0.000000% 36.221587% 7.526714% 0.426231 % 4.094919°% 1,996808% 0.339927% 2.071624% 1,369698% 2.736607% 2.972906% 3,464324% 100.000000% fl j City of Palm Desert is a No -Low Property Tax City and the 7% represents n•har fire sure allocates to No -Lois- Property Tax Cities. Source: County ofRirerside, Property Tax Allocation Percentages. TRA 018-041, W1I1 City of Palm Desert Property Tax Rates Direct and Overlapping Property Tax Rates Last Ten Fiscal Years City Direct Overlapping Rates Basic Total Desert Sands Desert Coachella Coachella Fiscal County -wide Direct Tax Unified School Community Valley Water Valley Water Year Levy Rate itCiCt_._ _ ol_li aD.�ist. District District I.D. 58 2018 1 u.n n n.i 1.00000 0.07251 0,04030 1 u I k.k.k. 0 .niuuu 201710 1.00000 1.00000 0.08599 0.02036 0.10000 0.00000 2016 1.00UOU 1.00000 0.10915 0.02087 0.10000 0.00000 2015 1.00000 1.00000 0.10984 0.02325 0.10000 0.00000 2014 1.00000 1.00000 0.10954 0,01995 0.10000 0.00000 2013 1,00000 1.00000 0.11156 0,01995 0.08000 0.00000 2012 1.00000 1.00000 0.11467 0.01995 0.08000 0.00000 2011 1.DU000 1.00000 0.10036 0.01995 0.08000 0.00000 2010 1.00000 1.00000 0.08112 0.01995 0.06000 0.00000 2 D9 1.00000 1.00000 0.07990 0,01995 0.04000 0,00000 Notes: Proposition 13 limits the ability of the city to raise the property tax rare. Source: CalMuni Statistics Inc 197 City of Palm Desert Principal Property Taxpayers Current and Ten Years Ago 2018 Taxable Percentage of Ass ed Value City Tax Ass ess Value 2009 Taxable `Percentage of Assessed Value City Tax Ass Value WEA Palm Desert 5 S 153.280.347 152,134,509 133,879,627 128,514,726 98,233,189 65,426,527 50,780,771 50,682,887 50,639,859 49,650,678 933.223,120 1.06 1.05% 0,92% 0.89% 0.68% 0.45% 0.35% 0.35% 0,35% 0,34% 6.44% Marriott Desert Springs $279.271,039 135.678,768 86,575,826 80,189,859 77,210,317 62,544,816 60,922,381 58,920,898 46,666,992 43,628,923 $ 931.609,829 201% 0.98% 0,62% 0.58% 0.56% 0.45% 0.44% 0.42% 0.34% 0,31% 6.72% Marriott Desert Springs WEA Palm Desert LP Gardens on El Paseo LLC Desert Crossing II WVC Ranco Mirage Elisabeth E. Stewart PRU Desert Crossing LLC Gardens SPE 11 CC Cimarron LP Monarch Sevilla Venture Walmart Real Estate Business Trust Palm Desert Funding Co First American Trust Canterra Segovia Operations Walmart Real Estate Business Trust Sunrise Spectrum Time Warner Ent Total & Total Note. The estimated pruperry lax revenue stored above is basted rgxm net taxable vol++es, tax ratios am! base } e+r vulura rhea rmpuct the revenue calculation. As a result, parcels with the sume assessed value that ore assigned fo d1 ffercm lay rare area.+ mcry camr+huee dasslmdar amounts oftatal revenue to the Cat and Redevelopment Agency. Source: Hd!_ Caren 4, Cone thru Riverside County Assessor 17 l8 and Hdl_ Goren & Come thru R+venude County Assessor 08 09 198 City of Palm Desert Property Tax Levies and Collections Last Ten Fiscal Years Collected within the Fiscal Fiscal Year of the Levy I'I 12113) Year Taxes Levied Ended for the Percentage June 30, Fiscal Year Amount of Levy 2009 5,697.181 4.760,806 83.56% 2010 5.372.247 4.686,541 87,24% 2011 5,312,856 4,560,417 87,24% 2012 5,478.345 4.366,451 79.70% 2013 5,398.524 4.913,780 91.02% 2014 5,623.740 5,048,787 89,78% 2015 5,911.601 5,523,658 93.44% 2016 6.212,993 5,943,252 95.66% 2017 6,731.899 6.022,566 89.46% 2018 6,729.952 6.553,297 97,38% Collections Total Collections to Date in Subsequent Percentage Years (41 Amount ial{s) of Levy 135,057 $ 4.895,863 85.93% 282,866 $ 4,969,407 92.50% 486,495 $ 4.776,795 89.91 % 1,111,894 $ 5,478,345 100,00% 484,744 $ 5,398,524 100.00% 574,953 $ 5,623,740 100,00% 387,843 $ 5.911,501 100.00% 269,741 $ 6,212,993 100.00% 182,652 $ 6,205,218 92,18% 173,642 $ 6,726,940 99.96% (1) City of Palm Desert is on the "Teeter Plan" with the County of Riverside. The first payment was received in the fiscal year 1993.194. (2) City of Palm Desert is a No -Low Property Tax City" Proposition 13 rolled she tax rates back to 1973 which is when the City of Palm Desert incorporated and the Property Tax rates were zero. Based on current stare law the Coumy allocates 7% of the I % assessed values within the City less the Redevelopntenr Agency tax increment. Fiscal Year 1992193 was she first year to receive the NolLow taxes. (3) Fiscal Year 1996197 final total collected includes adjustments for No -Low property tax collections from prior years modified by the County of Riverside. The County adjusted the payment to the City of Paint Desert (FY 199"6) far the annexation of Paint Desert Country Club. (4) Includes tax collections accrued as of June 30. 