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HomeMy WebLinkAbout2002-03-27 IFC Regular Meeting Agenda Packet COMMITTEE MEETING WORKSHEET Meeting Description Investment Committee Meeting Date 3/27/02 Time 2:00 p.m. Location North Wing Conference Room Mailed Agenda 3/20/02 Posted Agenda 3/20/02 Time Convene Adjournment Z=UDIYM,l Staff Members Attending Yes No Others Attending Yes No 1 Paul Gibson, Chair arson 10 Dennis Coleman 2 Council Member to S - 11 Justin McCarthy 3 Council Member %' ✓ 12 Recording Secretary 4 Dave Erwin, City Attorney 5 Carlos Ortega, City Mgr. 6 Thomas Jeffrey Public Members Attending Guests Attending 7 Russ Campbell 12 8 Murray Magloff 13 9 Bill Veazie 14 10 Everett Wood 15 16 17 Follow-Ups/Tasks Assigned Person Responsible Due Date 1 IV r 2 c 3 4 5 6 7 8 60 � I l o'w "`� 50 w , . WEr 7.W, _ FI M�in�r i�ma. ■K �if'.7/I�.�r ffA .. - ®m W. rA =�mTm i. . L2T,1��ft• ,z WMARN . ENO �m i��� . 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GCSYn dam✓ PTJ- (s 1 a Spoke Mtn (1) Mtn (2) MEETING NOTES a Spoke Mtn (1) Mtn (2) MEETING NOTES t COMMITTEE MEETING WORKSHEET Meeting Description Investment Committee Meeting Date 2/27/02 Time 2:00 p.m. Location North Wing Conference Room Mailed Agenda 2/21/02 Posted Agenda 2/21/02 III Time Convene Adjournment (TyV Staff Members Attending Yes No Others Attending iYesNo 1 Paul Gibson, Chair arson 10 Dennis Coleman 2 Council Member 11 Justin McCarthy () nwA 3 Council Member 12 Recording Secretary It J 4 Dave Erwin, City Attorney 5 Carlos Ortega, City Mgr. 6 Thomas Jeffrey Public Members Attending Guests Attending 7 Russ Campbell 12 8 Murray Magloff 13 9 Bill Veazie 14 p 15 16 17 Follow-Ups/Tasks Assigned Person Responsible Due Date 1 2 3 1(Vl Yl 4 �^' S 6 7 8 .. - ®m I f I MEETING NOTES VA el vowel 0 1 MEMO- ;�Tdd�J mA 1 , � .. - �M • il�i�•�f.���'*c ' [ah7�i - - s,I , _-_WOE UNWA i�i ► . ii IWA %� i_. I ids Ar. _. ,URA - rei _��,. �► _ - Spoke Mtn (1) Mtn (2) MEET114G NOTES cl _ CITY OF PALM DESERT INVESTMENT & FINANCE COMMITTEE AGENDA March 27, 2002, 2:00 p.m. North Wing Conference Room I. CALL TO ORDER II. ROLL CALL III. ORAL COMMUNICATIONS A. Any person wishing to discuss any item not on the agenda may address the Investment and Finance Committee at this point by giving his/her name and address for the record. Remarks shall be limited to a maximum of five minutes, unless the Investment and Finance Committee authorizes additional time. B. This is the time and place for any person who wishes to comment on agenda items. It should be noted that at the Investment and Finance Committee's discretion, these comments may be deferred until such time on the agenda as the item is discussed. Remarks shall be limited to a maximum of five minutes, unless the Investment and Finance Committee authorizes additional time. IV. COMMITTEE MEMBER REPORTS V. CONSENT CALENDAR ALL MATTERS LISTED ON THE CONSENT CALENDAR ARE CONSIDERED TO BE ROUTINE AND WILL BE ENACTED BY ONE ROLL CALL VOTE. THERE WILL BE NO SEPARATE DISCUSSION OF THESE ITEMS UNLESS MEMBERS OF THE INVESTMENT & FINANCE COMMITTEE OR AUDIENCE REQUEST ITEMS BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE DISCUSSION AND ACTION UNDER SECTION V. CONSENT ITEMS HELD OVER, OF THE AGENDA. A. Approval of Minutes Rec: Approve minutes of the regular meeting of February 27,' 2002, as submitted. Action: 1 032IO2.w d INVESTMENT & FINANCE COMMITTEE AGENDA March 27, 2002 VI. CONSENT ITEMS HELD OVER None. VII. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for February 2002 Rec: Review and submit for the next City Council agenda. Review the presentation on the investment graphs. Review the investment activity for February 2002. Review status of capital projects and cash-flow projections. Action: B. Review Short-Term Investments Maturing in March 2002 Rec: Review investments in 1) collateralized deposits; 2) treasury bonds and notes; and 3) agencies discount notes Action: C. McCallum Theatre Financial Reports Rec: Review and file. Action: D. State of California Local Agency Investment Fund Monthly Report for December 2001 Rec: Informational item for the Committee to review. No action required E. City nd Redevelopment Agency Monthly Financial Reports for City Council for January 2002 Rec: Report and submit to City Council Action: 2 032]02.wpC INVESTMENT & FINANCE COMMITTEE AGENDA March 27, 2002 F. Parkview Professional Office Buildings - Financial Report for February 2002 Rec: Review and file report: Action: G. Palm Desert Golf Course Facilities Corporation Financial Information for January 2002 and February 2002 Rec: Review and file report Action: Vill. CONTINUED BUSINESS None. IX. OLD BUSINESS A. Status of Public and Private Partnerships Background Checks Rec: Status report on background checks Action: B. Bond Issuance by Palm Desert Financing Authority Rec: Status report on issuing new bonds Action: X. NEXT MEETING -Wednesday, April 24, 2002 at 2:00 p.m. XI. ADJOURNMENT I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda for the Investment and Finance Committee was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this 20`h day of March, 2002. DiX Lea , R rdi g Secretary 3 032702.wpd : x y \ , % \ � \ 2 (/ ■ } § / § { ( \ ) \ § \ qg k § * @ q ia » y § §tv \ ) � \ Finance Department MEMORANDUM To: Rachelle Klassen, Deputy City 44 Clerk From: Diana Leal, Administrative Secret Subject: Investment and Finance Committee Date: May 6, 2002 Attached is a copy of the March 27, 2002 minutes of the Investment and Finance Committee approved by the Committee on April 24, 2002. Please place on the next City Council agenda for approval thereof. Additionally, attached is the sign in sheet of said meeting. Thank you for your assistance. Attachments (2) GAFinance\Diana Leal\WpdocsUnvestment Committee\2002 Memos\City Clerk\3-27-02.wpd _ CITY OF PALM DESERT INVESTMENT & FINANCE COMMITTEE _ Minutes March 27, 2002, 2:00 p.m. North Wing Conference Room I. CALL TO ORDER A regular meeting was called to order by Chairman Gibson on Wednesday, March 27, 2002, at 2:00 p.m. IL ROLL CALL Present: Absent: Paul Gibson, Chairman Russ Campbell Thomas Jeffrey, Investment Manager Jean Benson, Mayor Pro-Tempore Bob Spiegel, Council Member Carlos Ortega, City Manager Dave Erwin, City Attorney Murray Magloff Bill Veazie Everett Wood Also Present: Justin McCarthy, Redevelopment Director/ACM Dennis Coleman, Redevelopment Finance Manager Diana Leal, Recording Secretary III. ORAL COMMUNICATIONS - None IV. CONSENT CALENDAR A. Approval of Minutes Motion was made by Mr. Spiegel and seconded by Mr. Veazie to approve the Minutes of the February 27, 2002 meeting as submitted. Motion carried. 1 MinOle 32702.wpd INVESTMENT & FINANCE'COMMITTEE MINUTES March 27, 2002 V. CONSENT ITEMS HELD OVER None. VI. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for February 2002 Mr. Jeffrey gave a brief summary of the December Investment Reports. For the month ended February 28, 2002, the book value of the City Portfolio was approximately $165,300,000. The City earned approximately $445,000 in interest during that month. The City Portfolio yield-to-maturity was 3.27%. The City portfolio outperformed LAIF for the fifth consecutive month. For the month ended February 28, 2002, the book value of the RDA Portfolio was approximately $106,300,000. The RDA earned approximately $205,000 in interest during that month. The RDA Portfolio yield-to-maturity was 2.51%. Mr. Jeffrey informed the Finance Committee that Standard and Poor's had recently downgraded a General Motors Acceptance Corporation Medium-Term Note in the City portfolio from "A" to "BBB+", the minimum investment grade rating allowable under the California Government Code. This downgrade reflected long-term profit pressures upon GM from Japanese competitors. Unlike Ford's downgrade, the GM downgrade was not based upon GM's current market performance. Mr. Jeffrey recommended holding the GM note until it matures in March 2003. He indicated that the Treasurer's Office does not plan to purchase any more U.S. automobile company debt until there is an improvement in the financial condition of those companies. B. Review Short-Term Investments Maturing in March 2002 Mr. Jeffrey gave a brief overview of maturing investments in March 2002 for the City and for the Redevelopment Agency. C. McCallum Theatre Financial Reports A copy of the Financial Reports for the McCallum Theatre was provided to the Committee for their review. Mr. Spiegel asked if the report included monies provided by the City of Palm Desert. Mr. Gibson said that it is included as the monies were disbursed in mid July. 2 Minufes32702.wpd INVESTMENT & FINANCE COMMITTEE MINUTES March 27, 2002 Mr. Spiegel asked if the ticket sales were listed in the report as he would like to receive a report indicating the cost for production and monies received. Ms. Benson said that she receives a copy of the McCallum report on a monthly basis. She will provide Mr. Spiegel with a copy. D. State of California Local Agency Investment Fund Monthly Report for December 2001 Mr. Gibson said that the interest rates seemed to have dropped as their investments matured. Mr. Jeffrey has proposed language under SB68 to amend LAIF as it is a trust fund on the City's behalf. Currently, the way it is written, the funds placed in LAIF are considered state money. Some cities have threatened to pull their money because there is a possibility of not being able to withdraw funds unless the state has an adopted budget. E. City and Redevelopment Agency Monthly Financial Reports for City Council for January 2002 Mr. Gibson said that the City has received the quarter ending payment that includes the holidays (period: November through January) indicates that the cash receipts were down 6.5% from last year's cash receipts. The revised projection for sales tax would be approximately$13.2 to $13.3 million versus the budget of $13.8 million. Last year the City received $13.5. Transient Occupancy Tax (TOT) is still in line with what is budgeted of $7 million. From September to mid to end October the City is down. Vacation Inn has been delinquent on their payment and the City has placed liens on their property. The City was ready to file a court claim to collect monies due. Vacation Inn agreed to pay outstanding fees on a monthly basis, however, at this point they are in default of their agreement and the City will proceed with a court action. Franchise fees are slightly down from last year. Expenditures are well under the year to date budget. F. Parkview Professional Office Buildings - Financial Report for February 2002 Mr. Gibson said that four tenants have moved out. Tenant improvements such as new carpeting have been made in order to make the spaces available to the new tenants. The City is waiting for a renewal lease for Water Resources Board. Once they are in place, as part of a requirement of the agreement, the City will be spending close to $100,000 to make the necessary tenant improvements in order for the Water Resources Board to continue leasing for another 6 to 10 years. They have occupied their space for 10 years. 3 Minu es32702.wpd INVESTMENT & FINANCE COMMITTEE MINUTES March 27, 2002 Ms. Benson asked about the funds received from the Parkview Office Buildings. Mr. Gibson said that each year the City reviews fund balance. Last year, the City transferred, in essence, 2 or 3 years worth of balance which equated to $1 million. It was sent to the General Fund and it was decided that the funds be used in the park fund to be used to fund the amphitheater. Staff does not propose to transfer any funds this year, although there is approximately $1.7 in cash, there is about $1.4 in depreciation. The remaining funds will be directed to repair the roofs. Until all necessary improvements have been done, staff does not recommend the transfer of any monies. Mr. Ortega pointed out that the City did not lose any money; the income projected was less then what was received. Mr. Gibson said that Goodwill has run into financial problems and will be vacating their space in October once their lease expires. G. Palm Desert Golf Course Facilities Corporation Financial Information for January 2002 and February 2002 Mr. Young said that for the month of February the rounds continue to be strong. They have become aggressive with some of their golf providers in helping them provide rounds of golf to Desert Willow by giving them a further discount on the rounds they offer. The posted rounds are down. They are running about 25% of what is budgeted. One of the reasons may be that the people coming from southern California are well aware of the golf providers that offer discount rounds as opposed to the golfers from various parts of the country that just want to come here to have fun and not have to look for discounts. The net income for the month of February improved over prior year by $105,000. They almost reached the one million mark. Rounds of golf were heavy, however, average rate was down about $15. In January, Mr. Young called other golf courses to see how they were doing. Indian Wells Golf Resort (IWGR) representative said that January rounds were 5900 compared to Desert Willow's 7380. IWGR's green fees were 63% of their original budget. Tahquitz Creek indicated that their rounds, green fees, revenues etc. were down. Landmark indicated that their rounds were slightly up with average dollar down. Marriott Desert Springs are down 20% their average round because they are running their two-for-one special which impacted Desert Willow. KSL are down 15%. All the local golf suppliers are down 20% - 40% from the previous January. Mr. Young said that he prefers not to discount the rounds as it injures your rates the following year. Mr. Gibson said that there is an interest agreement, if the rate is lowered, they receive a 50% discount on posted rates. 4 mnwe532202.w d INVESTMENT & FINANCE COMMITTEE MINUTES March 27, 2002 Ms. Benson asked about the number of resident cards. Mr. Young said that 7,000 cards have been issued. Mr. Magloff asked about the lights at Desert Willow. Mr. Young said that a lot of dollars have been spent to place the current lighting. They have rented power lights for special night events. They are contemplating requiring valet parking for night functions. Sidewalk lights have been added to the handicap areas. Mr. Young said that they had three functions this year, Morningside, PGA West Desert Island, Tamarisk Mission Hill Country Club had a dinner. For the first event, they sold 180 tickets at $140/person. The show was only 45 minutes. They sold 125 tickets at the next show. It went more smoothly. They sold 50 tickets to the March show. If there was a party of four, they sat at a table for four. It was very successful. Food and beverage is doing well. Breakfast has been added to the menu. They are averaging about 70 people per day for breakfast. A hostess has been employed to assist. Every Saturday night in June is booked for a wedding. Some hotels are referring people to Desert Willow. They had visitors from Japan who had dinner Friday night. One of the golf providers had a hole-in-one contest. They lit up the greens. Mr. Gibson said that a sales audit was conducted and the City and Desert Willow had zero findings. Mr. Spiegel asked what is necessary to qualify for complimentary rounds. Mr. Young said that they are putting together a program which he will be bringing to the next meeting. VI I. CONTINUED BUSINESS None. VIII. OLD BUSINESS A. Status of Public and Private Partnerships Background Checks There being no business issues to report, discussion ensued to the next agenda item. 5 Min.tes3270Z.Pd INVESTMENT & FINANCE COMMITTEE MINUTES March 27, 2002 B. Bond Issuance by Palm Desert Financing Authority Mr. Coleman distributed handouts relative to the bond issued in November 2001. All of the yields were under 5%. In addition, bonds were issued in escrow. The highest rate received was 4.90%. Staff refinanced Project Area No. 1 bond issue. Interest saved was approximately $929,000. Also generated $977,000 of new bond proceeds. The pricing reported that they were going to receive was 2027 maturities were at 5.00%, discounted to yield 5.08%, and they surpassed this with rates of 5.00% discounted to yield at 5.06% and we obtained a rate of 5.10% at a yield for the thirty-year bonds. They priced better than some issues and priced as well as the San Francisco's airport deal. They did 5.08 at the 2027 maturity and the Agency did 5.06 at the 2025. They are looking to refinance Project Area No. 2 bond. The money is not as much, however, they will be able to lock in a restructuring and bring the coverage from $1.60 per dollar debt to $1.25 per dollar debt and perhaps hold as much as $677,000. However, now that Council has given their permission to take a look at acquiring projects it would require bonds in the housing side. They are looking at two different structures: 1) leverage the money and 2) straight cash allocation bonds. Staff will have more to report at the next committee meeting. Mr. Ortega said that because they like to make comparisons through a final pricing summary to ensure that they receive a good deal. IX. NEXT MEETING - Wednesday, April 24, 2002 at 2:00 p.m. X. ADJOURNMENT There being no further business, the meeting was adjourned by Mr. Gibson at 2:46 p.m. Respectfully submitted, D ana a cor ng Secretary 6 M.Wes32702 wpd f7wi�_Lllif CrtyLIANCFebCufiry2002 _ " „� � Paul S. Gibson, C.C.M.T., Treasurer Thomas W. Jeffrey, J.D., M.B.A., Investment Manager Treasurer's Commentary The Federal Reserve Open Market Committee("FOMC") did not meet in February to discuss interest rates. The pieces of an economic recovery continue to fall into place. The Conference Board's composite index of leading economic indicators increased 0.6% in January and 2.6%from December 2001 through February 2002, signaling a firm recovery. Economic growth for first quarter 2002 is projected to be around 4%. Credit is available to support the recovery. The economic positives now outweigh the negatives. Due to a favorable inflation outlook, it is thought that the FOMC will not begin to raise interest rates until late 2002. The FOMC will want to be sure that "the dynamics of a sustained expansion are more firmly in place." This view is consistent with the short portfolio positions that most fund managers have taken;they are loath to take intermediate or long investment positions at current interest rates. Moody's Investors Service announced that, in future, it would be updating its credit ratings on a more frequent basis. This is undoubtedly a reaction to the Enron bankruptcy. 