HomeMy WebLinkAbout01 JULY 1999 A;GENDA
� INVESTMENT F� FINANCE COMMITTEE
A�EDNESDAY, July 2l, 1999-- 1:30 P.M.
NOT2TH WING CONP�R�NCE ROOM
I. CAI,L, TO ORD$R
II. ROLL CALL
III. APPROVAL OF MINUTES
Rec: Appcove the Minutes o{June 16, 1999 as submitted.
l�ation:
IV. ORAL COMMLINICATIONS
A. Any person wishing to discuss any item not otherwise on the agenda may
address the Investment �3 �inance Committee at this point �y ivin �is or
her name and address {or the record. Remarizs shall be limited to a
maximum o{{ive minutes unless additional time is authorized by the
C�airman.
B. Tkis is tke time and place �or any person who wishes to comment on non-
�earin� a�enda items. It should be noted t�at at the Investment �3
Finance Committee's discretion, these comments may be de�exred unti�
such time on the a�enda, as tke item is discussed. Remar�xs skall be
limi{ed to a masimum o�{ive minutes unless additional time is authorized
by t�e Chaixmau.
V. OLD BUSINESS
A. �Status of Public anc� Private Partnerships Baclx�rounc� Ckeclxs for
Section 4
Rec: Report by Caxlos Ortega.
Action:
$. $ona Issuance bv �a�m Desert Pinancin�Authoritv
Rec: Status Report on new Bonds.
Action:
C. Requalification o� Brolxer/Dealers
1. Dean Witter Reynolds, Inc.
2. Norwest Securities
AGENDA - INVESTM�NT f� FINANCE COMMITTEE Jul 21, 1999
VI. NEW BUSINESS
A. Citv anc� Rec�evelopment�encv Investment �"ckedule for Tune
1999
Rec: Review and submit to tke next City Counci� agenda. Review the
presentation on the inveatment �raphs. Review the investment
activity during the mont� o�May. Review status of capital projects
and cash {low projections.
Action:
B. Review .�kort Term Investments Maturin� in Julv. 1999
Rec: Review investments in 1) collateralized deposits; 2) treasury bonds
and notes; and, 3) Agencies discount notes.
1. Competitive O{�ering No. 99-3
Action:
C. �tate o� Cali�ornia l,oca.l E�enCy �mveskn[xent �nnc�Monthlv Renorts
�or May. 1999
Rec: Informational item �or the Committee to review. No action
xequixed.
D. Mont}�y Financial Report �or City Council �o,r„Iune, 1999
Rec: Report and submit to City Council.
Action:
E. Parlxview Pro�essional O��ice Builclin�s - �inancial Renorts �or
Tune. 1999
Rec: Review and {ile ieport.
L�ction:
F. Desert Willow Gol� Resort Financial In�ormation {or Tune, 1999
Rec: Review and file report.
Action:
G. Palm Desert Recreation Facilities Corporation Income Analvsis for
AGENDA - INVESTMENT f� FINANCE COMMITTEE July 21, i999
June. 1999
Rec: Review and {i�e reporE.
Action:
H. Adoption o� C'apitalization Policy Revision
Rec: 1. Increase minimum requirement �or mackinery and
equipment to �500.00
2. Increase minimum xequirement {or impxovements ot�er
than bui�dings to �1,000.00.
Action:
VII. REPORT5 AND REMARKS
A. Renorts and Remarlxs bv anv �,"ommittee Member
B. Items to be placecl on the Next A�enc�a
VIII. NEXT MEETING DATE
Next regulaxly scheduled meetin� is:
The August 18, 1999 Meeting has been Postponed to:
L t' �,
r�/�P;(:,� �(.�.'�„[c.�,�.. ri'P;u.!l.�ii:L:L��w� � � ��,'r /'.- :.{4 ly� O>�W; I� 1..,..,
IX. ADJOURNMENT
I hereby certi{y under penalty o{perjury under the laws o{the State o�Cali�ornia, that the
�ore�oin� a�enda �or the Palm Desert Investment and �inance Committee was posted on t�e
City Hall bulletin board not less than 72 hours prior to the meeting. Dated this July 14, 1999.
Veronica Abarca, Recordin� Secxetary
City of Palm Desert Internal Correspandence
Dace: Monday, 12 July 1999
Subject: Requalification of Dean Witter Reynolds, Inc.
From: Thomas W. Jeffrey, Investment Manager ��
To: Paul S. Gibson, City Treasurer
*
�
RECOMMENDATION
That the City of Palm Desert and the Pa/m Desert Redeve%pment Agency
approve the continued�etention of Dean Wittei Reyno/ds, /nc. as a broker-
dealer for the City and for RDA.
BACKGROUND
Dean Witter Reynolds, Inc. ("DWR") has submitted sufficient materials to the
City Treasurer for a decision to be made on its requalification.
• Broker/niegiity. Bonny Schumacher, the account representative, had a
Form U-4 Status Report which indicated that no securities sales
complaints had been filed against her over the past 10 years.
• Capital Position. On 31 January 1999, DWR reported a net capital
position of 5753 million, well in excess of the City's 5100 million net
capital requirement for secondary brokers.
• Trade Failure Rate. DWR did not provide information on its trade failure
rate during 1998.
• Y2K Comp/iance. DWR's computer systems are Y2K-compliant, in terms
of clearing financial transactions in the Year 2000.
• Litigation. DWR did not provide any information on litigation, fraud, and
public sector loss exposures. Morgan Stanley Dean Witter's ("MSDW")
Form 10-K for the fiscal year ended 28 November 1998, however, cited
, five pending, separate legal actions against DWR by retail investors.
These lawsuits were not deemed to be materially adverse to MSDW's
consolidated financial position.
• Po/itica/ Contributions. DWR made no recent political contributions per its
MSRB G-37/38 filing for the quarter ended 12/31/98.
� CI1V OF P ,;l �l DE5ER1
� ]j—SIO PRED WARING DRIVE
_ PALM DESERT, CALIFORNIA 922C)0-25]S
TEL: �OO 34G-o6i i
Fnx: 760 3qi-7o98
info�palm-deserc.o�g
Tuesday, 13 July 1999
Norwest Investment Services, Inc.
Attention: Tony Garcia, CFA _
Vice President
420 Montgomery Street, 2"d Floor
MAC 0101-028
San Francisco, CA 94104
Re: Resumption of Securities Trading
Dear Mr. Garcia:
The City of Palm Desert ("City") is in receipt of your recent correspondence
indicating that, effective 12 July 1999, the City's investment account will
be transferred from Norwest Investment Services back to Wells Fargo
Institutional Security Sales. This action has addressed the City's concerns
over your firm's capital position.
Consequently, the suspension of trading between your firm and the City may
be considered lifted, upon receipt of this correspondence.
Sincerely,
O �
Paul S. Gibson
City Treasurer
cc: Finance Committee
♦�j ��noo.��anmrnu
� Institutional Sxurity Sales
444 Market Street
� MAC 01959 71
WELLS - _ . � �,� � ._ : �-
San Francisco,CA 94111
. �..., .._ _ c.� r -���C .i.,'
FARGO
Il "7';1 C n
�.� J�;: 1 � . � ._ �.,
CITY OF PALM DESERT
ATTN THOMAS JEFFREY
73-510 FRED WARING DRIVE
PALM DESERT CA 92260-2570
Subject: Investment Account 22007637
Dear Valued Customec
One goal of the merger involving Norwest Corporation and Wells Fargo & Company has been to
offer customers the best of both companies, including the best products, services and systems. We
appreciate your patience as we continue to combine our operations and change the Norwest
business names to Wells Fazgo.
On July 12, 1999, your account will be restored to Wells Fazgo Institutional Security Sales, where
it existed prior to March 6, 1999. However, as we advised you in our letter dated February 5,
Norwest Investment Services, Inc., will process your transactions. This change should be
transparent to you. Your account will continue to be serviced by the same people, and the
statements you receive will look identical to the ones you have received since March.
We value your business and appreciate the trust you have placed in Wells Fargo. Our goal is
100% customer satisfaction with our products and services and we aze continually working to
improve both. Should you have any questions, please don't hesitate to call your investment
representative, Tony Garcia at 800-353-4331.
Sincerely,
/�/���--^-�-
Rick Allen
Senior Vice President
Institutional Security Sales
Wells Fargo Bank, N.A.
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REDEVELOPMENT AGENCY `^ INVESTMENT ACTIVITY REPORT ^ JUNE 1999
rXECUTIVE SUMMARY -
As of 6/30/99, total portfolio book value was approximately$162MM (with SLGS). This reflected a net decrease of
approximately$2.7MM from prior month, due to bond draws for capital projects. There was an unrealized portfolio net gain
(market value- book value) of approximately$432M, based upon prevailing market interest rates. This was only a "paper"
gain since there was no profit-taking. Significant changes in investment position, by security type, are discussed below:
"State& Local Govt Series -Couoon." Palm Desert Financing Authority buys special interest-bearing U.S. Treasury
notes with maturities of 2- 10 years to invest proceeds of advance refundings held in escrow (to comply with IRS yield and
arbitrage rebate restrictions). Nonmarketable. Priced Sbp below U.S. Treasury borrowing cost for Treasury securities of
comparable maturity. Although unrated, considered "AAA". THIS ACCOUNT BALANCE DID NOT CHANGE.