2018. (5) Includes amounts receivable for tax year 2017-2018 along with prior receivables due for prior tax years. Source: Riverside County Auditor Controller Office and City of Palm Desert `11:1 CiI) of I'ahn Dc�r[ Supplemental Top 25 Sales Tax Generators Graph - Fiisturical Sales Ta% Trends June 30.2018 I Top 25 Sales Tax Generators (1) I Primary Economic Category j` ALBERTSON'SFOOD CENTERS SUPERMARKETS APPLE STORES SPECIALTY STORES BEST BUY STORES LP APPLIANCE 1 ELECTRONICS CIRCLE K FOOD STORES SERVICE STATIONS COSTCO WHOLESALE COMPANY WHOLESALE GENERAL STORES J.0 PENNY COMPANY DEPARTMENTSTORES JW MARRIOTT DESERT SPRINGS HOTEL 1 FOOD & BEVERAGE KDHLS DEPARTMENT STORES DEPARTMENT STORES LOWE'S HOME CENTERS BLDG.MATLS-WHSLE MACY- S 0 E PARTMEN T S TOR ES ❑EPARTMENTSTORES NORDSTROM RACK DEPARTMENT STORES PGA TOUR SUPERSTORE GOLF & SPORTING GOODS RALPHS GROCERY SUPERMARKETS SAKS FIFTH AVENUE DEPARTMENT STORES SAM'S CLUB WHOLESALE GENERAL STORES SEARS ROEBUCK & CO DEPARTMENT STORES SUPLOT PARTNERS SPECIALTY WHOLESALE STORES SPECTRUM TV CABLE PROVIDER STONELEDGE FURNITURE HOME FURNISHINGS SUPERIOR POOL PRODUCTS SPECIALTY WHOLESALE STORES TARGETSTORES ❑EPARTMENTSTORES TESLA MOTORS AUTOMOBILE DEALER TOMMY BAHAMA APPAREL STORESMESTAURANT TOTAL WINE & MORE SUPERMARKETS WA L-MART SUP E RC E N TE R DE PAR TM E NT STO R E S [ I] listed m Alphatwneal Order Sales and Use Tax Trends FY 2009 - 2018 Millions ._ = i, Cha nQe from Pn or Year $23.0 $21-0 S19.0 $17.0 $16.0 $13.0 $11 0 $9.0 $7.0 rA v O 0 o p N N N Annunr. 14.474 13,273 14, fi 80 -1 N y V N N N N N 15-836 16.764 17-258 17.564 O o O N N N 18-994 18305 18,627 Nare: (•lrrrenr C allivema Imrprrrlrrhm llrrAA&-lNrlr r jlrrdfr'rdrxd fay rr firrrrr(mon as Wr efxF wr to a)ftirrF(e rxr jw frrer[d7' rrh+rnkrrrwr, rherejr+re Un jnk-nrmF Irrfurm<rrirrn xhrrh 15 p fecled by kn. Rr wo drs h• -d 1 he Sarre of (Wifivrrxr exrl"Wed Safes Tar B2 r e1rNr %rrh Prgwr0 lawtbm rr naa reFrn•.verrrs fbe prrrrxw nj.ale. rm F7krF x rre• erclrnrr rL 5'nrm, SROF. Nvr Mani& —,es LLC In Grn g— m cm frvr &,ae FFAF'Pn prm-Trrxrs, i'ip nfprrlm Fk•.rrrr 200 City of Palm Desen Supplemental Taxable Sales by Category Last Ten Calendar Years Sector 2017 2016 2015 2014 2013 2012 2011 20W 2000 2008 Apparel Stores $ 1,912,324 $ 2,017.617 S 2.054,232 $ 2.080,342 $ 1.956.390 $ 1,884.720 $ 1.738.840 $ 1.682.350 $ 1,341.860 $ 1.424.880 General Merchandise 3•675,927 3.588.672 3.678.239 3.786.704 3,809,3D5 3.783.700 3.667,800 3.210,230 3.043,960 3.266730 Food Markels 804.225 753,419 757.334 799,835 807.438 767,770 507.340 468.900 405.730 448.800 Restaurants ;1; 3.074.872 2.955.944 2.820.500 2.725.634 2.561.754 2.377.780 2,276,530 1.520.430 1.374.750 1.459.070 FumiturelAppliance ` 1,093•695 1.146.949 1.099•638 1,048,971 988.716 996.960 973.270 971.710 974,150 1.061.660 Bldg.Mdl15-Wholesale 1,389.484 1.274.500 1.200.141 1.128.354 1.113.345 984.810 882.170 730.230 582.410 865.640 Automotive 606.305 525,291 256,144 221.758 201.896 198.570 182.640 150,940 113.140 103.010 Service Stations 465.705 430J20 508.861 597.432 624.649 638.490 866.370 607.640 664.160 649,120 Other Retail 1,875.063 1.912,870 1.879.937 1.969.242 1,769,914 1.586.330 1489,210 1.414.080 1,857.220 2,180.050 Non-Retail(1) 1.641,878 1,911.824 1.659.439 1.681.430 1,498,793 1,455,190 1262,170 1,822.270 1.856.550 1.822.230 Totals S 16.539.496 S 16,517,806 S 16.114,465 $15.939,698 $15.332,432 $14•674.320 $13,846.340 $12,578,780 $12.213,930 $ 13.281.190 City direct sales tax rate 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% (1) N ur•rc+ml any n mix f Mnv*fkrCm dulllhuWs.. hrrrlkm and pfflj BYlrnMls AlfinR dwel Rl CUHsnmi n' Note: The comhrmll sales eax mle far the Ctry of Palm Iksere es 7.75K uhieh mprecenls the Seale ofCalifwwo mandated fax nae of 7,2S95and 0.5%mldmrmal sales lax imposed by the ('mnh' of Rrrennk. The f'rty of Palm Veserl meows I %ofall.vales lavWrlelnled rrNhnt the city Mons. .S'wrnr Mnnrr M,-HC ru L'nGhrrnm Verb Arxrrd liyrruhennnn 201 City of Palm Desert Supplemental Principal SaIes Tax Remitters Current and Ten Calendar Years Ago Ir1 s ry 2017 Zoos Tax Amount Percentage Tax Amount Percentage General Merchandise 3,675,927 22.23% $ 3,266,730 24.60% Other Retail 1,875,083 11,34% $ 2,180,050 16.41% Non -Retail (1) 1,641,878 9.93% $ 1,822,230 13.72% Restaurants 3,074,872 18.59% $ 1.459,070 10.99% Apparel Stores 1,912,324 11.56% $ 1,424,880 10.73% Furniture/Appliance 1,093,695 6.61% $ 1,061,660 7.99% Service Stations 465,705 2.82% $ 649,120 4.69% Bldg_ Matls-Wholesale 1,389,484 8,40% $ 865,640 6.52% Food Markets 804.225 4.86% $ 448,800 3.38% 4utomotive 606,305 3.67% $ 103.010 0.78% Totals $ 16,539,496 $ 13,281,190 (1) Non -retail are a wir of ntanr factt�rers, distributors. builders and professionals selling direct to consernters. Note: The combined sales tar rare for the City of Palm Desert is 7, 75%. which represents the State of California mandated lax rate of 7.25% and 0.5% additional sales tar imposed by the Count' V of Riverside. The City- of Palm Desert receives I % of all sales tar generateirithin the cin- limits. Sauce: Mrnrisenices LLC via California State Board of Equalization 4IN Special Assessment) Fiscal Local Obligation Year Bonds n City of Palm Desert Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business Type Activities Compensated Absences Total Percentage Claims and Judgments N Capital Primary of Total Personal Payable Pa a Leases Government Income" 2009 4,717,000 ` 3,538,422 358,121 2010 10.095.000 "'' 3.062,201 245,414 2011 