'Va bs.. 4�7d ors C.C.M.r Treasurer PORTFOLIO STATISTICS Dollars in Thousands FEB-02 JAN-02 DEC-01 NOV-01 OCT-01 SEP-01 CITY Month-End Book Value`** $ 165,313 $ 179,824 $ 163,537 $ 166,386 $ 165,331 $ 169,727 Month-End Market Value*** $ 167,796 $ 182,342 $ 166,130 $ 169,077 $ 168,076 $ 172,344 Paper Gain (Loss) $ 2,483 $ 2,518 $ 2,593 $ 2,691 $ 2,745 $ 2,617 Interest Earnings $ 445 $ 488 $ 499 $ 519 $ 567 $ 615 Yield-To-Maturity 3.27q, 3.27% 3.55% 3.69% 3.98% 4.28% Weighted Maturity(Days) 333 325 364 360 375 359 Effective Duration 0.18 0.19 0.24 0.27 0.31 0.32 RDA Month-End Book Value"` $ 106,319 $ 85,482 $ 85,132 $ 84,935 $ 69,921 $ 70,498 Month-End Market Value*" $ 108,295 $ 87,392 $ 87,015 $ 86,814 $ 71,736 $ 72,303 Paper Gain (Loss) $ 1,976 $ 1,910 $ 1,883 $ 1,879 $ 1,815 $ 1,805 Interest Earnings $ 205 $ 184 $ 194 $ 203 $ 188 $ 289 Yield-To-Maturity 2.51% 2.45% 2.61% 2.83% 3.04'/0 3.69% Weighted Maturity(Days) 160 202 203 204 247 221 Effective Duration 0.18 0.24 0.25 0.27 0.35 0.29 City Treasurer's Office 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 Omits SLGSs. 760.346.0611 City of Palm Desert- Portfolio Characteristics 28 February 2002 Dollars in Thousands Ageing Interval Market Value < 1 M $ 53,798 General Fund Ageing <2M - <3M 80 <6M 18,195 63 <1 Y R 9,142 60 "�r <2YR 4,070 0 a 40 <4YR - o � 21 a y � 11 <5YR 5 >SYR 0 0 0 Total: $ 85,205 <11 <2M <3M <6M <1YR <2YR Ratings' Market Value Credit Guality AAA AAA $ 77,406 AA 3,077 A7/P1 AA A 4,075 of � pA At/P1 2°/6 Unrated" 83,239 Unrated" Total: $ 167,797 /° Sector Market Value Asset Allocation Money Market Commerce Funds Paper U.S. Treasury $ 23,509 �/ 0°A Corporate Federal Agency 30,164Bonds Money Market Funds 32,903 903 6% Commercial Paper - Federal Agency LAIF Corporate Bonds 10,228 24% LAIF 40,000 RDA Loan 31,003 U.S.Treasury RDA Loan Total: $ 167,797 140/6 180/6 Month City Yield LAIF Yield Variance Pertormance Mar01 5.72 5.98 -0.26 Apr 5.46 5.76 -0.30 6.5 May 4.91 5.33 -0.42 Jun 4.71 4.96 -0.25 5.5 Jul 4.53 4.64 -0.11 Aug 4.42 4.50 -0.08 & 4.5 Sep 4.28 4.35 -0.07170 3.5 h Oct 3.98 3.79 0.19 Nov 3.69 3.53 0.17 2.5 Dec 3.54 3.26 0.28 Mar01 Apr May Jun Jul Aug Sep Oct Nov Dec Jan02 Feb Jan02 3.27 3.07 0.20 Feb 3.27 2.97 0.31 0 LAIF Yield 0 C ty Yie d Standard and Poor's Credit Ratings " LAIF, HighMark Sweep, and City Loan to RDA Page 2 of 8 City of Palm Desert Portfolio Holdings 28 February 2002 Market Ratings Par Value Issuer Coupon Maturity Cost YTM I Price Value I Moody's IS&P Medium-Term Notes $ 1,000,000 ASSOCIATES 6.50 8115102 $ 1,009.277 4.38 101.86 $ 1,018,554 Aa3 AA- $ 2,000,000 DU PONT 6.75 10/15/02 $ 1,999,249 6.81 102.90 $ 2,058,038 Aa3 AA- $ 2,000,000 GENERAL ELECTRIC 6.52 10/8/02 $ 1,996,910 6.80 102.64 $ 2,052,836 Aaa AAA $ 1,000,000 GENERAL ELECTRIC 6.65 9/3/02 $ 1,011,123 4.36 102.31 $ 1,023,074 Aaa AAA $ 4,000,000 GENERAL MOTORS 5.95 3/14/03 $ 3,999,844 5.94 101.87 $ 4,074,740 A2 BBB+ $ 10,000,000 Subtotals $ 10,016,402 5.97 $ 10,227,242 Agencies-Coupon $ 4,000,000 FEDERAL HOME LOAN BANK 3.50 8/6/02 $ 3,997,365 3.66 100.66 $ 4,026,250 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 6.63 8/15/02 $ 1,999,201 6.72 102.13 $ 2,042,500 Aaa AAA $ 2,000,000 FED NATIONAL MTG ASSOC 5.38 3115/02 $ 2,001.017 4.01 100.13 $ 2,002,500 Aaa AAA $ 2,000,000 FED NATIONAL MTG ASSOC 6.75 8/15/02 $ 2,021,492 4.29 102.16 $ 2,043,125 Aaa AAA $ 10,000,000 Subtotals $ 10,019,075 4.47 $ 10,114,375 Agencies-Discount $ 2,071,000 FEDERAL HOME LOAN BANK 3.46 7/30/02 $ 1,999,741 3.60 99.26 $ 2,055,674 Aaa AAA $ 1,000,000 FEDERAL HOME LOAN BANK 2.34 7/23/02 $ 980,175 2.41 99.29 $ 992,900 Aaa AAA $ 1,000,000 FEDERAL HOME LOAN BANK 2.33 6/20/02 $ 982,396 2.39 99.46 $ 994,600 Aaa AAA $ 2,048,000 FEDERAL HOME LOAN BANK 2.34 10/7/02 $ 2,000,077 2.42 98.83 $ 2,024,038 Aaa AAA $ 2,000,000 FEDERAL HOME LOAN BANK 1.56 3/1=2 $ 1,995,233 1.56 99.94 $ 1,998,800 Aaa AAA $ 4,000,000 FED HOME LOAN MTG CORP 3.77 3128/02 $ 3,873,914 3.92 99.87 $ 3,994,800 Aaa AAA $ 3,977,000 FED HOME LOAN MTG CORP 2.30 7/18/02 $ 3,900,774 2.36 99.32 $ 3,949,957 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 2.35 10/10/02 $ 1,952,608 2.43 98.81 $ 1,976,200 Aaa AAA $ 2,064,000 FED MTG DISCOUNT NOTE 3.51 6/20/02 $ 2,000,006 3.65 99.46 $ 2,052,855 Aaa AAA $ 20,160,000 Subtotals $ 19,684,925 3.27 $ 20,039,824 Treasury-Coupon $ 1,340,000 UNITED STATES TREASURY 6.25 8/31/02 $ 1,342,356 5.84 102.16 $ 1,368,894 Aaa AAA $ 300,000 UNITED STATES TREASURY 6.63 X31/02 $ 300,166 5.85 100.41 $ 301,219 Aaa AAA $ 15,194,000 UNITED STATES TREASURY 5.88 9/30/02 $ 15,196,306 5.84 102.31 $ 15,545,361 Aaa AAA $ 16,834,000 Subtotals $ 16,838,829 5.84 $ 17,215,474 Treasury-Discount $ 166,000 UNITED STATES TREASURY 5.08 5/15/02 $ 128,677 5.84 99.72 $ 165,530 Aaa AAA $ 6,170,000 UNITED STATES TREASURY 5.03 8/15/02 $ 4,718,446 5.82 99.31 $ 6,127,550 Aaa AAA $ 6,336,000 Subtotals $ 4,847,122 5.82 $ 6,293,080 LGIPs $ 40,000,000 L.A.I.F. 0.00 311/02 $ 40,000,000 2.97 100.00 $ 40,000,000 NR NR $ 40,000,000 Subtotals $ 40,000,000 2.97 $ 40,000,000 NR=Not Rated Page 3 of 8 City of Palm Desert Portfolio Holdings 28 February 2002 Market Ratings Par-value-7 Issuer I Coupon I Maturityl Cost YTM I Price Value I Moody'sl S&P Pooled Funds-AIM $ 20,667,385 PRIME PORTFOLIO 0.00 311/02 $ 20,667,385 1.40 100.00 $ 20,667,385 Aaa AAA $ 20,667,385 Subtotals $ 20,667,385 1.40 $ 20,667,385 Pooled Funds-HighMark $ 10,499,223 CITY MAIN SWEEP 0.00 311/02 $ 10,499,223 1.10 100.00 $ 10,499,223 NR NR $ 297,057 DESERT WILLOW SWEEP 0.00 311/02 $ 297,057 1.10 100.00 $ 297,057 NR NR $ 1,439,779 OFFICE COMPLEX SWEEP 0.00 311/02 $ 1,439,779 1.10 100.00 $ 1,439,779 NR NR $ 12,236,059 Subtotals $ 12,236,059 1.10 $ 12,236,059 City Loan to RDA $ 31,002,917 CITY OF PALM DESERT 0.00 2/28/32 $ 31,002,917 2.97 100.00 $ 31,002,917 NR NR $ 31,002,917 Subtotals $ 31,002,917 2.97 $ 31,002,917 Total Investments $ 167,236,361 $ 165,312,714 3.27 $ 167,796,355 Cash $ 448,448 CITY MAIN CHKG 0.00 3/1/02 $ 448,448 0.00 100.00 $ 448,448 NR NR $ 60,888 OFFICE COMPLEX CHKG 0.00 3/1/02 $ 60,888 0.00 100.00 $ 60,888 NR NR $ 13,773 DESERT WILLOW CHKG 0.00 311/02 $ 13,773 0.00 100.00 $ 13,773 NR NR $ 28,949 OFFICE COMPLEX TRUST 0.00 3/1/02 $ 28,949 0.00 100.00 $ 28,949 NR NR $ 13,364 RECREATIONAL FAC CHKG 0.00 311/02 $ 13,364 0.00 100,00 $ 13,364 NR NR $ - VACATION INN CHKG 0.00 311/02 $ - 0.00 100.00 $ - NR NR $ 565,422 Subtotals $ 565,422 0.00 $ 565,422 Cash and Investments $ 167,801,782 $ 165,878,136 $ 168,361,777 NR=Not Rated Page 4 of 8 Palm Desert Redevelopment Agency-Portfolio Characteristics 28 February 2002 Dollars in Thousands Ageing Interval Market Value Portfolio Ageing <1 M $ 91,037 w/o SLGSs <2M 3,987 <3M 100 85 <6M 3,972 so e0 <1YR 1,051 70 v <2YR 1,012 0 60 <3YR 6,540 40e <4YR - y0 30 " <5YR 10 4 0 4 1 1 6 0 >5YR 0 Total: $ 107,599 <1M <2M <3M <6M <1YR <2YR <3YR <4YR Qualit • Market Value Credit Quality ,Al/P1 AAA $ 44,737 4% AA AAA A 41% Al/P1 3,992 Unrated Unrated" 59,566 AA 55 Total: $ 108,295 0% A 0% Sector Market Value Asset Allocation Money Market Funds U.S.Treasury $ 3, 36 Federal Agency ,977977 Money Market Funds 37,612 Federal Agency L2, LAIF 54,055 4% sue Commercial Paper 3,992 LAW Corporate Bonds - U.S.Treasury 52°i Total: $ 108,295 6% Month RDA Yield LAIF Yield Variance Pertormance Maroc 5.44 5.98 -0.54 Apr 5.20 5.76 -0.56 7.0 May 4.74 5.33 -0.59 6.0 Jun 4.44 4.96 -0.52 Jul 4.08 4.64 -0.56 65.0 Aug 3.96 4.50 -0.54 � 4.0 Sep 3.69 4.35 -0.66 Oct 3.04 3.79 -0.74 3.0 Nov 2.83 3.53 -0.69 2.0 rb Dec 2.59 3.26 -0.67 Mar01 Apr May Jun Jul Aug Sep Oct Nov Dec Jan02 Feb Jan02 2.46 3.07 -0.61 Feb 2.51 2.97 -0.46 l7 LAIF-field p RDA Yield • Standard and Poor's Credit Ratings " LAW and HighMark Sweep Page 5 of 8 Palm Desert Redevelopment Agency Portfolio Holdings 28 February 2002 Market Ratings Par Value Issuer Coupon Maturity I Cost I YTM I Price I Value I Moody's I S&P Commercial Paper-Discount $ 4,000,000 GENERAL ELECTRIC 2.25 4/10/02 $ 3,955,750 2.31 99.80 $ 3,992,044 P-1 A-1+ $ 4,000,000 Subtotals $ 3,955,750 2.31 $ 3,992,044 Federal Agency-Discount $ 4,000,000 FED HOME LOAN MTG CORP 2.24 6/28/02 $ 3,936,284 2.33 99.42 $ 3,976,800 Aaa AAA $ 4,000,000 Subtotals $ 3,936,284 2.33 $ 3,976,800 U.S.Treasury-Coupon $ 422,700 UNITED STATES TREASURY 6.25 8/31/02 $ 424,213 5.43 102.16 $ 431,814 Aaa AAA $ 405,200 UNITED STATES TREASURY 6.25 8/31/02 $ 406,650 5.43 102.16 $ 413,937 Aaa AAA $ 9,100 UNITED STATES TREASURY 6.25 8/31/02 $ 9,133 5.43 102.16 $ 9,296 Aaa AAA $ 837,000 Subtotals $ 839,995 5.43 $ 855,048 U.S. Treasury-Discount $ 198,000 UNITED STATES TREASURY 4.70 2115103 $ 150,793 5.45 98.13 $ 194,307 Aaa AAA $ 181,000 UNITED STATES TREASURY 4.63 2/15104 $ 130,168 5.51 94.36 $ 170,793 Aaa AAA $ 7.143,000 UNITED STATES TREASURY 4.59 8/15/04 $ 4,989,671 5.54 92.30 $ 6,592,988 Aaa AAA $ 532,400 UNITED STATES TREASURY 4.66 8/15/03 $ 394,279 5.47 96.48 $ 513,638 Aaa AAA $ 344,600 UNITED STATES TREASURY 4.66 8/15/03 $ 255,200 5.47 96.48 $ 332,456 Aaa AAA $ 8,399,000 Subtotals $ 5,920,112 5.53 $ 7,804,183 LGIPs $ 14,055,000 L.A.I.F. BOND PROCEEDS 0.00 311/02 $ 14,055,000 2.97 100.00 $ 14,055,000 NR NR $ 39,999,843 L.A.I.F. 0.00 311/02 $ 39,999,843 2.97 100.00 $ 39,999,843 NR NR $ 54,054,843 Subtotals $ 64,054,843 2.97 $ 54,054,843 Pooled Funds-AIM $ 32,100,885 PRIME PORTFOLIO 0.00 311/02 $ 32,100,885 1.40 100.00 $ 32,100,885 Aaa AAA $ 32,100,885 Subtotals $ 32,100,885 1.40 $ 32,100,885 Pooled Funds-HighMark $ 5,304,832 HOUSING AUTH CHK SWEEP 0.00 3/1/02 $ 5,304,832 1.10 100.00 $ 5,304,832 NR NR $ 206,549 HOUSING AUTH TRT SWEEP 0.00 3/1/02 $ 206,549 1.10 100.00 $ 206,549 NR NR $ 6,511,381 Subtotals $ 5,511,381 1.10 $ 5,511,381 NR=Not Rated Page 6 of 8 Palm Desert Redevelopment Agency Portfolio Holdings 28 February 2002 Market Ratings Par Value Issuer Coupon Maturity Cost I YTM I Price I Value I Moody'sl &P Total Investments $ 108,903,109 $ 106,319,251 2.51 $ 108,295,186 Cash $ 59,096 HOUSING AUTH CHK 0.00 W/02 $ 69,096 0.00 100.00 $ 59,096 NR NR $ 51,077 HOUSING AUTH TRT 0.00 311/02 $ 51,077 0.00 100.00 $ 51,077 NR NR $ 110,173 Subtotals $ 110,173 0.00 $ 110,173 Total Cash and Investments $ 109,013,282 $ 106,429,424 $ 108,405,358 NR=Not Rated Page 7 of 8 STATEMENT OF COMPLIANCE The investment portfolios of the City of Palm Desert('City")and the Palm Desert Redevelopment Agency ("RDA')are governed by federal, state, and local law. The City Treasurer's'Statement of Investment Policy" is more restrictive than the California Government Code. The Palm Desert Investment Committee and the Palm Desert City Council review the Statement of Investment Policy annually. For the month ended 28 February 2002,the City and the RDA investment portfolios were in compliance with all applicable federal,state, and local laws and regulations. The City Treasury continued to pursue conservative and prudent investment strategies, based upon the stated objectives of safety, liquidity, and yield(in order of priority). Barring unforeseen events,the City Treasury should have sufficient cash to finance the operations of the City of Palm Desert and the Palm Desert Redevelopment Agency over the next six months. In addition, portions of either the City or the RDA portfolio could be liquidated in order to meet any significant, unexpected cash requirements. Bloomberg L.P. and Interactive Data Corporation provided the data and the analytical tools that were used to calculate the market value of all securities in the City and the RDA investment portfolios. State and Local Government Series securities are held in escrow accounts and are therefore not included in this report as assets. All balances are bank balances. Respectfully submitted on 27 March 2002, Paul.S. Gaon C.C.M.T. " City Treasurer SUMMARY OF AUTHORIZED INVESTMENTS California Government Code City Investment Policy CA Govt Maximum Maximum Quality Maximum Maximum Quality % of City %of RDA Code Investment Category Maturity Limit S&P/Mdys Maturity Limit S&P/Mdys Portfolio Portfolio 53601 a Palm Desert Bonds 5 Years No Limit Not Authorized 1 53601 b < z`"•: .U:S Treasures_ SYeaW-, No L"irriitin 53601 c CA State Debt 5 Years No Limit Not Authorized 53601 d CA Local Agency Debt 5 Years No Limit Not Authorized 53601 e) °'r' Federal'A encies^7 4'5Years;.; ;No^Limit,`: Pr ; � „5Yearss' '„30°/>:� .,,, , I18O1/o 3i7,ger =53601 f ` ,,Bankei"s's�Acce tanceeK 180.Da"'s; ;, 40%a $ " °T.. t ,.180 Da s ,<`40%. , A,1',RSP.1s l 0:0%,"7?- 53601 Cornmercial,Pa er;.w, 270,D'a s. 15/30% : .,A 1,orrP-1 . 270',Da_"s, 05/300or A'Vde^P.1^ M7 ^'> i53601 h ,"° Ne' ofiable CDs.M '? .5 Year's;,; „`30%. ," 5Years 53601 Re os 1 Year No Limit Not Authorized 53601 i) Reverse Re os 92 Days 20% Not Authorized '°53601 ' " nW6di6m Term Note s=E1 , 5.YeatV 53601 k) ,;T.: . uMutual_Funds ?90_Da's , E 20%",:=. ,AAA&°Aaa '900 4 20%„ AAA,&'Aaa ;19:9%bn : r35:4% 53601 I Trust Indenture Debt Not Authorized 53601 m Secured Bank Deposits 5 Years No Limit Not Authorized 53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Authorized Securities AA Securi Ft,16429.. ,'° fL LAIF1 'ea , ; � t ,No;Limit m s e k £ a, .,NoLimit 'x VA. AL44'2%'3 813% 100.0% 1 The City loan to RDA, which is not a bond, has been approved by the Palm Desert City Council. ' Certified California Municipal Treasurer Page 8 of 8 Q h U > O ' m E�p E q� a0 v1 `V �I � LL w a C7 _ n O � e � o E Z< o a U ? V YI O N N m � y n O O O o n> O O O O W O O O O a o m n w 6 a d 3 3 0 0 N e E N n2 u O N C me N N oa N C M W c d w v L m LL 7 a � w a IL O L. N OU O 10 N O m (� J r Lr O 2 F J fp W O w F c n C1 n LL � L d m -F LL F y � K C a c E E n N C N � b � N n' Ori N y m w m N U ri m 0 0 0 0 0 o o L' f C m ti 0 0 � rc FRIENDS OF THE CULTURAL CENTER, INC. PALM DESERT, CALIFORNIA INDEPENDENT AUDITORS' REPORT COMBINED FINANCIAL STATEMENTS. AND SUPPLEMENTARY INFORMATION JULY 31. 2001 LUND &GUTTRY LLP /CERTIFIED PUBLIC ACCOUNTANTS 39700 BOB HOPE DRIVE•SUITE 309•PO.BOX 250• RANCHO MIRAGE,CA 92270-0250 Telephone(760)568-2242 •Fax(760)346-8891 E-Mail:cpas®lundandguttry.com•www.lundandguttry.com INDEPENDENT AUDITORS' REPORT Board of Trustees Friends of the Cultural Center,Inc. Palm Desert, California We have audited the accompanying Combined Statements of Financial Position of Friends of the Cultural Center, Inc. as of July 31, 2001 and 2000, and the related Combined Statements of Activities, Functional Expenses and Cash Flows for the years then ended. These combined financial statements are the responsibility of the Center's management. Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion the combined financial statements referred to above present fairly, in all material respects, the financial position of Friends of the Cultural Center,Inc. as of July 31,2001 and 2000. and the changes in their net assets and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was made primarily for the purpose of expressing an opinion on the combined financial statements, taken as a whole, shown on pages 2-15 of this report. The data included on pages 16-19 are presented primarily for supplemental analysis purposes. This supplementary information has been subjected to the audit procedures applied in the audit of the combined financial statements and, in our opinion, is fairly stated in all material respects in relation to the combined financial statements taken as a whole. November 2,2001 (1) FRIENDS OF THE CULTURAL CENTER,INC. COMBINED STATEMENTS OF FINANCIAL POSITION JULY 31,2001 AND 2000 ASSETS 2001 McCallum Friends of Theatre the Cultural Foundation, Center,Inc. Inc. Combined CURRENT ASSETS Cash and cash equivalents $ 92,374 $ 9,706,633 $ 9,799,007 Accounts receivable 17,216 - 17,216 Pledges receivable (net) -Note 5 862,474 305,000 1,167,474 Inventory-Note 6 239,717 - 239,717 Other current assets 28,480 - 28,480 Note receivable 60,161 - 60,161 Note receivable-Note 7 100,000 - 100,000 Due from related parties-Note 17 26,469 26,469 Total current assets 1,426,891 10.011.633 11,438,524 NOTE RECEIVABLE - DESIGNATED -Note 7 - - PROPERTY AND EQUIPMENT (NET) -Note 8 12,510,584 - 12,510,584 INVESTMENTS -Note 9 100,000 - 100,000 DUE FROM RELATED PARTIES -Note 17 - - - PLEDGES RECEIVABLE -Note 5 4.030,045 835.000 4.865.045 TOTAL ASSETS $18.067.520 $10.846.633 $28.914,153 (The accompanying notes are an integral part of these financial statements) (2) 2000 McCallum Friends of Theatre the Cultural Foundation, Center, Inc. Inc. Combined $ 115,238 $ 1,604,089 $ 1,719,327 73,911 - 73,911 301,000 - 301,000 238,498 - 238,498 18,617 - 18,617 60,161 - 60,161 100,000 - 100,000 72,354 85,464 157,818 979,779 1,689,553 2,669,332 100,000 - 100,000, 12,948,893 12,948,893 100,000 - 100,000 - 626,626 626,626 328.375 328.375 $14.457,047 $ 2,316,179 R6.773,226 (THIS PAGE LEFT BLANK INTENTIONALLY) 2000 McCallum Friends of Theatre the Cultural Foundation, Center,Inc. Inc. Combined $ 91,756 $ - $ 91,756 800,000 - 800,000 1,910,000 - 1,910,000 82,082 - 82,082 104,466 - 104,466 1,369,561 - 1,369,561 133,250 - 133,250 85,464 72,354 157,818 4,576,579 72,354 4,648,933 3,000,000 - 3,000,000 131,565 131,565 626.626 626.626 8,334.770 72354 8.407,124 5,292,902 228,836 5,521,738 200,000 200,000 629,375 - 629,375 2.014.989 2,014.989 6,122.277 2,243.825 8.366.102 $14.457.047 $ 2.316.179 $16.773.226 (THIS PAGE LEFT BLANK INTENTIONALLY) 2000 McCallum Friends of Theatre the Cultural Foundation, Center, Inc. Inc. Combined $ 4,533,822 $ - $4,533,822 150 150 1,180,473 1,180,473 55,329 91,160 146,489 59,523 59,523 5,829,297 91,160 5,920,457 666,482 (57,991) 608,491 666.482 (57.991) 608,491 6,495,779 33,169 6,528,948 4,555,177 - 4,555,177 698,043 698,043 684,617 - 684,617 1,572,932 6,832 1,579,764 504,661 504,661 8,015 430 6,832 8,022,262 $0,519,651) $ 26.337 $0,493,314) (THIS PAGE LEFT BLANK INTENTIONALLY) 2000 McCallum Friends of Theatre the Cultural Foundation, Center, Inc. Inc. Combined $0,519,651) $ 26,337 $(1,493,314) 393,625 - 393,625 (666,482) (666,482) (272.857) (272,857) 67,500 67,500 57.991 57,991 125,491 125,491 (1,792.508) 151,828 1,640,680) 7,914.785 2,091,997 10,006.782 $6.122.277 $2,243,925 $ 8,366.102 (THIS PAGE LEFT BLANK INTENTIONALLY) 2000 General and Production Marketing Development Admin. Total $1,051,791 $ 121,542 $ 329,840 $ 392,889 $1,896,062 3,375,901 - - - 3,375,901 16,859 439,405 154,792 295,854 906,910 14,198 5,277 43,311 30,775 93,561 - - - 170,668 170,668 907 98,468 21,340 18,948 139,663 32,846 5,655 13,275 51,776 - - 78,218 6,107 84,325 4,461 842 22,238 44,131 71,672 33,287 - - - 33,287 - - - 25,139 25,139 6,316 14,817 4,328 48,734 74,195 - - - 403,401 403,401 18,611 17,692 24.895 129.843 191,041 $4.555.177 $ 698.043 $ 684.617 $1,579.764 $7,517.601 (THIS PAGE LEFT BLANK INTENTIONALLY) 2000 McCallum Friends of Theatre the Cultural Foundation, Center, Inc. Inc. Combined $ (1,792,508) $ 151,828 $(1,640,680) 504,661 - 504,661 3,252 - 3,252 (178,806) - (178,806) (39,940) - (39,940) 225,121 - 225,121 90,220 - 90,220 16,053 - 16,053 50,867 - 50,867 7,434 7,434 (1,113,646) 151,828 (961,818) 22,022 - 22,022 (120,677) (120,677) 100,000 100,000 1.345 1,345 (700,000) (700,000) 1,910,000 1,910,000 (74,627) (74,627) 14,789 14.789) 1,150,162 (14,789) 1,135373 37,861 137,039 174,900 77,377 1,467,050 1,544,427 $ 115,238 $1,604.089 ILIL9 327 FRIENDS OF THE CULTURAL CENTER, INC. NOTES TO THE COMBINED FINANCIAL STATEMENTS 1. DESCRIPTION OF THE CENTER The Friends of the Cultural Center, Inc. is a not-for-profit organization incorporated in California in 1973. Its stated purpose is to conduct cultural, charitable and educational activities in the Coachella Valley. Currently,the Center operates the McCallum Theatre for the Performing Arts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of Friends of the Cultural Center, Inc. have been prepared on the accrual basis of accounting. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Center and changes therein are classified and reported as follows: Unrestricted net assets-Net assets that are not subject to donor-imposed stipulations. Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that may or will be met, either by actions of the Center and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Permanently restricted net assets - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Center. Generally, the donors of these assets permit the Center to use all or part of the income earned on any related investments for general or specific purposes. Combined Financial Statements The financial statements of the McCallum Theatre Foundation, Inc. have been combined with the financial statements of Friends of the Cultural Center, Inc. Intercompany transactions and balances have not been eliminated in the combined financial statements. Credit Risk Financial instruments which potentially subject the Center to concentrations of credit risk consist principally of temporary cash investments and pledge receivables. The Center places its temporary cash investments with high credit quality financial institutions and, by policy, limits the amount of credit exposure to any one financial institution. Concentrations of credit risk with respect to pledge receivables are limited due to the Center's large number of donors and their dispersion across multiple geographic areas. The Center currently does not have any significant concentrations of credit risk. Inventory Inventory is stated at the lower of cost or market and consists of various stage supplies and beverage inventory. Investments Investments are reported at fair market value and consist of the Centers' donated interest in a charitable remainder annuity trust. (g) FRIENDS OF THE CULTURAL CENTER,INC. NOTES TO THE COMBINED FINANCIAL STATEMENTS 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Property and Equipment Property and equipment are stated at cost and are being depreciated using the straight-line method over their estimated useful lives. Donations of property and equipment are recorded as support at their estimated fair value. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted support. Absent donor stipulations regarding how long those donated assets must be maintained, the Center reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Center reclassifies temporarily restricted net assets to unrestricted net assets at that time. The useful lives of property and equipment are follows: Building 60 years Improvements 3 -20 years Theatrical equipment 7 -20 years Office f imiture and equipment 3 - 10 years Revenue Recognition Contributions are recognized when the donor makes a promise to give which is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. Ticket sales received prior to the fiscal year to which they apply are not recognized as revenues until the year earned. These amounts are included in deferred revenue in the Statement of Financial Position. Tax-exempt Status The Center is classified as a Section 501(c)(3) Organization under the 1986 Internal Revenue Code and Section 23701(d)of the California Revenue and Taxation Code. Asa result, it has been determined to be exempt from federal income and California franchise taxes. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly actual results could differ from those estimates. (9) FRIENDS OF THE CULTURAL CENTER,INC. NOTES TO THE COMBINED FINANCIAL STATEMENTS 3. CHANGE OF NAME—MCCALLUM THEATRE FOUNDATION,INC. The Board of Trustees submitted a certificate of amendment of the articles of incorporation to the State of California for the submission of the change of name of the McCallum Theatre Endowment, Inc. to the McCallum Theatre Foundation, Inc. The change of name was approved and effective as of July 25, 2001. 4. PERMANENT ENDOWMENTS During 1994, the McCallum Theatre Foundation, Inc. was funded with a $1,000,000 contribution, to provide income for the McCallum Theatre's operations and programming. Should Friends of the Cultural Center, Inc. cease to function as an active organization responsible for the operation and maintenance of the McCallum Theatre for the Performing Arts or otherwise fail to maintain its status as a nonprofit organization, $1,000,000 from the McCallum Theatre Foundation, Inc. would be distributed to the Prim Foundation of Nevada. During 1988 and in subsequent years, a number of donors directed their current and future donations to establish a permanent endowment, to provide income for the McCallum Theatre's operation and programming. The Board of Trustees established a long-term investment policy statement for the Foundation in the year ended July 31, 2001. The Board of Trustees also established computations to be utilized for the distributions from the Foundation to the operating fund that factor in allocations to the base principal, available assets and adjustments for annual valuation of the Consumer Price Index at December 31 of each year. Distributions of $348,445 were paid to the operating fund during the year ended July 31, 2001. 5. PLEDGES RECEIVABLE Pledges receivable consists of the following at July 31,2001 and 2000: 2001 2000 Pledges receivable $6,032,519 $629,375 Less: Reserve for doubtful pledges Net pledges receivable 6,032,519 629,375 Less: current portion of net pledges receivable 1 1( , 67,474) 30S 1,000) $4,865.045 $328.375 The maturities of pledges receivable at July 31,2001 are as follows: Less than one year $1,167,474 One to five years 2,550,045 Thereafter 2,315.000 $6.032.519 6. INVENTORY Inventory consists of the following at July 31,2001 and 2000: 2001 2000 Audio supplies $ 30,640 $ 30,640 Lighting supplies 140,054 140,054 Maintenance supplies 63,907 63,907 Other supplies 5.116 3.897 Total $239.717 $238.498 (10) FRIENDS OF THE CULTURAL CENTER, INC. NOTES TO THE COMBINED FINANCIAL STATEMENTS 7. DESIGNATED NET ASSETS The Center received a contribution of one million shares of common stock from a Corporation in July 1997 valued at $510,000. On August 1, 1997, the Corporation entered into a stock redemption agreement with the Center. The one million shares of common stock that were donated during the year were redeemed for$110,000 cash and a$400,000 note receivable on August 1, 1997. At July 31, 2001, this amount was classified as note receivable - current $100,000. The terms of the note require annual principal of$100,000 along with interest at 8%to be paid August 1, for the remaining year. The Board of Trustees designated the proceeds of these assets for the purpose of paying interest and/or principal on the note payable to the City of Palm Desert. During fiscal year 2001, the Center met all obligations due to the City of Palm Desert and paid the outstanding debt. Therefore, as of July 31, 2001, the designated restriction had been met for the remaining$100,000 restriction on the note receivable. The unrestricted-designated net assets at July 31, 2001 and 2000 are as follows: 2001 2000 5- = LiQ0 000 S. PROPERTY,PLANT AND EQUIPMENT Property and equipment consists of the following at July 31, 2001 and 2000: 2001 2000 Building and improvements $15,750,433 $15,730,996 Theatrical equipment 2,267,892 2,244,356 Office furniture and equipment 345,305 262,550 Property held under capital lease 299.247 365.510 18,662,877 18,603,412 Less: accumulated depreciation (6,489.619) (5,990.845} 12,174,258 12,612,567 Artwork 336,326 336.326 Total $11510.584 $12 948.893 9. INVESTMENTS Investments consists of the following at July 31, 2001 and 2000: Interest in Charitable 2001 2000 Remainder Annuity Trust $ 100.000 $ 100.000 10. ADVANCE COLLECTIONS OF TICKET SALES The Center had received $1,600,095 and $1,369,561 at July 31, 2001 and 2000 respectively, on advance ticket sales for the 2001-2002 and 2000-2001 seasons. As each production is presented, that portion of the advance sales collections which pertains to that production will be recognized as revenue. In the event any of the scheduled productions for the 2001-2002 season is not presented, the advance ticket collections for that production will be available for refund to the ticket holder. (11) FRIENDS OF THE CULTURAL CENTER, INC. NOTES TO THE COMBINED FINANCIAL STATEMENTS 11. REVOLVING LINE OF CREDIT Under the terms of a revolving credit agreement with a bank,the line of credit is secured by a Certificate of Deposit and matures in February 2002. The Center may borrow up to $1,500,000 at 1%above prime rate as stated in the Wall Street Journal, with an interest rate floor of 7%, and a ceiling of 16%. Funds for these borrowings may be used for any purpose. At July 31, 2001 and 2000, the Center had $1,500,000 and$800,000 outstanding on this line of credit. 12. NOTES PAYABLE Notes payable were paid off in full during the year July 31, 2001. Notes payable consisted of the following at July 31,2000: 2000 Loan from private foundation with 7.5%interest only due monthly,and principal and interest due January 2002 $2,500,000 Loan from City of Palm Desert with 5%interest only due annually, and principal and interest due January 2007 500,000 3,000,000 Less: Current portion of notes payable IL MO 000 Notes payable — related parties of $2,070,000 at July 31, 2001 and $1,910,000 at July 31, 2000, consists of outstanding short-term notes from several members of the Board of Trustees. Short-term loans totaling $500,000 and $3,360,000 were made to the Center during the years ended July 31, 2001 and 2000 to provide cash flows for the current operations. The Center made repayments of$340,000 and $1,450,000 during the years ended July 31, 2001 and 2000. 13. LEASES AS LESSEE The Center leases office and theatrical equipment under capital leases expiring in various years through June 2004. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are amortized over their estimated productive lives. Amortization of assets under capital leases is included in depreciation expense. Property held under capital leases consists of the following at July 31, 2001 and 2000: 2001 2000 Office equipment $ 57,344 $123,607 Theatrical equipment 241,903 241.903 $299,247 365.510 Interest rates on capitalized leases vary from 10% to 20% and are imputed based on the lower of the Center's incremental borrowing rate at the inception of each lease or the lessor's implicit rate of return. (12) FRIENDS OF THE CULTURAL CENTER, INC. NOTES TO THE COMBINED FINANCIAL STATEMENTS 13. LEASES AS LESSEE (continued) Minimum future lease payments under capital leases as of July 31, 2001 for each of the next five years and in the aggregate are as follows: July 31. Amounts 2002 $ 54,717 2003 41,657 2004 35,191 Total payments 131,565 Less: current portion of obligations under capital lease (54,717 ) 76 848 14. LEASES AS LESSOR The Center has two leases as a lessor for telecommunications equipment placed on the roof of the building. The terms of the first lease is an annual payment of$34,034 through August 2014, subject to renewal in August 2004. The annual payment is increased every year for the rate of inflation. The terms of the second lease are monthly payments of$1,750 through July 2025, subject to renewal in July 2005. Minimum lease income payments as of July 31, 2001 for each of the next five years and in the aggregate are as follows: Jul 3y 1, Amount 2002 $ 55,034 2003 55,034 2004 55,034 2005 53,284 2006 and - thereafter $218.386 15. LAND LEASE During the year, the Center restructured its existing land lease with College of the Desert. This transaction resulted in the land being sub-leased by the McCallum Theater Foundation, Inc. to the City of Palm Desert Redevelopment Agency. The terms of the revised lease agreement required a prepayment of the remaining payments on the lease, $104,165 per year, through the expiration of the lease in the year 2048. This total $5,000,000 prepaid rent collected in July 2001 has been recorded in"deferred rent income" and will be recognized as $104,165 income in each remaining year on the lease through the year 2048. (13) FRIENDS OF THE CULTURAL CENTER, INC. NOTES TO THE COMBINED FINANCIAL STATEMENTS 15. LAND LEASE (continued) The Center's operating fund leases the same real property from the City of Palm Desert Redevelopment Agency for an annual amount of$1 per year through the year 2048. Minimum land lease income payments as of July 31, 2001 for each of the next five years and in the aggregate are as follows: July 31, Amount 2002 $ 104,165 2003 104,165 2004 104,165 2005 104,165 2006 and 4,583,340 thereafter $5,000,000 16. RESTRICTIONS ON NET ASSETS Temporarily restricted net assets are available for the following purposes or periods: 2001 2000 Contributions and pledges for operations for periods after July 31 $4,892,519 $ 629,375 Facility maintenance 100.000 - $4,992.519 $ 629.375 Permanently restricted net assets are restricted to: 2001 2000 Permanent endowment $4,680,164 $2,014,989 Contributions and pledges for permanent endowment 1.140,000 - $5,820.164 $2,014,989 (14) FRIENDS OF THE CULTURAL CENTER,INC. NOTES TO THE COMBINED FINANCIAL STATEMENTS 17. DUE TO/FROM RELATED PARTIES During the fiscal year ended July 31, 1996, the McCallum Theater Foundation, Inc. loaned $300,000 to Friends of the Cultural Center, Inc. for operating purposes. The balance of$300,000 was repaid to the Foundation as of July 31,2001. During the fiscal year ended July 31, 1999, the McCallum Theater Foundation, Inc. sold land held for investment and loaned the proceeds $326,626 to the Center for operating purposes. The balance of $326,626 was repaid to the Foundation as of July 31,2001. Due to/from related parties consists of the following at July 31,2001 and 2000: Current Portion 2001 2000 Advances due within one year $ 26,469 $ - Accrued interest on advances and operating expenses 157,818 26 469 LIL7 818 Long-Term Portion Advances due after one year $ 626.626 18. 