"Fideli�y Treasury Pool." RDA invests tax-exempt bond proceeds (construction, cost of issuance, and reserve monies) in
Fidelity Institutional Money Market Fund: Treasury Portfolio-Class I." U.S. Bank, as trustee, pays bond expenses and
debt service from this fund. This $3.9MMM fund invests in U.S. Treasury bills and notes, and repurchase agreements for
those securities. Weighted average maturity is 60 days or less. S&P credit quality rating of"AAAm"; Moody's of"Aaa."
THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$38MM DUE TO SECURITIES PURCHASES.
"Local y�y Investment Fund (LAIFI:' RDA invests City's loan in $13MMM pool managed by State Treasurer's
Office for 2,600 governmental entities. LAIF has diversified portfolio (BAs, CP, Treasuries, agencies, corporates, repos,
reverse repos, CDs)with weighted average maturity of 180 -540 days. No loss of principal in 20 years of operation. Deposits
can be"cashed"within 24 hours. Limit of$30MM per account. S&P credit rating of"(A+) positive"; Moody's of"Aa3."
THIS ACCOUNT BALANCE DID NOT CHANGE.
"United States Traasury-Coupon." RDA buys interest-bearing U.S. Treasury notes with maturities of 2- 10 years to
invest tax-exempt bond proceeds. Although unrated, considered "AAA". THIS ACCOUNT BALANCE DECREASED BY
APPROXIMATELY$3M DUE TO AMORTIZATION OF PREMIUMS.
"State& Local Govt Series -Time." Palm Desert Financing Authority buys special noninterest-bearing U.S.
Treasury certificates of indebtedness with maturities of 15 days - 1 year to invest proceeds of advance refundings held in
escrow (to comply with IRS yield and arbitrage rebate restrictions). Nonmarketable. Although unrated, considered "AAA."
THIS ACCOUNT BALANCE DECREASED BYAPPROXIMATELY$372M DUE TO A MATURING SECURITY.
"United States Treasury -Discount." RDA buys noninterest-bearing zero coupon securities ("STRIPS")with maturities of
6 months-30 years to invest tax-exempt bond proceeds (construction monies). Purchased at discount; face value paid at
maturity (difference is yield). Although unrated, considered "AAA". THIS ACCOUNT BALANCE DID NOT CHANGE.
"HlahMark Sweep Accounts." RDA sweeps excess checking balances into"HighMark 100% U.S. Treasury Money
Market Fund." This$905MM fund invests only in U.S. 7reasury bills and notes (no repos or reverse repos). Weighted
average maturity is 90 days or less (per SEC regs). Although unrated, underlying securities considered "AAA."
THIS ACCOUNT BALANCE INCREASED BYAPPROXIMATELY$45M DUE TO INTEREST INCOME.
"Federal Ayency -Coupon." RDA buys U.S. government agency and instrumentality notes with maturities of 2- 10 years
to invest advance refundings and tax-exempt construction funds. Agency debt guaranteed by U.S. Treasury; instrumentality
debt is not (guarantee, instead, believed to be U.S. GovernmenYs "moral obligation"). Although unrated, considered "AAA."
THIS ACCOUNT BALANCE INCREASED BY APPROXIMATELY$12.7MM DUE TO SECURITIES PURCHASES.
"Fedaral Ayency- DlscounY'. The City buys noninterest-bearing federal agency notes at a discount. THIS
ACCOUNT BALANCE DID NOT CHANGE.
"Commarcial Paoer". The City buys high-grade, unsecured commercial paper at a discount,with maturities of
180 days or less, from Fortune 500 companies. THIS ACCOUNT INCREASED BYAPPROXIMATELY$11.8MM DUE TO
SECURITIES PURCHASES.
'Fadaral Ayency-Calla6le". The City purchases federal agency securities that may be called prior to maturity, in
order to obtain an additional premium for that risk, thereby increasing overall portfolio profitability. THIS ACCOUNT
BALANCE/NCREASED BYAPPROXIMATELY$10.9MM DUE TO SECURITIES PURCHASES.
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CITY OF PALM uESERT TRADE SHEET (COMP�TITIVE OFFERING)
SETTLEMENT DATE: 1- Z.Z- �Iq
FIRM/BROKER: �EAN W,�r-r'EQ /Bou►�y SCFIUMAGI-►ER
SECURITYTYPE: _GECC MEQII.�M-TER.1`�1 �IpTE (AAA�Aa.a�
CUSIP NUMBER: 3Io q (p Z, G t�J P,rj
HAS: � BOUGHT: � SOLD:
COUPON RATE (%): S, S9
MATURITY DATE: S- I I- O I
CALL DATE: N /A
TRADE DATE: —I - I �-9 q
ISSUE DATE: 5- � �-9Qj
YIELD-TO-MATURITY (%): S . q�
YIELD-TO-CALL (%): N �A
PURCHASE PRICE ($): q q, B Iv �-F O
PAR VALUE ($): Z � bo0� oOp, O�
PREMIUM/(DISCOUNT) ($): � ��1 2.0.00�
PRINCIPAL ($): I�Gq�I� ZF�O. 00
ACCRUEDJNTEREST ($): �-t I S S-I� Z Z,
TOTAL COST ($): 2 � E��J S�g31. Z,Z
DELIVERY INSTRUCTIONS: Union Bank of California, N.A.
DTC Account# 2145
For Credit to Account #: 242000750-01
Agent Bank #: 27978
/ I.D. #27978
RVP ( �' ) DVP ( ) (City General Fund)
TRADED BY: THOM EFFREY, INVESTMENT MGR
APPROVED BY: �`
CPD Treasury Form No.6(Orig.3-9-99) g:
�
MATURING SECURITIES
CITY OF PALM DESERT
JULY 1999
1 . 55.4MM US Treasury Note; Matures 7-15-99
�
REDEVELOPMENT AGENCY
JULY 1999
1 . S2.OMM FHLMC Discount Note; Matures 7-14-99
�- -
City of Paim Desert Facsimile Correspondence
Dste: Monday, 28 June 1999
Subject: COMPETITIVE OFFERING N0. 99-3
From: Thomas W. Jeffrey, Investment Manager ���
To: All Bidding Brokers
Pages: 7
The Palm Desert Financing Authority wishes to purchase commercia/paper (A-1/P-1/;
bankers's acceptances; callable Agencies (one-time, discrete, or continuous ca//, in that
order of preferencel; and coupon-bearing U.S. Tieasuiy secu�ities, at pai or at a
discount. Discount securities may be substituted for coupon-bearing Agencies and
Tieasuries, if they piovide a superior yield. The purpose of this offering is to invest the
gross proceeds of tax-exempt bonds.
This offering will be subject to the final regulations (TD 8801 ) that were issued on 29
December 1998 by the Internal Revenue Service ("IRS") on determining the fair market
value of investments purchased for yield-restricted defeasance escrows ("yield
burning"�. In order to comply with current IRS regulations, brokers must: (1 ) read,
execute, and submit "Section B: Certificate of Absence of Collusion", and "Section C:
Certificate of Third-Party Administrative Costs". Section C describes the IRS limits on
broker's fees that must be observed in order to avoid allegations of "yield burning".
Brokers must execute and include ali of the following documents as part of their offers:
• Section A: Broker Registration Form
• Section B: Certificate of Absence of Collusion
• Section C: Certificate of Third-Party Administrative Costs
• Section E: Competitive Offering Sheet
Please fax Sections A, B and C to 760.776.6391 by 5:00 p.m. on Fiiday, 25 June.
A broker's failure to complete and submit any of the above documents will result in
immediate disqualification from this offering. If a broker consistently refuses to provide
such documents or to participate in competitive offerings, then the City may elect to
terminate its business relationship with that broker.
Since 11 securities will be involved, offer deadlines will be staggered over four 20-
minute intervals. The City shall review the first three offers that it receives within each
interval, so observance of deadlines wili be critical.
Comoetitive Offering No. 99-3
28 June 1999
Page2of2
All security purchases will be for the Palm Desert Redevelopment Agency ("RDA")
Portfolio.
DEL/VERY/NSTRUCT/ONS (for security nos. 1 through 11):
ABA 091000022
U.S. Bank Minnesota/1050
AlC: Palm Desert
Attn: Sue Fahimi (651) 244-0286
Participant I.D. #: 2839
Institutional #: 93696
Agent #: 93697
SECTION A
BROKER REGISTRATION FORM
In connection with the following municipal bond issues:
Palm Desert Financing Authority
Project Area No. 1 : S100MM ('92A); $24.025MM ('95); 56.305MM ('951
Project Area No. 2: S17.505MM ('92A►; 54.09MM ('95)
Proiect Area No. 4: 511 .02MM ('98)
The City of Palm Desert (hereafter referred to as "City"1, on behalf of the Palm Desert
Financing Authority, is seeking offers for the amounts that are listed in Section D of this
solicitation. The City will eval�ate each sec�rity offer senaratelv. The City mav acce�
Qne or more security offers from a single broker if they maximize vield. No dead dates
p/ease.