9.543,000 2,798.466 122.707 2012 9,238,000 3,26B,224 - 2013 8,920,000 3,334,322 2014 8,246.000 3,713,172 - 2015 3,302,000 2.972.605 - 2016 3,045,000 2.737,997 - 2017 2.808.000 2,563,719 - 2018 2,658,000 2.747.009 - Naves: Deb ds regarding the city's ouivandtng debt can be found to the notes to she financial statements ° - Personal income. papulultun and per capita informabonprorided by C altf nnfo f)eparimem off- urance, and il. S ('ensus Bureau and ar estimated by C W Finance using I %grtnr-th rate- Total Debt Per 955,141 9,578,684 0-39% 200 328,273 13,730.886 0.56% 287 1,035.721 13,499.894 0.55% 282 2,291,358 14,797,582 0.61% 309 1,751,083 141005,405 0.57% 292 1,222.915 13.182.087 0.54 % 275 1,435,046 7,709,651 0.32% 161 929,060 6.112.357 0.28% 140 499.881 5.891.600 0.24% 123 1,493,330 6.898.339 0.2B% 144 6 - Special Assessment Gowrnment Activities includes Highlands IlndefXroundtng Al) No 04-01. as ofJune Jd, 2018 the balaitce uus SI-36RM 1•iscal Year End 2009 the ('ity issurd the hnerk lmkpemlence Progrumr limited Obligation Impmventem Bonds Series 2009A (taxable) S2.5 million io fatal the Energy Itufependencv loan 1)-ogrtmr. The actual Bond Issuance nos jrrr S2-015m d' The Cily issued S1.136 million dollars al the• Enerp- Indepettdetice Pmgram (AB81I Ass"tmems) Limited Obligation Itnprarrentem Bonds (Taxable) The .specrai assrrsmnenr cofleclion will Commence dewing the fiscal year 20M2011. Au June 30. 2011i the outstanding balance irav SO. 531M In addition the Palm f)escrt f-wancntg Authority Issued S5:225 million dollars ce the 1 neW Imlepeadenve Program Variable Rate Demand Lease Revenue Bondv..Srrtes 2lM)9(FederallyTaxable). On September 2, 2014 the bandv r•ere culled in full -as of ,horn 30, 2017 their were no aursfandnng hounds. 1 - Personal nxnme and Per Capita startseir includes government and husmess type ac urnttes combined KIM City of Palm Desert Ratios of General Bonded Debit Outstanding Last Ten Fiscal Years 0 General Bonder! Debt Outstanding Percentage of Actual Special Assessment Taxable Value of Per Bonds Property Capita Note: There is no General Obligation Bonds from FY 2009 to FY 2018 K UT City of Palm Desert Supplemental Special Assessment Information June 30, 2018 2003 01-u1 Revenue Bonds 2004 R-Bonds Cons noanity Facilities District 2004-2 section 29 District NamelDesrription 2W301-01 Rer'enue s Silver Spur Ron It 98 1 No.2005-1 (University Park) Assessment District Bonds 94 3 hlerano I'tility Canyons � Bighorn Special Tax Bonds Series Limited OtAiaation s Undergrounding 2006A Improvement Bonds Bond Issue Date ob+P 4(';Z ffl3 9"e19•74 95r9� Q¢ ,''' ,M1 Final MaturityDate 091W� p91o2128 09.•'9,'�I8 09/01/37 2'2037 Highest lnlerest Rate 5.25% 5 375Yn 5 1 lW/1, 5 424I 5 1W/. Bond Issue Amount S 1 2.319,099 S p55_9g S ¢7,9�j 111)t7 29,430,000 Mal uredPriPic i al $ 878, S 9$0,000 $ �!^ Called Principal s 10dd000 $ 160i000 $ 1,34d�00 S 27015/�000 ?�,195,000 Outstanding Bonds 4 $ 2�5/p�pp T 1,270\000 T 65, 00 S 21,93 r Redemption Premium 3.W9S 3 00°/. 3 ty"' 3 "/q 3 "N Original Parcels 121 201 9f 78 f48 Active Parcels % I8 193 07 777 Reserve Requirement $ ;9�oa s 1,179„404 $ op,§4 s � 1��.9� Reserve Balance IT 18 S 79,375 S 163.636 S 68.651 3 S 59, S 1, ,0 8 Prince pal Due 18119 "' $ 85,OOD S 85,000 S 65.000 S 935,000 670,000 Pri ne ipal Levied 17118 ' S 98,168 $ 89,252 S 61,813 S 935,000 734,391 interest Due 18i19 "' S 6.870 S 65,179 $ 1,638 S 1,533,500 1,086,913 Interest Levied IT1.8';' S I3,965 $ 68,737 $ 3.152 S 1,556,875 1.208,534 17/18 D& ienc5• Rate l w, 30904 0 OD55 0.W 4,W/. Arbitrage Installment Computation Date 90ga Rebate Due 06/25/23 06/25/23 091021I9 05/08/21 04/11/22 Arbitrage Yield Rate 4913'% 4.91295'. 4.49949: 5359M 5.0134Ye Arbitrage -Amount U«cd - Contintmig Disclosure Last Report Issued I11o/2018 111U+2018 12115120t7 1/10/2018 112o12018 (1) Reserve Balances ore- as of h 30 18 (2) Amoam reprerencr principal pied inrereri cedlecred spring she FY 17 18 tax roll jir Dehl.Wrrrce Payment dire is FY 18 19. (3) l erred amenvirr reflect adjastmencr for erinrlroction filndr, resent' fifnds, redemption fiaxls and other arllussmems. (a) Oatsranding bond balance ar.lane 30. 2018. (5) The sc hedide presents the informaron jeer each inch vidual focal oblrgatim homded dairicr. A.rsessnieni Districts 93-3 Metuno and 01-01 SilverSlmr were refunded and obligated la pay Dehi Sen•rce la Series 2003 A.ssessmenr Revenue Brxals see awe 13 fix arkilfranul information. Sexirne: Wddan h wne'ial Aiuional Reprxt 205 City of Palm Desert Direct and Overlapping Government Activites Debt June 30. 