401(K) PLAN A 401(K) plan was adopted in 1999. The plan coverage includes substantially all employees. The Center will match funds up to 50% of the first 6% of salary deferred by the employees. Amounts paid during the years ended July 31, 2001 and 2000 amounted to $28,147 and$21,998,respectively. Effective August 1, 200L the Center converted to a new safe-harbor 401(k) plan. The terms of the new plan provide for a 100% match by the Center of the first 4%of salary deferred by the employees. 19. DEVELOPMENT REVENUE Development revenue on the combined statements of activities is allocated as follows: 2001 2000 Unrestricted net assets $ 4,251,771 $1,180,473 Temporarily restricted net assets 5,138,690 393,625 Permanently restricted net assets 3.963,098 67,500 Total Development Revenue $13,353,559 $1,641.598 (15) POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF DECEMBER 2001 WITH DECEMBER 2000 (DOLLARS IN THOUSANDS) F)ECEMBEft�tl01 ,C1£CEMBER 2000, C�IANr;;ls Average Daily Portfolio S 48,332,244 $ 40,825,322 +7,506,922 Accrued Earnings $ 133,875 $ 226,605 -92,730 Effective Yield 3.261 6.535 -3.274 Average Life-Month End(in Days) 183 189 -6 Total Security Transactions Amount $ 22,084,111 $ 24,808,298 -2,724,187 Number 477 641 -64 Total Time Deposit Transactions Amount $ 1,563,750 $ 1,015,095 +548,655 Number 113 110 +3 Average Workday Investment Activity $ 1.182,393 $ 1,291,170 408,777 Prescribed Demand Account Balances For Services $ 573,084 $ 174,833 +398,251 For Uncollected Funds $ 217,067 $ 222,663 -55,586 1 PHILIP ANGELIDES TREASURER STATE OF CALIFORNIA j INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) I i i December 31,2001 DIFFERENCE IN PERCENT OF PERCENT OF PORTFOLIO FROM TYPE OF SECURITY AMOUNT PORTFOLIO PRIOR MONTH Government Bills $ 1,138,076 2.29 +.57 Bonds 0 0.00 0.00 Notes 4,318,604 8.68 +.64 Strips 0 0.00 0.00 Total Government $ 5,456,680 10.97 +1.21 Federal Agency Coupons $ 5,205,539 10.46 -.17 Certificates of Deposit 5,240,047 10.53 4A2 Bank Notes 1,115,009 2.24 -.05 Bankers'Acceptances 17,877 0.03 +0.03 Repurchases 0 0.00 0.00 Federal Agency Discount Notes 10,929,044 21.96 -2.81 Time Deposits 5,078,795 10.20 +.22 GNMAs 859 0.00 0.00 Commercial Paper 11,511,436 23.13 +3.17 FHLMC 8,611 0.02 0.00 Corporate Bonds 2,511,685 5.05 +.17 Pooled.Loans 2,98%262 6.01 +.25 GF Loans 0 0.00 0.00 Reversed Repurchases -300,375 -.60 +.60 Total(All Types) $ 49,764,479 100.00 0 INVESTMENT ACTIVITY DECEMBER 2001 NOVEMBER 2001 NUMBER AMOUNT NUMBER AMOUNT Pooled Money 477 $ 22,084,111 426 $ 20,093,305 Other 34 76,425 24 21,361 Time Deposits 113 1,563,750 107 1,727,000 Totals 624 $ 23,724,286 557. $ 21,841,666 PMIA Monthly Average Effective Yield 3.261 3.526 Year to Date Yield Last Day of Month 4.005 4.149 2 e 0 lo IRS ' a � •A w c W •o oho � % 's• o w er F a y O 9Q a as M Q h �O 00 M 01 7 Q� V1 V1 V1 OO 0➢ O .�-. � .~-. Ol. O o o W b CO UJ h Oi N •+ O O O� N O N N 00 h �D Vl O 7 W V W Z N N M V D N v h v H O cWc o� Q L � P W 0' 0 o Q aWLC , � 000O OO� C 0O06 y LL ¢ w O Z LL W � u b N N � 0 0 •-+ O b: u 7 �'1 M --� M O f� G A Q 0 U FJ'I' w h e.• Q O V1 O O M d' Vt v1 O M vt h 0 0 0 ,Ip cl;b .-+ O O .-+ O d' y(Pi 0.l N v Q w F 0 y 000. 000. aoo is o0000 0 0 0 0 0 O O .� o0 0 o v oo r rn v cn o a o 0 0 0 0 0 o v go M q q H O O vi vi �p vi in N y m CO U ° i r O R N Fa 'WCr O � � t1 N F b➢ C 7 0. m s rn u q O W a c iU' w I m m m 0 +' 4 C cn O 8 go Z Wgo w w o op = EW„ .� ' 17 m a C�7 9 a. 3 7 7 a p, p > W L L L aW+ F 4 p City of Palm Desert Parkview Office Complex Financial Statement for Fiscal Year 2001- 2002 February-02 February-02 # % YTD YTD # % Budget Actual Variance Variance Budget Actual Variance Variance Revenues Rental $ 68,500 $ 63,786 $ (4,714) 93.12% $ 548,000 $ 529,023 $ (18,977) 96.54% Dividends/Interest $ 4,500 $ 1,388 $ (3,112) 30.84% $ 34,500 $ 19,950 $ (14,550) 57.83% Total Revenues $ 73,000 $ 65,173 $ (7,827) 89,28% $ 582,500 $ 548,973 $ (33,527) 94.24% Expenses Professional-Accounting&Auditing $ 5,800 $ 6,800 $ (1,000) 117.24% - $ 52,400 $ 54,400 $ (2,000) 103.82% Professional-Consultants $ 6,OW $ 5,611 $ 399 93.52% $ 48,OW $ 51,293 $ (3,293) 106.96% Tenant Improvements $ 2,500 $ - $ 2,500 0.00% $ 20,000 $ 15,507 $ 4,493 77.54% Repairs&Maintenance Building $ 8,000 $ 7,786 $ 214 97.32% $ 64,000 $ 81,923 $ (17,923) 128.01% Repairs&Maintenance-Landscaping $ Z300 $ - $ 2,300 0.00% $ 18,400 $ - $ 18,400 0.00% Utilities-Water $ 250 $ 97 $ 153 38.62% $ 2,000 $ 786 $ 1,214 39.28% Utilities-Gas/Electric $ 5,000 $ 1,103 $ 3,897 22.06% $ 61,000 $ 62,216 $ (1,216) 101.99% Utilities-Trash $ 700 $ 526 $ 174 - 7514% : $ 5,600 $ 2,104 $ 3,496 37.57% Telephone $ 150 $ 122 $ 28 81.05% ` $ 1,200 $ 1,247 $ (47) 103.88% Insurance $ 521 $ - $ 521 0.00% $ 4,166 $ - $ 4,166 0.00% Total Expenses $ 31,221 $ 22,044 $ 9,177 70.61% <' $ 276,766 $ 269,476 $ 7,290 97.37% Opera€in$Tncome ` ` $ - ,T79 49} $ 1,360_'. �U3+ 'i°Xr. ' 3t1, 734 $27 t" rE'.,2,37). 91,42°dy Equipment Replacement Reserve $ 10,000 $ 12,618 $ (2,618) 126.18% $ 80,000 $ 100,942 $ (20,942) 126.18% etliteome Se 31xT=/9 $ -(1i'168 ,U1$% 7, `$gA734 '•S I`!,5$5 ,4' , 79)' .1779.15?In III 2002 Investment Report2002 Invest Report ti City of Palm Desert Parkview Office Complex Vacancy Rate Schedule by Suite February 2002 Suite Square No. Tenant Feet 73-710 Fred Waring Drive-Two (2) Story Building 100 Hanover 1,915 100A VACANT 645 102 Bergren 1,360 103 Multiple Sclerosis 488 104 Arthritis Foundation 960 106 Coachella Valley Economic Partnership 928 (moved from Suite 205) 108 Senator Kelly 785 112 Assemblyman Battin - 1,406 114 Chamber of Commerce 1,478 118 Goodwill Industries 1,250 119 City/CVAG Conference Room 1,380 120 Duke Gerstal 1,750 200 CVAG 4,292 200A University of California Riverside 841 201 University of California Riverside-Lease started March 1,2002 604 203 Vacant 480 205 Vacant 700 208 Alzheimer's Association-Moved from Suite 211 960 2002 Investment Report2002 Vacancy Report City of Palm Desert Parkview Office Complex : Vacancy Rate Schedule by Suite February 2002 Suite Square No. Tenant Feet 210 Wilson,Pesota&Pichardo 3,040 211 State of California Department of Food&Agriculture 937 (lease begins April 1,2002) 217 Joe B.McMillan,.Esq. 775 220 CA.State Dept.of Agriculture 1,607 222 Cove Comission-Fire Marshal 1,900 (lease started March 15,2002 222 CITY Storage-Vacant 1,081 Total square footage(2 story Building) 31,562 Vacancy Rate-2,906/31,562= 9.21% 73-720 Fred Waring Drive- One Story Building 100 State of California-Water Resources 15,233 102 State of California-Rehabilitation Department 4,396 Total Square Footage 19,629 Vacancy Rate-0.00% 0.00% Overall Vacancy Rate for Both Buildings: Vacancy Rate--2,906/51,191 5.68% Occupancy Rate-48,285/51,191 94.32% 2002 Investment Report2002 Vacancy Report City of Palm Desert Desert Willow Budget Vs Actual For the month of January 2002 Budgeted Actual Budgeted Actual January January $ Percentage Year to Year to S Percentage Revenue 2002 2002 Variance Variance Date Date Variance Variance Course&Ground $ 558,265 $ 487,786 $ (70,479) 87 38% $ 2,117,651 $ 1,947,951 $ (169,700) 91.99% Carts $ 33,986 $ 35,900 $ 1,914 105 63% $ 155,357 $ 164,855 $ 9,498 106.11% Golf Shop $ 110,432 $ 93,153 $ (17,279) 84.35% $ 446,708 $ 377,909 $ (68,799) 84,60% Range $ 1,900 $ 5,468 $ 3,568 287.79% $ 7,050 $ 19,020 $ 11,970 269,79% Food&Beverage $ 119,404 $ 123,321 $ 3,917 103,28% $ 615,086 $ 655,053 $ 39,967 106.50% Interest Income $ 1,500 $ 260 $ (1,240) 17.33% $ 20,500 $ 4,576 $ (15,924) 22.32% Total Revenues $ 825487 1 745888 S 79599 90.36% S 3 62352 j 3169364 $ 192988 94.26% Payroll Proshop $ 8,632 $ 4,649 $ 3,984 53,85% $ 43,947 $ 27,850 $ 16,097 63.37% Cart $ 25,318 $ 30,736 $ (5,418) 121,40% $ 128,136 $ 154,555 $ (26,419) 120.62% Course&Ground $ 136,052 $ 118,399 $ 17,653 87,02% $ 888,619 $ 846,427 $ 42,192 95,25% Go]f Operations $ 28,803 $ 25,359 $ 3,444 88.04% $ 167,785 $ 153,500 $ 14,285 9149% General&Administration $ 40,935 $ 33,111 $ 7,824 80,89% $ 281,213 $ 244,837 $ 36,376 8706% Food&Beverage $ 62,176 $ 59,671 $ 2,505 95.97% $ 356,175 $ 349,653 $ 6,522 98,17% Total Pa roll 301.916 S 271.924 $ 29 992 90.07% 1 1865 875 S 1 776 822 1 89 053 95 23 Other Expenditures Perimeter Landscaping $ - $ - $ - 0,00% $ - $ - $ - 0.00% Proshop $ 11,300 $ 9,079 $ 2,221 80,35% $ 24,400 $ 27,285 $ (2,885) I11.82% Proshop-COGS $ 57,979 $ 41,685 $ 16,294 71.90% $ 207,664 $ 214,885 S (7,221) 10348% Can $ 14,700 $ 13,855 $ 845 94,25% $ 97,900 $ 79,897 $ 18,003 81.61% Course&Ground-North Course $ 45,355 $ 51,169 $ (5,814) 112,82% $ 439,523 $ 510,566 $ (71,043) 116.16% Course&Ground-South Course $ 43,818 $ 40,860 $ 2,958 93.25% $ 452,976 $ 398,473 $ 54,503 87.97% Course&Ground-Desert Pallet-N $ 1,450 $ - 1,355 $ 95 93.45% $ 11,275 $ 6,690 $ 4,585 59,33% Course&Ground-Desert Pallet-S $ 1,440 $ 1,355 $ 85 94,10% $ 11,490 $ 6,163 $ 5,327 53.64% Golf Operations $ 750 $ 1,477 $ (727) 196.93% $ 11,250 $ 11342 $ (92) 100.82% General&Administration $ 86,818 $ 77,068 $ 9,750 88.77% $ 511,811 $ 431450 $ 80,361 84.30% Range $ 150 $ 810 $ (660) 54000% $ 11,600 $ 15,053 $ (3453) 129.77% Food&Beverage $ 15,978 $ 18,125 $ (2,147) 113,44% $ 100,717 $ 134,824 $ (34,107) 133.86% Food&Beverage COGS $ 37,311 $ 40,556 $ (3,245) 108.70% $ 192,121 $ 216,419 $ (24,298) 112,65% Management Fee $ 25,000 $ 25,000 $ - 100.00% $ 175,000 $ 175,000 $ - 10000% Financing/Lease $ 4,113 $ 4,167 $ (54) 101.31% $ 21,132 $ 31,300 $ (10,168) 148.12% T tat Other Ex nditur s $ 346,162 $ 326 561 $ 19.601 94.34% S 2120,859 S 259347 $ 9 512 99.58 Emmmmommmzmo Desert Willow Golf Academy Desert Willow Golf Academy $ 18,100 $ 13372 $ (4,728) 73.88% $ 100,350 S 37,779 $ (62,571) 37.65% COGS-Merchandise $ (4,880) $ (4,673) $ 207 95.76% $ (31,719) S (26,173) $ 5,546 82.52% Other Expenditures $ (I800) $ (1,384) $ 416 76.89% $ (13,815) $ (11,255) $ 2,560 8147% Learning Center Income(Loss) $ 11,420 $ 7,315 $ (4,105) 64.05% $ 54,816 $ 351 $ (54,465) 0.64% Operating Income(Loss) $ 188829 $ 154,718 $ (34,111) 81,94% $ (717,566) $ (866,454) $ (148,888) 120.75% Equipment Reserve Replacement $ 71,955 S 76,929 $ 4,974 106.91% $ 503,685 $ 537,494 $ 33,809 106.71% Net Income Loss S 116 874 77 789 S 39 085 66.56% 1 1 221 251 1403 94 $ 182 6 7 114.96°/ S.arishot of Golf Rounds Bud eted Iran Actual Dmo) Variance Variance% Budgeted td Actual td Variance Variance Resident 2,605 1,617 (988) 62% 8,388 8,584 196 102% Non Resident 4,576 3,921 (655) 86% 23,016 21678 (1338) 94% Other - 61 61 100% - 516 516 100% Complimentary 220 386 166 175% 920 2843 1923 309% Total 7,401 5,985 (1,416) 81% 32,324 33,621 1,297 104% Folder:Desert Willow 2001:Dw2002;FinaruJm Statement Page 1 OD a CID m | |o \ | | \C �cc . .� a | ; ) ■ � ] f ) \\ § { \ ja ; 3 , 2gL a \ f G . ) K ka W / ƒ {� � * � � j / ) � . 7 \ ® � 2 ■ , a J - 22 a � . t \ + [ \ / ) $ � \ ( � -- .--. - --..-- . ----..-®---- . .-- . - - - _:!»!. )/\ \ \ ( \ } «2 \ .®--..-.---- } \ Z; * ..--.- - --..�. . -------- ---- - --- - . .- - - 5»(I!! .- -.-- . -..... � ...�..�..�.. . ,.. . . . . . b 312�o ) } C )0 13) ) )0 ;z » ` Qo 80 o � w � CV y H N O N Ir co r ca V Q � M v � y 0 O � V a a8 N O N go M �1 N I L �Q C5 U � N k2 kk G . . 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O b V 7N O y Q ~ p v Y y C OI N W NO N ^Epp VNI N Q S N N $ O y O � O O z XNX m n�1� n r U 72,11 n m S O m M �J N z o N � SIN^ 6 M a cecececese ce aye ge n- `R F Q .� b NI pUp W F m N d O rmj bR 8 7 pp rJ N vml 1� W W a P � VN�1 .O b vdl d � < n v m d n U Q r E � 0 U v a G v N < N S W N Q �y aw O $ �o� d en $ `eO HNVN � m e N �a Fx"Q e o 0 E E y E E ¢' �X 0` zo ; c� ' a�X 0` zCg u y W ssssss � S° O M M 00 00 h L o m co r h A Fes+' O co M h o .n vi oo �p � O 'C 7 O' vo �o t- rn 000 N O U N ap O 00 h b H w0 rl w U 0 � a .� sssssss s N H vi � 7 omo N 0 7 � h ,F Cd O 4 m a a z p, o m � b w � Ma000 �7 �n h sssssb� s S° op M �p � ti 7 h 01 O� N INN-. 01 '� O O O� O� w ri en bR 6IRe 6R S oo N Can ap M vl N oo T 01 C � W O N G" O 01 i0 Vl N �D h O a. 7 0 o p V 'j- M N a, 12 � 7 d d O p7 F Z • F � b o F w F x N o W O Fzj 3 L h W Le L L H -�, ¢ rn0zn 0ZQ U E �� asassas e 5 n > c O� N .7 Q 0� yYlj r r O O. h 0 O vl V VV � ^ N > >a p bCC N N m O R .�. O M F ya o� ' U a ° ee r O U oeo Q p � O fA 0 3 p > r r O P w N z y pp� r r o o � y o pO G r e o a n � •Ua N e W O ^ V v� r rr u ry.� � z am � � rPi °Ory N BQ � BF � BF � B2 �. O NI .O vl N rn N N U O. N N r 1. O H u° n p aF.z° Faw' # U a N N m f�l M � 9 � •� e W M N N h 5 e � � ¢ r°Ji 0 'Zg -2 � } \ + § 2 | « a ; ; A| &! £7 x # 3 } * _ ) \CC4 ! ; $ § ) } | | § & | | � ■ � ■ ) ! J � � ) , 2 Desert Willow Breakdown of Rounds per point of sale system Desert Willow - Combined Analysis- January 2002 Resident 3,006 $ 135,370 1 j $ 45.03 1 40.76% Non-Resident 3,921 $ 384,628 $ 98.09 53.17% Other 61 $ 610 $ 10.00 0.839%/9 Complimentary 386 $ 2,245 $ 5.82 5.23% Desert Willow Totals 7,374 522,853 70.90 100.00% Dw2002;POS AVG RD Page 11 Desert Willow Breakdown of Rounds per point of sale system FIRECLIFF COURSE- JANUARY 2002 Description No. Of Revenue Avg. Per Pet to Rounds Per POS Round Total Resident Rounds Resident Fee- Weekend 634 $ 28,530 $ 45.00 16.92% Resident Fee-Weekday 635 $ 28,611 $ 45.06 16.95% Resident -Twilight 58 2,610 $ 45.00 1.55% Total Resident 1,327 59,751 45.03 . 35.427 Non Resident Posted Weekend 78 $ 12,870 $ 165.00 Posted Weekday 118 $ 15,930 $ 135.00 3.15% IROC Des. PRTY - Weekday 69 $ 4,658 $ 67.51 1.84% IROC Des. PRTY - Weekend 130 $ 10,725 $ 82.50 3.47% IROC MBR. Guest Weekend 26 $ 3,432 $ 132.00 0.69% IROC MBR. Guest Weekday 30 $ 3,240 $ 108.00 0.80% Wholesale Weekend 291 $ 29,173 $ 100.25 7.77% Wholesale Weekday 377 $ 32,293 $ 85.66 10.06% Twilight 153 $ 13,752 $ 89.88 4.08% Outing - Weekend 121 $ 16,164 $ 133.59 3.23% Outing - Weekday 273 $ 25,066 $ 91.82 7.29% Perferred Hotel- Weekday III $ 12,694 $ 114.36 2.96% Perfe_rred Hotel- Weekend 62 $ 8,820 $ 142.26 1.66% Super Twilight 48 $ 3,120 $ 65�11 00 1�10, 28% Posted Replay 5 $ 450 13% Specials- Desert Golf, 5 $ 550 13% Fee Pass Fire - Card 121 $ 8,350 $ 69.01 3.23% Passbook 5 $ 550 $ 110.00 0 13% Fee Special Event Variable 153 $ 17,752 $ 116.03 4.08% Total Non Resident Rounds 2,176 219,589 100.91 1 58.09% Other Rounds Junior Walking 33 $ 330 $ 10.00 0.88% Total Other 33 330 10.00 0.88% Complimentary VIP- 13 $ - $ - 0.35% mer_ PGAMeb 69 j $ 1,170 $ 16.96 i_ _1.84%° Donation 12 $ - $ - 0.32% COD/ PDHS 14 $ $ _t_0.37%° Employee/ Employee Guest 102 $ $ - r 2.72% Total Complimentary 210 1,170 5.57 5.617 Total Round (FireCliff) 3,746 $ 280,840 $ 74.97 1 100.00%° Dw2002;POS AVG RD Page 12 Desert Willow Breakdown of Rounds per point of sale system MOUNTAINVIEW COURSE- JANUARY 2002 Description No. Of Revenue Avg. Pr Rounds PerP03 Round j Total Resident Rounds Resident Fee- Weekend 661 $ 29,745 $ 45.00 18.22% Resident Fee-Weekday 962 $ 43,354 $ 45.07 I _ 26.52% Resident Twilight 56 $ 2,520 1 $ 45.00 1.54% ! I Total Resident 1,679 75,619 45.04 46.28% Non Resident Posted Weekend 38 $ 6,250 $ 164.47 1.05% Posted Weekday 105 $ 14,175 $ 135.00 2.89% IROC Des. PRTY- Weekday 124 $ 8,370 $ 67.50 3.42% IROC Des. PRTY- Weekend 181 $ 14,933 $ 82.50 4.99% IROC Mbr. Guest Weekend 29 $ 3,828 $ 132.00 0.8o% I_ROC Mbr. Guest Weekday 41 $ 4,428 $ 108.00 1.13% Wholesale Weekend 240 $ 21,373 1 $ 89.05 6.62% Wholesale Weekday 295 $ 24,248 $ 82.20 8.1361. Fee Pass - Card 142 $ 9,770 $ 68.80 3.91% Replay 3 $ 270 $ 90.00 0.68% Twilight 145 $ 13,050 $ 90.00 4.00% Super Twilight 58 $ 3,770 $ 65.00 1 1.60% Outing-Weekend 19 $ 2,584 $ 136.00 0.52% Outing-Weekday 31 $ 2,176 $ 70.19 0.8500 Preferred Hotel -Weekday 63 $ 7,208 $ 114.41 1.74% Preferred Hotel - Weekend 63 $ 8,899 $ 141.25 1.74% Passport 4 $ 440 $ 110.00 0.11% Desert G0- 11 $ 1,335 $ 121.36 0.30% Fee Special Event Variable 153 $ 17,932 1 $ 117.20 4.22% Total Non Resident Rounds 1,745 165,039 94.58 48.10% Other Rounds Junior Walking 28 $ 280 $ 10.00 0.77% Total Other 28 280 10.00 ! 