OFFERS ARE DUE TO THE CITY BY 8:00, 8:20, 8:40 & 9:00 A.M. (PDT) ON 6/28/99.
AWARDS WILL BE MADE WITHIN EACH 20-MINUTE INTERVAL.
Piease submit your written offers by facsimile machine to:
Thomas Jeffrey
Investment Manager
FAX: 760 776 6391 IDIRECTI Ifor Certificates & Off r 1
TEL: 760.776.6383 (DIRECT)
FAX: 760.341 .6372 (for Bloomberg Trade Tickets & Security Descriptions)
The City reserves the right to refuse any and a// offers.
Firm:
Signature:
Telephone:
Facsimile:
SECTION B
CERTIFICATE OF ABSENCE OF COLLUSION
Palm Desert Financing Authority
Project Area No. 1 : 5100MM ('92A1; 524.025MM ('951; $6.305MM ('95)
Project Area No. 2: 517.505MM ('92A1; 54.09MM ('95)
Project Area No. 4: S11 .02MM ('98)
I hereby certify that the following is true with respect to the competitive offering dated
28 June 1999 which the City of Palm Desert and the Palm Desert Financing Authority
(hereafter referred to collectively as the "City") are sponsoring in order to invest the
gross proceeds of the above-referenced bond issues:
1 . That the prices underlying any offers that my firm submits in response to the above-
referenced offering have been arrived at independently, without consultation,
communication, or agreement for the purpose of restricting competition as to any
matter relating to such prices with other offerors, with the City, or with any other
person.
2. That my firm has not communicated with, and will not communicate with any other
offerors about their offers in relation to the above-referenced offering.
3. That any offers which my firm submits to the City in response to the above-
referenced offering are not being submitted solely as a courtesy to the City or to any
third party, in order to satisfy the Internal Revenue Service requirement that an issuer
must solicit offers from at least three "reasonably competitive providers", and must
receive at least one offer from a "reasonably competitive provider".
4. That my firm has not made and will not make any attempt to induce any other
person or firm to submit or to not submit an offer in response to the above-
referenced offering, for the purpose of restricting competition.
Firm:
Signature:
Title:
Date:
SECTION C
CERTIFICATE OF THIRD-PARTY ADMINISTRATIVE COSTS
Palm Desert Financing Authority
Project Area No. 1 : S100MM ('92A1; 524.025MM ('95); 56.305MM ('95)
Project Area No. 2: 517.505MM ('92A►; 54.09MM ('95)
Proiect Area No. 4: S 1 1 .02MM ('98)
I hereby certify that all of the offers that my firm submits to the City of Palm Desert and
the Palm Desert Financing Authority (hereafter referred to collectively as the "City") in
response to a competitive offering dated 28 June 1999, which the City is sponsoring in
order to invest the gross proceeds of the above-referenced bond issues, will include
broker's fees that meet the test of being a "qualified administrative cost" under current
Internal Revenue Service ("IRS") regulations.
The IRS defines a "qualified administrative cost", in the case of a yield-restricted
defeasance escrow, as a broker's fee that is comparable to a fee that would be charged
for a reasonably comparable investment, if acquired with a source of funds other than
the gross proceeds of tax-exempt bonds, and if it is reasonable.
Under the current IRS test for a "qualified administrative cost", a broker's fee will meet
the reasonable and comparable requirements if it does not exceed the /esser of 510,000
or 0. 1 percent of the initial principal amount of investments that are purchased for the
yield-restricted defeasance escrow.
Firm:
Signature:
Title:
Date:
SECTION D
SCHEDULE OF MATURITY DATES AND INVESTMENT AMOUNTS
Palm Desert Financing Authority
Project Area No. 1 : S100MM ('92A); 524.025MM ('951; 56.305MM ('95)
Project Area No. 2: 517.505 ('92A); 4.09MM ('95)
Project Area No. 4: 511 .02MM ('98)
Trade Date: Monday, 28 June 1999
Sett/ement Terms: Commercial Paper -- Cash, Regu/ar, or T+3
Bankers's Acceptances -- Cash or Regular
Agencies & Treasuries -- Regu/ar, Skip, or New /ssues Also
Available wiih De/ayed Sett/ement
Final Stated Maximum Amt
Maturity Date for Investment Desired Securitv USB A/C #
DUE AT $:00 A.M. ON 6/28/99 (A/
11) September 1999 $2,800,000 CP or pomestic BA 94621273
(2) September 1999 S2,000,000 CP or pomestic BA 94623465
(3) September 1999 51 ,700,000 CP or pomestic BA 94621544
DUE AT 8:20 A.M. ON 6/28/99 /BJ
(4) November 1999 $1 ,000,000 CP or pomestic BA 95448265
(5) December 1999 53,000,000 CP or pomestic BA 94623483
(6) December 1999 S 500,000 CP or pomestic BA 94623483
DUE AT 8:40 A.M. ON 6/28/99 /B1
(7) February 2000 S 1 ,000,000 Callable Agency (1 x) 95448265
(8) March 2000 52,000,000 Callable Agency (1x) 95448263
(9) July 2000 $ 500,000 Callable Agency (1x) 95448265
DUE AT 9:00 A.M. ON 6/28/99 /B)
(10) June 2001 $ 705,000 US Treasury 94623505
(1 1 ) July 2001 S 1 ,500,000 Callable Agency (1 x) 95448265
FOOTNOTES
(A1 Offers must be structured for maturity in September 1999 before 27`" day.
(81 Offers must be structured for maturity on the 15th day of each specified month
(plus or minus 10 daysl, Q as close as possibie to the last business day of the
prior month.
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STATE OF C/WFORNIA �� PHILJP ANGELIDES. Treasurer
' OFFICE OF THE TREASUREF. �i� Y iF t�i.!� � �
SACRAMENTO +���� �,cE � `��`r.'
�.., E';ftT'�c��-
Local Agency Investment F u9��i'� 2i P,"'; 4 22
PO Boa 942809
Sacramento, CA 94209-0001
(916) 653-3001
May, 1999 Statement
a .
Hcconat Nnsnber : 9&33-621
CITY OF PALM DESERT
Attn: CTfY TREASURER *
T3530 FRED WAItIl�iG DRiVE
PALM DESERT CA 92260
Transactioas
Effective Transaction 'I`ran Conf'um Authorized
Date Date Type Number Caller Amount
05-05-1888 OS-04-1999 RD 24514 THOMI�.S JEF'�'REY 2,000,000.00
05-19-1998 OS-18-1998 RD 3486 THOMAS JEFFREY 1,000,000.00
05-20-1998 05-20-1999 RW 11389 THOMAS jEFFREY - 1,400,000.00
Hcconnt Summary
Total Deposit : 3,000,000.00 Seginning Balaace : 24,61T,139.13
Total Withdrawal : - 1,400,000.00 Ending Balance : 26,21T,139.13
�
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c:� ( �J;�`��`'
Page : 1 of 1
%lr'y a
STATE OF CALIFORNIA � � � -��,, �FPpI�IP ANGELIDES. Treasurer
� OFFICE OF THE TREASUREr. 'p9 JU�J J` �'`;+;;���;`e/t�
sncw�n,e�ro 21 �n � 21
Local Agency Imestment Fund
PO Boa 942808
Sacramento, CA 94209-0001
(916) 653-3001
May, 1999 Statement
� .