2018 2017118 Assessed Valuation: DIRECT AND OVERLAPPING TAX ASU, 5EEMENT DEBT', Desert Community College District Desert Sands Unified School District Palm Springs Unified Sc hoot District City of Palm Desert Limited Obligation Improvement Bonds City of Palm Desert 1915 Act Bonds City of Palm Desert Community Facilities District No. 9 1 -1 City of Palm Desert Community Facilities District No. 2005-1 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT OVER1APPING GENERAL FUND OBLIGATION DEBT: Riverside County General Fund Obligations Riverside County Pensions Obligations Desert Sands Unified School District Certificates of Participation City of Palm Desert General Fund & Enterprise Obligations Coachella Valley Recreation and Park District Certificates of Participation TOTAL GROSS OVERLAPPING GENERAL FUND OBLIGATION DEBT Less: Riverside County Supported Obligations TOTAL NET OVERLAPPING GENERAL FUND OBLIGATION DEBT OVERLAPPING TAX INCREMENT DUTISUCCESSOR AGENCIES) TOTAL CITY DIRECT DEBT TOTAL GROSS OVERLAPPING DEBT TOTAL NET OVERLAPPING DEBT GROSS COMBINED TOTAL DEBT NET COMBINED TOTAL DEBT S 14,447,437,657 City+s Share of Tot a] Debt 6130119 % Applicable e1) Debt 6130118 S 314,935,000 18.6& $ 58,747,975 294,895,000 34.138% 100,671,255 405,516,959 4.382°/ 17,769,753 1,183,000 100000% 1,183,000 24,903.000 100.000% 24,903,000 0 100.000% - 29,195,000 100.000% 29195000 $ 232a69,NJI 5 812,829,106 5.479% $ 44,534,907 266,365.000 5.479"/a 14,594,138 43,550,000 34.138% 14,867,G99 4,ISI,330 100,000% 4,151,330 (3) 779,538 26.699% 207,784 S 78.355.258 272,754 S 78,092,504 S 530,573,028 0.252-100°/n S 2M,814,224 S - S 558,488,135 S 558,211,381 S 558,488,135 (2) S 558,215,381 (1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value Ihat is within the boundaries of the city divided by the dislrict's total taxable assessed value. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non -bonded capital lease obligations. (3) Includes special assessment debt with government corm milmenl, enterprise obligations wiIh government comitment, and lease revemie bands, if applicable. Ratios to 20107-18 Adiusted Assessed Valuation. Total Overlapping Tax and Assessment Debt 1,61 % Total Direct Debt 0.00 Gross Combined Total Debi 3 87% Net Combined Total Debt 3.86% Ratios to Redevelooment Successor Aeencieslncrementa] Valuation S (9,333,112,954) Total Overlapping Tat Increment Debt 2.70% Source: California Municipal Statisties, Inc., City of Palm Desert Finance Department Kor.] City of Palm Desert Legal Debt Margin Information Last Ten Fiscal 1-ears Leval Debt Margin Caku lation for Fiscal Year 2018 Assessed Valle S 14,447,437.657 Debt Limn(15%of Assessed Value)f1}� 2, 167.115.649 Dcbt Appicabk Io LImiL General OOhgation Bonds 1,366,000 Less' A n unt set aside for repayment of general obligation debt Total Debt Applicable to Limn - L ega1 debt margin S 2 16S 747 645 FISCAL YEAR 211J09 2010 2011 x012 2013 2014 2015 2016 2D 17 Z0la Debt Limit 2.076.172.690 1999.731,410 1-969-825,360 14154.624.932 1-811-620.824 1,869,699,172 1-963,741,235 2.059.815.120 2,114,442.742 2,167,115,549 Total Net debt applicable to hrmt 2-702.000 1.719.004) 1.650.000 1-624.00D 1.589.000 1.526.000 1,489,000 1,451A00 1.410.000 1,358,1100 Legal debt margin 2.073-470.690 1,998,012.410 1.968,187,360 1.803,000,932 s e10,031,824 1,L68,173.132 1 902.252.235 2.11".364.120 2AT3t. 32,742 2.165.747.649 Total nel debt appitable to the li mil as a percentage of debt limit 0.13% 0.09Y 0.081A 0 09% 0.09% O.g8% 0 08 % 0.07% 0.07% 0.06% I!! Srrriwt 43W n/9rr t "difi— Ci.n mrnreur f 5xk Simxr I"dt,5.aru.tlrwinpnl Var.v., h.r 5}.. F'.uQuarn Gd7 City oPPal m Desert Pleadge-Revenue Coverage Last Ten Fiscal Years Special Assessment Bonds Tax Increment ° Special Debt Service Special Debt Service L Fiscai Assessment Assessment ljN§jjwUEENEWdjjjgPCVOnS PrincWl In st Coverage Collections Principal Interest Coverage 2009 8.486.467 2,816,000 5,566,827 1.0004 33.095.785 12.610.000 20.043.623 1013 2010 6,304,563 3,793,000 5,515.677 0.6773 33.292,785 14,145,000 19.516.455 0.969 2011 9-695.868 3,452,000 5,595,543 1-0717 39.400,572 22,240.000 18.767.205 0.961 2012 8.822.163 3.332,000 4.897.651 1,0720 32.941.958 ' 15.290.000 17.651.958 1.000 2013 9.524,786 3.786.896 5.255,558 1-0633 33,473,418 ' 16,315,000 17.158,418 1.000 2014 ' 14.895214 12.324,000 ° 4.954,432 0,8621 38.444.447 ' 23,650,000 14,794,447 1 000 2015 10.848.129 ° 8,159,000 ' 4,543,692 D-8540 32.294,255 ' 18.295,000 13.999.255 1-000 2016 8.537.227 25,401,000 " 4.463,786 0.2859 34.810.024 ' 18,055,OD0 16.755.024 1 000 2017 5-896,570 3,192.000 3.233.399 0.9177 37.535.680 °' 16,255,000 '' 21,280,680 1.000 2018 5.590.479 3.545,000 3,088,864 0.8427 23.428.001 ' 14.235.000 °' 9.193,001 1.000 NWes: 1XIads regarding the ctry'r ora eondrng debt can he fund in the notes is the financial sfarementr The Cay issued S2.015 mdhan dollars of fhe Energy' Independence Program (ABBI1 Assessments) Limited Ubhgannn Improvement Bondy (Taxable) The special assessment collection sr ill commence during she fiscal year 2009.2010 with the first interest payntent paid on March 2. 2010, a - Tax ai renwnl hump are hacked by properly far increment bused on calculation provided by the Riverside County tar assessor office - Additional Infdrrmanon on tar rn remmnt Lary be fewn(in the notes to the f'mrnctal statements. " The C''ry tssuedS 1-136 mrlfron dollars of the F.