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HomeMy WebLinkAbout2002-07-24 IFC Regular Meeting Agenda Packet Finance DeP artment MEMORANDUM To: Records Technician *ti From: Diana Leal, Administrative Secretary\ Subject: Investment and Finance Committee Date: July 8, 2004 Attached, for your records, is a copy of the June 23, 2004 Investment and Finance Committee meeting attendance register. Thank you for your assistance. Attachments (1) GAFinance\Diana Lea1\Wpdocs\1nvestment Committee\2002 Memos\City C1erk\2003\6-23-04attend.wpd / \ / \ § \ ( ( t , � 14 \ § \ / § \ i ^ § ® ( _ k ) ( \ $ k ` 3 § y zt p © . . 2 d \� � � I Finance Department MEMORANDUM To: Rachelle Klassen, City Clerk � t From: Diana Leal,Administrative Secret Subject: Investment and Finance Committee Date: July 8, 2004 Attached is a copy of the May 26,2004 minutes of the Investment and Finance Committee approved by the Committee on June 23, 2004. Please place on the next City Council agenda for approval thereof. Thank you for your assistance. Attachments (1) GAFinance\Diana Lea1\Wpdocs\1nvestment Committee\2002 Memos\City Clerk\2003\5-26-04 minutes.wpd _ CITY OF PALM DESERT INVESTMENT & FINANCE COMMITTEE Minutes May 26, 2004, 10:30 a.m. North Wing Conference Room I. CALL TO ORDER A regular meeting was called to order by Chairman Gibson on Wednesday, May 26, 2004 at 10:31 a.m. II. ROLL CALL Present: Absent: Paul S. Gibson, Finance Director Bob Spiegel, Mayor Buford Crites, Mayor Pro-Temp Russ Campbell Carlos Ortega, City Manager Dave Erwin, City Attorney Thomas Jeffrey, Deputy City Treasurer Everett Wood Bill Veazie Thomas Wormley Also Present: David Yrigoyen, Director of Redevelopment Dennis Coleman, RDA Finance Manager Jose Luis Espinoza, Assistant Finance Director Rodney Young, General Manager Desert Willow Diana Leal, Recording Secretary Guests: Jennifer Larson, Desert Sun Reporter III. ORAL COMMUNICATIONS Mr. Gibson indicated that Jennifer Larson, a reporter from the Desert Sun was in attendance. IV. COMMITTEE MEMBER REPORTS None. 1 526N,. d INVESTMENT & FINANCE COMMITTEE MINUTES May 26, 2004 V. CONSENT CALENDAR A. ' Approval of Minutes Motion was made by Mr. Wood and seconded by Mr. Veazie to approve the Minutes of the April 28, 2004 meeting as submitted with Mr. Ortega and Mr. Crites abstaining. VI. CONSENT ITEMS HELD OVER None. VII. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for April 2004 For the month ended April 30, 2004, Mr. Jeffrey reported that the book value of the City Portfolio was approximately $130.3 million. The City earned approximately $156,000 in interest during that month. Portfolio yield-to- maturity was approximately 1.54%. For the month ended April 30, 2004, Mr. Jeffrey reported that the book value of the RDA Portfolio was approximately $152.7 million. The RDA earned approximately $156,000 in interest during that month. Portfolio yield-to- maturity was approximately 1.22%. Mr. Wood asked if staff could e-mail the monthly investment report to committee members. Mr. Gibson responded that it would not be a speedy process at this point. Mr. Gibson suggested that committee members who might be interested in this option should provide their e-mail addresses to staff, so that staff could e-mail meeting agendas to them, and, eventually, the monthly investment report. Mr. Crites observed that not everyone might have a personal computer. If so, then e-mail would lead to an uneven dissemination of information among committee members. B. State of California Local Agency Investment Fund Balance for the month of April 2004 The City is maxed out in the LAIF accounts. 2 sze0a."d INVESTMENT & FINANCE COMMITTEE MINUTES May 26, 2004 C. California Asset Management Program (CAMP) April 2004 Statements Mr. Gibson said that staff is monitoring the CAMP accounts to ensure that the cap is not exceeded. D. City and Redevelopment Agency Monthly Financial Report for City Council for April 2004' Mr. Gibson said that he was very pleased to see that the Transient Occupancy Tax was up $200,000 last month. Building permits continue to increase. The only negative footnote is the Department of Motor Vehicle funds taken by the state. Mr. Ortega asked if the $7.3 million was budgeted as of the end of April. Mr. Gibson said that companies typically have 30 days after the month closes to pay their bill, thus reporting is at least a month behind. He said that the City will easily reach the $7.3 million this year and may be slightly higher. Mr. Gibson said that the Riverside County Sheriff's department is now billing the City in a timely fashion which helps staff get a better picture as to expenditures. E. Parkview Professional Office Buildings - Financial Report for April 2004 Mr. Gibson said that he wanted to provide an answer to Mr. Spiegel's question posed at the last meeting regarding the increase in expenditures for March. He said that the increase in improvements was due to slurry sealing of the parking lot. Mr. Ortega said that he understands that the County has made a request to increase their rental space in order to bring the Economic Development Agency. Mr. Gibson said that he was not aware of that request, however, a tenant would be moving out and that there should be sufficient space available. Mr. Gibson said that next year, once UCR completes their building, they will be moving out of Parkview. Numerous companies have contacted Mr. Gibson to express their interest in the space once it becomes available. F. Palm Desert Golf Course Facilities Corporation Financial Information for April 2004 Mr. Young said that their revenue is up. He said that in July, August and September of last year they had lots of problems. In November there were golf course issues. They are experiencing a strong recovery. They are well ahead of budget. He is optimistic about Memorial Day weekend. He expects 3 szs04.K d INVESTMENT & FINANCE COMMITTEE MINUTES May 26, 2004 that Food and Beverage will be at budget or better. However, they are ahead of local golf courses without hotels. Golf courses with hotels have more rounds due to the packages they can offer along with hotel stays. Desert Willow's (DW) rounds are up (80,000 rounds). Course conditions are better than they have been, they have received positive comments from customers. They are using less than 700,000 gallons of water per day due to better water management. Mr. Ortega said that he believes it is due to the hiring of the new golf course superintendent. Mr. Young said that during that time he and his staff met with Coachella Valley Water District to review the Desert Willow's water usage and compared DW with other local golf courses. He thinks they will do a better job at utilizing the water. Mr. Young said that they are changing from two computer software packages to one computer so that all of the irrigation will be on a much improved irrigation system. They are also using new sprinkler heads and irrigation equipment. Vlll. CONTINUED BUSINESS - None. IX. 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. B. Bond Issuance by Palm Desert Financing Authority Mr. Coleman said that at the last meeting, the Investment and Finance Committee recommended to the City Council the hiring of Citigroup Global Markets, Inc. to refund the 1995 Project Areas No. 1 and 2 bond issues. At the meeting of the City Council, the City Council acting as the Finance Authority, hired Citigroup. In terms of the refunding, Mr. Coleman had previously reported refunding for Project Area No. 1 and Project Area No. 2, however, they have decided to only refund Project Area No. 1 as the savings in Project Area 2 were not sufficient enough to pursue. For the past five years, the rates have been low and have afforded the opportunity to refund bonds and issue bonds for new money at a significantly low rate. As the rates rise, this affects the savings on refunding of the bonds. When staff was first alerted as to the savings for both of the bonds, Project Area No. 1 savings was about $2.2 million and now it is down to about 4 52604.wptl INVESTMENT & FINANCE COMMITTEE MINUTES May 26, 2004 $600,000 plus. There was a significant change in the market where the stocks soared, the treasuries took a dive. Staff is monitoring the market so that they can issue bonds for the same debt service to pull out a savings of$600,000. Staff is looking at restructuring the bond. By doing so, they can lower their maximum annual debt service. The maximum annual debt service is that point at which all of the Agency bonds in parity have the highest amount of debt service. This is important as whenever the Agency issues new bonds, it is based on the current income against the proposed maximum annual debt service. At this time, the maximum annual debt service in parity on these bonds is about $10.8 million. By restructuring the bond, they can bring it down to a $9.4 or $9.6 million. This is lower by $1.5 million. On Monday, the insurers came to the City of Palm Desert for a presentation. Citigroup felt that it was a strong enough credit that the Agency should have other insurers involved. In the past the Agency has tried to do this. They have had AMBAC take a look at insuring the Agency's bonds. FSA at some point also had the opportunity to review the bonds. Fidget was never approached to do this, however, when Fidget was owned by GE Capital they were very conservative and did not insure tax allocation bonds. XL Capital is a new company that insures California bonds. It was not until the year 2002 that they were allowed to insure California bonds. Staff participated in the presentations to the insurance companies. They had a conference call with Fidget of New York for an hour and a half to go over the presentation. In addition, a second firm, XL Capital sent Tammy Ames, an Analyst to view the presentation. Ms. Ames understands not only, the Redevelopment tax allocation credit, but the state budget considerations as well. Agency staff provided a presentation to MBIA, the third firm, over the phone. AMBAC and XL Capital was given a tour of Project Area No. 1. Mr. Coleman said that they were fortunate that Big Horn allowed the insurers to visit Big Horn. He said that he would provide the committee members with a copy of the 42- page presentation prepared by Citigroup. The presentation was the fiscal consultant's report. The fiscal consultant was hired to verify the Agency's revenue. The Agency has extremely good credit. In Project Area No. 1, the Agency is allowed to issue bonds according to