Hcconnt Number : 65-33-015
PALM DESERT REDEVELOPMENT AGENCY
Attr►: PAUL GffiSON, TREASURER �
T3-510 FRID WARING DRIVE
PALM DESIItT CA 92260
Tsansactions
Effecrive 'lYansaction 1Yan Confirm Authorized
Date Date Type Numbes Caller Amount
05-19-1999 05-18-1999 RD 31146 THOMAS JEFF'REY 13,000,000.00
05-20-1999 05-20-1998 RW 2468T THOMAS JEFFRE`I - 13,330,000.00
OS-28-1998 05-28-1899 RD 1490 THOMAS JEf'FREY 4,000,000.00
Hccouat Summary
Total Deposit : 17,000,000.00 Beginning Balance : 15,842,522.15
Total Withdrawal : - 13,330,000.00 Ending Balance : 19,512,522.15
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PALM DESERT REDEVELOPMENT AGE�'""' ^-
COMBINED STATEMENT OF ACTUA�
REVENUES 8 EXPENDITURES
� COMPARED TO BUDGET
30Jun•99 RDA RDA %of (FAV)UNFAV
Budget YTD Budget Ac[ual YTD Budget Variance
REVENUES
1 Tax inaemenl 26,039,395 26,039,395 27,650,964 106.19% (1,611.569)
Interest 1,886,400 1,888,400 3,647,479 193.36Yo (1,761.079)
3 Sales of Property 589.407 0.00 h (589,407)
5 Reimbursement From Other Agencies 800,000 800,000 � 510.760 63.&4°h 289240
OtherRevenue 64,000 64,000 68,169 106.51�, (4,169)
4 Transfers In 462,000 462,000 9,404 2.04% 452,596
2 Palm Desert Housing Authority Revenue 3,198,191 3,198,191 3,173,987 99.24qe 24,204
TOTAL REVENUES 32,449,986 32,449,986 35,650,170 (3200.184)
FAV(UNFAV)
IXPENDRURES . Variance
AdminisVative Cosis 1,223,797 1223,797 971,508 79.38% 252,289�
ProfessionalServicas 2,501,004 2,501,004 657,189 2628Yo 1,843,835
Property Tax AdminisVative Fee . 812,290 812290 480,816 59.19% 331.474
Cost of Inventory Sold
Capital Outlay
Ofice Equipment 36,000 36,000 25,658 7127% 10,342
6 DeeO Canyon/Hwy 111 4,099 4,099 87,556 0.00°k (83,457)
Parking Spaces 16,000,000 t6,000,000 5,000,825 31.26% 70,999,175
I-t0lnterchanges 250,000 250.000 250,000 100.00%
Joni Drive Extension 250,000 250,000 0.00% 250,000
Desert Willow-Mounfain Viaw Course 24,774,435 24,774,435 3,402,672 13.73% 27,371,763
DesertWillow-FirecliRCourse 11,666,905 11,666.905 1,089,510 9.34°/, 10,577,395
Washington Street Improvements � 300,000 300,000 0.00% 300,000
Fred Waring Improvemants 435,000 435,000 216220 49.71qo 218,780
Project Area 4 Perimeter Landscape 374,000 374,000 0.00% 374,000
Street Improvements 428,255 428,255 0:00°/, 428255
Storm Drain Improvement5 2,200,000 2200,000 0.00%a 2,200,000
Desert Crossing Improvements 43,450 43,450 0.00% 43,450
6 Hwy 111/74 Improvements 175,000 O.00qo (175,000)
Parking Lot Improvements 55,259 b5,259 � 0.00% 55,259
HOUSING
New Houses-for Resale H�P#7 786,165 786,765 268,556 34.16% 517,609
Home Improvement Program 1-6 70,056 70,056 21,294 48,762
Santa Rosa Rehab Program 568,818 568,618 434,186 76.33% 134,632
3 Desert Rose Project 199,000 199,000 300.578 151.04Yo (101,578)
3 Portola Palms Projec[ 105,326 105,326 313.381 (208,055)
7 Land Purchases/Bldg Improvements 340,350 340,350 3,350,145 984.32% (3,009,795)
2 Palm Desert Housing Authority Expenditures 4,758,403 4,758,403 2,779,377 58.41qo 1,979,026
DeGine in Value on InvanWry Held
For Resale
Payments to Other Governmental Agencies 7,270,900 7.270.900 1,904,971 2620% 5,365,929
Bond Issuance Costs (13,200) 13200
Bond Discount
Interest Md Fiswl Charges 12,801,172 12,807,712 11,623,443 90.80% 1.177,669
Principal Payments 1,325,000 1,325,000 1,325,000 100.00%
TOTAL EXPENDITURES 89,579,624 89,579,624 34,684,666 54,91A.958
'TAX INCREMENT REVENUE IS USED TO PAV DEBT.
1. Tax Incmmenl ls receivaE In Jan an0 May
2.The Juna BB will Ee OonteE xM�Vie yearenE tlocinp revmue ie abecEy al wM1at wae anEapate0 an0
eepenOttuns ale way unEer as ol May BB.
�� �OeneeS OXel1 Cy XOuse Sale6
♦. Rertulnirq Irarmfen In vnll pe Eone EUMO�e year en0 joumals.
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City oE PaUn Desert
. Parkview Office Complex
Inmme Statement
ForJune1999
June-99 Junr99 N % YTD Y'I'D # °6
Bud et Actval Variance Variance Bud et AcNal Varience Variance
Revenues
Renta] $ 58,900 $ 62,389 $ 3,489 105.92% � $ 706,800 $ 705,977 $ (823) 99.88%
Dividends/Interest $ 1,200 $ 3,672 $ 2,472 305.98%' ` $ 14,4(10 $ 35,844 $ 21,944 248.92%
TotelRevenues $ 60,100 $ 66,061 $ 5,961 109.92% $ 721,200 $ 741,821 $ 20,621 302.86%
Expenses
Professional-Accwnting&Audituig $ 3,700 $ 5,774 $ (2,074) 156.0646 $ 44,400 $ 62,545 $ (18,145) 140.87%
ProEessional-ManagementFee $ 5,500 $ 11,662 $ (6,162) 212.03% $ 66,000 $ 83,030 $ (17,030) 125.80%
TenentImprovements $ 5,800 $ - $ 5,800 0.00% $ 69,600 $ 7,760 $ 61,840 1115%
Repairs&Maintenance Building $ 9,100 $ 5,722 $ 3,378 62.88% $ 109,200 $ 61,092 $ 48,108 55.95%
Repairs&Maintenance-Landueping $ 1,079 $ - $ 1,079 0.00%. �. $ 12,948 $ - $ 12,948 0.00°�
Utilities-Weter $ 250 $ 162 $ 88 6474°k ' $ 3,000 $ 1,176 $ 1,524 3920%
Utilities-Ges/Elxtric $ 6,000 $ 4,277 $ 1,723 7128°� � $ 59,500 $ 49,727 $ 9,773 83.57k
UtilitiesTrash $ 450 $ 689 $ (239) 153.OSk $ 5,400 $ 6,823 $ (1,423) 126.35%
Telephone $ 150 $ 137 $ 13 91.35 k' � - $ 1,800 $ 1,771 $ 29 9839 h
Insurance $ 521 $ - $ 521 O.00k '� � $ 6,250 $ - $ 6,250 0.00%
TotalEzpenses $ 32,550 $ 28,423 $ 4,127 87.32%�'�' ' $ 378,098 $ 273,924 $ 104,174 72.45%
�
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H
Investt999-Invest
Parkview Office Complex
. Vacancy Rate Schedule by Suite
June 1999
Suite Square
No. Tenant Feet
73-710 Fred Waring Drive-Two (2) Story Building
100 Hanover 2,560
102 Bergren 1,360
103 Multiple Sclerosis 488
104 Arthritis Foundation 960
106 Vacant 9z8
108 Senator Kelly �g5
112 Assemblyman Battin 1,406
114 Chamber of Commerce 1,47g
118 Council Approved-U.S. Filter(2 yr.Lease) 1,250
119 City/CVAG Conference Room 1,380
120 Golf Dimensions 1,750
200 CVAG 4,292
200A Vacant(space is not available to lease) 841
201 U.S.District Court 604
203 Acwunting Services 480
205 Coachella Valley Economic Parinership 700
208 Councff Approved New Lease w/ A.Trask 960
210 Wilson,Pesota&Pichardo 3,040
211 Alzheimer's Association 937
217 Mcmillan 775
Invest;Vacancy RePort
Parkview Office Complex
. Vacancy Rate Schedule by Suite
June 1999
Suite Square
No. Tenant Feet
220 CA.State Dept.of Agriculture 1,607
222 WMA Securities 2,981
Total square footage(2 story Building) 31,562
Vacancy Rate--1,769/31562= 5.60%
73-720 Fred Waring Drive-One Story Building
100 State of California-Water Resources 15,233
102 Vacant(Received a lease agreement from
the State of CA Rehabilitation Dept) 4,396
Total Square Footage 19,629
Vacancy Rate---4,396/19,629=22.4%
Overall Vacancy Rate for Both Buildings:
Vacancy Rate--6,165/51,191= 12.04°k
Note: We are in the process of obtaining bids for construcHon of tenant improvements for the State of CA
Rehabilitation Departinent. (Expected lease start date October 1,1999)
InvesGVacancy 2eport
. � � _.