•nergy lnlepewkmv Program (ABBDI Assessments) Limner! Ohlrganon improvement Bonds TTamaNe) The spec'01 assessment cntleruun mil! commence rhiring flre ftsralyear 201&2011 In addition the, Palm Revert Financing Awhow) issued SS-225 million rhdfars of the F.irefgy lnakpendcmr Program Variable Rate Ihmand Lease Revenue Burins, Sen" 21WiTederally Tarable). lateness is paid monlhly commencing August 2009 and Principal is pawl annually on September 2 T he firs' Principal puyment rear paid an.Svp(ember 2, 2010. a A portion of the SSo.51 (2o07) and Sl7- vi5 (2o(8) mrflrrm (-Fly 1005-1 ((lntverwify Park) Bras pre pard to the amount of $6.269 Millrun The prepaid 56-769M and S2.280 (2604-1) were called during on Septeinher 2, 2014. Thr total amount paynble for the bonded obligations is dishur-sed by the State of[ ohjarma Department of Finance 10 the C uy ofl ulm Nserl Succes.sorAgenxy. The annual collection equal the anneal ahltgakuru. l The 00ry called the $1225 Million F.nergs Independence Diagram Vartahle Rate lkmand Lease Revenue Rants, Series 2009 (Federally Taxable) in fitlf on September 2, 2014 in the amours ofS4.485 Million The hherhry Fund wed the remaining S3.225 Bunl Van& in the amount of S2 155 Million in addition to the 575 Million loan from the City Cmnend Fund as proceech to cull the hr'nh. s Tire CIry ufpaln' Thsen loaned the Energy Fund S2.5 Million to troll the 55-225 Million Energy Independence Program Lease Revenue Bunrds• ,Series 2009 (Federally Taxable). The S2.5 Mdhun rs rrnlrnded as Special Assescmcnt f.'ullertrons- DyurnnK the Fiscal Year 2013-16 the ('(m'nirmites Facilities lhstria 2005-1 (Onrversnry Park Series, S)%ecurt Tar Bonds Seres 2006A and Series 2007 defeated $20..885M of'lre original tssrredS67 7)5M. t- poring the Fiscal Year 2016.17 the SuceessorAge" rssuedfourseries of hondr (1) fix Tat Aflrxnfron Refunding Burins. 2017 Sores A (S32-39M), (tt) Taxable Tar Allocation Rcynndng Rondds, 201 7Series 8 (Sl40.130Af). Tax allocaitan Refunding Roads, 2017 Series H-A (S 7. 365M), and (is) Taxable Tar Allocation Rcfanudmg Burls, 2017 H-B (S45.815M)- See Nose 18 iia Allocation Bonds. The 2017 Refunding Boons ref rndodall of the fax allocation revenue bolds: with she exception of the Project Area No- 12007A Borah, and she Pro)ec' Area No- 2 2003 Burins. 208 City of Palm Desert Demographic and Economic Statistics Last Ten Calendar Years Calendar Percentage Per Capita City Riverside Percentage County Year City Increase Personal Personal Unemployment County Increase Unemployment End Population(Decrease) Income CY a Income CY hate b Population Decrease} Rate ti 2018 52,769 4.0 o 5 2,831,046,858 $ 53,650 5.00% 2,415,955 1,31% 4.80% 2017 50.740 2.8% $ 2,789,208.727 $ 54,971 4,00% 2.384.783 1,57% 5.70% 2016 49,335 -3.4% $ 2.747.988,894 $ 55,701 4,20% 2,347,826 1.71% 6.70% 2015 51,053 1.3% $ 2,707,378.221 $ 63,031 4,60% 2,308,441 1,25% 6.50% 2014 50,417 GA% $ 2,667.367,705 $ 52,906 4.90% 2,279,967 1.10% 8.40°/0 2013 49.949 1.0% $ 2,627,948,478 $ 52,613 6.00% 2,255,059 1.23% 10.20% 2012 49,471 0.7% $ 2,589,111.801 $ 52.336 7,74% 2,227,577 0,44% 11.99% 2011 49,111 -5.7% $ 2,550.849,065 $ 51.940 8.67% 2,217,778 3.66% 14.44% 2010 52,067 1.1% $ 2,513,151,788 $ 48,268 8.8% 2,139,535 1.51% 14.65% 2009 51.509 1.2% $ 2,476.011,613 $ 48,069 6.8% 2,107,653 0.93% 11.46% a - Perxanal Income ewtmated bared on average growth rate afpreriot6 fouryears. The growth rare fewfor used was 1.5% Income chou will be updated once the actmil data t,% amadable. b - Ilnemplayment role for fiscal yrar 17 18 is based on annual information from Stale of [:alifomia Employment 1]evelopmenl Department Luber Market Information Division (not seasonally mijusted) Sources; State L)epctrlmen( of'Ftnance, (.IS. Dept of Labor, fole Emplrymvnt l)cvclopmcm 1)cMameni 209 City of Palm Desert Principal Employers Current and Ten Years Ago 2018 2009 Percentage of Percentage of Employer Employees Rank Total City Employer Employees Rank Total City Employment Employment JVV Marriot-Desert Springs JW Marriot-Desert Springs Resort & DS Villas 2,304 1 9.76%v Resort 2.000 1 6.08°I Universal Protection Services Heckmann Corp 1.500 2 ° 6.361v 1.871 2 5.50°/v Securitas-Security Service USA 700 3 2.97°/0 Guthy Renker Corp. 825 3 2.51% Organization of Legal Pro's College of the Desert 501 4 2.12°W 711 4 2.169'v Sunshine Landscape Securitas-Security Service USA 500 5 2.12°/v 700 5 2.13°/v Marriott Shadow Ridge Desert Valley Industries 300 6 ° 1.2710 400 6 1.22°/v Desert Arc Wa[Mart Super Center 250 ? 1.06°/0 350 7 1.06°Io Costco VVholesale Wiliam Bower Associates 250 $ 1.06°Iv 350 8 1.06°/° Bighorn Golf Club Macy's West 250 9 1.06%v 30D 9 0.91% Spectrum Bighorn Golf Club 236 10 1.00%v 250 10 0.76% Totals 6.791 29%v Totals 7,697 23% Smaves: Injogroup, (A Employment I-knVopmem I)e1mrimenr - Federal und.Suue Government noe rmlrrded pill] City of Palm Dcscrt Supplemental Miscellaneous Statistics June 30, 2018 City] Municipal Government Form of Government: Date of Incorporation: Number of Employees: Size of City: Geographic Location: Streets: Number of Business Licenses: Number of Hotels & Rooms: CONTRACT SERVICES: Police Department Fire Department Animal Control Water & Sewer Trash Collection Electric Gas Telephone Airport Public Education Elementary School (grades K - 5) Middle School (grades 6 - 8) High School (grades 9 - 12) Community College - College of the Desert CSUSB - Palm Desert Campus UCR - Palm Desert Graduate Center Insurance COveracte General Liability Coverage (Excludes Earthquake & Flood) Special Events Worker's Compensation Property Insurance Health Insurance Medical Dental Vision Disability Insurance Life Retirement Source: Ciry of Palm Desert Council - City ManagerlCharter City November 26, 1973 109 Full-time Employees 26.96 Square Miles Located 117 miles east of Los Angeles and 515 miles South of San Francisco. 