every dollar of debt service. The Agency has to only have $1.15 covered. Most project areas in California do not have this. They are at about $1.20 - $1.25 for every dollar. The $1.15 coverage make some insurance companies uneasy. This is one of the few project areas in the state that has a $1.15 coverage. Staff expects to receive three bids. Fidget has expressed their interest in bidding. XL Capital indicate that if the Agency can obtain $1.15 through the credit committee, they will 5 526N4. d INVESTMENT & FINANCE COMMITTEE MINUTES May 26, 2004 submit an aggressive bid because they want to increase their fixed rate portfolio in terms of California bonds. MBIA stated that they have no problem in providing a bid. The finalized fiscal consultant report will be sent out today. The preliminary official statement is being sent to a few insurers. The documents will go to the City Council, the Redevelopment Agency and the Financing Authority to authorize the specifics of the bond deal, in general, subject to being changed and subject to form. If the City Council approves, staff will be obtaining insurance commitments next week. After the insurance commitments are received, staff will reevaluate the savings and at that time will decide if they should go into the market. If everything goes well by the end of this month, the bond should be refunded. By the next Investment and Finance Committee staff will be able to inform the committee as to whether or not staff will be able to price and close the bond. Staff is scrambling to take advantage of this window of opportunity period because the economy has been strong. The producer price index numbers came out higher than what was expected. What typically happens is that the bonds get oversold. The bonds went down and the stock market took off. Everything balances out afterwards. The 30-year treasury was trading at 5.56%, today, they are closer to 5.38%. The 20 -year AAA municipal index, nationwide, was at a 5.08%. The Agency will not be issuing any new money for 2 or 3 years. On another note, the Governor has proposed a budget to local governments for another$1.3 billion a year for two years. The Governor will work with the legislature to place the state constitutional amendment on the ballot which he will stand behind and endorse. ;The amendment would be such that after two years of ERAF it will prohibit the State from touching local government income. Local cities and the County were asked to give $350 million per year. This bill allows for the City to have the Redevelopment Agency pick up the City's share of cost. The Agency's portion for next year will be about $3,896,840. Earlier this month, the Agency sent a check to the County in the amount of $2,113,709. Previously, the Agency spent $1,184,000. This project area's portion is $2.4 million. Staff told the insurance companies that once ERAF goes away, the Agency will go back to the market and obtain new money. It is much easier when you don't have to worry about quantifying the ERAF cost. In 2006-2007 the Agency will have the capacity to bring in new money for all of the project areas. Staff is looking at Project Area No. 1 with a 6% interest rate overall. Mr. Veazie asked if staff would be requesting three bids. Mr. Coleman said that he believed that they would be able to obtain three bids. One of the issues is how will the surety work if MBIA is not hired. Perhaps the can have a surety on the basis of a stand-alone bond issue. MBIA has been insuring most 6 526N.wpd INVESTMENT & FINANCE COMMITTEE MINUTES May 26, 2004 of the Agency's bond issues with the exception of one done in 1985. The difference in the new surety versus the old surety is that the old surety that will disappear is $1,955,000 and staff is looking at a new surety of$400,000 by restructuring. By restructuring the principal, staff will bring the coverage for maximum annual debt service from $1.33 to $1.55. The reason it is high even though there is a coverage requirement of$1.15, is because staff has to bond around ERAF the last time out to satisfy the insurance company and the investment community. Mr. Veazie said he is not optimistic about interest rates going down when he considers the outlook of energy, crude oil and gasoline. Mr. Crites said that the City of Palm Desert is fortunate to have the means to have projects. Other cities are not as fortunate. He said that the City's projects are reviewed by outside expertise brought in by the members of the Investment and Finance Committee. He thanked staff and members of the committee for a job well done. Mr. Coleman said that the other news he had to offer is that the preliminary numbers as of fiscal year 2001-2002 show that the Agency was 61h in the State in terms of gross increment. San Francisco jumped from $35 million to $59 million. According to the numbers provided, San Francisco is down to'$41 million, this places the Agency at 5"' place. San Jose is first at $198 million, Los Angeles second at $89 million, Industry is at $60 million and San Diego is $55 million. The City of Palm Desert was at $50 million at the end of last fiscal year, slightly ahead of Oakland who is at $48 million. The City of Palm Desert's payment to ERAF is $3 million while San Jose's payment to ERAF is $18 million, plus they will pay for their City's portion which is another $11 million for a total of$29 million.: ERAF depends on pass thru. X. NEXT MEETING - Wednesday, June 23, 2004 at 10:30 a.m. XI. ADJOURNMENT There being no further business, the meeting was adjourned by Mr. Gibson at 11:13 a.m. Respe ally sub ed, ea , R o din Secretary 7 52604.w d { COMMITTEE MEETING WORKSHEET Meeting Description Investment Committee Meeting Date 7/24/02 Time 2:00 p.m. Location North Wing Conference Room Mailed Agenda 7/17/02 Posted Agenda 7/17/02 Time:., Convene Adjournment ;o-7 Staff Members Attending Yes o Others Attending -Yes' NO 1 Paul Gibson, Chairperson 11 Dennis Coleman 2 Council Member 12 Justin McCarthy 3 Council Member 13 Rodney Young 4 Dave Ervin, City Attorney 14 Recording Secretary 5 Carlos rtQa, Cit 6 Thomas Jeffrey Public Members Attending Guests attending 7 Russ Campbell V 15 8 Murray Magloff 16 9 Bill Veazie ✓ 17 10 Everett Wood ✓ 18 19 20 Follow Ups/Tasks Assigned Person Responsible Due Date 1 2 .S 3 01 4 , 5 6 6 7 hl) — a �, s 0/ i . _ . rd IN /./i M .y.I�..: ♦ . � / rig.. 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Attachments (1) GAFinance\Diana Leal\Wpdocs\Investment Committee\2002 Memos\City C1erk\9-25-02.wpd CITY OF PALM DESERT � . INVESTMENT & FINANCE COMMITTEE Minutes July 24, 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, July 24, 2002 at 2:07 p.m. II. ROLL CALL Present: Absent: Paul Gibson, Director of Finance Dick Kelly, Mayor Thomas Jeffrey, Investment Manager Jean Benson, Mayor Pro-Tempore Jose Luis Espinoza, Fin. Oper. Mgr. David Erwin, City Attorney Steve Aryan, Asst. to the City Manager Carlos Ortega, City Manager - Murray-Magloff- - - -- ------ — - - Bill Veazie Russ Campbell Everett Wood Also Present: Justin McCarthy, ACM Redevelopment Dennis Coleman, Redevelopment Finance Manager Rodney Young, General Manager Desert Willow Diana Leal, Recording Secretary Guests: None III. ORAL COMMUNICATIONS - Mr. Veazie said that one of the finest concepts of tax exempt bonds are public utility bonds, specifically, in the west coast, where they are called LA Department of war and power (LA DOWAPS), Sacramento Municipal Utility Districts (SACS Muds), etc. He believes that the concept is wonderful considerably. If a district can be formed, or perhaps added to the Coachella Valley Water District and be called the Coachella Valley Water District and Electric District or an electric district by itself. Have it approved by the state and able to float tax free bonds. The 1 72402.wpd INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 1 surrounding cities could benefit by obtaining money by floating a bond issue, tax free with a coverage estimate. The bond issue will cost a full month in interest at the time it is floated, however, they are estimating their revenues by comparing what other electric companies are making. He would hope that the City of Palm Desert would look into this concept. Mr. Gibson said that he believes that Council took action to go along with a study and if all of the other cities, through a cooperation, agree to move ahead, then the City of Palm Desert would be a participant. Unfortunately, at this point, the City of Palm Springs has expressed their desire to not move ahead. Therefore, the City of Palm Desert does not plan to move ahead. Another dilemma is that there is a price tag that the City would like to pay which may not be what Edison would like to have the City pay. Until these points are negotiated, it is unknown whether it would be reasonable or not. IV. COMMITTEE MEMBER REPORTS None. V. CONSENT CALENDAR A. Approval of Minutes Motion was made by Mr. Campbell and seconded by Ms. Benson to approve the Minutes of the June 26, 2002 meeting as submitted. Motion carried. VI. CONSENT ITEMS HELD OVER None. VII. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for June 2002 Mr. Jeffrey gave a brief overview of the June 2002 Investment Reports and said that they were not the final numbers for June. The final numbers will be obtained once the auditors have made the necessary adjustments for fiscal year end. For the month ended June 30, 2002, the book value of the City Portfolio was approximately $195,900,000. The City earned approximately $463,000 in interest. The portfolio yield-to-maturity was 2.86%. For the month ended June 30, 2002, the book value of the RDA Portfolio was approximately $92,600,000. The RDA earned approximately $198,000 in interest. The portfolio yield-to-maturity was 2.67%. 