Clty of Palm Descrt
Desert Wlllow
Hudget Vs Actual
For the moath of Juae 1999
BudgMed Actual Budgeted Actual
Jwe June S Percrntage Year to Year ro S Percentage
Revenue 1999 1999 Variance Variance Date Ila/e Variance Variance
Cwrse&Ground S 145,025 $ 264,fi84 $ 119,659 182.51% $ 4.267,586 $ 4,566,198 $ 318,b12 107.47%
Cans E 4,415 S 27,967 S 23,552 fi33.45% § 193,979 $ 230.091 E 36,112 II8.62%
GolfShop S 25,300 $ 45,963 5 20,663 181.67% § 468,418 $ 507,897 $ 39,479 I08.43%
Range S 1,400 5 383 $ p,017) _ 27.3696 $ 23,148 $ 13,034 S (10,t14) 56.3I%
Food&Beverage $ 23,838 S 48,192 E 24,354 202.16% $ 453,508 $ 458,013 S 4,505 100.99%
Incerest Income $ 1.500 $ 4.702 S 3.202 313.47% $ 18.000 $ 21.872 $ 3.872 121.51'.6
Total Revenua $ 201,478 S 391,891 $ 19p,413 194.5196 $ 5,424,639 S 5,81'7,105 S 392,466 10713%
Psyroll
Penmeter Landscaping $ 9,357 $ 7,087 $ 2,270 75J4% $ 109,833 $ 90,722 $ 19,111 82.60%
Proshop $ 4,617 $ 7,932 $ (3,315) 171.80% $ 96,828 $ 94,151 5 2,677 9724%
Cart S 13,935 $ 14,755 $ (820) 105.88% $ 181,507 $ 147,356 S 34,151 Sl.t8%
Course&Ground $ 96,721 $ 90,657 $ 6,064 93.73% 3 1,064,434 $ 1,033.624 $ 30,810 97.IIR
Golf Opeations $ 16,461 $ 22,8I1 E (6,350) 138.58% $ l96,535 $ 227,619 $ (31.084) 115.82%
General&Adminis[ration $ 25,I63 $ 27,75I $ (2,588) 110.28F, $ 290,290 $ 257,521 $ 32769 68]I%
Faad&Beverage $ 8,317 $ 9,728 $ Q,411) 116.97� $ I80,703 $ 159,346 $ 21,357 88.16%
TotalPa 11 $ 174,571 $ 180,721 E 6,I50 103.52% $ 2,120,130 $ 2,010,339 $ 109,791 94.82%
Other ExpendiWres
Perimerer Landscaping $ 4,900 $ 8,942 $ (4,042) 182.49 k S 58,SOD $ 49,031 $ 9,769 83.39%
Proshop $ I,O50 $ 2,523 $ (1,473) 240.29 b $ 37,240 $ 39,912 $ (2,672) 107.18 R
Pmshop-COCS $ 15,600 $ 39,303 $ (23,703) 251.94� $ 250,566 $ 277,380 $ (26,814) 110.70tB
Cart $ 20,923 $ 47,730 $ (26,807) 228.12',6 $ 321,566 $ 391,060 $ (69,494) 121.fi1%
Course&Ground-North Course $ 57,741 $ 75,903 $ p8,162) 131A5� $ 722,431 $ 642,608 S 79,623 8898%
Course&Ground-South Course $ 56935 $ 100,652 $ (44,317) 178.67% $ 464,816 S 452,813 $ 12,003 97.42%
Course&Ground-Desen Palle[-N $ 4,200 $ - $ q,2p0 0.00`R� $ 49,800 $ - S 49,800 O.ODSR
Course&Cround-0esert Palleo-5 5 2,775 $ - $ 2,775 0.00% $ 32.910 S - $ 32,910 0.(p%
Golf Operations $ 700 $ 537 $ 163 76.71% $ 28,340 $ 24,485 $ 3,855 8G.40%
General&Adminisvation $ 26,891 S 39,896 $ (13,005) 14836� $ 457,231 $ 548,635 $ (91,404) 119.99%
Range $ 250 $ 449 $ Q99) 179.60% $ 19,950 $ 21,008 $ (1,058) 105.30%
Food&Beverage $ 3,795 $ 6,768 $ Q,993) 178.87% $ 58,285 $ 71,W1 $ (13,356) 12291%
Food&Beverage COGS $ 8,343 $ I7,669 $ (9,526) 214.18% $ 158,728 $ I89,601 $ (30,873) 119.45%
Management Fee $ 25,000 S 76,136 S (51,13fi) 304.54% $ 256,250 $ 316,079 $ (59,829) I23.35%
Financing/Lease $ 8,793 $ p0,748) $ 19,541 -1221390 $ lOd,509 $ �9,287 $ 23,222 7735%
Total ONer Fac nditures $ 237,296 $ 405,980 $ 168,684) 171.0996 $ 3,019,422 $ 3,103,740 $ (84,316 IWJ9%
David Leadbetter Academy
Leaming Center Revenues $ 20,000 $ 16,310 $ (3,690) 81.5596 $ 400,000 $ 31A,499 $ (75,SOq B1.I2%
ReimbursementsmDavidLeadbetter $ p),000) $ p3,664) $ 3,13fi 81.55% $ (340.IXp) $ (D5,724) $ 64,276 B1.I0�
OtherExpendit�res $ Q00) $ p.37'n $ (1.277) 1377.00% $ CI4.700) $ p6.523) $ (1,823) ]12.40%
Leaming Cenler Income(Loss) $ 2,900 $ I 069 $ (I 831) 3G.S6W $ 45 300 $ 32 252 $ (13 048) 71 2096
Netlncome ss $ 207489 $ 193,741 $ t3,748 9337W, $ 330387 $ 735,278 $ 404,891 222.55%
Dw9899;Finencial 5[a[emen[
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Dawr[Willow
Cuh Rawrve Aorly�b
Thrce Mooth
ProJ�ed EzpenNturea 7Wr Au¢uu &ptember Pro)ecled Expenditures
A roll l69 399 $ l68 763 192 4l8 5 530 580
COGS 11 887 12 860 S 20 483 45 230
atin 220 138 202 029 S 263 575 665 742
Tomis 401,d24 f 357,652 056,476 f 1,241,552
Cesh Reserve Analysls Ooe Mon[h
R uired Reserve E 500 000.00
Cash on Ha'M E I.720,874.90
Variantt-Pavorable Unfawrabie $I 220 874.90
ReconciWtion of��ustad euh roquirement
Reconcilcd Cash on hand SI,574,537.80
Add:
Prropening&GrzM�opening Owed by the City , $ 23,353.46
Preapening owed by Ne RDA b -
Perime¢r(Cash Owed By Ciry of Palm Desen) S 82.982.64 �
Adrys�ed Cash on Hand 51,720,874.90
Adiusted Reserve Requirement E 500,000.00 �
Adjusted Cash Belance 51,220,874.90
i Represents 88%of perimerer expeMitures ro dare.
�The management agreemen[was amrnAed to adlusl the reserve
reQuiremem from a calcula[ed one monih reserve to a fixed one
momh reserve af 5500,000.
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Palm�esert Recreation Facilities Corporatioa
Iacome 8tatemeat
Jun-99 Jun-99 N %
Budget Actual Variance Variance
Food & Beverage Revenues $23,838 $48,192 $24,354 202.16°k
Total Revenues $23,838 $48,192 $24,354 202.16�
Salaries $8,317 $9,728 ($1,411) 116.97%
Cost of Goods Sold-F&B $8,343 $17,869 ($9,526) 214.18%
Food & Beverage Expense $3,795 $6,788 ($2,993) 178.87%
Total Expenses $20,455 $34,385 ($13,930) 168.10%
Net Income (Loss) $3,383 $13,807
Note: The above revenues and expenditures are also included in the Desert Willow analysis.