170 paved street miles 9.094 active business licenses 17 hotels, 2,616 rooms Contract with Riverside County Sheriff - 78 positions plus 36 support staff Contract with Riverside CountylState Fire 54 positions plus 11 Fire Prevention staff Riverside County Animal Services Coachella Valley Water District Burrtec - Waste Management Southern California Edison Southern California Gas Verixon Palm Springs International Airport 4 1 1 1 1 1 Calif. Joint Powers Insurance Authority $50 MillionlEvent Excess Coverage: from $2 Million up to $50 Million limit Calif. Joint Powers Insurance Authority $1 Million Calif. Joint Powers Insurance $10 Million Calif. Joint Powers Insurance Based on Prop. Value California PERS; choice of PPO, HMO, Kaiser, Blue Shield Delta Dental Vision Service Plan Disability - Standard Insurance Company Standard Insurance Company California PERS - Public Employees' Retirement System 211 City of Palm Desert Full-time Equivalent City Government Employees by Function 1 Program Last Ten Fiscal Years Function 1 Program 2018 2017 2016 2015 2014 2013 s 2012 a•b 2011 e 2010 2009 General Government City 31 32 32 34 34 33 26 31 31 49 Economic rev & Housing 10 11 13 13 13 12 17 24 25 19 Public Safety 29 29 28 26 25 24 24 25 26 35 Police & Fire (1) 179 170 163 169 173 157 162 155 151 148 Public Works 39 39 40 40 40 38 40 47 49 53 Totals 288 281--- 276 282 285 . 264 271 284 284 318 (1) The City operates os a "comrac't c'lly" ulrl+m:rng, prtmardy, agreement with other governmental enfrlres, private firms and individual, to provide services. C:ontrocled services include, Police and Fire prolecf+on through the County of Rtversrrk, Cal -lire. animal control, health.servtces. legal ,serwees anti laWtcape maimenom ,e. ❑ - As of June 2011 realignments were mcule due to budget cuss, refrremems and Icr .�vffs, these continued to F'Y 1013. b - On 1•'ehrurary 1, 2012 the Stare of C:alrfornu+ dissulved the City ofPr+lm Lk -serf RedeVelopment Agency as par! of the Sfalewide d+.ssol+d+on nl'all City Redevelopment Agencies, which in turn crerded the SuccessorAgency to the Redevelopment Agency of the C ay of Palm ❑eserl. 1n�+rc'e: C'!!y of Palm Desert I•inanc+al Plan, California Department of I•'arestry and Fire P rarection, Riverside County Sherdfs Depatvment 212 City of Palm Desert Operating Indicators by Function 1 Program Last Ten Fiscal Years Function 1 Program 2018 1, 2017 2016 2015 General Govemrnent 9usiness License lnspectle , 24 33 196 477 515 473 617 Contracted Services - SurrtecWaste (1) Refuse Colleded (tonsl 56,348 $4,301 52.772 54,865 57,935 52.131 49.205 53,108 51,483 58.198 Recyclables Colleded 28119 26651 23.810 24.611 26.424 24.13M 23,5aa 22,857 20,591 22,155 Puplic Safety Physical Arrests 1 554 1.520 1284 1.946 1.348 966 1,012 1,134 1.342 1.446 Parking Violations 575 587 712 794 366 198 559 332 933 1,278 Traffic Violations 7.012 6.939 6.223 5.525 5.284 5.080 6,216 8.360 10,200 9,162 Emergency Responses -Fire Department 9.984 9.617 9.285 6.628 8.235 7.907 7-151 7,720 7.772 7,149 Fiees Extinguished 90 68 103 86 106 104 101 107 134 119 Fire Inspections 3,376 1274 2,116 2,989 2.552 3.048 5.235 4,651 4,825 8.248 Bvrldrng Permits Issued 3,644 4.734 4-704 4,909 5-562 4,546 3.448 3.711 3.230 3.637 9u:lding l nspedions Conducted 18.601 23.542 24, 756 24,057 24.830 19,107 14749 14.069 14080 18.040 Putsiic Works _ sheet Resurfacing (miles) P) 7.3 26-8 2.9 8 34 23 60 5 8 1 Parks, recreation d culture AIIiietic Field Parmils Issued 2,934 MR 2.997 4,430 6,54E 2.635 3.682 6.050 6.291 6,149 Arnphdheater 1 P"llons Perm115 I5sued 121 106 104 283 247 128 266 286 226 133 Community Center Admissions 60.769 51,694 64.493 53.426 50,204 53.062 69.240 30,2M 59.986 55.954 Aquatic Center Admissions (2j 53,739 58.023 60.359 54.103 43.545 48.663 45.909 4.329 (1) 71ic Ciiy up,•nw-' ar a "cvmrraci city"anrr_mg. primarily ageemcni iri+d arh, gnrnrnremal cnrirre.[. pmwe frmrs aml im&rJrcala to pmvuk senvices. ['vnrrarred srnr(•es im•lid • Pahce• and Fin pr w0on rhrvngh the C'axmy gfRnrrsxh•- animal a wrvil. heallh srmcrs. kga7 eenvea•s a"d 7andwolle MU1A1vna1ieT (2) Agrranc ('enter vynrarr m-, hegan in.lunc IUf 1. ma rgcd by the YMCA (3) Mw mrihuJs u(srrre•i rrsurJx, k hate tiny ru,x•J (•�irieaey'. nc�r •krrr equal ng nw,r mifrs r a fa '(•d (-)Per Ruiijng & &efgy D'P.rnuenr hnvm.[s hcrn.[e ih.