0.77% Complimentary VIP 23 $ - $ 0.63% PGA Member 61 $ 1,075 $ 17.62 1 9;. Donation 16 $ - $ - 0.44% COD_ / PDHS 14 $ - $ 0.39% Employee/ Employee Guest 58 is - $ 1.60% Trade Rounds 4 $ - $ 0.11% Total Complimentary 176 1,075 6.11 4.850/o Total Rounds (Mountainviewy 3,628 $ 242,013 r $ 66.71 160°l° Dw2002;POS AVG RD Page 13 City of Palm Desert Desert Willow Cash Reserve Analysis for the month of January 2002 Cash Reserve Analysis One Month Required Reserve $ 500,000.00 Cash on Hand $ 362,017.96 Variance- Favorable Unfavorable $ 137,982.04 Page 14 PalmDesert Recreation Facilities Corporation Income Statement San-02 Jan-02 N % Budget Actual Variance Variance Food & Beverage Revenues $119,404 $123,321 $3,917 103.28% Total Revenues $119,404 $123,321 $3,917 103.28% Salaries $62,176 $59,671 $2,505 95.97% Cost of Goods Sold-F&B $37,311 $40,556 ($3,245) 108.70% Food & Beverage Expense $15,978 $18,125 ($2,147) 113.44% Total Expenses $115,465 $118,352 ($2,887) 102.50% Net Income (Loss) $3,939 $4,969 ($1,030) 126.15% Dw2002;PDRFC Budget Page 1 City of Palm Desert Desert Willow Budget Vs Actual For the month of February 2002 Budgeted Actual Budgeted Actual February February $ Percentage Year to Yearto $ Percentage Revenue 2002 2002 Variance Variance Date Date Variance Variance Course&Ground $ 696,256 $ 659,317 $ (36,939) 94.69% $ 2,813,907 $ 2,607 268 $ (206,639) 92.66% Carts $ 37,241 $ 43,690 $ 6,449 117.32% $ 192,598 $ 208,545 $ 15,947 108.28% Golf Shop $ 84,698 $ 110,297 $ 25,599 130,22% $ 531,406 $ 498,206 $ (43200) 91.87% Range $ 2,000 $ 4,749 $ 2,749 23745% $ 9,050 $ 23,769 $ 14,719 262.64% Food&Beverage $ 148,767 $ 169,247 $ 20,480 113.77% $ 763,853 $ 824,300 $ 60,447 107 91% Interest Income $ 1,000 $ 309 $ (691) 30.90% $ 21,500 $ 4,885 $ (t6,615) 2272% Total Revenues $ 969962 $ 987609 17647 101.82% $ 4332314 S 4156973 175341 95.95 Payroll Proshop $ 8,161 $ 3,464 $ 4,697 42,45% $ 52,108 $ 31,314 $ 20,794 6009% Can $ 29,182 $ 32,323 $ (3,141) 110,76% $ 157,318 $ 186,878 $ (29,560) 118 79% Course&Ground $ 113,736 $ 111,783 $ 1,953 98.28% $ 1,002,355 $ 958,210 $ 44,145 95,60% Golf Operations $ 27,148 $ 35,573 $ (8,425) 131.03% $ 194,933 $ 189,073 $ 5,860 96.99% General&Administration $ 39,334 $ 34,925 $ 4,409 88.79% $ 320,547 $ 279,762 $ 40,785 87.28% Food&Beverage $ 57,887 $ 62,612 $ (4,725) 108,16°% $ 414,062 $ 412,265 $ 1,797 99,57% Total Pa roll $ 275"8 280,680 $ 5 232 101.90% $ 2,141,323 2457402 S 83 821 96.09% Other Expenditures Perimeter Landscaping $ - $ - $ - 0,00% $ - $ - $ - 0,00% Proshop $ 4,300 $ 5,890 $ (1,590) 136.98% $ 28,700 $ 33,175 $ (4,475) 115.59% Proshop-COGS $ 47,579 $ 59,154 $ (11,575) 124.33% $ 255,243 $ 274,039 $ (18,796) 107.36% Cart $ 15,200 $ 12,561 $ 2.639 9264% $ 113,100 $ 92,458 $ 20,642 9175% Course&Ground-North Course $ 37,423 $ 39,770 $ (2,347) 106,27% $ 476,946 $ 550,336 $ (73,390) 115.39% Course&Ground-South Course $ 33,929 $ 31,322 $ 2,607 92.32% $ 486,905 $ 429,795 $ 57,110 88 27% Course&Ground-Desert Pallet-N $ 1,460 $ 2,117 $ (657) 145.00% $ 12,735 $ 8,807 $ 3,928 69.16% Course&Ground-Desert Pallet-S $ 1,440 $ 1,925 $ (485) 133.68% $ 12,930 $ 8,088 $ 4,842 62.55% Golf Operations $ - $ - $ - #DIV/0! $ 11,250 $ 11,342 $ (92) 100,82% General&Administration $ 75,882 $ 76,439 $ (557) 100 73% $ 587,693 $ 507,889 $ 79,804 86.42% Range $ 450 $ 395 $ 55 87.78% $ 12,050 $ 15,448 $ (3,398) 128 20% Food&Beverage $ 17,766 $ 15,942 $ 1,824 89.73% $ 118,483 $ 150,766 $ (32,283) 127.25% Food&Beverage COGS $ 46,260 $ 49,449 $ (3,189) 106.89% $ 238,381 $ 265,968 $ (27,487) 111.53%0 Management Fee $ 25,000 $ 25,000 $ - 100.00% $ 200,000 $ 200,000 $ - 100.00% Financing/Lease $ 3976 $ 7,970 $ (3,994) 200.45% S 25,108 $ 39,270 $ (14,162) 15640% Tolal O/her Ex eit tures S 310 665 327 934 S 117 269 105.56% $ 2,579Q4 $ 2 587 281 $ 7 757 100.30 Desert Willow Golf Academy Desert Willow Golf Academy $ 18,300 $ 12,035 $ (6,265) 6537% $ 118,650 $ 49,814 $ (68,836) 4198% COGS-Merchandise $ (4,706) $ (6,781) $ (2,075) 144 09% $ (36,425) $ (32,954) $ 3,471 90.47% Other Expenditures $ (1,700) $ (1,251) $ 449 73,59% $ (15,515) $ (12,506) $ 3,009 80.61% Learning Center Income(Loss) $ 11894 $ 4,003 $ (7,891) 33.66% $ 66,710 $ 4,354 $ (62,356) 653% Operating Income(Loss) $ 395,743 $ 382,998 $ (12,745) 96.78% $ (321,823) $ (483,456) $ (161,633) 15022% Equipment Reserve Replacement $ 71,955 $ 66,140 $ (5,815) 91,92% $ 575,640 $ 603,634 $ 27,994 104.86% Net Income Loss $ 323 788 $ 316 858 6 930 97.86% 1897,4631 1087 090 S 189 627 121.13 Snapshot of Golf Rounds Budge ed into Actual no Variance Variance% Budgeted td Actual td Variance Variance% Resident 2,230 2,693 463 121% 10,618 11,277 659 106% Non Resident 5,341 5,838 497 109% 28,357 27,516 (841) 97% Other - 54 54 100% - 570 570 100% Complimentary 220 575 355 261% 1239 3418 2179 276% Total 7,791 9,160 1,369 118% 40,214 42,781 2,567 106% Folder:Desert Willow 2001:Dw2002;Financial Statement Page 1 § © ® P \ f $ 2 ) ! 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( k } \ Ajo Bel ® \ m U � w a w y oo r o0 00 �n oo r � O � ~ b�O O � Q b tp eee OON 06 b W O U w0 N O t: U Q � d ssssssss aN M M N D\ D\ � O 00 ti Q � .>1 Aga z a � b Q d C SCN So S r �n t� r .-• �n �D O� O+ � a. tc N aea o � 7 'O vMi N 7 W r r M en 04 en b al vt N 7 �n o0 r r '� G a •--� •--� •--� 7 M M 7 M N el F d� C GO eQ+ k CG E-F C 7 o W F N W � O u 7 y V q � ¢ � 0zo ri U � ¢ v, 0zC) w U �= sassagsa s ,, v' e .. �ro O vl vl N N J J Q O y m BF 6yF �B�ppF BF 6F BF BF gp� ce A N m N - vl d - N m > 88 N > F �t om V Ni� ON N o r v�i m N lV p U CJ se sNece ae sew Po 5e t• d A � a a � _ r - a 8 (7 k BQ 9Q bpe, BOyQ 9e 6e BQ BQ 5E u `°^' �" � - V Q it!? pat > 001 W d N N N m dry H C p /t m r NL rl � o < rno � �o � •o ^ u be EQ be 6Q BQ BQ BQ BQ 6E 3 > 00 rvrrgwacrdi, � ..e�ora � e � vi Q� A E > U `o y ne � � a .. m n c y nry rvowNcmi, n asa ci m c�oa�a; a 0 3 J -t Oz Faro' odu �oo�JJ '^ Nvld ran in N � n b � Qri OZg `..° ti 80 ] Q °Ji OZg ti U a co > � a ;; ssssssss 0 00 M i� O V1 vt W 00 � zit tR O _ 'O V' 09 N O h V 00 �O 1 � O� u ° 8 0 U � M O ~ O ' � U O tn N Nao M Q C o n 00 r M N O kn may z p, 0H ' hvvmCD o� �n � S6� b� 0 0 N .M-1 U M �n O �O N N O N N _ A o � z D\ ol O O N c -� omrn o00o N « .d o � o � 0000 p vt M 7 01 01 Q\ M 'O ell el q r O M b h O\ � [- N �O N 00 h 7 00 7 00 00 00 '/� 7 7 pip � 'O M N b N \O H � N N rl F W F N C W 3 X N G L fO •` G G L T 7 d O O Y y T 7 d O O v �' ¢ v 0zm ' ¢ v OzO w U �a assesses o � A .q a v> a u o. j m C N q R C 7 O Cd . . . . . . . �CA O U U �]Q O N > V ^ o n r H ae am V o c? F Ed 0 U Cv tl2 6e BQ ae BQ BQ BQ ee � m C a C U ae sea � BQ 6�' 6e BF � as `dam BF.m aorr — oagro � y C .�N U N •-• ry H> o z a � r oo om y � c CD pryN o Pin .Q`�+ r Q= F a dDD m o z W.A N - F o pQ > 0 4� U CL - N C c0 O m m 'Up O'er� oz �-am E yp y N QP OP O N - N >E a F a d c a a F F o � ¢ rnOZ ❑ � ti / : ) 00 k ■ � " - ! 2 {! � J) § � � ® � ° � ■ ..« fa \; � I § ■ ) } / ! � / , Desert Willow Breakdown of Rounds per point of sale system Desert Willow - Combined Analysis- February 2002 Resident 2,693 $ 121,172 $ 45.00 29.40% Non-Resident 5,838 $ 579,548 $ 99.27 63.73% Other 54 $ 540 $ 10.00 0.59% Complimentary 575 $ 1,120 $ 1.95 6.28% Desert Willow Totals 9,160 702,380 76.68 100.00% Dw2002;POS AVG RD Page 11 Desert Willow Breakdown of Rounds per point of sale system FIRECLIFF COURSE- FEBRUARY 2002 _ Description No. Of Revenue Avg. Per Pct to Rounds Per POS Round Total Resident Rounds I Resident Fee- Weekend 502 $ 22,590 $ 45.00 10.599% Resident Fee-Weekday 783 $ 35,231 $ 44.99 16.51% Resident -Twilight 70 $ 3,1 00.00 $ 45.00 1.48% I Total Resident 1,355 60,971 45.00 28.570 I Non Resident Posted Weekend 125 $ 20,625 $ 165.00 2.64% Posted Weekday 230 $ 31,050 $ 135.00 4.85% IROC Des. PRTY - Weekday 124 $ 8,370 $ 67.50 2.61% IROC Des. PRTY - Weekend 135 $ 11,138 $ 82.50 IROC MBR/Guest - Weekend 33 $ 4,356 $ 132.00 0.70% IROC MBR/Guest - Weekday 39 $ 4,212 $ 108.00 0.82% Wholesale Weekend 298 $ 30,939 $ 103.82 6.28% Wholesale Weekday 469 $ 41,190 $ 87.83 9.89% Twilight 235 $ 21,144 $ 89.97 4.96% Super Twilight 52 $ 3,380 $ 65.00 1.10% Outing 663 $ 69,898 $ 105.43 13.98% Perferred Hotels - Weekday 152 $ 17,694 $ 116.41 3.21% Perferred Hotels - Weekday 92 $ 13,160 $ 143.04 1.94% Posted Replay 18 $ 1,620 $ 90.00 1 0.38% Fee Pass Fire - Card 297 $ 20,640 $ 69.49 6.26% Passbook 1 $ 110 $ 110.00 0.02% Fee Special Event Variable 63 $ 6,159 $ 97.76 1.33% I Total Non Resident Rounds 3,026 305,685 101.02 63.81% Other Rounds Junior Walking 36 $ 360 $ 10.00 0.76% Total Other 36 360 10.00 0.76% I Complimentary VIP 11 $ - $ - 0.23% PGA Member 33 $ 360 $ 10.91 0.70% Donation 33 $ 200 $ 6.06 0.70% COD / PDHS 180 $ - $ - 3.80% Employee / Employee Guest 68 $ 100 $ 1.47 1 1.43% I Total Complimentary 325 6601 1 $ 2.03 6.85% Total Rounds (FireClifi) 4,742 $ 367,676 $ 77.54 1 100.00% Dw2002;POS AVG RD Page 12 Desert Willow Breakdown of Rounds per point of sale system MOUNTAINVIEW COURSE- FEBRUARY 2002 Description No. Of Revenue Avg. Per Pct to Rounds Per POS Round Total Resident Rounds 1 Resident Fee- Weekend 498 $ 22,410 $ 45.00 11.27% Resident Fee-Weekday 774 $ 34,821 $ 44.99 17.52% Resident Twilight 66 $ 2,970 $ 45.00 1.49% Total Resident 1,338 60,201 44.99 30.29% I Non Resident Posted Weekend 121 $ 19,801 $ 163.64 2.740% Posted Weekday 173 $ 23,355 $ 135.00 3.92% IROC Des. PRTY- Weekday 129 $ 8,708 $ 67.50 2.92% IROC Des. PRTY- Weekend 204 $ 16,830 $ 82.50 4.62% IROC-MBR Guest - Weekend 27 $ 3,564 $ 132.00 0.61% IROC-MBR Guest - Weekday 37 $ 3,996 $ 108.00 0.84% Wholesale Weekend 240 $ 22,591 $ 94.13 L 5.43% Wholesale Weekday 558 $ 49,769 $ 89.19 12.63% Fee Pass - Card 291 $ 20,205 $ 69.43 6.59% Replay 27 $ 2,430 $ 90.00 0.61% Twilight 158 $ 14,220 $ 90.00 3.58% Super Twilight 65 $ 4,225 $ 65.00 1.47% Outings 539 $ 56,532 $ 104.88 12.20% Preferred Hotels 176 $ 21,977 $ 124.87 3.98% Fee Special Event Variable 67 $ 5,660 $ 84.48 1.52% Total Non Resident Rounds 2,812 273,863 1 97.39 63.65% I I Other Rounds Junior Walking 18 $ 180 $ 10.00 0.41% Total Other 18 180 10.00 0.41% I Complimentary VIP 21 $ $ 0.48% PGA Member 26 $ 235 $ 9.04 0.59% Donation 19 $ 100 $ 5.26 0.43% COD / PDHS 148 $ - $ - 3.35% Employee 36 $ 125 $ 3.47 0.81% Total Complimentary 1 250 4601 1.841 5.667 Total Rounds (Mountainview) 4,418 $ 334,704 $ 75.76 100% Du2002;POS AVG RD Page 13 City of Palm Desert Desert Willow Cash Reserve Analysis for the month of February 2002 Cash Reserve Analysis One Month Required Reserve $ 500,000.00 Cash on Hand $ 708,804.18 Variance- Favorable Unfavorable $ 208,804.18 Please note: Although the cash balance is over the $500,000 reserve requirement; Kemper Sports Management Inc. has transferred $273,463.49 to cover the cash shortfalls. To date Kemper has not been reimbursed. Page 14 PalmDesert Recreation Facilities Corporation Income Statement Feb-02 Feb-02 N % Budget Actual Variance Variance Food & Beverage Revenues $148,767 $169,247 $20,480 113.77% Total Revenues $148,767 $169,247 $20,480 113.77% Salaries $57,887 $62,612 ($4,725) 108.16% Cost of Goods Sold-F&B $46,260 $49,449 ($3,189) 106.89% Food & Beverage Expense $17,766 $15,942 $1,824 89.73% Total Expenses $121,913 $128,003 ($6,090) 105.00% Net Income (Loss) $26,854 $41,244 ($14,390) 153.59% Note: The above revenues and expenditures are also included in the Desert Willow analysis. Dw2002;PDRFC Budget Page 1 FINAL PRICING SUMMARY PALM DESERT FINANCING AUTHORITY $22,070,000 ' Tax Allocation Revenue Bonds (Project Area No. 1) ' Series 2002 1 1 1 ' KINSELL, NEWCOMB & DE DIGS, INC. February 28, 2002 ' TABLE OF CONTENTS TAB ' I. Project Area No. 4 ' Cover Page Official Statement I List of Participants 1 ° 1 II. Preliminary Pricing Results ' Comparable Tax-Exempt "AAA" Insured Issues 2 ' III. Final Pricing Schedules ' Sources & Uses 3 Debt Service 3 IV.The Interest Rate Environment ' Economic Summary 4 1 ' NEW ISSUE—BOOK-ENTRY ONLY RATIN( Standard&Poor's: "AA ' Fitch: "AA (See"CONCLUDING INFORMATION—Ratings"hert In the opinion of Richards Watson&Gershon,AProfessional Corporation,Los Angeles,California,Bond Counsel,under existing lax',the interest or Bonds is exemptfrom personal income taxes ofthe State ofCalifornia and,assuming compliance with the tax covenants described herein,is excluded from gross inc ' for Federal income tax purposes and is not a specific preference item for purposes of the Federal alternative minimum tax. See, however, "COACLUD. INFOPAtATION--Tax-Exempt Stains of the Bonds"herein regarding certain other tax considerations. $22,070,000 PALM DESERT FINANCING AUTHORITY ' TAX ALLOCATION REFUNDING REVENUE BONDS (PROJECT AREA NO. 1,AS AMENDED) 2002 SERIES A Dated: Date of Delivery Due: April 1,as shown be The Bonds are being issued as fully registered bonds,registered in the name of Cede&Co.as nominee of The Depository Trust Company,New Y New York("DTC"),and will be available to ultimate purchasers in the denomination of S5,000 or anv integral multiple thereof,under the book-entry sys maintained by DTC. Ultimate purchasers of Bonds will not receive physical certificates representing their interest in the Bonds. So long as the Bonds registered in the name of Cede&Co.,as nominee of DTC,references herein to the owners shall mean Cede&Co.,and shall not mean the ultimate purcha • ' of the Bonds. Intereston the Bonds will be payable on October l and April l of each year,commencing October 1,2002. Payments of the principal of,premi if any,and interest on the Bands will be made directly to DTC,or its nominee,Cede&Co.,by BNY Western Trust Company,Los Angeles,California "Trustee"),so long as DTC or Cede&Co.is the registered owner of the Bonds. Disbursements of such payments to DTC's Participants is the responsib of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and Indirect Participants,as more fully descri ' herein. See"THE BONDS-Book-Entry System." The Bonds are subject to optional redemption and mandatory slatting fund redemption as described herein. The Bonds will be issued by the Palm Desert Financing Authority(the"Authority")under an Indenture of Trust,dated as of March 1.2002,by between the Authority and the Trustee(the"Indenture"). The proceeds of the Bonds will be disbursed to make a loan(the"Loan")to the Palm Dc ' Redevelopment Agency(the"Agency")pursuant to a Loan Agreement dated as of March 1,2002(the"Loan Agreement")by and among the Authority. Agency and the Trustee. The Bonds are special obligations of the Authority payable from and secured by Revenues as defined herein consisting primarily of amounts pay: by the Agency under the Loan Agreement. The Loan Agreement is secured by and payable from Tax Revenues,as defined herein on a parity with the Pro ' Area No. 1,as Amended,Loan Agreement dated as of July 1, 1997(the"1997 Loan Agreement")and the Project Area No. 1,as Amended,Loan Agrees dated as of June 1, 1995(the"1995 Loan Agreement")each by and among the Authority,the Agency and the Trustee,the combined unpaid balance of wl is$91,315,000 as of the date hereof. See"SECURITY FOR THE BONDS"herein. The Authority has heretofore issued its Tax Allocation Revenue Bonds(Project Area No. 1,As Amended), 1992 Series A(the "Prior Bond pursuant to an Indenture of Trust dated as of April I, 1992(the"Prior Indenture"),the proceeds of which were used to make a loan(the"Prior Loan")to Agency pursuant to a Loan Agreement dated as of April 1, 1992(the"Prior Loan Agreement"). The Agency will use a portion of the proceeds of the Loa prepay the Prior Loan,which will effect the current refunding of a like portion of the Prior Bonds. The Agency is to use the proceeds of the Loan to refund ' Prior Bonds,finance certain redevelopment activities of the Agency in connection with the Agency's Project Area No.1,As Amended,to obtain a Quali: Reserve Fund Credit Instrument and pay costs of issuance of the Bonds. Payment of the principal of and interest on the Bonds when due will be insured by a financial guaranty insurance policy to be issued by MBIA Insura Corporation simultaneously with the issuance of the Bonds. MBLq The Bonds are not a debt of the City of Palm Desert or of the State of California or any of its political subdivisions(other than the Authority), neither the City of Palm Desert nor the State of California nor any of its political subdivisions(other than the Authority)is liable therefor. The Loan is n debt of the City of Palm Desert or of the State of California or any of its political subdivisions(other than the Agency),and neither the City of Palm Desert the State of California not any of its political subdivisions(other than the Agency)is liable therefor. The interest on,premium,if any,and principal of the Bc are payable from and secured by a pledge of certain amounts payable by the Agency to the Authority under the Loan Agreement. Neither the Authority nor Agency has any taxing power. Neither the Bonds nor the Loan constitutes an indebtedness within the meaning of any constitutional or statutory debt limita orrestriction. Neither the members of the Authority nor of the Agency nor any persons executing the Bonds or the Loan Agreement are liable personally then In no event will the obligations of the Agency under the Loan Agreement be payable out of any funds or properties other than Tax Revenues(as defined her of the Agency as set forth in the Loan Agreement. ' S 10,905,000 5.00%Term Bonds Due April 1,2025-Yield 5.060% - S 11,165,000 5.10%Term Bonds Due April 1,2030—Yield 5.100% (accrued interest to be added) ' The Bonds are offered when,as and if issued and accepted by the Underwriters,subject to the approval as to legality by Richards,Watson&Gersi A Professional Corporation,Los Angeles,California,Bond Counsel. Certain legal matters will be passed on for the Authority and the Agency by Best Bes Krieger LLP, Riverside,California,Disclosure Counsel, and by Richards, Watson & Gershon, a Professional Corporation, Los Angeles, California. I ' anticipated