2 ]2402."d INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 The asset allocation graph indicates that the amount of commercial paper has risen slightly. Basically, if there exists any excess cash staff is trying to fill up LAIF which is one of the high yielding assets. The final performance graph indicates that the difference between the City's portfolio yield and the LAIF portfolio yield is beginning to narrow in terms of the City's advantage over LAIF as some of the older securities are beginning to mature and staff is having to replace them with lower yielding securities. The Redevelopment Agency portfolio's variance, for the first time, is getting very close to LAIF. The reason being that it is the inverse of the City's situation with LAIF and the gap is narrowing between the two of them. Mr. Wood asked if there was a prediction of how the market would do. Mr. Jeffrey said that the stock market has not bottomed-out yet. He believes that bad news will continue through August. As far as the yield, the affect has been that there is a great deal of cash coming into the bond market. Some people think that when the stock market eventually does recover the cash will be coming out of the bond market. The federal funds counted 1.75%. They are running out of room to start making cuts, and there is no liquidity crisis in the market. The market is not in danger of a collapse. All of the corruption of the last 10 years is being corrected. The City is concentrating on commercial paper because it is about 10 basis points higher than federal agency discounts. B. State of California Local Agency Investment Fund Balance for the Month of June 2002 Mr. Magloff asked what LAIF does with the money and who is in charge of LAIF. Mr. Gibson said that they go out and invest the money. They match what their withdrawals are and the cash flow that comes in to determine what their needs are every day. Mr. Gibson said that the State Treasurer is the official person in charge, however, he has a board that oversees the LAIF accounts. Mr. Gibson said that since the State did not adopt a budget, there still remains a question as to whether the City can withdraw funds, if state warrants are not being issued. In light of this issue, the City deposited $30 million in funds into the California Asset Management Program (CAMP) and will have access to these funds if necessary. 3 72402.wpd INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 i C. California Asset Management Program (CAMP) Mr. Campbell asked how long will the funds in CAMP last. Mr. Gibson said that after the election is over, sometime in November, he expects that the budget will approved. Mr. Jeffrey said that after the budget has been approved, the money in the CAMP account will be placed in high yielding assets. A nominal balance will be kept to keep the account open in case there is future need. D. City and Redevelopment Agency Monthly Financial Reports for City Council for June 2002 The figures for year to date for the City's general fund from Mar. - Jun. 30. The City generally accrues in July and August for receipts received in those months that are actually for the previous fiscal year. This includes sales tax. The City typically receives monthly advances. The two months in July in August are determined by the Government Finance Officers Associations that the City accrue those funds so that the City will accrue an additional $1,800,000 to the sales tax account. Instead of $11,000,000, the ending sales tax will be $12,800,000. On the transient occupancy tax (TOT), based on receipts received up to July, there should be $7,300,000 in TOT. All of the other figures given remain the same as is in the budget or are based on the accrual year-to-date actual amounts. There is a total general fund revenue of$33,800,000 with all accruals added on. With regard to expenditures, currently there is $29,300,000 with approximately, at least, an additional $1,000,000 expenditures. A payment of one month remains for the biggest expenditure which is the Sheriff's Department. Mr. Gibson expects that the ending expenditures will be somewhere between $30 and $31 million including encumbrances. Mr. Veazie said that the figures for the year-to-date for the property taxes represent $2.5 million, total general fund revenue $30.7 million. About 8% in the general fund is represented in the form of property tax income. Mr. Gibson said that as the City's other revenues grow, it will continue. The agreement with the County and the State is that the City will only receive 7% because the City is a no low property tax city. The City was formed at the time that Proposition 13 rolled the taxes back. E. Parkview Professional Office Buildings - Financial Report for June 2002 Mr. Jeffrey asked if there has been a rent increase or any variances. Mr. Gibson said that there are a few tenants that have come in. The City will end up with a net income of$270,617. Next year the roof will be redone with a coating. Goodwill will be moving out. This will leave office space available. At 4 7240Z.0 INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 fi this time, the City is considering using the available space for City staff as there is insufficient space at City hall. The City is in the process of doing a design for the Sheriff whereby they will move to another facility. Once the Sheriff Department moves out, their facility will become available. The City is also looking at City hall to better utilize space. Mr. Campbell asked where the Sheriff Department would be located. Mr. Gibson said that there was discussion of moving them across the street. F. Palm Desert Golf Course Facilities Corporation Financial Information for June 2002 Mr. Gibson said that a summary sheet was distributed to the committee which shows a comparison of the two fiscal years in total. Mr. Young said that the rounds are up. They have lost some groups, however, they will be aggressive in bringing the groups back. Mr. Wood inquired if there were any auxiliary revenues. Mr. Gibson said that with a corporation, the City and Redevelopment entered into an agreement with a time share product called Intrawest. They give the City fees based on the right field to play at Desert Willow. They will pay the City for the land they purchased to place the time shares on. If potential people buy the time shares, there will be a 50% discount for those individuals, plus a 20% discount to play at Desert Willow. Desert Willow utilizes those funds to pay for the Capital Improvements. Mr. Young said that if Desert Willow had a hotel, it would be easier to offer promotional deals. The Marriott has a promotion at this time whereby for$99 a person can have unlimited golf. They have 300 rounds a day. 'Mr. Young said that they have had special events at Desert Willow. A few days ago they had 36 kids from the Junior Golf Association. In addition, the National Golf Foundation has a type of "Bring your Daughter to Work Day' where Desert Willow offered a free clinic and 16 ladies that golfed. Vill. CONTINUED BUSINESS - None. IX. 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 n4o2."d INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 n B. Bond Issuance by Palm Desert Financing Authority Mr. Coleman provided the Committee with a pricing summary. The summary indicates July 17 and not the 11`h because it closed six days later due to a procedure error which occurred. The investment bankers were able to get the buyers to buy the bonds and keep them at the same rate. The investment for $15,604,000, the key note was basically the investment for the escrow. The bottom line is that the City pulled $1,177,000 out in new project funds and spent $4,000 more for the investment however it went in interest over to the City. The new bond issue is done. The yield and tax rate, in the 2022 maturity was a 5.00, discounted to yield 5.07. With the market at this time, a lot of money is going into bonds with depressingly yields. Mr. Coleman said that now that this bond is complete, they now have the bond they are working on to acquire 36 new housing units. This housing bond is approximately $12,155,000. The verification report is done on their increment and they have submitted it to MBIA and Ambac and are hoping to get commitments from both of them. Staff has tentatively budgeted a hundred basis points for the insurance commitment. The last time they obtained insurance on a housing bond it was about 45 basis points, it is unknown. The coverage they are looking at for this bond is almost at 2.15/1.00 in debt in parity after the other bonds are taken out. They are hoping to close this bond issue August 31 or thereabouts. They are going to beat the state as they are scheduled to get their ratings on their power bonds. Fortunately for the City, the State is activating their ratings and insurance commitment, they will be making presentations to buyers throughout the country. As this is being set up, the City will have time to get their bond done. If the rates hold to what has been seen in the last few days, this may be the second or third best bond in terms of yield because the City may be able to do a 30 year and a 5.10 yield which will be a very favorable rate. At the next meeting Mr. Coleman will have a pricing summary for the Committee. X. NEXT MEETING - Wednesday, September 25, 2002 at 2:00 p.m. XI. ADJOURNMENT There being no further business, the meeting was adjourned by Mr. Gibson at 2:44 p.m. Respectfully submitted, Diana Leal, Recording Secretary 6 nao2.wpd i s } CITY OF PALM DESERT INVESTMENT & FINANCE COMMITTEE AGENDA July 24,2002, 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. Aparoval of Minutes Rec: Approve minutes of the regular meeting of June 26, 2002, as submitted. Action: ' 1 0I2402.wPd l INVESTMENT & FINANCE COMMITTEE AGENDA July 24, 2002 VI. CONSENT ITEMS HELD OVER None. VII. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for June 2002 Rec: Review and submit for the next City Council agenda. Review the presentation on the investment graphs. Review the investment activity for June 2002. Review status of capital projects and cash-flow projections. Action: B. State of California Local Agency Investment Fund Balance for the month of June 2002 Rec: Informational item for the Committee to review. No action required C. California Asset Management Program (CAMP) June Statement Rec: Informational item for the Committee to review. No action required D. City and Redevelopment Agency Monthly Financial Reports for City Council for June 2002 Rec: Report and submit to City Council Action: E. Parkview Professional Office Buildings - Financial Report for June 2002 Rec: Review and file report Action: 2 072402 wPd INVESTMENT & FINANCE COMMITTEE AGENDA July 24, 2002 F. Palm Desert Golf Course Facilities Corporation Financial Information for June 2002 (will be distributed at the meeting) 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, September 25, 2002 at 2:00 p.m. (A meeting will not be held in August) 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 17`" day of July, 2002. ana eal, F6@Drdi Secretary 3 072402.wp0 CITY OF PALM DESERT INVESTMENT & FINANCE COMMITTEE Minutes June 26, 2002, 2:00 p.m. North Wing Conference Room I. CALL TO ORDER A regular meeting was called to order by Jose Luis Espinoza, Finance Operations Manager/Acting Chairman on Wednesday, June 26, 2002 at 2:03 p.m. II. ROLL CALL Present: Absent: Jose Luis Espinoza, Acting Chairman None Thomas Jeffrey, Investment Manager Dick Kelly, Mayor Jean Benson, Mayor Pro-Tempore Steve Aryan, Asst. to the City Manager David Erwin, City Attorney Murray Magloff Bill Veazie Russ Campbell Everett Wood Also Present: Justin McCarthy, ACM Redevelopment Dennis Coleman, Redevelopment Finance Manager Rick Zessna, Head Professional - Desert Willow Diana Leal, Recording Secretary Guests: None III. ORAL COMMUNICATIONS - None IV. COMMITTEE MEMBER REPORTS Mr. Espinoza said that Mr. Gibson inquired if the Investment and Finance Committee would like to not hold a meeting in August. The committee members agreed not to hold a meeting in August. 