[Inerr -arc mi 7vrtger drxtc S"mes: Rnrrside Como- Shenffs Depi., ('ahAmra Slaw• Urpanmenr of F'ommy & Fier Prmrcnvn- 0q• atPWm Ibsen. C nrxlie•Ile Va ley- R--onion iF Park Dalm1.• Rvrrrce- Waeh and I& YMCA 213 City of Palm Mscn Capital Asset Statistics by Function 1 program Last Ten Fiscal l ear% Fun ctl o n l Prog ra m 2018 2017 2016 2015 1 2014 2013 2012 2011 2010 2002 General GoNemment Contracted Services (1) ,^ _ Col',ecicn tmcrs 24 =2._.. 30 30 _= 35 57 51 54 Public Safely -Polka 3 Fire PpLi Slabons 1 Pprxe Sub Slabo,,5 1 1 1 1 1 1 0 0 1 2 2 patrol lints--.m 30 29 29 29 26 28 31 31 26 30 Patrol Uru, .Uotoryoes 9 9 11 10 10 10 10 10 10 10 Fire Stations 3 3 3 3 3 3 3 3 3 3 e Trucxs a plus 1 Reserve 4 plus 1 Reserve 4 plus 1 Reserve 4 plus 1 Rsmd 4 plus 1 Rsrvd 4 plus 2 RSrvd 4 plus 2 Rsmd 4 plus 2 Rsrvd 4 plus 2 Rsrvd 4 plus 2 Rarvd Ambulance 4 plus 3 Reserve 4 plus 3 Reserve 4 plus 3 Reserve 4 plus 3 Rsrvd 4 plus 3 Rarvd 4 plus 1 Rsmd 4 plus 1 RSeW 3 plus 1 Sppr1 3 plus 1 Spprt 3 plies 1 Spprl Fre Prevention Pck.ups 3 3 3 3 3 3 3 3 3 3 Public Works lm+es] 17p 170 170 170 17p 770 174 159 159 159 1Streets 7ratric SCrgls tParks, 99 99 98 98 98 9a 96 97 99 99 recreaftri &cubum ,4creage 201 201 201 201 201 201 201 201 201 212 Total Parka 13 13 13 13 13 13 13 13 13 14 Pran-nos 16 1fi 16 16 16 16 16 16 15 16 6ascbaihohbali diamonds 5 8 8 8 8 8 6 8 8 9 • ■(iot<rRoaoall fields 9 9 9 9 9 9 9 9 9 Basketball Cour , 11 11 11 11 1 t 11 1 7 11 11 9 11 " ennM Court 10 10 10 10 10 10 10 10 10 10 Volleyball Coung CommunAy Censers 2 2 2 2 2 2 2 2 2 2 oa Skatebrd Parr 2 2 2 2 2 2 2 2 2 2 Aquatc Ceriler (2) , 1 1 t 1 1 1 1 1 Comme Mimi Ofrrca Space [Park-Ot6ce Compler) Leaaeable Space isquato t Occupancy Rate Number of Tenants br Type Gavernm em IState. iota) r P afrt Priwre Square Footage lease by fen Govemmenl [State, local r Non -PIA private Vecanl Municipal Gulf course IDesen Wile Goo Rmq]in Courses - Fire Gand M Holes Galr Cam Clubhouse square footage Rounds per Course Fire CM7 ew Mountain V Taal Annual Round �9 50,322 50,322 50.322 50,322 50,322 50.322 50,322 50,322 50.322 50,322 82% 84% 90% 90% 86% 08% 83% 90Si 97% 90% ---" 7 7 9 8 9 9 10 10' 10 11 3 3 4 3 4 4 5 7 7 5 2 3 1 1 4 5 3 4 6 7 am egbnal) 30,907 32,287 33.127 30.907 31,921 31,321 32.021 32,696 34,617 34,617 4.061 4.061 3.561 6.269 3,294 4,467 5.215 5.663 4,735 4.735 6.218 6.938 8.688 8.025 0.025 8,513 4.310 7.360 10,2 F2 10.212 9. 136 8.416 4,946 5.121 7.082 6,021 8,776 4.613 758 758 ouruain View 2 2 2 2 2 2 2 2 2 2 36 36 35 36 36 36 36 36 36 36 172 172 172 172 172 172 172 172 160 160 39.000 39000 39.000 39,000 39,000 39.000 39.000 39,000 33.000 33,000 45 520 39 424 39.368 {4,845 45,941 45.645 45,90$ 44,745 45,968 46.041 43 712 39 931 40.910 42,407 43,160 34.669 41,656 39 179 37,146 34.699 93 332 79 355 80.276 87,252 89,001 84.314 86,671 83,923 83.134 80.940 /ll The f-iq ,+J,rmrrs ru v'ronlrek'1 W."r,rih:rnR. pnrn 00 ugr-', -1k usher R,,.rrnnrrnrrr! rnlrfres, (rrnwr �.nr. exvd rn,hi•r�i.N.. ro prrn•ii& smYrrs l ir,rrrxnrd servrcrr rm-luek Puhee ia„! F+rr prw.:rron rhnrrr,4h lLn• l'uirnrr uJHnvrrrrk•. ,ui+u+nlc•,nrrc7. hrnhh senrcri. hrynr! srnieer mx1lr.ierGrrgr.• imm�rrnnrrvr e?) Ayr,vnc ['rnrer uprroiruxi hrgrm mJiufe 201! 5inrrc rs ka-te (paw, %-.0 LVpr . [-� frr.rru .5inrr llepnrrarenr ojForrsrn• dPin• Pr„rrvrrnn. Crt ofpdra De'v". Conchr!!c lu!!r3• Rrcrewion d PuntlLsrrxi. A""' W re 214 /ll The f-iq ,+J,rmrrs ru v'ronlrek'1 W."r,rih:rnR. pnrn 00 ugr-', -1k usher R,,.rrnnrrnrrr! rnlrfres, (rrnwr �.nr. exvd rn,hi•r�i.N.. ro prrn•ii& smYrrs l ir,rrrxnrd servrcrr rm-luek Puhee ia„! F+rr prw.:rron rhnrrr,4h lLn• l'uirnrr uJHnvrrrrk•. ,ui+u+nlc•,nrrc7. hrnhh senrcri. hrynr! srnieer mx1lr.ierGrrgr.• imm�rrnnrrvr e?) Ayr,vnc ['rnrer uprroiruxi hrgrm mJiufe 201! 5inrrc rs ka-te (paw, %-.0 LVpr . [-� frr.rru .5inrr llepnrrarenr ojForrsrn• dPin• Pr„rrvrrnn. Crt ofpdra De'v". Conchr!!c lu!!r3• Rrcrewion d PuntlLsrrxi. A""' W re 214 Supplemental Redevelopment Agency Statistical Section City of Palm Desert, California Note: This section is not required by GASB No. 44, however, City believes that statistical information is beneficial to the reader. On February 1, 2012 the State of California dissolved the City of Palm Desert Redevelopment Agency as part of the Statewide dissolution of all City Redevelopment Agencies, which in turn created the Successor Agency to the Redevelopment Agency of the City of Palm Desert. For more information on the dissolution of the RDA please see note 16 and note 17. 215 City of Palm Desert Redevelopment Agency Project Areas Project Area No. 2 1987 1 W 47 F G Z Q N f—HOV L•EY•L•N • W—p 0 0: ❑ V _H OV LEY•L• N•E-Ff--,,,,' I Project Area No. 3 1991 ` I W ❑ tr ¢ >� OO tPARLK-VIEZ� O ¢ r w w C W Q Project Area No` 1. = i J a w 0r gjn8t r U 3 0 N a o 1975 STATE-HWV• 1 EL-PASE❑ 1 E }ADVNTAIN-pR F,4IRWAY 11 1 GRAPEVINE ST p E y a 1 Tr HAYSTAD K-RO t MESA•VIEVV•pPvpORT00" t Project Area No. 1 E ha Added Territory 1982 2 1 1 r !I 1 1 1 1 t Project Area 1993 s N J a CALIFIRN"P Project Area No. 1 - Original (1975) 0 Project Area No. 1 -Added Territory (1982) Project Area No. 2 (1987) 0 Project Area No- 3 (1991) 0 Project Area No. 4 (1993) City Limits N w E s 0 05 , 2 July, 2004 216 City of Palm Desert Redevelopment Agency Tax Allocation Bond Issue Information June 30. 