Dw9899;PDRFC Budget
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Desert Willow-Combiaed AndyaL-MAY 1999
Resident 903 $ 29,530 $ 32.70 12.04%
Non-Resident 6,060 $ 246,814 $ 40.73 80.82%
Other 61 $ 625 $ 10.25 0.81%
Complimentary � 474 $ - $ - 6.32%
Desert Willov Tota4 7,498 276,969 36.94 100.00%
FIRECLIFF COURSE-JUNE 1999
Descriptioa No. Of Reveaue Av�. Per Pct to
Rouads PerP08 Rouad Totel
Resideat Rouads
Resident Fee- Weekend-aummer 79 $ 2,750 $ 34.81 1.93%
Reaident Fee-Weekday-Summer 309 $ 10,705 $ 34.64 7.56%
Resident lrvilight 85 $ 2,110 $ 24.82 2.08%
Total Resideat 473 15,565 32.91 11.58%
Noa Rosideat
Summer Fee- Posted Repiay 220 $ 5,500 $ 25.00 5.39%
Summer Fee- 9 Hole-Weekday 1 $ 35 $ 35.00 0.02%
Summer- Posted Weekend 846 $ 35,472 $ 45.48 20.71%
Summer- Posted Weekday 450 $ 21,005 $ 46.68 11.02%
Summer Fee- IROC MBR WKDY 1 $ 40 $ 40.00 0.02%
Summer Fee-IROC Des. PR1'1'Wkdy 3 $ 150 $ 50.00 0.07%
Summer Fee-Iroc Des. Pry ltvilight 3 $ 120 $ 40.00 0.07%
Summer Fee -Wholesale Replay 12 $ 300 $ 25.00 0.29%
Summer Fee-Wholesale Weekend 72 $ 2,880 $ 40.00 1.76%
Spring Fee-Wholesale Weekday 56 $ 1,680 $ 30.00 1.37%
Summer Fee- 'ltvilight 386 $ 15,148 $ 39.24 9.45%
Spring Fee- P.S. Golfer Fee (wkdy) 42 $ 1,680 $ 40.00 1.03%
Summer Passbook-WKDY 379 $ 15,020 $ 39.63 9.25%
Summer Fee-Passbook WKND 216 $ 8,530 $ 39.49 5.29%
Fee Special Ebent Variable 616 $ 21,142 $ 34.32 15.08%
Total Noa Resideat Rouads 3,303 131,702 39.87 80.86%
Other Rouads
Junior Wallring 29 $ 290.00 $ 10.00 0.71%
TotalOther 29 290.00 10.00 0.71%
Compllmeatary
VIP 95 $ - $ - 2.33%
PGA Member 104 $ - $ - 2.55%
COD/PDHS 2 $ - $ - 0.05%
Donation 50 $ - $ - 1.22%
Employee 21 $ - $ - 0.51%
Employee Guest 8 $ - $ - 0.20%
Total Complimentary 280 - - 6.85%
Total Rouad (FireCllff) 4,085 147,557 $ 36.12 100.00%
MOUNTAINVIEW COURSE�JUNE 1999
Dewriptioa No. Of Reveaue Av�. Per Pct to
Rouada Per POS Rouad Total
ReddeaL Rouad�
Resident Fee-Weekend 94 $ 3,275 $ 34.84 2.75%
Resident Fee-Weekday 237 $ 8,220 $ 34.68 6.94%
Resident7tvilight 99 $ 2,470 $ 24.95 2.90%
Total Reddeat 430 13,965 32.48 12.60%
Noa Re�ideat
Summer Fee- Posted Weekend 631 $ 31,297 $ 49.60 18.49%
Summer Fee- Posted Weekday 555 $ 24,600 $ 44.32 16.26%
Summer Fee- IROC MBR Guest wkdy 1 $ 40 $ 40.00 0.03%
Summer Fee- IROC MBR wlmd 2 $ 96 $ 48.00 0.06%
Summer Fee- IROC Des. PR1'1'-ltvilight 2 $ 80 $ 40.00 0.06%
Summer Fee-IROC MBR'ltvilight 2 $ 60 $ 30.00 0.06%
Summer Fee-IROC Des. PR1'Y Wkdy (2) $ (75) $ 37.50 -0.06%
Summer Fee-IROC Des. PRTP Wlmd 2 $ 60 $ 30.00 0.06%
Summer Fee-Wholesale Replay 2 $ 50 $ 25.00 0.06%
Summer Fee-Wholesale Weekend 204 $ 8,160 $ 40.00 5.98%
Summer Fee-Wholesale Weekday 27 $ 835 $ 30.93 0.79%
Sumer Fee- P.S Goifer (WKND) 4 $ 160 $ 40.00 0.12%
Summer Fee-Tbvilight 399 $ 15,684 $ 39.31 11.69%
Summer Fee- P.S. Golfer Fee (wkdy) 11 $ 440 $ 40.00 0.32%
Spring Fee- Passbook-WKND 269 $ 10,463 $ 38.90 7.88%
Summer Fee- Passbook(WKDY) 324 $ 12,925 $ 39.89 9.49%
Fee Special Ebent Variable 324 $ 10,237 $ 31.60 9.49°/a
Total Noa Reaideat Rouads 2,757 115,112 41.75 80.78°/a
Other Rouads
Junior Walldng 31 $ 310 $ 10.00 0.91%
ChariTy Event 1 $ 25 $ 25.00 0.03%
TotelOther 32 335 10.47 0.94%
Complimeatary
VIP 22 $ ' $ - 0.64%
PGA Member 51 $ - $ - 1.49%
COD/PDHS 100 $ - $ - 2.93%
Donation 10 $ - $ - 0.29%
Employee 9 $ - $ - 0.26%
Employee Gueat 2 $ - $ - 0.06%
Total Compllmentary 194 - - 5.68°/a
Total Rouad (Mouatniaviesv) 3,413 $ 129,412 $ 37.92 100%
�� CITY O� PALM DESERT
PINANCE DEPARTMBNT
INT�RO��IC� M�MO
Date: July 15, 1999
To: Mayor and Members of the City Council
From: Paul Gibson, Finance Director
Subject: Fixed Asset Policy on minimum value to record an asset.
The Finance Staff contracted all of the Cities in the Coachella Valley and all of the Cities have their
fixed assets - Furniture & Equipment at a level of $500 or greater.
If the City of Palm Desert elects to increase the minimum value to $500 the following items would
no longer be included in the listing:
Time Stamp 385 'Typewriter 400
Vacuum 265 20" TV 400
M,agazine Racl� 200 VCR 300 -500
Hand Held Microp�one 400 Loc�xers 275
Camera's 150-300 Motorola Radio 400-500
Modem 210 so�tware �or Computers 100-500
In�xjet Printexs 300 Dictatin� Machine 250-300
C"omputer Monitor's 300 Txanscriber 250-300
'I'ape Recorder 200 Keyboard 200
Chairs 100-500 �ile Cabinets 100-350
Hancl Held Calculators 50-300 Portable P.A. 375
SmaIl Re{rigexator 275 Bac�Zpac�x Blower 420
Grass Edger 200-350 Calculator 200-300
Tables 100-500 Cxedenza 200-500
�inance recommendation is that anyt�in� that we thinlz may wallz away, we will ta� wit� a non-{ixed asset tag
indicatin� City o� Paim Desert ownership.
Sta{�recommends adoptin� tke attac�ed Fixed Asset Policy. We need to �inalize this policy prior to havin� the {irm
hired to do the City's Fixed Asset Inventoxy in September.
Sinc y,
paul 5". Ciibson, �inance Director
I�`. 1
CITY OF PALM DESERT
CAPITALIZATION POLICY
I. WHEN SHOULD AN EXPENDIT[JRE BE CAPITALIZED?
A. For Machinery and �c�uinment: When (1.) The purchase or construction cost is
�500 or more (per unit) includin� �reig�t, installation, and sales ta�c and tke
estimated use�ul li�e o{ the asset is �reater than one year, OR (2.) wken the
expenditure represents an "addition" or "betterment" wkick, re�ardless of cost,
matexially adds to the value o�an existing {ixed asset item or appreciably extends its
uselul li�e. Machinery and equipment capital expenditures, excludin� autos, should
be coded to object number 4040. Capital expenditures relating to autos should be
coded to object numbex 4045.
B. For Buildinds and Imnrovements: Wken (1.) the purckase or construction wst
is �1,000 or more, includin� (but not limited to) legal �ees, arckitects' �ees, cost o{
fixtures, inspection �ees, cost o�permits and/or licensea, sales tas, and insucance and
interest during construction, OR (2.) an "addition" or "betterment" to an existing
buildin� costing �1,000 or more. Capital buildin�s are coded to object number
4020.
�'. For Imnrovements otkex than Buildin�s (land attachments of a nermanent
nature : When the purchase or conatruction costs is �1,000 ox more, including
frei�kt, installation, and eales tax, plus positively identi{ied incidentals. Capital
expenditures �or improvements ot�er than bui�dings are coded to object number
4010.
D. For Land: All expenditures are capitalized, re�ardless of cost, including puxchase
price plus taaces and otker surveyin�, �in�� �radin�� dzaina�e, demolition, and ot�er
costs of preparing the land �ar its intended use. Land purckases axe coded to object
numbei 4010;the cost o�rigkt-o�-way acquisitions are coded to object number 4005.
II. ACCOiJN'I'ING FOR°INVENTORIABLE EQUIPMENT"
A.Ithou�h City policy, as stated above, is to capitalized expendituces for mac�inery and
equipment items �avin� a miit cost o{�5��ox moce, department heads are also accountable
�or(1.) Machinery and equipment items wkick are�400 to �499.99 and (2.) Machinery and
equipment items which are susceptihle to t�e�t, re�ardless o{cost. Sensitive items include
cameras, calculators, tape recoxders, kand tools, microphones, small �ramed artwor�Z, hand-
held power tools, and other easily-concealed items. These items will be assigned an asset
number and wil] be tag�ed, engraved or otherwise identi{ied as City property. E�
expenditures �or °inventoriable equipment'� s�ou�c� be coded to object number 218�.
Accounting �or non-sensitive machinery and equipment items costin� less tkau �500 is at
the discretion o� the department head; kowever, the Finance Department will not be
responsible {or tagging othernise inventorying tkese items.
CITY OF PAI.M DESERT
ANNUAL CERTIFICATION OF FIXED AS5ETS
Each department must conduct an annual certi�ication o{the �ixed asset items in its custody. In
1�pri10�each year t�e �inance Department will distribute the latest °ProperLy Record Status Report"
for certification by the department head. The retumed certi{ied listing, with all notations and
explanations o�missing or newly-discovered items, is due on May 31st.