1 62602."d INVESTMENT & FINANCE COMMITTEE MINUTES June 26, 2002 Ms. Benson said that she, Mr. Kelly and Mr. Spiegel will be attending a League of California Cities meeting and will not be available to attend the July 24, 2002 meeting. Mr. Espinoza.asked if the other committee members would be available to attend on July 24 as a quorum, six members in attendance, is necessary to transact business. The members stated that they would be available to attend. V. CONSENT CALENDAR A. Approval of Minutes Motion was made by Mr. Campbell and seconded by Ms. Benson to approve the Minutes of the May 22, 2002 meeting as submitted. Motion carried. VI. CONSENT ITEMS HELD OVER None. VII. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for May 2002 Mr. Jeffrey gave a brief overview of the May 2002 Investment Reports. For the month ended May 31, 2002, the book value of the City Portfolio was approximately $189,103,000. This represented a $25 million increase from prior month due to receipt of property taxes. The City earned approximately $440,000 in interest in May. The portfolio yield-to-maturity was 2.92%. For the month ended May 31, 2002, the book value of the RDA Portfolio was approximately $103,648,000. The RDA earned approximately $214,000 in interest in May. The portfolio yield-to-maturity was 2.38%. Mr. Jeffrey purchased $19.6 million of securities in May. B. State of California Local Agency Investment Fund Balance for the Month of May 2002 Mr. Espinoza said that as of May, 2002 the City has $37 million and in the Redevelopment Agency account there is $40 million. Both accounts will decrease by $3.5 million each to be transferred from LAIF to CAMP. 2 62602.wptl INVESTMENT & FINANCE COMMITTEE MINUTES June 26, 2002 9 C. California Asset Management Program (CAMP) Mr. Jeffrey stated that, henceforth, the Finance Committee would be receiving a monthly account statement from CAMP, so long as the City maintained balances there. The bulk of the City money currently invested with CAMP would be withdrawn and reinvested in higher-yielding assets once the California State budget crisis is over. Ms. Benson asked why only $23 million had been transferred from LAIF to CAMP when the Finance Committee had originally authorized $30 million. Mr. Jeffrey responded that $30 million will be invested in CAMP, with the difference being transferred over the next few days so that the City can maximize its LAIF interest. Ms. Benson then asked if such a transfer was still necessary, in view of a recent Court of Appeal decision in Jarvis v. Connell that authorized LAIF withdrawals as continuing appropriations. Mr. Jeffrey responded that the transfer was still necessary since the State budget approval process would probably continue into the next fiscal year and new litigation might be filed. Mr. Erwin asked why the Jarvis litigation had been initiated. Mr. Jeffrey responded by briefly discussing the history of the Jarvis litigation. He closed by stating that if SB 68 (Baffin) is enacted, the LAIF should be completely removed from the Jarvis litigation, which is currently on appeal. D. City and Redevelopment Agency Monthly Financial Reports for City Council for May 2002 Mr. Espinoza said that for the year ending they are estimating $112,000 net gain over expenditures. Mr. Kelly asked if there would be a surplus. Mr. Espinoza said that he believes that there will be a surplus. Depending on what accruals and receivables come in. He took last year's accruals and receivables, with the exception of sales tax, and made a projection. E. Parkview Professional Office Buildings - Financial Report for May 2002 Mr. Espinoza said that at this time the office complex is 95% occupied. He said that the reason why the rentals were down last year was due to the loss of a client (WMA). The Cove Communities occupied the vacant space, however, they requested to use some of the space, therefore;the City is using the extra space for storage. 3 62602.wpd INVESTMENT & FINANCE COMMITTEE MINUTES June 26, 2002 F. Palm Desert Golf Course Facilities Corporation Financial Information for May 2002 Rick Zessna, Desert Willow Head Professional said that year-to-date they have not met their goals for the budget, however they are beating last year's numbers. All things considered, with golf, the 9-1-1 incident and the economy they are fairing better then the competitors. Food and Beverage is doing quite well. Since his arrival in June and Rodney's in May, they have made quite a few changes to try to improve the facility. They have reduced the amount of money invested in merchandise. They have a better grasp on the overall activities of the facility. Mr. Espinoza said that at the last meeting Ms. Benson brought up complimentary rounds. He referred to page 12 and 13 which indicates the complimentary rounds. Mr. Zessna said that it is very important to promote the golf course through corporate outings. There are business people who make advance trips. They will be set up with rounds of golf so that they can promote the facility. Mr. Kelly said that of the 50 most friendly golf courses for women, Desert Willow was voted number 17 in the nation, and of the public facilities it is number one in the valley. Mr. Zessna said that Desert Willow is recognized all around the country, if not the world, as a fantastic golf facility. Mr. Magloff asked how the restaurant was doing and how was the evening business doing. Mr. Zessna said that they are doing rather well. The breakfast was changed from 7:00 a.m. to 8:00 a.m. as there weren't enough activities. They can bring one chef in and have him prepare the breakfast with one or two servers and they are fine. He said that they do not serve dinner, however, they do have outings (i.e. weddings, bar mitzvah's, birthday parties, etc.). Ms. Benson said that last year it was mentioned that Desert Willow would have dinners on Thursday, Friday and Saturday this year, but they did not. Mr. Zessna said that it would be better to have dinner on those days when there is a hotel as it provides the base. Mr. Kelly said that the banquet business does very well. None of the country clubs do well serving dinner because if no one shows up, the country club is still required to pay for the dinners. 4 62602.wpd INVESTMENT & FINANCE COMMITTEE MINUTES June 26, 2002 i i Mr. Wood asked if there was a projected time for a hotel to be placed at Desert Willow. Mr. Kelly said that there have been many interested parties, but they have had trouble obtaining financing. Fortunately, Desert Willow is doing well due to the time shares. Mr. Magloff asked if the Redevelopment Agency could utilize their funds to finance a hotel. Mr. Kelly said that RDA could use their funds to fund a hotel. Ms. Benson said that the problem was that the hotels that have approached the City have requested more money than can be given. Mr. Kelly said that it was not uncommon to see other cities that give up to $30 million to entice the hotels as they are in dire need of having a hotel. The City is not in this position. Mr. Veazie said that the valley has nationally renowned golf courses that receive a tremendous amount of television exposure when professionals play. Desert Willow does not receive as much exposure as do some of the other golf courses in the valley. Mr. Kelly said that Desert Willow receives a great deal of exposure just by word of mouth. Desert Willow has the advantage that there are not a lot of homes on both sides which gives you a great view. Even the most prestigious golf courses have condos or homes on both sides which takes away from the beautiful view. Mr. Veazie said that Desert Willow would be considered reasonable cost compared to some of the other golf courses. Mr. Zessna said that Desert Willow is considered high end during the season, of course the great benefit to the residents is that they can play for$45 when the outside play is paying $165/round. VIII. CONTINUED BUSINESS - None. IX. 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. 1 5 e26az.wve INVESTMENT & FINANCE COMMITTEE MINUTES June 26, 2002 B. Bond Issuance by Palm Desert Financing Authority Mr. Coleman said that with respect to the Project Area No. 2 bonds, at the last meeting he indicated that they were going with the insurance commitments from both MBIA and AMBAC. They did receive the commitments. He also mentioned that they were trying to reduce the coverage from $1.60 to $1.25. They thought that, given the market, they would be able to get it at $1.30. They met certain milestones and are at $1.20 now. They did not know if the insurance companies would honor it given the current conditions. They received the insurance commitment from MBIA indicating that it was at $1.20. In the bond issue that was done in November for Project Area No. 4, they obtained the cost of insurance at 150 basis points of total debt service, which is one and one half percent of the total debt service. They got Project Area No. 1 back in March at 120 basis points and they obtained 82 '/z basis points for Project Area No. 2. It turns out that Project Area No. 2 had a shadow rating, which is a rating that the rating agencies give that they do not make the Agency aware of, but they tell the insurance agencies and that is that this project area has "A" rating. They received a surety of at 3%: They have been getting the surety at 4%. With the savings in insurance, it turns out they did quite well. They priced the bonds last week, meaning they were pre-sold. The underwriters did a fantastic job. They received several comparisons of what was going on in the market and a lot of the information they received