that the Bonds will be available for delivery on or about March 11,2002, KINSELL, NEWCOMB DE DIOS, INC. Stinson Securities, LLC INVESTM[NT BANKING The date of this Official Statement is February 28, 2002 ' PALM DESERT FINANCING AUTHORITY PALM DESERT REDEVELOPMENT AGENCY CITY OF PALM DESERT ' AUTHORITY COMMISSION AND STAFF Richard S. Kelly,President ' Jean M. Benson, Vice-President Buford Crites, Commissioner Robert A. Spiegel, Commissioner ' James Ferguson, Commissioner Carlos L. Ortega, ChiefAdministrative Officer ' CITY COUNCIL/AGENCY MEMBERS Richard S. Kelly, Chairman ' Jean M. Benson,Mayor Pro Tem/Vice Chairman Buford Crites, CouncilmemberMember Robert A. Spiegel, Councilmember/Member ' James Ferguson, Councilmember/Member AGENCY STAFF ' Carlos L. Ortega, City Manager/Executive Director Justin McCarthy,Assistant City Manager Redevelopment Richard J. Folkers,Assistant City Manager Development Services ' Sheila R. Gilligan,Assistant City Manager Community Services Paul S. Gibson,Finance Director/Treasurer David L. Yrigoyen,Director of Redevelopment ' Teresa L.La Rocca,Director of Housing Dennis M. Coleman,Redevelopment Finance Manager Janet M. Moore,Redevelopment Accountant H ' SPECIAL SERVICES Bond Counsel Richards, Watson&Gershon, A Professional Corporation Los Angeles, California Disclosure Counsel Best Best&Krieger LLP Riverside, California Trustee BNY Western Trust Company Los Angeles, California Financial Advisor ' MuniSoft Modesto, California Fiscal Consultant ' Rosenow Spevacek Group, Inc. Santa Ana, California ' Verification Agent Grant Thornton LLP Minneapolis,Minnesota 1 ' COMPARABLES- Palm Desert Financing Authority Tax Allocation Revenue Bonds (Project Area No. 1, As Amended)Series 2002 ' Issuer Issuer Issuer Issuer Palmdale SD Novato USD Anaheim Pub Util Auth-A Chula Vista _ ' Sale Date 2/25/02 2/25/02 2118/02 3/5/02 ParAmount $21,128,370 $36,800,000.00 $96,210,000 $13,500.000.00 Rating AAA AAA AAA AAA Fin. Type GO ULT GO ULT Revenue COP Stone&Youngberg, Underwriter RBC Dain Rauscher Inc. LLC Salomon Smith BarneyStone&Youngberg LLC Coupon/ Coupon/ Coupon/ Coupon/ Yield Yield Yield Yield ' 2.50 C& 1.50% 2002 3.00 @ 1.50% 3.00 @ 1.60% 2.50 @ 1.70% 2003 2.00 @ 2.00% 3.00 @ 2..00% 2.50 @ 2.00% 2004 3.00 @ 2.43% 3.00 @ 2.45% 2.50 @ 2.45% 2005 3.00 @ 2.73% 3.00 @ 2.75% 2.75 @ 2.75% 2006 3.00 @ 3.03% 3.50 @ 3.05% 3.00 @ 3.05% 2007 3.25 @ 3.33% 3.40 @ 3.35% 3.40 @ 3.35% ' 2008 3.50 @ 3.57% 3.60 @ Par 3.60 @ 3.55% 2009 3.625 @ 3.75% 4.00 @ 3.80% 3.70 @ 3.70% 2010 3.75 @ 3.85% 4.00 @ 3.90% 3.80 @ 3.85% 2011 3.875 @ 3.95% 4.00 @ Par 3.90 3.95% ' 2012 4.05 @ 4.15% 4.50 4.10% 4.125 @ 4.17% 2013 4.50 @ 4.35% 4.50 @ 4.25% 4.25 4.35% 2014 4.40% 4.50 4.30 4.40% 4.50 @ 4.45% 2015 4.50 @ 4.60% 5.25 4.40% 4.50 @ 4.60% 2016 4.65 @ 4.75% 5.25 @ 4.50% 4.625 @ 4.70% 2017 4.75 4.85% 5.25 4.60% 4.75 @ 4.80% 2018 4.85 4.95% 5.25 @ 4.70% 4.75 @ 4.85% 2019 4.875 @4.98% 5.25 @ 4.80% 4.75 @ 4.92% ' 2020 4.90 @ 5.00% 4.75 Q 4.97% 4.75 @ 4.98% 2021 4.90 @ 4.96% 4.75 @ 5.00% 2022 5.00 @ 5.05% - 4.90 @ 4.98% 4.75 @ 5.02% 2023 ' 2024 2025 5.00 @ 5.05% 5.00 @ 5.09% 2026 ' 2027 5.00 @ 5.05% 2028 2029 2030 2031 5.00 @ 5.08% 1 Palm Desert Financing Authority Tax Allocation Revenue Bonds (Project Area No. 1, As Amended) Series 2002 ' Comparables on the day of Pricing 2-28-02 ' Issuer Issuer Issuer Issuer Long Beach Bond Fin. Palm Desert Fin Auth Auth. Monrovia Redev.A y. California St. Pub WRK-A ' Sale Date 2128/02 2/28/02 315/02 2/25/02 Par Amount $22,070,000 $40,915,000 $9,100,000 $96,670,000.00 Rating AAA AAA AAA AAA ' Fin. Type Tax Allocation Revenue Tax Allocation Revenue Kinsell, Newcomb&De Goldman Sachs& Underwriter Dios UBS Painwebber Inc. Wedbush Morgan Securities Company Coupon/ Coupon/ Coupon/ Coupon/ ' Yield Yield Yield Yield. 2002 2003 2.00 CaD 1.40% ' 2004 2.00 Par 2005 3.00 @ 2.45% 3.00 @ 2.43% 2006 3.00 2.75% 3.00 2.73% 2007 3.00 @ 3.05% 4.00 @ 3.03% ' 2008 3.25 @ 3.35% 3.30 Par 2009 3.50&3.60% 3.55 @ Par 2010 3.625 Q 3.75% 3.75 Par 2011 5.00 @ 3.88% 3.85 ccD 3.875% - ' 2012 5.25 3.98% 4.50 CED 4.00% 2013 5.25 4.13% 4.10 @ 4.15 2014 5.25 @ 4.28% 5.25 @ 4.30% ' 2015 5.25 4.38% 4.40 @ Par 2016 5.25 4.48% 5.25 @ 4.48% 2017 5.25 4.58% 5.25 @ 4.58% 2018 5.25 4.68% 5.25 4.68% ' 2019 5.25 @ 4.78% 5.25 4.78% 2020 5.25 Q 4.84% 5.25 @ 4.83% 2021 5.25 A 4.875% 5.00 5.07% 5.25 4.857% 2022 5.25 4.90% 5.25 4.88% ' 2023 2024 2025 5.00 %5.06% ' 2026 5.00 CED 5.07% 2027 5.00 @ 5.07% 2028 2029 ' 2030 5.10&Par°/, 2031 5.00 Q 5.10% 1 1 1 ' Palm Desert Financing Authority Tax Allocation Revenue Bonds ' (Project Area No. 1, As Amended) Series 2002 Sources and Uses Schedule ' SOURCES OF FUNDS ' Par Amount of Bonds $22,070,000.00 Redevelopment Fund (1992) $847,049.65 Revenue Fund (1992) $15.76 Interest Account(1992) $17.36 Principal Account (1992) $153.36 TOTAL SOURCES $22,917,236.13 USES OF FUNDS Original Issue Discount(OID) 88,766.70 ' Total Underwriter's Discount (1.025%) 226,217.50 Costs of Issuance 162,653.50 Gross Bond Insurance Premium 591,000.00 Reserve Surety Premium 45,000.00 Deposit to Current Refunding Fund. 19,912,505.96 *New Bond Proceeds 19,912,319.48 ' *Deposit to Current Refunding Prior Bonds 186.48 Deposit to Project Fund 1,044,042.82 Redevelopment Fund (1992) $847,049.65 ' TOTAL USES $22,917,236.13 1 1 1 f 1 I Palm Desert Financing Authority Tax Allocation Revenue Bonds (Project Area No. 1, As Amended) Series 2002 Debt Service Schedule Date Principal Coupon Interest Total P & I 4/01/2002 - - - ' 4/01/2003 _ - 1,170,398.25 1,170,398.25 4/01/2004 1,114,665.00 1,114,665.00 4/01/2005 - - 1,114,665.00 1,114,665.00 ' 4/01/2006 - - 1,114,665.00 1,114,665.00 4/01/2007 1,114,665.00 1,114,665.00 4/01/2008 - 1,114,665.00 1,114,665.00 ' 4/01/2009 - - 1,114,665.00 1,114,665.00 4/01/2010 1,114,665.00 1,114,665.00 4/01/2011 - - 1,114,665.00 1,114,665.00 ' 4/01/2012 _ - 1,114,665.00 1,114,665.00 4/01/2013 1,114,665.00 1,114,665.00 4/01/2014 - - 1,114,665.00 1,114,665.00 ' 4/01/2015 - - 1,114,665.00 1,114,665.00 4/01/2016 1,114,665.00 1,114,665.00 4/01/2017 - - 1,114,665.00 1,114,665.00 ' 4/01/2018 - - 1,114,665.00 1,114,665.00 4/01/2019 1,114,665.00 1,114,665.00 4/01/2020 - - 1,114,665.00 1,114,665.00 ' 4/01/2021 - _ 1,114,665.00 1,114;665.00 4/01/2022 1,114,665.00 1,114,665.00 4/01/2023 - - 1,114,665.00 1,114,665.00 ' 4/01/2024 4,780,000.00 5.000% 1,114,665.00 5,894,665.00 4/01/2025 6,125,000.00 5.000% 875,665.00 7,000,665.00 ' 4/01/2026 2,015,000.00 5.100% 569,415.00 2,584,415.00 4/01/2027 2,120,000.00 5.100% 466,650.00 2,586,650.00 4/01/2028 2,230,000.00 5.100% 358,530.00 2,588,530.00 ' 4/01/2029 2,340,000.00 5.100% 244,800.00 2,584,800.00 4/01/2030 2,460,000.00 5.100% 125,460.00 2,585,460.00 Total 22,070,000.00 - 27,218,883.25 49,288,883.25 1 Palm Desert FinancingAuthority tS' Tax Allocation Revenue Bonds (Project Area No. 1, As Amended) ' Series 2002 Pricing Summary ' Maturity Type of Bond Coupon Yield Maturity Value Price Dollar Price 4/01/2025 Term 1 Coupon 5.000% 5.060% 10,905,000.00 99.186% 10,816,233.30 4/01/2030 Term 2 Coupon 5.100% 5.100% 11,165,000.00 100.000% 11,165,000.00 Total 22,070,000.00 21,981,233.30 Bid Information Par Amount of Bond $22,070,000.00 ' Reoffering Premium of(Discount) (88,766.70) Gross Production $21,981,233.30 ' Total Underwriter's Discount(1.025%) $(226,217.50) Bid (98.573%) 21,755,015.80 ' Total Purchase Price $21,755,015.80 ' Bond Year Dollars $538,538.50 Average Life 24.401 Years Average Coupon 5.0542131% tNet Interest Cost(NIC) 5.1127018% True Interest Cost (TIC) 5.1558418% 1 ' Economic Summary During the pricing call, the Finance Team, comprising the Underwriting Syndicate (Kinsell,Newcomb & De Dios and Stinson Securities),the Financial Advisor(Munisoft), and the Issuer(Palm Desert Financing Authority), discussed the comparable interest rate ' scales on similar recent bond issues. We also discussed the supply of California paper currently trading in the market as well as the new issues the Authority would be pricing with same day. Based upon the economic indicators and other factors discussed, the ' Authority determined to price the issue at the interest rate scale proposed at 6 a.m. on Thursday,February 28,2002.With the hard work of the Underwriting Syndicate and the ' Financial Advisor, we were able to get low rates and ultimately increase the new money proceeds to the Authority. In conclusion, the Finance Team, with the help of a strong market was able to meet and exceed all of the Agency's goals and objectives relating to the financing. The following articles describe what took place during the week of pricing. The graph ' below illustrates the treasury's yield curve for the week of February 28, 2002. ' 00NlNYlCI .. 4 5d ' last .504 5.5 Hiph 03N1N2 5.504 r emp 5.4047 1 ' law 02,72M2 5.344 - - ' ' ___________________________________________________ ___i____.._______ 5.4e _______________________________________________________________ ______-_____________ 5.48 i r ' S.44 i ___________________________ 5.42 r i ________________ ______________________ ___ __________ _____________ 5.3c r 128 r 7 28 2002 Mar ' THE BOND BUYER THE DAILY NEWSPAPER OF MUNICIPAL FINANCE ' THE BOND BUYER ........................................................................ INDUSTRY NEWS ' March 1, 2002 ' Municipal Prices End Little Changed; $365 Million of S.F. Airport Bonds Sell ' By Sean Monsarrat, The Bond Buyer Wire . Primary-Market Snapshot ' Municipal bond prices were firm on the short end of the yield curve yesterday, while underwriters set a top yield ' of 5.10% on a $151 million portion of$365 million in San Francisco Airport Commission revenue refunding bonds. The market held steady when weekly jobless claims rose, but the bid side weakened roughly 1/8 of a point on the long end when Treasury prices fell after gross domestic product rose at a 1.4% seasonally adjusted annual rate, the fastest pace in a year. The increase was higher than many economists forecasted. Government bond prices declined further after the ' Chicago Purchasing Managers' index surged to 53.1% in February from 45.1% in January. ' Cary Leahey, senior economist at Deutsche Bank, said ' the data helped build the case for a moderate self- sustaining recovery and ran counter to Federal Reserve Board chairman Alan Greenspan's Wednesday testimony before the House Financial Services Committee. ' "All the data runs counter to Greenspan's soggy recovery story," he said. "The GDP data show consumers held ' their ground while jobless claims tell the story that the labor market has improved a lot but is still fairly steady and Chicago is consistent with a better manufacturing ' tone." In the municipal arena, traders said an acute shortage of ' supply insulated prices from the chilling effect of the cooler government market, but also limited trading. ' "There wasn't a lot of pushing around because there's not much incentive right now," a trader said. "There were a lot of 1/8 [of a] point type situations out there and nobody ' had much incentive. You really had to dig them out of the corners if you wanted to get trades done." ' Traders said yields continued to decline on bonds due in the short end of the maturity spectrum in spotty trading. t Turning to the primary, the San Francisco Airport Commission offered investors three separate portions of airport revenue refunding bonds totaling roughly $365 ' million combined. Salomon Smith Barney Inc. won a $151 million portion ' with a true interest cost of 4.986%. Serial bond yields ranged from 2.45% in 2005 to 4.90% ' in 2024. A 2027 term containing $21 million was reoffered as 5s to yield 5.08%, and a 2032 term containing $43 million was reoffered as 5s to yield 5.10%. Salomon also won a $97 million portion with a TIC of 3.76% and reoffered serial bonds at yields ranging from 2.45% in 2005 to 4.10% in 2013. ' The issues are insured by MBIA Insurance Corp.- insured and carry underlying ratings of A2 from Standard ' & Poor's and A-plus from Fitch Ratings. Meantime, Merrill Lynch & Co. was the sole bidder for ' $117 million of San Francisco Airport Commission revenue refunding bonds subject to the alternative ' minimum tax. Merrill's bid produced a true interest cost of 5.177%. Serial bonds were reoffered at yields ranging from 2.20% in 2004 to 5.18% in 2022. Bonds due in 2024, 2027, and 2032 containing roughly $60 million combined were not formally reoffered. The issue is rated A by Standard & Poor's and A-plus by Fitch. In the negotiated sector, Goldman, Sachs & Co. priced ' $250 million of New York State Dormitory Authority State University education facilities revenue bonds, setting a top yield of 5.125% in 2031, insured. Serial ' bonds were priced to yield from 2.28% in 2004 to 4.97% in 2022. A 2028 term containing $71 million was priced as 5s to yield 5.10% and a 2031 term containing $44 ' million was priced as 5 1/8s at par. Bonds due from 2007 through 2031 are insured by ' Financial Guaranty Insurance Co. The loan carries underlying ratings of AA-minus from Standard & Poor's and Fitch Ratings. ' Copyright ©1997-2002 The Bond Buyer. All Rights Reserved. YOU ARE ENTITLED TO DISPLAY AND SEARCH THE CONTENT OF THIS SERVICE AT THE TERMINAL ACCESSING OUR SITE, AND TO DOWNLOAD ARTICLES, SOLELY FOR YOUR OWN ' TRANSITORY, INTERNAL USE. NO PART OF THIS SERVICE OR CONTENT CONTAINED HEREIN MAY BE OTHERWISE RETRANSMITTED, REDISTRIBUTED, COPIED, STORED, DOWNLOADED, ABSTRACTED, DISSEMINATED, CIRCULATED OR INCLUDED AS PART OF ANY OTHER PRODUCT OR SERVICE. 1 1 THE BOND BUYER THE DAILY NEWSPAPER OF MUNICIPAL FINANCE Wednesday's Market Municipal Bond Rise 118 to 114; $ 1 .4 Billion of New Deals Priced By Sean Monsarrat and Nicholas Chesla. "The market really underperformed be- The Bond Buyer Wire cause of a lack of tradable blocks," a trader said. "You're looking for a little bit more of Issuers offered investors roughly$1.4 bit- a discount,but 4 3149cs put the fear of God Eon worth of major new deals yesterday,while in you and yields are dropping to levels where ' secondary market prices rose 1/8 to 114 of a people don't care:' point,lagging a Treasury market rally. Low yields have been the order of the day Government bond prices shot up after Fed- in the short end of the market,where the av- eral Reserve Board chairman Alan erase tax-free money market fund seven-day ' Greenspan said the economy is improving yield dropped one basis point to a record low only at a moderate pace,indicating monetary of 0.89% for the week ended Feb. 25 from policy will be left unchanged. 0.909c posted the prior week, according to 'The typical dynamics of the business cy- hNIoneyNet Inc.Meanwhile,the funds'aver- ' cle have reemerged and are prompting a firm- age mau rity dropped to 37 days from 39 post- ing in economic activity,"Greenspan told the ed during the previous week. House Committee on Financial Services.An Tax-tree money market funds received array of influences seems likely to moderate $625.9 million of new cash for the week end- the speed of the anticipated recovery" ed Feb.22,pushing the total assets of the 522 Ethan Harris,co-chief U.S.economist at total funds tracked by hMoneyNet to$269.45 Lehman Brothers Inc.,pointed to the Federal billion. Open Market Committee's forecast for 2.5% Stockbroker and general purpose combined to 3%gross domestic product growth in 2002 took on$595.9 million of new cash. Insdtu- and said tighter monetary policy was not im- tional funds received$162.1 million, while minent. state-specific institutional funds lost$132.1 ' `"The message was very clear—there is million,for a combined total of$30 million in no reason to tighten monetary policy in an new cash. environment where growth is just returning Tuning to the primary,ABN ANIRO Fi- to Vend,"he said.Further,Greenspan lauded nancial Services Inc.priced$224 million of ' economic productivity,which should be wel- Cook County,Ill.,general obligation bonds, come news to both stocks and bonds. setting a top yield of 5 229c in 2025,insured. "In the Q&A, he emphasized how won- The issue is insured by Ambac Assurance derful the productivity data were,and this is Corp and carries underlying ratings of Aa2 ' the feel-good story of the economy;'Hams from Moody's Investors Service and AA said. "It means low inflation and strong from Fitch Ratings. growth,which is good for stocks and low in- In tight bidding in the competitive arena, terest rates" Stone &Youngberg won S100 million of ' Governments came off their highs ahead Oakland Unified School District unlimited- of the Treasury's$25 billion, two-year note tax GOs out of five bids with a true interest auction,but bobbed back and gapped up as cost of 4.915%. Lehman Brothers had the stocks gave up gains in volatile activity. In cover with a TIC of 4.917%. late trading,the 10-year note was quoted up The loan was reoffered with a top yield of 23/32 to yield 4,83% and the 30-year bond 5.05% in 2026. Bonds due 2012 yielded 22 was quoted up 23132 to yield 5.37%. basis points less than Municipal Market Data's In the municipal arena,the market opened Tuesday triple-A yield curve scale.The issue ' with a softer tone and traders reported in- is insured by Financial Guaranty Insurance creased crossover selling of relatively rich Co. municipals.The government rally stemmed Back in the negotiated sector,Goldman, crossover selling and ultimately fostered some Sachs&Co.priced S 187 million of Califor- ' new-issue follow-through business and mod- nia Public Works Board lease revenue bonds est price gains,but traders said a lack of sup- for the Department of Corrections and De- ply and low absolute yields limited secondary partment of General Services with a top yield ' market activity. of 5.07%in 2027,insured. 