2018 $15,745,000 DESCRIPTION Tax Allocation Revenue Bond Bond Issue Bate Final Maturity• Date Hi =hest Interest [ale Bond Issue Amount Outstandin g Bond Amount Call Premium Bond Insurer Reserve Requirement (1) Reserve Balance: (1 ) Called Bonds I'rinei pie due I& 14 Interest Due 18/19 Arbrita,c Yield Rate: Arbrita ge-Amount Owed Arbrrtage Fier Year Due Date: Bond Issue Date Final Maturity Date Hi hest Interest Rate Bond Issue Amount Outstanding Bond Amount Call Premium Bond Insurer Reserve Re uirement ( 1) Reserve Balance (1) Called Bonds Princi lc due 18. 19 1 nterust Due 18, 19 Arbrita *e Yicld Rate Arbrita •e-Amounl Owed Arbritage Five Year Due Date: $ 15.745,000 S 15,745,000 1 - 2.00a/n MBIA 4 s 1.574,500 [1; 769,006 4.9502% 03/26/23 Tax Allocmlion ' Bond (F..xemM)t 13 01/31/17 10/01/30 5.00MU 52,390,000 S 52,390,000 S 0.00% BAM Housing Tax Allocation 5,828,909 (I - a 2,740,000 2,427,050 3.659% 01/31/22 Tar Allocation Bond (Taxable) 0.00% BAM A ,4 01; 3li 17 10/01/41 4.250% 140,130.000 140,130,000 9,680.207 6,545.000 4,500,929 3.659% 01/31/22 Years 14 6 Bond Issue Date 01/31/17 01/31/17 Final Maturity Date 10/01/31 10/01/23 11iuhest Interest Rate 5.000% 3.000°/a Bond Issue Amounl �,365 000 S 45 815 000 Outstandin r Bond Amount . 365�00 $ 45115)00 Call Premium 0.()0% 0.00a/a Bond Insurer RAM BAM Reserve Requirement 1 687,519 4,591.500 Reserve Balance i (1) (11, Called Bonds 5 - 5 Princi le due 18119 365,000 7,560,,000 t Due 18/19 - 310 194 849\150 to a Yield Rate 2.47% 2.9 17% to Amount Owed - - ear Due 01/31/22 01/31/22 ( 1) A surety bond was issued by MB1A Insurance, future reserve balance's wi11 he zero I Refunded PA 14 ta-x exempt portion of bonds ($22 07M. S19M, $24 945M, $62.3M, $1711K $67 6M, $4 745M. $15 05M. SI 1.02M, $15.695K and $19 2M) 2 Refunded PA 1.4 taxable portion of bonds (322 07M, SI9M, $24 945M, S62.3M, S17.31M. $67 6M, $4 745M, S15 0564, $I 1 02M, $15 695M, and $19.2M) 3 Refunded Housing tax exempt portion of bonds (12.1 M and SSG 155M) 4 Refunded Housing taxable portion of bands (12 1 M and $96 155M) Source City of Palm Desert and Successor Agency to the Palm Desert Redevelopment Agency 217 City of Palm Desert Historical Tax Increment/ Redevelopment Property Tax Trust Fund Summary All Project Areas rro ecr area rra.-t 012113 FY 2013114 I FY 2014115 FY 2015/16 FY 2016/17 I FY 2617118 G ross Ta x I nc rement 48,562,361 48.767,884 51,298,203 53,437,088 56,610,029 58,222.677 59.842.517 Less: 1 Housing Set-Asidc* I 9,712,472 9,753,577 tO,259,641 10,687,418 11,322,006 11,644,535 11,968,503 SB 2557 610,071 714,717 673,261 696,944 629.449 725,403 662,238 Gross Pass -Throw hs 18,843.3D] 18,642,892 20,111,377 21.241,903 22,961,604 25,052,727 2Z919,420 Net Tax increment 19,396,517 19,656,698 20,253,925 20,820,823 21,696,970 20,800,012 24,292,356 ountDeposired 1 29,927,559 26,848,203 25,090,381 26,530,801 .24,696,424 I 2S,131,004 1 19,798,469 Project Area No. 2 FY 2011112. FY 2012113 - FY 2.01N14 ; -_XV 2014/JS FY 2015/ 6 I FY 2016/17 1 FY 201 Gross Tax Increment 13.335,941 13.700,701 13,556.184 15,232,096 10 232,329 16.302.895 i6.916,067 Less: Housing Set -Aside' SB 2557 2 867t188 2\740,140 21711,237 3,046419 3,246.466 3.260J79 3.383,213 176,347 200,429 170,214 ONO 180.457 202.348 187,481 ,Gross Pass-Throuahs 51381,108 4,983,714 4,967,602 5,665,961 6,078,194 6,103,481 6.372,798 Net Tax Increment 5,911,298 5,776,418 5,698,132 6,526,816 6,727.213 6,736,487 6,972,575 RWTTFAmount Deposited 7,503.0091 7,S68,2411 7,017,S311 5,441,721 5,547,4271 5,887,814I 5,596,560 Project Area No. 3 FY 2011112 I FY 2012/13 I FY Z013114 FY 2014115 FY 2015116 FY 2016117 F 22017/18 Gross Tax Increment 3,847,543 3,575,242 3,760,421 3,754,999 4,039,902 4,360,574 4.364M6 Less: I ousin Set -Aside" j a B 2557 769\\�09 715 048 752,084 751,000 807,990 872.115 872,921 49,U34 52158 49,871 48,901 45,175 52,745 8,947 Gross Pass -Throe hs 1,671,676 1,277,864 1.377,700 11371,786 1,510,2 t9 1,656,158 1,662,390 Net Tax Increment 1,357,325 1,529,472 1,580,766 1 4s83,312 1,676 i28 1,779 556' 1,820,348 1RPTTFAmount Deposited I 2,088,587I 1,491,5321 1,3S7,6781 1,237,9301 1,290,623I 1,29S,1561 1,443,9991 Project Area No. 4 FY 2011/12 FY 2012113 FY 2013/14 F1' 2014115 FY 2015116 1 FY 2016117 1 FY 2017118. Gross Tax Increment 11,342,081 11,153,422 11,941,800 11057,891 13,889,272 14,287,533 14,685,301 I..L,s: Housing Set -Aside* 2.269416 2.230§84 2.388,360 2,611,578 2,777,854 2.857,507 2,937,060 SB 2557 143,�02 164,�46 156,818 166,634 154,976 178,812 162,715 Gross Pass-Throughs 6,73g�420 7,530,089 7,901,830 8,,381,422 9,866,,804 9,433,947 9,943.062 Net Tax Increment 2,200,243 1,228,603 1,494,792 1,898,257 2,089.637 1,817,267 1,642,464 JRPTTF A mou tit Deposited 3,910,755 I 4,064,105 1 3,675,440 1 3,071,966 I 2,443,5071 2,610,660 I 4,858,5271 *For caIeu[at ion purposes only - No requirement to deposit Housing Set Aside post Redevelopment Dissolution 218