did not point to one specific place. It was an interesting market that there were a lot of bond issues that were coming out to market and some that had just been out. It turns out that some of the bond issues that came out before us weren't totally sold. They were allocations (unsold) at different yields. They received yields from between 1.75% to 5.07%. This is reflected on the page titled "pricing summary". The 20 year maturity they received at 5.07% shows how the market has moved because back in March when it was done they received a 30 year at 5.06. Overall, they were able to get this bond issue sold, which will close on July 11. They are pointing out that they are basically paying the same debt service as before without lengthening the maturities and are pulling out $1.18 million in new money proceeds to utilize in projects. They are quite happy with the outcome. The underwriting team was a team they have used before, Kinsell and Stinson, they have done a wonderful job. Mr. Coleman said that they are in the process of doing the tax allocation bond for housing to buy Country Club Estates. They are also looking at money for building new apartments that they have (Santa Rosa Villas) and reimbursing the Agency for land. The net amount of money necessary is approximately $11.6 million. Currently they have the tax increment verification report by the consultant. After reviewing the document and providing final comments, the document will be ready to be sent to the insurance companies. They are trying to solicit a bid from AMBAC and 6 62602.wpd INVESTMENT & FINANCE COMMITTEE MINUTES June 26, 2002 MBIA. MBIA has done most of the Agency's bonds in terms of insurance. They just want to make sure with AMBAC they have another play, in case for whatever reason they cannot obtain insurance from MBIA. AMBAC has not been successful in bidding for the insurance, but they are coming closer and are beginning to understand the Agency's credit. They are hoping to receive an insurance commitment by July 12 after which time they can pre-sell the bond as is normally done by the 17'h of July and close it on the first week in August. The market has been shifting. It is still a good time to issue bonds for new money. There were additional bond of 115% coverage on the last bond. Mr. Campbell asked if Mr. Coleman felt that the real estate market was not going to do well. Mr. Coleman said that in talking with the insurance company, they believe that it is a very good and stable market. Usually once a year, they ask that the Agency provide them with an update on various information. They want to know how much money has been received, where they are on a coverage ratio for all of the bond issues and such. They have stopped asking for the information. When Mr. Coleman asked why this was not being done, they said that those people were transferred to the hospital industry because they feel that real estate is stable enough that they do not need to have people there. Mr. McCarthy said that the single family detached housing market is rate driven. When the rates leave the market, the market will dry up a bit. In terms of the industrial and commercial markets, you see a lot of refinance going on. People getting new debt on and are being able to up their cash flow. They are pulling money out of their commercial investments. It is a much more disciplined market than it was in the past. Commercial and industrial is demand-driven and when demand drives up because of higher financing cost, you will probably see some values fall back. Mr. Veazie said that at a prior meeting they had discussed about getting $20 million instead of$17 million. Mr. Coleman said that they were going to refinance the 1995 bonds as well, however, because they reached the $1.20 coverage, they left them alone. They were originally doing this for coverage purposes because they needed to do this in parity and they wanted to bring$1.60 down to $1.20. The documents stated that when the assessed valuation for the top ten tax payers is less than 40% of the project area and the top one is below 20% you reach the $1.20 coverage. Their only worry was whether or not the insurance companies would buy off and they did. When they bought off on it, there was no sense in refunding the 1995 bond issues as they already maintain the coverage and from a price standpoint it was actually a negative return. They had to do it when they thought they needed for parity for both of them. However, once it did not make economic sense, they carved it out and the savings went up. They were talking about a $600,000 in savings, now because of taking that out and not moving the principal payments from August to 7 62602.wod INVESTMENT & FINANCE COMMITTEE MINUTES June 26, 2002 r February to coincide, however this was left alone and they were able to pull out 1.1 to 1.2. Mr. Veazie said that one of the driving factors for the personal and private real estate boom is the same thing that provided the 5% bonds. When the Agency is unable to sell bonds any longer, mortgages at the lowest levels in years will continue to decline. Mr. McCarthy said that hotels are unique in the real estate market. They tend to be the most difficult to finance of all the classes be it retail, industrial or hotels. As capital gets allocated to various asset classes, the least amount and probably the latest capital goes to the hotel and return is the highest. In terms of the risk capital placed, they want high yields and on the debt side, they may not want as high a yield, however what they are doing is underwriting at a much lower level, 50-60% below the value, which is making it that much harder to attract the equity capital to finance those projects. Mr. Zessner asked if the single family homes are mainly driven from the hotel in the 20-40 age bracket. Mr. McCarthy said that one of the growth industries here is resorts and casinos. The casinos are driving the moderate income housing in the $200,000 range. The average mortgage . rate is $1,200/month. In some cases for a 3-4 bedroom homes this is only about $200 above rental rates and after taxes it is probably more cost effective. Mr. Kelly.said that the school system is booming. It is often mentioned that the City is tourist and agriculture, but he thinks that the City has a tremendous medical industry (hospitals, doctors and nursing homes). Ms. Benson said that the City also has quality of life issues for people that are looking for the overall attractions. Mr. Veazie said that he was recently at the Desert Orthopedic Center at Eisenhower Medical Center and spoke to some people who are coming here to this facility from San Diego because Eisenhower has a more modern facility and equipment. X. NEXT MEETING - Wednesday, July 24, 2002 at 2:00 p.m. 8 62602.wpd INVESTMENT & FINANCE COMMITTEE MINUTES June 26, 2002 c XI. ADJOURNMENT There being no further business, the meeting was adjourned by Mr. Espinoza at 2:35 p.m. Respectfully submitted, Diana Leal, Recording Secretary 9 62602.wpd Ri Paul S. Gibson C.C.M.T. Treasurer Thomas W. Jeffrey, J.D., M.B.A., Deputy City Treasurer Treasurer's Commentary The Federal Open Market Committee("FOMC")has adopted a neutral stance on interest rates for the foreseeable future. In all likelihood, the FOMC will not raise interest rates this year due to continued instability in the equity markets, which is jeopardizing the economic recovery. The immediate trigger for this instability is continuing disclosures of fraud in the way that corporations report their earnings. �\ � r This scandal has had a corrosive effect on investor confidence. Foreign investors are selling U.S. Dollar-denominated equities and investing elsewhere. U.S. investors are selling in waves every time that the market rallies, thereby depressing those rallies. Hedge funds are also contributing to downward market momentum by"shorting" stocks. A floor for the bear market, which continues to ratchet steadily downward, is not yet in sight. Turmoil in the equity markets has caused a"flight to safety" to the bond market, depressing bond yields. Investor skepticism over government efforts to correct the fraud problems has also been a factor. Congress, however, is poised to enact legislation that will mandate tougher criminal penalties for corporate misconduct. Pis ii C..C..M r Treasurer PORTFOLIO STATISTICS Dollars in Thousands JUN-02 MAY-02 APR-02 MAR-02 FEB-02 JAN-02 CITY Month-End Book Value"' $ 195,867 $ 189,180 $ 164,638 $ 163,593 $ 165,878 $ 165,778 Month-End Market Value"' $ 197,955 $ 191,365 $ 166,845 $ 165,816 $ 168,362 $ 188,297 Paper Gain (Loss) $ 2,088 $ 2,185 $ 2,207 $ 2,223 $ 2,484 $ 2,519 Interest Earnings $ 453 $ 440 $ 420 $ 448 $ 445 $ 488 Yield-To-Maturity 2.86% 2.92% 3.18% 3.17% 3.27% 3.27% Weighted Maturity(Days) 295 292 338 332 333 325 Effective Duration 0.11 0.13 0.17 0.15 0.18 0.19 RDA Month-End Book Value"' $ 92,648 $ 99,197 $ 101,608 $ 129,595 $ 106,429 $ 85,586 Month-End Market Value"' $ 94,673 $ 101,214 $ 103,579 $ 131,503 $ 108,405 $ 87,496 Paper Gain (Loss) $ 2,025 $ 2,017 $ 1,971 $ 1,908 $ 1,976 $ 1,910 Interest Earnings $ 198 $ 214 $ 232 $ 257 $ 205 $ 184 Yield-To-Maturity 2.37% 2.38% 2.42% 2.28% 2.51% 2.45% Weighted Maturity(Days) 166 158 154 132 160 202 Effective Duration 0.16 0.15 0.16 0.14 0,18 0.24 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 30 June 2002 Dollars in Thousands Ageing Interval Market Value General Fund Agei < 1 M $ 66,978ng <2M 9,035 <3M 3,000 80 <6M 12,075 61 <1 Y R 18,066 e0 <2YR - o <3YR 3 40 <4YR y° 20 11 17 <5YR 6 3 ? a<:. 