PROPERTY TRANSFER REQUEST/RELEASE OF ACCOiJNI'ABILITY FORM
�I'he "Property'Txans�er Request/Release o{Accountabi�ity" �orm will be distributed, once again, wit�
t}tis policy. Department �eads axe responsible {or ensuring� t�at this �orm is completed in a timely
manner when City property assi�ned to tkeir department is (1.) Trans�erred to another department,
(2.) Trans{erred to the Corporate Yard as surplus, or(3.) Lost or stolen. The departments must sign
tke �orm be�oxe tke Finance DeparEment will relieve tke trans�erring deparEment o�responsibi�iiy�or
the asset item.
r- -�
CALIFORNIA DEBT AND INVEs'TMENT ADVISORY COMMISSION
� PHILIP ANGELIDES, CHAIR
a�o
� ' DEBT LI N
E
A source ot Ca/Ifornla debt and Investment Iniormadon
Volume 18,No.8 June 1998
CDIAC DEFERS FEE INCREASE IN FIRST MEETING OF 1999
At its June 2, 1999 meeting, the Cali- Senate Members Appointed to e►ected to the Senate in 1994iShe was pre-
fomia Debt and Investment Advisory Commission viously elected ro the Assembly in 1992.
Commission, chaired by State Treasurer Currently she is Chair of the Senate In-
Philip Angelides, voted to defer an in- The Treasurer welcomed new Com- dustrial Relarions Committee andthe Asia
crease in Commission fees due to begin mission members Wesley Chesbro, Sena- Trade and Commerce Subcommittee.
on July 1, 1999. The scheduled fee in- tor from the 2nd Senate District,and Sena-
crease was deferred to July 1,2000.Fees tor Hilda Solis from the 24* Senate Dis- In further business, the Commission
were reduced in 1998 in order to decrease trict. They join Assemblymembers Lou approveda resolution to allow the Execu-
the Commission's fund balance to an Papan and Scott Wildman as the legisla- tive Director to enter into administrative
amount that would cover one year's ex- tive appointees of the Commission. contracts. The Commission was also
penditures. A review of current and an- briefed on CDIAC's work plan for fiscal
ticipated revenues and expenditures indi- Senator Chesbro (D-Arcata) was fust year 1999/00 and the status of iu Counry
cated that the prior fee decrease did not electedtotheSenatein 1998.Hepreviously InvesunentPoolproject.TheCommission
reduce the batance su�cientty—and the served as a city,county and state official. also discussed AB 1423 (Steinberg),
� revised fee schedule will accomplish that He is Chair of the Senate Committee on which will expand CDIAC's itrvestrnent
goal in the coming yeaz. (See page 9 for Revenue acid Ta7cation and the Select Com- program so that it will mirror CDIAC's
the adopted fee schedule.) mittees on Califomia's Wine Industry and existing debt program(see article on this
Developmental Disabilities and Mental page),and the on-going outstaciding debt
Health. Senator Solis (D-El Monte) was project. $
X TREASURER ANGELIDES SPONSORS BILL TO
PROMOTE BEST INVESTMENT PRACTICES
The California Debt Advisory Com- vestrnent practices and policy informafion. �r+sioe
mission was established in 1982 to serve The Commission will expand its role as an P'9�
as the Statds clearinghouse for state and established debt information repository to �ofFomNrCommbslon IA�mb�r 2
local debt issuance information. Foliow- one that strengthens its investrnent educa- �w suson epi�u s
ing the 1994 banlmiptcy filed by Orange tion and advisory functions.The Treasurer T•z.od e.v.nw N,n�iPano�Noas a
County where the County's investrnent noted at the June 2n0 Commission meetin �^rom we�saa z
F �Stahl9ii-00�lWblativ�3asbnB114 �
pool sustained a$1.6 billion loss,the Leg- that, by collecting and compi6ng this in- taes cn�naermutgus�mtnanieom. a
islature added education and oversight of formation,public agencies will have a re- S°�ce°��'2000�.�y�snwa seuion
local investment practices to CDIACs liablesourcetocontactforinvesqnentstrat- i oovaaweeonomkow�ioPmxit 4
range of responsibilities. In 1997, the egiesandpractices. Finanungrorsm�usustnus e
R�portlng FN SehMula 8
Commission's name was changed to the en vd,uc o.nt in�,��.vsady taaW �o
Califomia Debt and lirvestment Advisory The bill, AB 1423 authored by Adv�need Toplcs in D�bt Issua�
Saminar R�gittratlon Form 11
Commission and iu responsibilities ex- AssemblymemberDarrellSteinberg,would Glandaroflsaues �z
panded to include public invesknents. require CDIAC to collect,maintain and re-
view currently available investment infor-
� This year, State Treasurer Philip mation on local agencies' investrnentport-
Angelides is sponsoring legislation that folios and policies.This informadon would
will further enhance CDIAC's ability to be requ'ved from local agencies that do not -
maintain and provide important local in- invest 100 percent ofthe'v investment port-
(Continued on page 10)
Califomie Debt and Investmrnt Adtisory Commission,915 Capitol MWI,Room 400,P.O.Box 942809,Saaamrnto,CA 9Q09-0001,(916)653d269
� TREASURER ANGELIDES SPONSORS BILL
� ...(Continued from page 1)
folio in either their county pool, the State Treasurer's Local of investrnent trends and pattems. The intent of the measure is '
Agency Investment Fund,and/or insured bank accounts.Agen- to increase the educational opportunities for, and the informa-
cies will be required to submit a copy of the'v current invest- tion available to local agency o�cials involved in investment
ment policies and their second and fourth quarter portfolio re- decision making.The infom�ation may be used to compare trends
ports to CDIAC. and ractices amon
P g portfolios with similaz characteristics.For
example, studies may compaze investrnents with similar matu-
Currently, there is no centraliud collection and review of tity lengths or retums.Or,studies may compare the market value
local invesenenu ofpublic funds.This bill,as currently drafted, or weighted average maturities of investrnent poRfolios. This
provides an opportuniry for local govemments to share theu in- infonnation will give local agencies a resource for identifying
veshnent expertise to help CDIAC keep pace with local invest- investrnent strategies that may improve the safety and liquidity
ment policies and practices, thereby enabling the Commission of their own portfolios.CDIAC recognizes that the diversity of
to disseminate usefu]information to local agencies.Since 1983, local agency fiscal needs means that one best practice invest-
the National Association of State Treasurers has collected and ment formula can not be universally adopted.However,the data
published informarion on the states' investrnmt portfolios in an will provide important information on a ronge of best practices
ongoing effort to promote good fmancial management by the in constantly fluctuating mazket conditions. In addition,the in-
states. formation will assist CDIAC staff with the development of in-
veshnent seminar topics, issue briefs,and other investrnent-re-
lated products.
Intormation to be Used for Commission Reports,Studies
and Seminars AB 1423 has passed the State Assembly and will be heazd
in the Senate Local Govemment Committee in July.Ifyou have
As proposed,AB 1423 will require CDIAC to collect and any questions or comments regarding AB 1423,please contact
maintain local agency investrnmt infonnation to enable the study the State Treasurer's O�ce at(916)653-2995. $
�� !
CALIFORNIA PUBLIC DEBT ISSUANCE YEARLY TOTALS I
FOR THE PERIOD JANUARY 1, 1985 THRU APRIL 30, 1999* '
�
vFsa sre7o �sci e io.ni isciFe snmpur i rccuFc Tnrai cxnuac �,
1985 7,833,712,020 24,329,426,679 760,000,000 32,923,138,699
1986 7,599,576,464 16,464,931,480 249,400,000 24,313,907,944 -26.14 i
1987 4,155,360,000 12,423,924,702 800,000,000 77,379,284,702 -28.52 �
1988 7,950,675,000 74,315,675,201 220,000,000 22,486,290,201 29.38 I
1989 6,918,090,529 15,438,897,895 22,356,988,424 -,5�
7990 10,480,387,139 13,696,104,804 24,176,485,943 8.73
1997 14,521,605,862 20,063,079,556 237,500,000 34,822,185,418 44.03 I
� 1992 76,748,466,407 26,753,362,092 352,500,000 43,854,328,499 25.93
� 7993 15,291,478,972 41,320,302,474 63,700,000 56,675,481,446 29.23
1994 16,110,762,183 25,920,426,547 150,000,000 42,187,188,730 -25.57
1995 3,776,058,000 22,978,983,845 260,700,000 27,015,741,845 -35.95
1996 12,702,883,318 23,533,659,002 484,500,000 36,727,042,320 35.92
, 7997 10,529,337,417 28,229,894,673 150,000,000 38,909,232,090 5.96
1998 11,078,585,635 29,393,623,477 695,000,000 41,167,209,172 5.80
7999 1,905,656,716 4,735,796,215 26,000,000 6,667,452,331
'Totels mey intlude taxable debt issuances as uell et issuanee for the purpose of refunding I� �
existing indebtedness.