0 ' THE BOND BUYER ' THE DAILY NEWSPAPER OF MUNICIPAL FINANCE Municipal Prices Finish Mainly Firm; Merrill Wins $1 Billion of Calif. GOs ' By Sean Monsarrat and Nicholas Chesla, bonds priced to yield from 1.45%in 2003 to ' The Bond Buyer Wire 4. Bo in 2014. Bonds due 2007 yielded 13 bans points Underwriters won$l billion of California less than MtMD's Tuesday triple-A yield general obligation bonds in tight competitive curve scale and bonds due 2012 yielded nine bidding yesterday and reoffered the loan with basis points less.The issue is rated triple-A by ' a top yield of 5.27%in 2032.overshadowing Moody's and Standard&Poor's. the secondary market,where prices were firm Looking ahead to near-term price prospects in light trading in the broad market,some market participants While the California loan captured the most said underlying market tone could remain ' attention,traders reported modest secondary firm as demand outstrips supply. . market gains of'/a to '/4 of a point, made in "if we had more merchandise we'd do a notablysporadic second activity, while lot more business;'a trader said."there's a lot P secondary Y new-issue.pricing was generally firm to strong, of people buying bonds to get out of the stock ' according to one analyst. market right now' Merrill Lynch&Co.won the$I billion of In a newly released strategy report,Merrill California GOs out of three bids with a true in- Lynch said municipal bonds may continue terest cost of 5.094%,while Goldman,Sachs to enjoy increased demand from investors ' &Co.had the cover with a TIC of 5.095%. skirting the equity and corporate bond mar- Merrill Lynch estimated an approximate kets. unsold balance of$85 million. "The muni market continues to benefit Serial bonds were reoffered to investors at from problems in other sectors as investors ' yields ranging from 3.80%in 2008 to 5.24% are forced to reassess the risk/reaum profiles to 2027.A 2029 term containing$113 mil- of different asset classes;'according to the bon was reoffered as 5s to yield 5.25% and 28-pa8e report authored by the firm's mu- a 2032 term containing$194 million was re- nicipal credit research group,led by director ' offered as 5s to yield 5.27%.Bonds totaling Philip Fischer. "With Enron issues influ- roughly$320 million due in 2007,from 2009 encing the equity and corporate debt market, through 2018 and in 2020 were reported sold incremental demand for muftis appears to be ' and not available. picking up." Bonds due 2022 yielded 20 basis points Demand for bonds,Fischer said,will like- more than Municipal Market Data's Tuesday ly remain strong even if forward supply in- triple-A yield curve scale while bonds due creases toward the end of the month,when ' 2027 and 2032 yielded 19 basis points more. issuers are expected to resume borrowing af- The state last tapped the new-issue market ter a holiday hiatus. with$1 billion GOs in October 2001 with Corrections bonds that yielded from 15 to 21 basis points ' more than triple-As,depending upon the ma- The Midwest region and Michigan rank- turity.according to MMD. ings for financial advisers in 2001 that ap- Bonds due from 2015 through 2018 are pzared yesterday listed incorrect totals and noncallable and the 2017 and 2018 maturi- rankings for Robert IVY*.Baird & Co.The ' ties are also insured by Ambac Assurance firm should have been listed as firs[in Mtichi- Corp.The issue carries underlying ratings of gan,with 26 issues totaling$2.06 billion.The Al from Moody's Investors Service,A-plus errors resulted from incomplete data on Jan. from Standard&Poor's,and AA from Fitch 15,when the rankings were compiled. ' Ratings. In light new-issue activity in the negotiarzd The parry affiliation of Indiana Gov.Frank sector,Lehman Brothers priced$34 million O'Bannon,who is a Democrat, was given of New York State Dormitory Authority incorrectly in a Midwest Bond Watch item revenue bonds for Columbia Universty,set- yesterday. In addition, the item incorrectly Ling a top yield of 4.33%in 2014.At a repric- stated when the budget measure was voted ing,yields were lowered by one to five basis on by the House Ways and Mleans Commit- points,depending upon the maturity,except in _ tee.The changes to the O'Bannon plan were ' ?n 11.The final offering comprised serial considered in late January. i FINAL PRICING SUMMARY 1 ' PALM DESERT FINANCING AUTHORITY 1 ' $15,695,000 ' Tax Allocation Revenue Bonds (Project Area No. 4) Series 2001 ' KINSELL, NEWCOMB & DE DIGS, INC. November 15, 2001 1 1 TABLE OF CONTENTS TAB ' I. Project Area No. 4 ' Cover Page Official Statement I List of Participants I II. Preliminary Pricing Results Comparable Tax-Exempt "AAA" Insured Issues 2 ' III. Final Pricing Schedules ' Sources & Uses 3 Debt Service 3 tIV.The Interest Rate Environment Economic Summary 4 1 ' NEW ISSUE—BOOK-ENTRY ONLY RATIN( Standard &Poor's: "AA Fitch: "AA ' (See"CONCLUDING INFORMATION—Ratings"hen In the opinion of Richards Watson&Gershon,A Professional Corporation,Los Angeles.California,Bond Counsel,under existing law,the interest or Bonds is exempt from personal income taxes ofthe State of California and,assuming compliance with the tax covenants described herein,is excludedfrom ggross inc, for Federal income tax purposes and is not a tp¢ci�e preference item for purposes of the Federal alternative minimum tax See, however, "CO.\'CLUD. INFORbfATION--Tax-Exempt Status of the Bonds"herein regarding certain other tax considerations. S15,695,000 PALM DESERT FINANCING AUTHORITY TAX ALLOCATION REVENUE BONDS (PROJECT AREA NO. 4) SERIES 2001 Dated: Date of Deliver' Due: October 1, as shown be; The Bonds are being issued as fully registered bonds,registered in the name of Cede&Co.as nominee of The Depository Trust Company.New Y. New York,("DTC"),and will be available to ultimate purchasers in the denomination of S5,000 or any integral multiple thereof,under the book-entr% s%s maintained by DTC. Ultimate purchasers of Bonds will not receive physical certificates representing their interest in the Bonds. Solon as the Bonds regiscered in the name ol'Cede&Co.,as nominee of DTC,references herein to the owners shall mean Cede&Co.,and shall not mean the ultimate purcha ' oC the Bonds. Interest on the Bonds trill be payable on October 1 and April I of each Near,commencing April 1,2002. Payments of the principal o[.preml if any,and interest on the Bonds will be made dircetly to DTC,or its nominee,Cede&Co.,by BNY Westem Trust Company.Los Angeles,California "Trustee"),so long as DTC or Cede&Co.is the registered owner of the Bonds. Disbursements of such payments to DTC's Participants is the responsib of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and Indirect Participants,as more f ulk descr. herein. See"THE BONDS-Boo--Entry System" ' The Bonds are subject to optional redemption,mandatory sinking fund redemption,and extraordinary redemption as described herr The Bonds will be issued by the Palm Desert Financing Authorir'(the"Authority:)under an Indenture of Trust,dated as of November 1.2001 and between the Authority and the Trustee(the"Indenture"). The proceeds of the Bonds will be disbursed to make a loan(the"Loan")to the Palm 1)c Redevelopment Agency(the"Agency")pursuant to a Loan Agreement dated as of November 1,2001 (the"Loan Agreement')by and among the Autho: the Agency and the Trustee. The Bonds are special obligations of the Authority payable from and secured by Revenues as defined herein consisting primarily of amoums par: by the Aecnc%under the Loan Agreement. The Loan Agreement is secured by and payable from Tax Revenues,as defined herein on a parit%with the Pro Area No.4 Loan Agreement dated as of March 1, 1999(the"1998 Loan Agreement')by and among the Authority,the Agency and the Trustee, the uni balance of which isS 11,020,000 as of the date hereof. See"SECURITY FbR THE BONDS"herein. The Agency is to use the proceeds of the Loan to finance certain redevelopment activities of the Agency in connection with the Agency's Project P ' No.4,to fund a portion of the reserve fund and pay costs of issuance of the Bonds. Payment of the principal of and interest on the Bonds when due will be insured by a financial guaranty insurance policy to be issued by MBLA Insur.. Corporation simultaneously'with the issuance of the Bonds. M[31/-1 ' The Bonds arc not a debt of the City of Palm Desert or of the State of California or any of its political subdivisions(other than the Authority), neither the City of Palm Desert nor the State of California nor any of its political subdivisions(other than the Authority)is liable therefor. The Loan is n debt of the City of Palm Desert or of the State of California or any of its political subdivisions(other than the Agency),and neither the City of Palm Desert the State of Califomia nor any of its political subdivisions(other than the Agency)is liable therefor. The interest on,premium,if any,and principal of the Be arc payable from and secured by a pledge of certain amounts payable by the Avicncy to the Authorir,under the Loan Agreement. Neither the Authority nor ' Agency has any taxing power. Neither the Bonds nor the Loan constitutes an indebtedness within the meaning of any constitutional or statuton debt limita or restriction.Neither the members of the Authority nor of the Agencynor any persons executing the Bonds or the Loan Agreement are liable personally then In no event will the obligations of the Agency under the Loan Agreement be payable out of any funds or properties other than Tax Revenues(as def incd her of the Agency as set forth in the Loan Agreement. ' Maturity Schedule S4,610,000 Serial Bonds Dlaturity Date Principal Interest Maturity Date Principal Interest (October 1) Amount Rate Price (October 1) Amount Rate Price 2002 S 150,000 3.501'0 101.243 2013 S 225,000 3.95% 99.52 ' . 1003 150,000 3.5040 102.514 2014 225,000 4.10% 99.501 ,'004 160,000 3.50% 103.141 2015 - 235,600 4.209,0 99476 2005 - 170.000 3.50°, 103.453 2016 240,000 4.30% 99.45i ' 2006 165,000 3.50% 103.375 2017 - 260,000 440% 99 43( 2007 175,000 3.5090 102.119 2018 275,000 4.50% 99.41c, 2008 190,000 3.50°o 101.519 2019 285,000 4.55% 99.39(. 2009 185,000 3.50% 100.000 2020 295,000 4.60% 99-371 ' 2010 195,000 3.60% 99.621 2021 305,000 4.65% 99.353 2011 200,000 3.70% 99587 2022 315,000 4,70% 99.731. 2012 210,000 3.80% 99.556 ' S705,000 3.75 90 Special Term Bonds Due October I,2011 -Yield 3.75% S 1,895,000 4.70%Special Term Bonds Due October 1,2022-Yield 4.75% S2,440,000 4.80%Special Term Bonds Due October 1.2031 -Yield 4.90% S6,045,000 4.80°o Term Bonds Due October 1.2031-Yield 4.85°rii (accrued interest to be added) ' The Bonds are offered when,as and if issued and accepted by the Underwriter,subject to the approval as to legality by Richards,Watson& Gets! A Professional Corporation,Los Angcics,California,Bond Counsel. Certain legal matters will be passed on for the Undenwriter by Best Best&Knegur I Riverside.California, ,and for the Authority and the Agency by Richards,Watson&Gershon,a Professional Corporation, Los Angeles,California. anticipated that the Bonds will be available for delivery on or about November 28,2001. ' Kinsell Newcomb & De Dios, Inc. Stinson Securities, LLC ' The date of this Official Statement is November 15, 2001. 1 PALM DESERT FINANCING AUTHORITY ' PALM DESERT REDEVELOPMENT AGENCY CITY OF PALM DESERT ' AUTHORITY COMMISSION AND STAFF James Ferguson, President ' Richard S. Kelly, Vice President Jean M. Benson, Commissioner Buford Crites, Commissioner ' Robert A. Spiegel, Commissioner Carlos L. Ortega, ChiefAdministrotive Officer CITY COUNCIL/AGENCY MEMBERS James Ferguson,Mayor-'Chairman Richard S. Kelly,Mayor Pro Tem.11ce Chairman Jean M. Benson, Councilmember.Member ' Buford Crites, Councilmember,Member Robert A. Spiegel, Councilmember/Member ' AGENCY STAFF Carlos L. Ortega, City Monager'Executive Director ' Justin McCarthy,Assistant City Manager RedevelopmentlE•conomie DevelopmentlHousing Richard J. Folkers,Assistant City Manager Development Services ' Sheila R. Gilligan,Assistant City Manager Community Services Paul S. Gibson,Finance Director/Treasurer David L. Yrigoyen,Director of Redevelopment ' Teresa L. La Rocca, Director of Housing Dennis M. Coleman, Redevelopment Finance Manager Janet M. Moore, Redevelopment Accountant-11 ' SPECIAL SERVICES t Bond Counsel Richards,Watson &Gershon, A Professional Corporation Los Angeles, California 1 Trustee BNY Western Trust Compan}' Los Angeles, California Financial Advisor ' Muni$oft Modesto, California ' Fiscal Consultant Rosenow Spevacek Group, Inc. Santa Ana, California COMPARABLES- Palm Desert Financing Authority ' Tax Allocation Revenue Bonds (Project Area No. 4) Series 2001 Issuer Issuer Issuer Issuer MTN View-Whisman Cal Ed Fac.Auth Sch. Dist Pomona Co. San Marcos Public Fac.Auth San Diego USD ' Sale Date 1115101 1115101 W51011 1115101 Par Amount $5,000,000 $15,220,000 $54,055,000 $176,755,000.00 Rating AAA AAA AAA AAA Fin. Type GO ULT Revenue Revenue GO ULT Underwriter Sutro&Co, Inc. E.J. De La Rosa&Co Spleman&Company, Inc Banc of America SEC LLC ' Cou on/ Coupon/ Coupon/ Coupon/ Yield Yield Yield Yield 2002 3.50 @ 2.00 2.10 Par t 2003 3.50 2.10 2.00 0 Par 2.25 Par 2004 3.50 2.35 4.00 @ 2.30 2.50 Par 2005 3.50 @ 2.55 4.00 @ 2.53 2.60 @ 2.70 ' 2006 3.50 2.75 4.50 2.70 2.90 Par 2007 3.50 3.05 4.50 3.00 3.125 @ 3.20 2008 3.625 3.30 4.50 3.20 3.375 @ 3.40 2009 3.625 @ 3.45 4.50 3.35 4.150 @ 3.60 ' 2010 4.00 3.60 4.00 3.50 3.75 @ Par 2011 4.00 3.70 4.00 3.60 3.8-@ Par 2012 4.125 3.85 5.00 3.68 4.00 @ Par 2013 4.125 @ 4.00 4.50 3.93 4.00 @ Par 4.00 @ Par ' 2014 5.00 4.15 4.50 @ 4.04 4.125 @ Par 4.00 @ 4.09 2015 4.25 @ Par 4.75 4.15 4.60 @ 4.35 4.25 @ Par 2016 4.25 @ 4.35 4.75 4.27 4.90 @ 4.50 5.00 @ 4.33 2017 4.50 4.45 5.00 4.33 5.00 @ 4.60 5.00 @ 4.39 2018 4.375 @ 4.55 5.00 @ 4.70 5.00 @ 4.49 2019 4.60 4.65 5.00 Q 4.75 5.00 Kv 4.55 2020 5.00 4.80 5.00 @ 4.60 2021 5.00 4.85 5.00 @ 4.65 2022 5.00 @ 4.69 2023 5.00 @ 4.73 2024 5.00 @ 4.76 2025 2026 5.25 @ 4.75 4.75 NRO 2027 ' 2028 2029 2030 2031 4.875 NRO ' Total $67,500 $156,005 $486,495 Discount 1.350% 1.025% 0.90% Palm Desert Financing Authority ' Tax Allocation Revenue Bonds (Project Area No. 4) Series 2001 ' Comparables on the day of Pricing 11-14-01 ' Issuer Issuer Issuer Issuer Palm Desert Fin Auth Signal Hill Redv. South Gate Util Auth Cotati Comm Redem A Sale Date 11/14/01 11/14/01 11/14/01 11/14/01 ' Par Amount $15,695,000 $13,880,000 $25,690,000 $6,900,000.00 Rating AAA AAA AAA AAA Fin. Type Tax Allocation Tax Allocation Revenue Tax Allocation Kinsell, Newcomb&De Legg Mason Wood Underwriter Dios Walker O'Connot SWS Coupon/ Co u on/ Cou on/ Coupon/ Yield Yield Yield Yield ' 2002 3.50 @ 2.00 2.00 @ Par 1.75 @ Par 2.00 @ Par 2003 3.50 @ 2.10 2.10 @ Par 2.05 @ Par 2.25 @ Par 2004 3.50 @ 2.35 2.30 @ Par 2.30 @ Par 2.50 @ Par ' 2005 3.50 @ 2.55 2.55 @ Par 2.55 @ Par 2.70 @ Par 2006 3.50 @ 2.75 2.75 Par 2.75 @ Par 2.90 @ Par 2007 3.50 @ 3.10 3.00 Par 3.00 @ Par 3.10 @ Par 2008 3.50 @ 3.25 3.20 Par 3.30 @ Par 3.25 @ Par ' 2009 3.50 @ Par 3.40 Par 3.40 @ Par 3.40 @ Par 2010 3.60 @ 3.65 3.55 Par 3.55 Par 3.50 @ 3.60 2011 3.70 @ 3.75 3.70 @ Par 3.70 @ Par 3.70 @ 3.75 2012 3.80 @ 3.85 3.75 3.85 4.00 @ Par 2013 3.95 4.00 3.90 @ 4.00 4.00 @ 4.125 2014 4.10 4.15 4.00 CaPar 4.20 @ 4.25 2015 4.20 @ 4.25 4.10 @ Par 4.40 @ Par ' 2016 4.30 4.35 4.20 @ Par 4.40 @ 4.45 2017 4.40 @ 4.45 4.30 @ Par 4.50 @ Par 2018 4.50 @ 4.55 4.40 @ Par 4.50 @ 4.55 ' 2019 4.55 @ 4.60 4.50 @ Par 4.50 4.60 2020 4.60 @ 4.65 4.50 @ Par 4.60 @ 4.65 2021 4.65 @ 4.70 4.60 @ Par 4.625 4.70 2022 4.70 @ 4.72 4.60 @ Par 5.00 @ 4.70 2023 I 4.625 @ Par 2024 2025 2026 5.00 @ 4.76 5.00 @ 4.760 ' 2027 2028 2029 2030 2031 4.80 @ 4.85 5.00 4.83 2032 5.00 4.80 Palm Desert Financing Authority ' Tax Allocation Revenue Bonds (Project Area No. 4) Series 2001 Sources & Uses Schedule ' SOURCES OF FUNDS Par Amount of Bonds $15,695,000 ' Total Sources $15,695,000 ' USES OF FUNDS Original Issue Discount 86,649 ' Total Underwriter's Discount 177,353 Cost of Issuance 172,500 Gross Bond Insurance Premium 461,000 ' Debt Service Surety 19,315 Deposit to Debt Service Reserve Fund 310,424 (DSRF) Deposit to Project Construction Fund 9,276,343 Deposit to Special Escrow Fund 5,191,415 Total Sources $15,695,000 1 i � Palm Desert Financing Authority Tax Allocation Revenue Bonds ' (Project Area No. 4) Series 2001 ' Debt Service Schedule ' Date Principal Coupon Interest Total P+I 10/01/2002 150,000.00 3.500% 597,499.16 747,499.16 ' 10/01/2003 150,000.00 3.500% 704,650.00 854,650.00 10/01/2004 160,000.00 3.500% 699,400.00 859,400.00 10/01/2005 170,000.00 3.500% 693,800.00 863,800.00 ' 10/01/2006 270,000.00 3.597% 687,850.00 957,850.00_ 10/01/2007 285,000.00 3.596% 678,137.50 963,137.50 10/01/2008 310,000.00 3.597% 667,887.50 977,887.50 ' 10/01/2009 305,000.00 3.598% 656,737.50 961,737.50 10/01/2010 320,000.00 3.6590/c 645,762.50 965,762.50 10/01/2011 325,000.00 3.719% 634,055.00 959,055.00 ' 10/01/2012 345,000.00 4.152% 621,967.50 966,967.50 10/01/2013 365,000.00 4.238% 607,642.50 972,642.50 10/01/2014 375,000.00 4.340% 592,175.00 967,175.00 ' 10/01/2015 390,000.00 4.399% 575,900.00 965,900.00 10,!Y1/2016 400,000.00 4.460% 558,745.00 958,745.00 10%�1/2017 435,000.00 4.521% 540,905.00 975,905.00 ' 10/01/2018 450,060.00 4.578% 521,240.00 971,240.00 10/01/2019 475,000.00 4.610% 500,640.00 975,640.00 10/01/2020 490,000.00 4.640% 478,742.50 968,742.50 ' 10/01/2021 510,000.00 4.670% 456,007.50 966,007.50 10/01/2022 530,000.00 4.700% 432,190.00 962,190.00 10/01/2023 560,000.00 4.800% 407,280.00 967,280.00 ' 10/01/2024 580,000.00 4.800% 380,400.00 960,400.00 10/01/2025 605,000.00 4.800% 352,560.00 957,560.00 10/01/2026 640,000.00 4.800% 323,520.00 963,520.00 ' 10/01/2027 670,000.00 4.800% 292,800.00 962,800.00 10/01/2028 705,000.00 4.800% 260,640.00 965,640.00 10/01/2029 1,505,000.00 4.800% 226,800.00 1,731,800.00 ' 10/01/2030 1,570,000.00 4.800% 154,560.00 1,724,560.00 10/01/2031 1,650,000.00 4.800% 79,200.00 1,729,200.00 ' Total 15,695,000.00 - 15,029,694.16 30,724,694.16 Palm Desert Financing Authority ' Tax Allocation Revenue Bonds (Project Area No. 4) Series 2001 Pricing Summary ' Maturity Type of Bond Coupon Yield Maturiy Value Price Dollar Price 10/01/2002 Serial Coupon 3.5000,o 2.0000,o 150,000.00 101.243% 151,854.50 ' - 10/01/2003 Serial Coupon 3.500% 2.100% 150,000.00 102.5141h 153,771.00 1 010 1/2 0 0, Serial Coupon 3.5000,o 2.350% 160,000.00 103.141% 165,025.60 10/01/2005 Serial Coupon 3.5000/1 2.550% 170,000.00 103.453% 175,670.10 10/01/2006 Serial Coupon 3.500% 2.750% 165,000.00 103.375% 170,568.75 10/01/2007 Serial Coupon 3.S00% 3.100% . 