0 >5YR 0 Total: $ 109,154 <1M <2M <3M <6M <1YR <2YR Credit Guali AA Ratinas• Market Value tY ftijg AAA $ 72,000 AAA �/ A 37%AA 3,032 002% A 4,076 At/Pl Al/P1 15,969 8% Unrated'" 98,385 Unrated ' Total: $ 193,462 51% Sector Market Value Asset Allocation Money Market Commercial U.S.Treasury $ 22,865 Funds Paper Federal Agency 27,133 6° Money Market Funds 55,853 MTNs Commercial Paper 15,969 Federal A ency 5% 9 MTNs 10,139 14°fo LAIF LAIF 30,500 RDA Loan 31,003 U.S.Treasury " 16/ Total: $ 193,462 120% RDA Loan 16% Month City Yield LAW Yield Variance Performance Ju101 4.53 4.64 -0.11 Aug 4.42 4.50 -0.08 6.5 Sep 4.28 4.35 -0.07 Oct 3.98 3.79 0.19 5.6 Nov 3.69 3.53 0.17 Dec 3.54 3.26 0.28 0 4.5 Jan02 3.27 3.07 0.20 3.5 k � Feb 3.27 2.97 0.31 Mar 3.17 2.86 031 25 ° Apr 3.18 2.85 0.34 Jul01 Aug Sep Oct Nov Dec Jan02 Feb Mar Apr May Jun May 3.06 2.74 0.32 Jun 2.86 2.69 0.18 0 LAIF Yield ®City Yield ` Standard and Poor's Credit Ratings " LAIF, HighMark, CAMP, and City Loan to RDA Page 2 of 7 City of Palm Desert Portfolio Holdings 30 June 2002 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P Medium-Term Notes $ 1,000,000 ASSOCIATES 6.50 8115102 $ 1,002,489 4.38 100.54 $ 1,005,442 Aa3 AA- $ 2,000,000 DU PONT 6.75 10/15/02 $ 1,996,652 6.81 101.33 $ 2,026,616 Aa3 AA- $ 2,000,000 GENERAL ELECTRIC 6.52 10/8/02 $ 1,998,619 6.80 101.19 $ 2,023,718 Aaa AAA $ 1,000,000 GENERAL ELECTRIC 6.65 9/3/02 $ 1,003,789 4.36 100.77 $ 1,007,736 Aaa AAA $ 4,000,000 GENERAL MOTORS 5.95 3/14/03 $ 3,999,894 5.94 101.89 $ 4,075,544 A3 BBB+ $ 10,000,000 Subtotals $ 10,004,442 5.97 $ 10,139,055 Commercial Paper-Discount $ 2,030,000 GENERAL ELECTRIC 2.08 1/15/03 $ 1,999,036 2.17 99.00 $ 2,009,689 P-1 A-1+ $ 4,015,000 GENERAL ELECTRIC 1.72 7/15/02 $ 3,999,654 1.75 99.03 $ 4,012,089 P-1 A-1+ $ 6,000,000 GENERAL ELECTRIC 1.76 1/6/03 $ 5,943,387 1.83 10.00 $ 5,943,000 P-1 A-1+ $ 2,015,000 MERRILL LYNCH 1.95 11/25/02 $ 1,995,354 2.00 99.26 $ 2,000,006 P-1 A-1+ $ 2,023,000 WELLS FARGO BANK 2.01 12/26/02 $ 1,999,167 2.10 99.10 $ 2,004,794 P-1 A-1 $ 16,083,000 Subtotals $ 15,936,597 1.91 $ 15,969,578 Agencies-Coupon $ 4,000,000 FED HOME LOAN BANK 3.50 816/02 $ 3,999,405 3.66 100.16 $ 4,006,250 Aaa AAA $ 2,000,000 FED HOME LOAN MTG 6.63 8/15/02 $ 1,999,786 6.72 100.56 $ 2,011,250 Aaa AAA $ 2,000,000 FED NATIONAL MTG 6.75 8/15/02 $ 2,005,766 4.29 100.59 $ 2,011,875 Aaa AAA $ 8,000,000 Subtotals $ 8,004,957 4.58 $ 8,029,375 Agencies-Discount $ 2,071,000 FED HOME LOAN BANK 3.46 7/30/02 $ 1,999,741 3.65 99.86 $ 2,068,101 Aaa AAA $ 1,000,000 FED HOME LOAN BANK 2.34 7/23/02 $ 980,175 2.44 99.89 $ 998,900 , Aaa AAA $ 2,048,000 FED HOME LOAN BANK 2.34 10/7/02 $ 2,000,077 2.45 99.54 $ 2,038,579 Aaa AAA $ 3,977,000 FED HOME LOAN MTG 2.30 7/18/02 $ 3,900,774 2.40 99.92 $ 3,973,818 Aaa AAA $ 2,000,000 FED HOME LOAN MTG 2.35 10/10/02 $ 1,952,608 2.46 99.52 $ 1,990,400 Aaa AAA $ 4,080,000 FED NATIONAL MTG 2.21 3114/03 $ 3,999,350 2.31 98.76 $ 4,029,408 Aaa AAA $ 2,000,000 FED NATIONAL MTG 1.81 9/16/02 $ 1,985,621 1.85 99.63 $ 1,992,600 Aaa AAA $ 2,034,000 ' SALLIEMAE 2.13 2/7/03 $ 1,999,461 2.22 98.90 $ 2,011,626 Aaa AAA $ 19,210,000 Subtotals $ 18,817,807 2.45 $ 19,103,432 U.S.Treasury-Coupon $ 1,340,000 U.S. TREASURY 6.25 8/31/02 $ 1,340,785 5.84 100.75 $ 1,350,050 Aaa AAA $ 15,194,000 U.S. TREASURY 5.88 9/30/02 $ 15,194,985 5.84 101.06 $ 15,355,436 Aaa AAA $ 16,634,000 Subtotals $ 16,535,771 6.84 $ 16,706,486 U.S.Treasury-Discount $ 6,170,000 U.S.TREASURY 5.03 8/15/02 $ 4,718,446 5.82 99.83 $ 6,159,264 Aaa AAA $ 6,170,000 Subtotals $ 4,718,446 5.82 $ 6,159,264 NR = Not Rated Page 3 of 7 City of Palm Desert Portfolio Holdings 30 June 2002 Market Ratings Par Value Issuer I Couponj Maturity Cost I YTM I Price I Value I Moody's I S&P LGIPs $ 30,500,000 L.A.1.F. 0.00 711/02 $ 30,500,000 2.69 100.00 $ 30,500,000 NR NR $ 30,500,000 Subtotals $ 30,500,000 2.69 $ 30,500,000 Pooled Funds-AIM $ 18,970,997 PRIME PORTFOLIO 0.00 7/1/02 $ 18,970,997 1.41 100.00 $ 18,970,997 Aaa AAA $ 18,970,997 Subtotals $ 18,970,997 1.41 $ 18,970,997 Pooled Funds-HighMark $ 4,414,615 CITY MAIN SWEEP 0.00 7/1/02 $ 4,414,615 0.76 100.00 $ 4,414,615 NR NR $ 55,000 DESERT WILLOW SWEEP 0.00 7/1/02 $ 55,000 0.76 100.00 $ 55,000 NR NR $ 494,034 GOLF COURSE SWEEP 0.00 7/1/02 $ 494,034 0.76 100.00 $ 494,034 NR NR $ 1,615,056 OFFICE COMPLEX SWEEP 0.00 7/1/02 $ 1,615,056 0.76 100.00 $ 1,615,056 NR NR $ 6,678,705 Subtotals $ 6,578,706 0.76 $ 6,578,706 Pooled Funds-CAMP $ 30,303,375 C.A.M.P. 0.00 7/1/02 $ 30,303,375 1,77 100.00 $ 30,303,375 N/A AAA $ 30,303,375 Subtotals $ 30,303,375 1.77 $ 30,303,375 City Loan to RDA $ 31,002,917 CITY OF PALM DESERT 0.00 7/1132 $ 31,002,917 2.69 100.00 $ 31,002,917 NR NR $ 31,002,917 Subtotals $ 31,002,917 2.69 $ 31,002,917 Total Investments $ 193,352,993 $ 191,374,013 2.86 $ 193,462,184 Cash $ 50,618 OFFICE COMPLEX CHKG 0.00 7/1/02 $ 50,618 0.00 100.00 $ 50,618 NR NR $ 4,207,049 CITY MAIN CHKG 0.00- 7/1/02 $ 4,207,049 0.00 100.00 $ 4,207,049 NR NR $ 153,218 DESERT WILLOW CHKG 0.00 7/1/02 $ 153,218 0.00 100.00 $ 153,218 NR NR $ 14,126 CPD GOLF COURSE 0.00 7/1/02 $ 14,126 0.00 100.00 $ 14,126 NR NR $ 30,181 OFFICE COMPLEX TRUST 0.00 7/1/02 $ 30,181 0.00 100.00 $ 30,181 NR NR $ 37,789 RECREATIONAL FAC CHKG 0.00 7/1/02 $ 37,789 0.00 100.00 $ 37,789 NR NR $ - VACATION INN CHKG 0.00 7/1/02 $ - 0.00 100.00 $ NR NR $ 4,492,981 Subtotals $ 4,492,981 $ 4,492,981 Cash and Investments $ 197,845,975 $ 195,866,994 $ 197,955,165 NR = Not Rated Page 4 of 7 Palm Desert Redevelopment Agency-Portfolio Characteristics 30 June 2002 Dollars in Thousands Ageing interval Market Value <1 M $ 83,110 Portfolio Ageing w/o SLGSs <2M <3M 843 100 <6M 90 80 <1YR 196 0 70 <2YR 1,031 a 60 <3Y R 6,713 50 0° 40 <4YR - a30 <5YR 2010 0 1 0 0 1 7 0 >SYR 0 Total: $ 91,893 <1M <2M <3M <6M <lYR <2YR <3YR <4YR Quality Market Value Credit Quality vu Ai/pi AAA $ 38,160 AA - AAA A - 40°/ Unrated" A1/P1 - 60% Unrated" 56,409 AA Total: $ 94,569 0'/ A o=/> Money Market Sector Market Value Asset Allocation Funds U.S.Treasury $ 8,782 37% Federal Agency Money Market Funds 35,232 Federal Agency O LAIF 50,555 0% --�- Commercial Paper - LAIF Corporate Bonds - U.S.Treasury ' 54% Total: $ 94,569 Month RDA Yield LAIF Yield Variance Pertormance Julo1 4.08 4.64 0.56 Aug 3.96 4.50 -0.54 7.0 Sep 3.69 4.35 -0.66 6.0 Oct 3.04 3.79 -0.74 Nov 2.83 3.53 -0.69 5.0 Dec 2.59 3.26 -0.67 40 Jan02 2.46 3.07 -0.61 Feb 2.51 2.97 -0.46 3.0 11 t Mar 2.28 2.86 -0.59 2.0 Apr 2.42 2.85 -0.43 Jul01 Aug Sep Oct Nov Dec Jan02 Feb Mar Apr May Jun May 2.38 2.74 -0.36 Jun 2.37 - 2.69 -0.32 pLA1F Yield FD RDAYteid ' Standard and Poor's Credit Ratings " LAIF and HighMark Sweep Page 5 of 7 Palm Desert Redevelopment Agency Portfolio Holdings 30 June 2002 Market Ratings Par Value Issuer lCouponj Maturity Cost I YTM I Price I Value I Moody's I S&P U.S.Treasury-Coupon $ 422,700 UNITED STATES TREASURY 6.25 8/31/02 $ 423,204 5.43 100.75 $ 425,870 Aaa AAA $ 405,200 UNITED STATES TREASURY 6.25 8/31/02 $ 405,683 5.43 100.75 $ 408,239 Aaa AAA $ 9,100 UNITED STATES TREASURY 6.25 8/31/02 $ 9,111 5.43 100.75 $ 9,168 Aaa AAA $ 837,000 Subtotals $ 837,998 5.43 $ 843,278 U.S.Treasury-Discount $ 198,000 UNITED STATES TREASURY 4.70 2/15/03 $ 150,793 5.45 98.93 $ 195,889 Aaa AAA $ 181,000 UNITED STATES TREASURY 4.63 2/15/04 $ 130,168 5.51 95.82 $ 173,432 Aaa AAA $ 7,143,000 UNITED STATES TREASURY 4.59 8/15/04 $ 4,989,671 5.54 93.97 $ 6,712,563 Aaa AAA. $ 532,400 UNITED STATES TREASURY 4.66 8/15/03 $ 394,279 5.47 97.78 $ 520,586 Aaa AAA $ 344,600 UNITED STATES TREASURY 4.66 8/15/03 $ 255,200 5.47 97.78 $ 336,953 Aaa AAA $ 8,399,000 Subtotals $ 5,920,112 5.53 $ 7,939,424 LGIPs $ 36,500,000 L.A.I.F. 0.00 7/1/02 $ 36,500,000 2.69 100.00 $ 36,500,000 NR NR $ 14,055,000 L.A.I.F. BOND PROCEEDS 0.00 7/1/02 $ 14,055,000 2.69 100.00 $ 14,055,000 NR NR $ 50,555,000 Subtotals $ 50,555,000 2.69 $ 50,555,000 Pooled Funds-AIM $ 29,376,895 PRIME PORTFOLIO 0.00 7/1/02 $ 29,376,895 1.41 100.00 $ 29,376,895 Aaa AAA $ 29,376,895 Subtotals $ 29,376,896 1.41 $ 29,376,895 Pooled Funds-HighMark $ 5,648,512 HOUSING AUTH CHKG 0.00 7/1/02 $ 5,648,512 0.76 100.00 $ 5,648,512 NR NR $ 206,139 HOUSING AUTH TRUST 0.00 7/1/02 $ 206,139 0.76 100.00 $ 206,139 NR NR $ 5,854,651 Subtotals $ 5,854,651 0.76 $ 5,854,651 Investments $ 95,022,546 $ 92,544,657 2.37 $ 94,569,248 Cash $ 50,856 HOUSING AUTH CHKG 0.00 7/1/02 $ 50,856 0.00 100.00 $ 50,856 NR NR $ 52,540 HOUSING AUTH TRUST 0.00 7/1/02 $ 52,540 0.00 100.00 $ 52,540 NR NR $ . 103,396 Subtotals $ 103,396 $ 103,396 Cash and Investments $ 95,125,942 $ 92,648,053 $ 94,672,644 NR = Not Rated Page 6 of 7 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 30 June 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 24 July 2002, PauLS. 6iaw$14 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 bj ". _ lJ.S:Treasures,' S Years; ',No Limit: 5 Years '.No Limit 53601(c) CA State Debt 5 Years No Limit Not Authorized 53601 d) CA Local Agency Debt 5 Years No Limit Not Authorized 53601 ep -., Federal-Agencies''. 5 Years' No Limit 5 Years ,,',30% 53601 f ` 'Bankers's Acceptances '180:Da s 40% '' 1'8O Days r i A 1, 4 0q°' ,&'P 1 53601'(gf "?Cbmrnercial.Paper, 270 Days'tLimit -1+onP-1 270',Da's ,+.25%',°A=1£orK1 �53601 h "Ne otiable CDs- -' S Years5Years ' ;30g6' AA='orA63 53601 i Re os 1 Year > � 30D"' "s, `0 20% AAA'&Aaa 53601 i Reverse Re os 92 Da s Not Authorized 53601 ')' Medium-Terri Notes`. 5YearsA ' 3Years ', 30%- 5f2%, 53601(k)- Mutual'Funds '90DaaAAA&Aaa -90Days ,: 20% AAA&-Aaa ,'29.2%>l 38i9% ` 53601(I Trust Indenture Debt Not Authorized Secured Bank Deposits 5 Years Not Authorized 53601(n) Mortgage-Backed 5 Years (Issuer)& Not Authorized Securities A(Secud16429. LAIF - No Limit -. 15.9% 54t6%' 83.8% 100.0% 153601(m) 1 The City loan to RDA, which is not a bond, has been a proved by the Palm Desert City Council. Certified California Municipal Treasurer Page 7 of 7 STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER SACRAMENTO Local Agency Investment Fund PO Box 942809 —' Sacramento,Sacramento, CA 94209-0001 (916)653-3001 June,2002 Statement CITY OF PALM DESERT Account Number : 98-33-621 Attn: CITY TREASURER 73510 FRED WARING DRIVE PALM DESERT CA 92260 Transactions Effective Transaction Tran Confirm Authorized Amount Date Date Type Number Caller 06-07-2002 06-07-2002 RW 444191 THOMAS JEFFREY - 3,000,000.00 06-25-2002 06-24-2002 RW 697837 THOMAS JEFFREY - 3,500,000.00 Account Summary Total Deposit : 0.00 Beginning Balance : 37,000,000.00 Total Withdrawal : ' 6,500,000.00 Ending Balance : 30,500,000.00 Page : 1 of 1 STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER SACRAMENTO I � , Local Agency Investment Fund` PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 June, 2002 Statement PALM DESERT REDEVELOPMENT AGENCY Account Number : 65-33-015 Attn: TREASURER 73-510 FRED WARING DRIVE PALM DESERT CA 92260 Transactions Effective Transaction Tran Confirm Authorized Amount Date Date Type Number Caller 06-26-2002 06-26-2002 RW 453101 THOMAS W. JEFFREY - 3,500,000.00 Account Summary Total Deposit : 0.00 Beginning Balance : 40,000,000.00 Total Withdrawal : 3,500,000.00 Ending Balance : 36,500,000.00 Page : 1 of 1 C A I_ 1 1' O R N I A ASSET I STATEMENT MANAGEMENT PROGRAM 1 JOIN-1 1'UW"ERS AUTHORIT I" 1 ! SOOAIJFCRNIASCRFET 23RUFL< R SAN FRANCIscO cA11FORNIA 941 11 FOR ACCOUNT INFORMATION: 800-729-7665 STATEMENT DATE: 6/30/2002 CITY OF PALM DESERT ACCOUNT NUMBER: 553-00 ATTN: PAUL GIBSON 73-510 FRED WARING DRIVE FUND NAME: Cash Reserve Portfolio PALM DESERT,CA 92260 Page 1 of 1 Ac`count:Summary.s;of6/3 002Rff� Mau b Statement Income Dividends Capital Gains Total Shares Account Date Paid This Year Paid This Year Owned Value 6/30/2002 $36,405.00 $0.00 30,303,375.000 $30,303,375.00 ?ransacftiii►�Summa.afore6/7%2002 sW30l2002� £ ``M ' �" Beginning Balance Purchases Reinvestments Redemptions Ending Balance $23,268,087.26 $7.000,000.00 $35,287.74 $0.00 $30,303,375.00 eTFiADE" IMOSTING .,IT°�-' `°`' '�.'