Source: California Debt and Investment Rdvisory Commission, May 76, 1999.
i
• . . �
�
Ford 's Record Issue May Drive Imitators
CREDIT A Boost for Corporate Bonds
MARKETS pord's Record•Breakinp�Oeal... � 8as Neiped Soothe the Market
By GeecoeY Zucxexc�uta Top 10 carporate 6ond deals < � � :.",Yfelds on A-rned eaporete bonds over
s�aJ)RePo.ce.o)rxe wwc�sTneer�ov.Nw� ' TOT�L AMT. .;,-comparable Treasurys,in perceritape poims—
A forecast for imes[ors: It may soon be �� �� ���a� (BILlIONS) �..,,�ihe ahrinidnp qap rellects suo�per Oemand.
raining corporate bonds. Ford July 9,1999 56.60 :u`1.10
More U.S. crompanies are preparing to
sell bonds, buoyed by Ford Motor Co.'s ATdT March 23,1999 8.00 i .'
record-breaking bond issuance on Fri- p�p Holdinpt � � May 12,1989 6.11 �; �,� � �
day — and prodded by fears of another .
shutdown in the capital markets in Ihe WONECom Aug.6,1998 6.10 � - �. ' •
months ahead. But so far oNy top-notch ��M Nov.10,1998 5 00 ��� �� �
companies are finding investors interes[ed �
in their bonds,while lower-quality compa- �pc.Cory.of N.Amer. Oct.D,1998 4.80 �� , •
nies issuing junk bonds continue to strug- �� � . . �. .
gle to obtain much-needed tinancing. Nodolk Soulhem May 14,1997 4.30 �. �.
E7iday's deal by Ford,just[hree weeks
after many bond investors headed for the US WestCapital Jan.16,7997 a.10 � �
sidelines, proved tha[investors are again Canoeo 120
eager to buy corpora[e bonds from top- April 15,1999 A.00 .. - ' .
rated companies. Ford and its subsidiary, Ctwrter Communiwtlons March 12,199g 3.SB� -�15 �
Ford Motor Credit Corp.,sold$8.6 billion in
bonds,thelarges[corporate•bondissuance � F M a w d �
to da[e."There was a lot of excitemen[and ��lhamsonqnencW SetutltPos Wq Cndit SuissefirstBaston- �999
excess demand that exceeded our expecta-
tion," said Dave Cospeq Ford CrediYs improved investor enthusiasm: The U.S.debt syndication, "so we shoWd see a
[reasurer. spread, or difference in yields, be[ween reasonably heavy calendar of new issu
The Ford deal eased the anxiety tel[in corporate bonds and Treasurys,is shrink- ance,though nothing overwhelming."
corporate boardrooms in recent weeks as ing somewhat, making it cheaper [o sell I[is all a turnaround from[he fall,when
investors soured on corporate bonds,fear- investment-grade bonds. Single-A invest- new bond issuance became almost impos-
ing rising rates and a new rush out of inenbgrade corpora[e bonds now trade sible amid investors' flight from bonds
bonds with risk attached to them. In fact, at a yield of 1.33 percentage points above with risk. �
Ford pos[poned i[s deal three weeks ago, cromparable Treasurys, down ftom 1.38 And beCause Some iSsuers are already
citing investor wariness. points on June 25, acwrding to Credit Wary of another shift of sentiment,back to
i.arge deals like Ford's are especially Suisse First Boston. caution perhaps, as investors prepare
a[tractive to investors who still have "The implication of Ford going poorly for 2000 and possible computer glitches,
haven't torgotten the liquidity crisis in would have been large, and the market is they are eager to raise financing now.
the bond market of the fall, after the taking fmm it a sense of confidence," "There is a window of opportunity tha[
Russian debt default. Evidence of the said Donald Devine,Firs[Bosron's hez:of Plense Turm to Page C/.9, Colum�� !
Re��ord Ford Issue Could Spur Imitators '
CREDIT hg� ��d��y� �bor,plus 0.17 percentage point; $1.8 bil-
�Y lion of threryear floating-rate notes at
MARKETS �ds4asaf4:30p.m.Eastnmtl� three•month Libor, plus 026 percentage
���� point,and$4 billion of five-year notes with
Continued F1�om Page C1 a 6.7%coupoa Ford Motor sold$1.8 billion
exists,but in the fall companies may have of 32-year notes with a 7.45%coupon. The
difficulty selling bonds." said Fares Nou- 5_pp; yields on the securities are somewhat
jaim, cahead of global debt capital mar � . -�-•' lower than Ford woWd have paid several
kets at Bear,Stearns&Co."We're still in a �••����'"""�� � '� weeks ago,analysts said.
bear market lin bondsl, and there's a po- 3,pp -
tGntial that everyone's aware of for dra- .
matically wider spreads,so fourth-quarter
issuance should be really quiet." q,ap�:. — Friday �
But even as top-rated companies rejoice i � •••� oec.3i,iss�
over Ford's success, lower-rated compa- —oec 3� 1996
nies had li[tle to celebrate. Investors are �,pq '
shunning bonds issued by companies rated � 6 1 7 . 5 t6 �p.
below investment-grade, or junk. Just ' � �a � �' '�� `
$83.5 billion of junk,or"high yield,"bonds �"'��� '
have been sold so far this year, down 42%
from $145.1 billion for the same period a YIELD COMPARISONS
year ago,according to Thomson Financial Besetl m Mertlll LVnch BonE InOezes, oriceE es of
Securities Data, even as$585 billion of in- miaanemo,�,e„hm nm�.
vestment-grade 6onds were sold, up from �n �n xi����
$530 billion]ast year. com:co.�.nu.n. a.n� 6.31% 6.�9% �.ux �
"High-yield issuance is at the slowest roaa.��r�-ia. b:is b:ii b:i's i:ee
pace of [he year, if any[hing iYs getting A�"y��s 1-0Oyr bea 6.64 e:w i:zi
worse,and deals are getting done a[higher Corpente � �
yields," said John Kilgallon of Bear '�70VfN",�Qiiv °esi e:v�6e i:u s:�v
Stearns. "IYs just companies that have to 10+vrM��°a�o°iiv i:ei i.ei i:» e:ii
get their deals done that are paying the v�x.eeo�mm �.is zia zw s.e�
hi her yields,but other issuets are waitin OpRen�"01p0"monwc..c�i �
B B GNMA].OU% ].Jl ].3J ]AS 5.79
for things to improve." FNMA i.00% �.s� zza zn s.e�
FMLMQ.00% 7.Y7 7.78 7.17 S.B9
Par[of the problem is that new invest- wi'n�ruia wrowa�K �o.zv io.�v io.ei asi
ments into high-yield mutual funds have T�'Exemof6oMs
17�VrG.O.lAA1 1.8Y �.85 �.97 l05
been slow lately, reducing [he amount of �7-Z2-V�G.O.(AA) s.si s.zz s.s� �.m ,
mone in the hands of mone rtlana ers. n+v.r����n� s.0 s.0 s.n ..e�
Y Y g Note:Hion quauN rateE nnn-nn;mMlum auellN n-
At the same time,junk-bond inves[ors are BBB/Baa;h10�vleltl,BB/BCC.
tl1 Dollarvderromineted, SEGreolstered bonds ol for-
particularly nervous that rates will keep elynissuerswltllntheU.S.(3)ReHMsthess�weeknlah .
rising,crippling the second-tier and third- md^1°h"e��di�au°a�ck�-l��rltles intlexes raiher
tier companies in the junk-bond market. ages$3 billion of junk and investmenAgrade
And investors are having a hard time for- ponds for Invesco Trust Co.in Denver.
getting[he upheaval of[he fall,when junk- In fact,Cablevision Systems Corp.was
bond investors saw big losses,and are wor- able to pWl off a $500 million junk-bond
ried [hat another round of selling might deal las[week,thanks in large part to buy-
�ake place again later this year. (ng interes[ from investment-grade buy-
'There are plenty of companies that want ers�no[the junk crowd.
to come to the market,but iYs a question of Few junk-bond deals will get the enthu-
whether there's enough cash out there ro siasm that the toprated Ford deal got, of
meet the supply,"said Jerry Paul,Who man• course. Investors were eager to buy the
Bond Yields Ford deal because the company has"cash
and plenty of it," said Carol Levenson of
sA� Gimme Credit, a CMcago analyst. The �
.,. ;,. �- g�ed auto maker has "stability, on both finan- j
� ��: uo;ue;es cial and strategic fronts,"she said.
II 7 0 : zslw As of Thursday morning the Ford deal
was expected to be sized at about$7 billion.
But a surge of llth-hour interest,caused in
i L°"g-°e`m par[by the Federal Reserve's recent signal
s.o Treasurys that a string of in[erest-rate increases may
s.ssx
��. ��� � not materialize as feared,helped the deal
eclipse the $8 billion of securities sold in
- �' Muatc�pa�s March by AT&T Corp., previously the
� 5.0 °'�% largest corporate debt sale[o da[e.
� ' �. ' ' The deal is part of Ford's plan to regu-
� larly sell large global bond issues,in an ef-
�y p � � fort to become the benchmark for the en-
J �F M A �M�J J tire corporate bond market.
ise9 Ford Credit sold $1 billion of two-year
� ;,,,..��•:xrr�.;rr r.,�n�n se��.a;�,ae.,�ea,�n floa[ing-rate notes priced at the three-
month London Interbank Offered Rate, or