175,000.00 102.119% 178,708.25 10/01/2008 Serial Coupon 3.500%, 3.250% 190,000.00 101.519% 192,886.10 10/01/2009 Serial Coupon 3.500% 3.500% 185,000.00 100.000% 185,000.00 10/01/2010 Serial Coupon 3.600% 3.650% 195,000.00 99.621.% 194,260.95 10/01/2011 Serial Coupon 3.7000,0 3.750% 200,000.00 99.5873/a 199,174.00 10/01/2011 Term 1 Coupon 3.750% 3.7SO% 705,000.00 100.0001/2 705,000.00 10/01/2012 Serial Coupon 3.800% 3.850% 210,000.00 99.556% 209,067.60 10/01/2013 Serial Coupon 3.950% 4.000% 225,000.00 99.527% 223,935.75 10/01/2014 Serial Coupon 4.100% 4.150% 225,000.00 99.5010/a 223,877.25 10/01/2015 Serial Coupon 4.200% 4.250% 235,000.00 99.476% 233,768.60 ' 10/01/2016 Serial Coupon 4.300% 4.350% 240,000.00 99.452% 238,684.80 10/01/2017 Serial Coupon 4.400% 4.450% 260,000.00 99.430% 258,518.00 10/01/2018 Serial Coupon 4.500% 4.550% 275,000.00 99.41011a 273,377.50 10/01/2019 Serial Coupon 4.550% 4.600% 285,000.00 99.390% 283,261.50 ' 10/01/2020 Serial Coupon 4.600% 4.650% 295,000.00 ' 99.371% 293,144.45 10/01/2021 Serial Coupon 4.650% 4.700% _ 305,000.00 99.353% 303,026.65 10/01/2022 Term 2 Coupon 4.700% 4.750% 1,695,000.00 59.337% 1,682,436.15 ' 10/01/2022 Serial Coupon 4.700% 4.720% 315,000.00 99.730°/a 314,149.50 10/01/2031 Term 3 Coupon 4.800% 4.900% 2,440,000.00 98.434% 2,401,789.60 10/01/2031 Term 4 Coupon 4.800% 4.850% 6,045,000.00 99.209% 5,997,184.05 Total SS,695,000.00 - 15,608,350.65 BID INFORMATION ' Par Amount of Bonds..................................................... 515,695,000.CO Reoffering Premium or(Discount).................................. (85,649.35) Gross Production........................................................... 515,603,350.65 1 Total Underwriter's Discount (1.130%).......................... SC177,353.50) Bid(98.318%).............................................................. 15,430,997.15 ' Total Purchase Price...................................................... s15,430,997.15 ' Bond Year Dollars.......................................................... $321,039.96 Average Life.................................................................. 20.455 Years Average Coupon............................................................ 4.6815649%o Net Interest Cost(NIC)................................................. 4.7637986% True Interest Cost MC)................................................ 4.7858354,o Economic Summary ' During the pricing call,the Finance Team, comprising the Underwriting Syndicate (Kinsell,Newcomb & De Dios, Inc., and Stinson Securities), the Financial Advisor ' (Munisoft), and the Issuer(Palm Desert Financing Authority), discussed the comparable interest rate scales on similar recent bond issues. We also discussed the supply of California paper currently trading in the market as well as the new issues that the Authority would be pricing on the same day. Based upon the economic indicators and other factors discussed, the Authority determined to price the issue at the interest rate scale proposed but not open the order period until 11:00 a.m. (PST) Tuesday, November ' 14. A combination of better than expected economic indicators, a healthy supply of California paper in the market, and Moody's Investor Service warning that the State of California was facing a negative outlook and possible downgrade on their credit rating, the bond market went into a sell off that continued through November 21, 2001 (Date of this Economic Summary). Had the Authority determined to delay pricing, the expected rates on the bond issue would be approximately 20 to 25 basis points higher than the rates the Authority received. ' The following articles describe what took place during the week of pricing. The graph below visually demonstrates the treasury yield curve for the week of November 13. ' BOWNY7CIostNid Lan 5.2d8 KGh MIMI 5.288 5'2' enpe 5.0628 low 11l1 JOI 4.878 5.2 5.1 S.C'. 5 i r<` 14 a ,e THE BOND BUYER M-IE DAILY \E�VSPAPER OF MUNICIPAL FINANCE WEDNESDAY, NOVEMBER 14, 2001 : 1 Prices Finish Down 1/4 as Pjimary Dominates With Major New Issues ' B Nicholas Chesla, They rillion ws priced Ss to yield 5.149a. e Bond Buyer Wire Bonds duc 2006 yielded 12basis points more than Murticipit Ufa ken Da!n's Friday The primary rna'sci held the attention of triple-A yield cure scale, vchHc bonds due ' rmr:<c(participants dwing the session while 2611 yielded 17 basis paints rnor_,bonds due trading in the secondauy was light and cash 20t6 yielded ten basis points more,and bonds prices finished do«n'/+point. due 2021 yielded 21 basis points more.Bonds Governments remained firmly in negative due 2031 yielded 24 basis points more than ' territory on the day while equities rose,sup- the bLNID triple-A curve. ported both by the news Northern Alliance The isiuc is insured by Financial Guar forces had entered Kabul, the capital of anty Insurance Co. and carries underlying -Afghanistan, and reports the ILlely cause of ratings of Al from Moody's Lri estors Ser- Mondays crash of an Ametican Airlines jet in vice and kk-minus from Sta:tdard&Poor's. New York was mechanical failure rather than In the competitive sector,Lehman Brothers terrorism. won S179 million in Mississippi general In the municipal arena, traders said their obligation bonds with a true interest cost of ' attention was fi.•ced mostly in the primary naa.�- 4.3929c out of four bids. Salomon Smith ken where pricin,g was firm when several ma- Barney Inc.had Lie cover with a eve interest jor new issues came to market in both the cost of el.3939c.Serial bonds"cr:r..offered at competitive and negotiated sectors. yields ranging from 2.82%in 2005 to 4.869a ' Activity remained was mostly light in the in 2021.Bonds due 2002 through 20041,2006 secondary where prices weakened between through 2008, and 2013 through 201S were 3a point to'h point during the session finish- not formally reoffered. ing'/a point lower. Bonds due 2011 yielded five basis points In dollar bond tradine.Triborough Bridge more thin Friday's itL*yID triple-A yield curve and Tunnel Authority 5s of 2032 wer quot- scale,wh!le bonds due 2021 yieL•'ed ten basis ed recently at 5.109c bid,5.09%offered while points more.The issue carries ratings of A0 ' the 5s of 2027 which were quoted on Friday from Moody's and AA from Standard wt at 5.05%bid,5.02%o5ered were quoted late Poor's and Fitch. yesterday morning at 5.10% bid,5.0S 9c of- Meanwhile,iiNlerrill Lynch vvon 5140 mil- fered. Lower Colorado River Authority, lion or Wisconsin revenue bonds with a true Tex., transmission contract refunding 5s of interest cost of 4.139c out of five bids.Bear, 2032 were quoted at 5.109c bid, 5.05% of- Stearns £: Co. had the cove. with a TIC of fered and i\lassachusetts Turnpike 5s of 4.18%. Scral bonds were reoffered at yields 2039 were quoted at 5.104c bid, 5.0790 of- ranging from 2.159c in 2003 to 4.7491 in ' fered. 2019.Bonds due 2007 throuai 2011 and 2020 Ln the negotiated new-issue calendar yes- through 2022 were not forma!iy reoffered. terdav,Lehman Bruther•s priced S274 ntil- Bonds duc 2006 and 2016 yielded ten basis lion Burg County,Push.,sewer revenue and points;mate than Fridays bLNID ciplc-A yield rclundin2 bonds. curve scale. At a repricing,yields were lovrered by four Elsewhere in the competitive L—na,UBS basis points in 2003 and by three basis points PaineWebber won S 123 million of New in 2004 while yields v:ere lowered by two ba- Mexico refunding bonds with a t_nie interest sis point;in 2013 and 2014.1 fields were raised cost of 3.34 9r out of eight bids.Slate Street by one basis point in the 2031 and 2035 ma- Capital Markets had the cover with a TIC auities, of 3.3659c. Serial bonds were reoffered at The final offetirg comprised serial bonds yields ranging from 2.84%in 2C05 to 3.60% ' priced to yield from 20%in 2002 to 5.0290 in 2009.Bonds due 2002 through 2003,20Co, in 2013.A 2031 term containing S 100.7 mil- and 2007 were not formally reoffered.The lion of the loan was priced ns is to yield issue is rated Aa2 by Nloody's and AA by ' 5.11% and a 2035 term containing 532.92 Standwril R Poor's. THE BOITD BUYER TI-IE DAILY (NEWSPAPER Or= MUNICIPAL FINANCE FRIDAY, NOVEMBER 16, 2001 I I Bond Prices Fall 314 to One Point As Jobless Numbers Dr-op a Bit By Nicholas Chaste, that they didn't eien wart to try any more;' th The Bond Buyer Wire e trader said. In dollar bond trading, Triborough Municipal bond prices hit the downward Bridgc and Tunnel Authority 5s of 2032 trail,falling by F4 point to one point as sell- were cuffed down at 5 20%bid,5.17%of- ing pressure increased. fered,having been quoted ez:Let in the day Governments continued their rapid de- at 5.1S90 bid, 5.167c offered. Meanwhile, cline while stocks were mixed on eontin- Jacksomille Electric,Fla.,5s of 2031 there uing reports of progress by the Northern quoted at 5.209a bid, 5.16% offered and Aliiance in Afghanistan and on initial job- California 5s of 2030 were quoted at 5.107o less claims for the week ended Nov. 10, bid,5.09% offered. which came in lower than expected at Leading the negotiated sector of yester- 444,000, a drop of 8,000 from the previous day's primary,blo van Stanley priced$554 week. million in Metropolitan Transportation Richard J. DeKaser, chief economist Authority dedicated tax fund bonds. with National City Corp., said the latest Yields were raised by one basis point in initial claims figure fell within a new and 2009 and 2014 and by three basis points in lower range of weekly layoffs following a 2010 through 2013, while the yield was ' spilce in layoff activity after the Sept 11 at- lowered by two basis po zits in 2031. tacks. The final offering comprised serial bonds "Without speaking to individual weekly priced to yield from 2.197o in 2003 to movements, we're probably going to es- 4.95a7a in 2023.A 2025 term containing tablish a new range around 425,000 to 543.71 million was priced as 5s to yield 450,000, and that will take us into the ear- 5.07%and a 2031 term cootitting 5188.33 ly part of next year,"he said. million was also priced as 5s to yield 5.1390. Business inventories for September fell Except for the 2CO2 and 2003 maturities, 0.590,which was greater than expected,and the issue is insured by Financial Guaran- represented, according to DeKaser, the ty Insurance Co. and carries underlying dearth of private sector spending during that ratings of A3 from ivloody's Im estors Ser- month. Nice,AA-minus frorn Standard &Poor's ' In other economic news,the Philadelphia and A-plus from Fitch. Federal Reserve survey for November Meanwhile, Lehman Brothers priced showed a slight rebound from last month, 5293 million of Chicago Housing Au- although the index remains at negative 20.2. thority capital program revenue bonds. Late yesterday, the 10-year note was Yields were raised by five basis points in' quoted down 1t5/U to yield 4.772%and the 2006 through 2011,by four basis points in 30-year bond was quoted down 39/s to yield 2012, by three basis points in 2013 and 5.234%. 2015,and by one basis point in 2014. In the municipal arena, traders described The final offering comprised serial bonds market tone as ugly. Prices declined and priced to yield from 3.45 is in 2006 to selling pressure mounted as market panic- 5.099a in 2019. ' ipants tested the bid side. The issue is rated Aa3 by Moody's Investors "The market's gotten absolutely shel- Sr-rvice,AA by Standard Pc Poor's, and A4- lacked,"one trader said. minus by Fitch. While there were more sellers than buy- Elsewhere,Salomon Smith Barney Inc. ers, traders said as the session moved to- priced $125 million Califorria Statewide ward its conclusion professional accounts Communities Development Authority stopped trying to sell. with a 2031 bullet maturity priced at par to "Ilse bids have just Rotten so ridiculous._.yield.3.95%. ' THE BOINTD BUYER ' -ME DAILY Nc—%ySPAPC 'OF MUNICIPAL, F1;1As\CE THURSDAY, NOVEMBER 15, 2001 ' .Once Again, All Eyes on the .Primary As a Slow New Issues Hits the Market chile bonds du 2011 }ieldcd eight ba- B}'Nicholas Chesln, sts atnts more. The Bond Buyer Wire 1�e issue is insured by NIBIA Insur- \EW 7.ORK — Market participants ance Corp. and carries underlying rat- focused almost entirely on the primary ings of A2 front Moody's Investors Ser- fo:the second consecutive day, as a slew nice and AA-minus from Standard & of new issues were sold and prices in the Poor's. secondary v:cakened in light trading. Meanwhile, Salomon Smith Barney The retreat in Treasury prices picked repriced 5216 tnillion public utility dis- up the pace late afternoon while equities trice No. 2 of Grant County, Wash., rose following a much greater than es• electric system revenue and refunding pected 7.190 jump in retail sales for Oc- bonds. tober, a record one-month gain. Exclud- At the repricing, yields were raised ing autos, the increase was 1.09a, also five basis points in 2011 and from 2014 higher than anticipated. through 2019, six basis points in 2013, In the municipal arena, traders said seven basis points in 2003, 2009, and cash prices weakened on thin volume, 2012 and by eight basis points in 2010. down '/4 point, with some prices wverc The final offering comprised serial quoted down by up to 1/2 point. bonds were priced to yield from 2.609c Attention rested squarely on the pri- in 2004 to 4.83% in 2019. A 2022 tna- mary with firm new issue pricing. turity containing S57 million were priced "Based on some preliminary reads, as 5s to yield 5.149g. new issues seem to be going at least The issue is insured by Financial Se- moderately well," a trader said. curity Assurance and carries underly- In dollar bond trading, Lower Col- ing ratings ot'Aa3 from Moody's,A-plus orado River Authority,Tex.,Ss of 2026 from Standard fit Poo.'s, and A-minus were quoted at 5.1190 bid, 5.0790 offered; from Fitch. Massachusetts Turnpike 41/4s of 2034 Salomon. Smith Barney also priced were quoted at 5.159c bid,5.1290 offered; SIN million of Hall County Hospital Triborough Bridge and Tunnel Au- Authority and Gainesville revenue an- . thority 5s of 2032 were quoted at 5.12% tieipation certificates issued by North- bid 5.1017,0 offered; and Atlanta 5s of east Georgia Heal th'S}'item.2035 were recently quoted at 5.OS9e bid, At a repricing, the yield was lo.vercd 5.039c offered. by one basis point in 2031. In the debt futures market, the De- The final offering compriv_d serial cember municioal contract was recently bonds are priced to yield from: 2.S,:c in quoted down 3b/32 at 107-02 while the 2003 to 5.14 90 in 2016. A 2015 term MOB spread moved to negative 47 from containing S4.7 millionwas priced as negative 5S posted at the close Tuesday. 'S'/_s to yield 5.32% v.hile a 2021 term In the negotiated sector, Merrill containing SS.06 miliioa was priced at Lynch & Co. priced 5441 million of par to yield 5.509c, a 2024 term cor.- Ness. Jersey Economic Development taming 59.45 million vras priced as 51/as Authority market transition facility se- to yield 5.57% and a 2031 term con- nior lien revenue refunding bonds, Sc- tair.ing S54 million was priced as 5'h3 ties 2001A. to yield 5.64%. At a repricing, yields were raised by one basis point in 2005 and 2006. The final offering comprised serial bonds priced to yield from 2.14% in 2003 to 3.SS9c in 2011. Bonds due 2006 yielded seven basis points more than Tuesday's Municipal Market Data's triple-A yield curve scale