--'°'Y�p?s - DO" OU E SttARl;3 T�t'tIS DATE 3 DATE -r v NlS ON 6HTFI FISAC�TIO PRIG A.TR74 SACTIO sP"raSHARES OYYNED 06/01/02 06/01/02 Beginning Balance 23,268,087.260 06/26/02 06/26/02 Purchase-Wire Pur. $3,500,000.00 $1.00 3,500,000.000 26,768,087,260 06/27/02 06/27/02 Purchase-Wire Pur. $3,500,000.00 $1.00 3,500,000.000 30,268,087.260 06/30/02 06/30/02 Accrual Income Div Reinvestment-DIV $35,287.74 $1.00 35,287.740 30,303,375.000 Message Line: THE DIVIDEND YIELD FOR THE MONTH IS 1.77% THE ANNUALIZED YIELD IS 1.78% Effective June 24,2002,our new address is: 50 California Street,Suite 2300,San Francisco,CA 94111. Our other contact information remains the same- o et2l cn '+CCL 06 C O i w w — O N D\ C\ m ti O D\ N N \D 00 v 06 o Q 'all OW N tO'.�D n`J O 01W 'O W A' y o 0 0 o d o o � W tD •.- +O 0 0 ,\8 O d. R+. < a"G W �1 O D\ N J \D .-• G W r+ N_ ru N W=:.t w w Oti; N .+ \D J oo �D oo eo ',O N N•m J= O ii'r:.0 .W m- � O \D J A N Q\ W A •* J A O"=�0 C7.OuA;O. G rt- �W:s _ . N-\-+_ N O W O O IJ J J to �'J �D iY iD.. Oo th tli.:W O pt t Oo N ✓ N N to to to 01 N O O' xn x-* 40z �-• J O o7 A A to a, m ic, A Q �yJ to J'y.w N O : d o 000000 �' • ' x: � O (y 0 A o o Ntsm a ro 4• ro o � m W a\ O � O O to In �D V' O� C- N J J"J do m •�, w A O N N A O A N �D O'to J N. ._•+ -Oo 1 1j o all O J J T O A w ,.. J•N J. w 0 iD O O O O o O o '6 •6 O O 6 O p"O'O ` tl x X _ ft .t ` Y City of Palm Desert Parkview Office Complex Financial Statement for Fiscal Year 2001-2002 ' June-02 June-02 # % YTD YTD # '7 Budget Actual Variance Variance Budget Actual Variance Variance Revenues Rental $ 68,500 $ 78,231 $ 9,731 114.21% $ 822,000 $ 803,464 $ 18536 97.74% Dividends/Interest $ 4,500 $ 1,054 $ (3,446) 23.43% $ 52,500 $ 24,226 $ (28,274) 46.15% Total Revenues $ 73,000 $ 79,286 $ 6,286 108.61% $ 874,500 $ 827,690 $ (46,810) 94.65% Expenses Professional-Accounting&Auditing $ 75,600 $ 6,800 $ 68,800 8.99% $ 75,600 $ 81,600 $ (6,000) 107.94% Professional-Consultants $ 72,000 $ 5,616 $ 66,384 7.80% - - ' $ 72,000 $ 73,680 $ (1,680) 102.33% Tenant Improvements $ - 30,000 $ 480 $ 29,520 1.60% .' $ 30,000 $ 40,707 $ (10,707) 135.69% Repairs&Maintenance Building $ 96,000 $ 9,519 $ 86,481 9.92% $ 96,000 $ 118,127 $ (22,127) 123.05% Repairs&Maintenance-Landscaping $ 27,600 $ - $ 27,600 0.00% ...".�• $ 27,600 $ - $ 27,600 0.00% Utilities-Water $ 3,000 $ 107 $ 2,893 3.57% ,',; $ 3,000 $ 1,272 $ 1,728 42.40% Utilities-Gas/Electric $ 6100 $ 6,591 $ 74,419 8.12% -' ` $ 81,000 $ 84,170 $ (3,170) 103.91% Utilities-Trash $ 8,400 $ - $ 8,400 0.00% $ 8,400 $ 4,208 $ 4,192 50.09% Telephone $ 1,800 $ 153 $ 1,647 8.50% $ 1,800 $ 1,897 $ (97) 105.39% Insurance $ 6,250 $ - $ 6,250 0.00% + $ 6,250 $ - $ 6,250 0.00% Total Expenses $ 401,650 $ 29,255 $ 372,395 7.28"/0 i p ' -'..:.� $ 401,650 $ 405,660 $ (4,010) 101.00"/i Operat2ng Fncow... $ .•. (028r651i�-1$ S9i0"U >&3Q$rt6 2 214.22°a�,y Equipment Replacement Reserve - $ 10,000 $ 12,618 $ (2,618) 126.18% $ 120,000 $ 151,413 $ (31,413) 126.18% 2002 Investment Report2002 Invest Report City of Palm Desert Parkview Office Complex Vacancy Rate Schedule by Suite June 2002 Suite Square No. Tenant Feet 73-710 Fred Waring Drive -Two (2) Story Building 100 Hanover 1,915 100A EPA 645 102 Bergren 1,360 103 Multiple Sclerosis 488 104 Arthritis Foundation 960 106 Coachella Valley Economic Partnership 928 108 Assemblyman Kelly 785 112 Senator 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 604 203 Vacant 480 205 Vacant 700 208 Alzheimer's Association 960 2002 Investment Report2002 Vacancy Report City of Palm Desert Parkview Office Complex Vacancy Rate Schedule by Suite June 2002 Suite Square No. Tenant Feet 210 Wilson, Pesota&Pichardo 3,040 li 211 State of California Department of Food&Agriculture 937 217 Joe B. McMillan,. Esq. 775 220 CA.State Dept. of Agriculture 1,607 222 Cove Comission-Fire Marshal 1,900 222 CITY Storage-Vacant 1,081 Total square footage(2 story Building) 31,562 Vacancy Rate-2,261/31,562= 7.16% 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--2,261/51,191 4.42% Occupancy Rate-48,930/51,191 95.58% 2002 Investment Report2002 Vacancy Report T \ Finance Department MEMORANDUM To: Gloria Martinez, Records Technician 1 From: Diana Leal, Administrative Secretary Subject: Investment and Finance Committee Date: August 20, 2002 Attached is a copy of the July 24, 2002 Investment and Finance Committee meeting attendance register. The Investment and Finance Committee for August has been cancelled. Thank you for your assistance. Attachments (1) G.Tinance\Dma Lea1\Wpdm\1nvestment Committee\2002 Memos\City C1erk\7-24-02attendance.wpd . a . / � \ § / \ E � § § \ { uaa c 2a « Nt tel f / ® $ ) m \ 4 § \ I § / / ) ' � o k § } & � 3 z � » s e @ J � » _ CITY OF PALM DESERT INVESTMENT & FINANCE COMMITTEE AGENDA July 24,2002, 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 June 26, 2002, as submitted. Action: 1 072402 wpd INVESTMENT & FINANCE COMMITTEE AGENDA July 24, 2002 VI. CONSENT ITEMS HELD OVER None. VII. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for June 2002 Rec: Review and submit for the next City Council agenda. Review the presentation on the investment graphs. Review the investment activity for June 2002. Review status of capital projects and cash-flow projections. Action: B. State of California Local Agency Investment Fund Balance for the month of June 2002 Rec: Informational item for the Committee to review. No action required C. California Asset Management Program (CAMP) June Statement Rec: Informational item for the Committee to review. No action required D. City and Redevelopment Agency Monthly Financial Reports for City Council for June 2002 Rec: Report and submit to City Council Action: E. Parkview Professional Office Buildings - Financial Report for June 2002 Rec: Review and file report Action: 2 072402.wp0 INVESTMENT& FINANCE COMMITTEE AGENDA July 24, 2002 F. Palm Desert Golf Course Facilities Corporation Financial Information for June 2002 (will be distributed at the meeting) 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, September 25, 2002 at 2:00 p.m. (A meeting will not be held in August) 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 17'h day of July, 2002. f ana eal, fgc rdin6 Secretary 3 072402.wpd _ CITY OF PALM DESERT INVESTMENT & FINANCE COMMITTEE Minutes July 24, 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, July 24, 2002 at 2:07 p.m. II. ROLL CALL Present: Absent: Paul Gibson, Director of Finance Dick Kelly, Mayor Thomas Jeffrey, Investment Manager Jean Benson, Mayor Pro-Tempore Jose Luis Espinoza, Fin. Oper. Mgr. David Erwin, City Attorney Steve Aryan, Asst. to the City Manager Carlos Ortega, City Manager Murray Magloff Bill Veazie Russ Campbell Everett Wood Also Present: Justin McCarthy, ACM Redevelopment Dennis Coleman, Redevelopment Finance Manager Rodney Young, General Manager Desert Willow Diana Leal, Recording Secretary Guests: None 111. ORAL COMMUNICATIONS - Mr. Veazie said that one of the finest concepts of tax exempt bonds are public utility bonds, specifically, in the west coast, where they are called LA Department of Water and Power (LA DEWAPS), Sacramento Municipal Utility Districts (SACS MUDS), etc. He believes that the concept is wonderful considerably. If a district can be formed, or perhaps added to the Coachella Valley Water District and be called the Coachella Valley Water District and Electric District or an electric district by itself. Have it approved by the,state and able to float tax free 1 ]2602.wPE INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 bonds. The surrounding cities could benefit by obtaining money by floating a bond issue, tax free with a coverage estimate. The bond issue will cost a full month in interest at the time it is floated, however, they are estimating their revenues by comparing what other electric companies are making. He would hope that the City of Palm Desert would look into this concept. Mr. Gibson said that he believes that Council took action to go along with a study and if all of the other cities, through a cooperation, agree to move ahead, then the City of Palm Desert would be a participant. Unfortunately, at this point, the City of Palm Springs has expressed their desire to not move ahead. Therefore, the City of Palm Desert does not plan to move ahead. Another dilemma is that there is a price tag that the City would like to pay which may not be what Edison would like to have the City pay. Until these points are negotiated, it is unknown whether it would be reasonable or not. IV. COMMITTEE MEMBER REPORTS None. V. CONSENT CALENDAR A. Approval of Minutes Motion was made by Mr. Campbell and seconded by Mr. Veazie to approve the Minutes of the June 26, 2002 meeting as submitted. Motion carried. VI. CONSENT ITEMS HELD OVER None. VII. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for June 2002 Mr. Jeffrey gave a brief overview of the June 2002 Investment Reports and said that they were not the final numbers for June. The final numbers will be obtained once the auditors have made the necessary adjustments for fiscal year end. For the month ended June 30, 2002, the book value of the City Portfolio was approximately $195,900,000. The City earned approximately $463,000 in interest. The portfolio yield-to-maturity was 2.86%. For the month ended June 30, 2002, the book value of the RDA Portfolio was approximately $92,600,000. The RDA earned approximately $198,000 in interest. The portfolio yield-to-maturity was 2.67%. 2 72402 wpd INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 The asset allocation graph indicates that the amount of commercial paper has risen slightly. Basically, if there exists any excess cash staff is trying to fill up LAIF which is one of the high yielding assets. The final performance graph indicates that the difference between the City's portfolio yield and the LAIF portfolio yield is beginning to narrow in terms of the City's advantage over LAIF as some of the older securities are beginning to mature and staff is having to replace them with lower yielding securities. The Redevelopment Agency portfolio's variance, for the first time, is getting very close to LAIF. The reason being that it is the inverse of the City's situation with LAIF and the gap is narrowing between the two of them. Mr. Wood asked if there was a prediction of how the market would do. Mr. Jeffrey said that the stock market has not bottomed-out yet. He believes that bad news will continue through August. As far as the yield, the affect has been that there is a great deal of cash coming into the bond market. Some people think that when the stock market eventually does recover the cash will be coming out of the bond market. The federal funds counted 1.75%. They are running out of room to start making cuts, and there is no liquidity crisis in the market. The market is not in danger of a collapse. All of the corruption of the last 10 years is being corrected. The City is concentrating on commercial paper because it is about 10 basis points higher than federal agency discounts. B. State of California Local Agency Investment Fund Balance for the Month of June 2002 Mr. Magloff asked what LAIF does with the money and who is in charge of LAIF. Mr. Gibson said that they go out and invest the money. They match what their withdrawals are and the cash flow that comes in to determine what their needs are every day. Mr. Gibson said that the State Treasurer is the official person in charge, however, he has a board that oversees the LAIF accounts. Mr. Gibson said that since the State did not adopt a budget, there still remains a question as to whether the City can withdraw funds, if state warrants are not being issued. In light of this issue, the City deposited $30 million in funds into the California Asset Management Program (CAMP) and will have access to these funds if necessary. 3 ]2402.wPd INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 C. California Asset Management Program (CAMP) Mr. Campbell asked how long will the funds in CAMP last. Mr. Gibson said that after the election is over, sometime in November, he expects that the budget will approved. Mr. Jeffrey said that after the budget has been approved, the money in the CAMP account will be placed in high yielding assets. A nominal balance will be kept to keep the account open in case there is future need. D. City and Redevelopment Agency Monthly Financial Reports for City Council for June 2002 The figures for year to date for the City's general fund from Mar. - Jun. 30. The City generally accrues in July and August for receipts received in those months that are actually for the previous fiscal year. This includes sales tax. The City typically receives monthly advances. The two months in July in August are determined by the Government Finance Officers Associations that the City accrue those funds so that the City will accrue an additional $1,800,000 to the sales tax account. Instead of $11,000,000, the ending sales tax will be $12,800,000. On the transient occupancy tax (TOT), based on receipts received up to July, there should be $7,300,000 in TOT. All of the other figures given remain the same as is in the budget or are based on the accrual year-to-date actual amounts. There is a total general fund revenue of $33,800,000 with all accruals added on. With regard to expenditures, currently there is $29,300,000 with approximately, at least, an additional $1,000,000 expenditures. A payment of one month remains for the biggest expenditure which is the Sheriff's Department. Mr. Gibson expects that the ending expenditures will be somewhere between $30 and $31 million including encumbrances. Mr. Veazie said that the figures for the year-to-date for the property taxes represent $2.5 million, total general fund revenue $30.7 million. About 8% in the general fund is represented in the form of property tax income. Mr. Gibson said that as the City's other revenues grow, it will continue. The agreement with the County and the State is that the City will only receive 7% because the City is a no low property tax city. The City was formed at the time that Proposition 13 rolled the taxes back. E. Parkview Professional Office Buildings - Financial Report for June 2002 Mr. Jeffrey asked if there has been a rent increase or any variances. Mr. Gibson said that there are a few tenants that have come in. The City will end up with a net income of$270,617. Next year the roof will be redone with a coating. Goodwill will be moving out. This will leave office space available. At 4 72402.w d INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 this time, the City is considering using the available space for City staff as there is insufficient space at City hall. The City is in the process of doing a design for the Sheriff whereby they will move to another facility. Once the Sheriff Department moves out, their facility will become available. The City is also looking at City hall to better utilize space. Mr. Campbell asked where the Sheriff Department would be located. Mr. Gibson said that there was discussion of moving them across the street. F. Palm Desert Golf Course Facilities Corporation Financial Information for June 2002 Mr. Gibson said that a summary sheet was distributed to the committee which shows a comparison of the two fiscal years in total. Mr. Young said that the rounds are up. They have lost some groups, however, they will be aggressive in bringing the groups back. Mr. Wood inquired if there were any auxiliary revenues. Mr. Gibson said that with a corporation, the City and Redevelopment entered into an agreement with a time share product called Intrawest. They give the City fees based on the right field to play at Desert Willow. They will pay the City for the land they purchased to place the time shares on. If potential people buy the time shares, there will be a 50% discount for those individuals, plus a 20% discount to play at Desert Willow. Desert Willow utilizes those funds to pay for the Capital Improvements. Mr. Young said that if Desert Willow had a hotel, it would be easier to offer promotional deals. The Marriott has a promotion at this time whereby for$99 a person can have unlimited golf. They have 300 rounds a day. Mr. Young said that they have had special events at Desert Willow. A few days ago they had 36 kids from the Junior Golf Association. In addition, the National Golf Foundation has a type of "Bring your Daughter to Work Day" where Desert Willow offered a free clinic and 16 ladies that golfed. Vill. CONTINUED BUSINESS - None. IX. 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 72402.wae INVESTMENT & FINANCE COMMITTEE MINUTES July 24, 2002 B. Bond Issuance by Palm Desert Financing Authority Mr. Coleman provided the Committee with a pricing summary. The summary indicates July 17 and not the 11`h because it closed six days later due to a procedure error which occurred. The investment bankers were able to get the buyers to buy the bonds and keep them at the same rate. The investment for $15,604,000, the key note was basically the investment for the escrow. The bottom line is that the City pulled $1,177,000 out in new project funds and spent $4,000 more for the investment however it went in interest over to the City. The new bond issue is done. The yield and tax rate, in the 2022 maturity was a 5.00, discounted to yield 5.07. With the market at this time, a lot of money is going into bonds with depressingly yields. Mr. Coleman said that now that this bond is complete, they now have the bond they are working on to acquire 36 new housing units. This housing bond is approximately $12,155,000. The verification report is done on their increment and they have submitted it to MBIA and Ambac and are hoping to get commitments from both of them. Staff has tentatively budgeted a hundred basis points for the insurance commitment. The last time they obtained insurance on a housing bond it was about 45 basis points, it is unknown. The coverage they are looking at for this bond is almost at 2.15/1.00 in debt in parity after the other bonds are taken out. They are hoping to close this bond issue August 31 or thereabouts. They are going to beat the state as they are scheduled to get their ratings on their power bonds. Fortunately for the City, the State is activating their ratings and insurance commitment, they will be making presentations to buyers throughout the country. As this is being set up, the City will have time to get their bond done. If the rates hold to what has been seen in the last few days, this may be the second or third best bond in terms of yield because the City may be able to do a 30 year and a 5.10 yield which will be a very favorable rate. At the next meeting Mr. Coleman will have a pricing summary for the Committee. X. NEXT MEETING - Wednesday, September 25, 2002 at 2:00 p.m. XI. ADJOURNMENT There being no further business, the meeting was adjourned by Mr. Gibson at 2:44 p.m. Respec - Ily su itte , Dia ' Lea , � c rdi g Secretary 6 72402.wpd Paul S. Gibson, C.C.M.T., Treasurer Thomas W. Jeffrey, J.D., M.B.A., Deputy City Treasurer Treasurer's Commentary The Federal Open Market Committee ("FOMC") has adopted a neutral stance on interest rates for the foreseeable future. In all likelihood, the FOMC will not raise interest rates this year due to continued instability in the equity markets, which is jeopardizing the economic recovery. The immediate trigger for this instability is continuing disclosures of fraud in the way that corporations report their earnings. This scandal has had a corrosive effect on investor confidence. Foreign investors are selling U.S. Dollar-denominated equities and investing elsewhere. U.S. investors are selling in waves every time that the market rallies, thereby depressing those rallies. Hedge funds are also contributing to downward market momentum by"shorting"stocks. A floor for the bear market, which continues to ratchet steadily downward, is not yet in sight. Turmoil in the equity markets has caused a "flight to safety" to the bond market, depressing bond yields. Investor skepticism over government efforts to correct the fraud problems has also been a factor. Congress, however, is poised to enact legislation that will mandate tougher criminal penalties for corporate misconduct. Paul-S. qazo,14 C.C.M.T. Treasurer PORTFOLIO STATISTICS Dollars in Thousands JUN-02 MAY-02 APR-02 MAR-02 FEB-02 JAN-02 CITY Month-End Book Value"' $ 195,867 $ 189,180 $ 164,638 $ 163,593 $ 165,878 $ 185,778 Month-End Market Value"` $ 197,955 $ 191,365 $ 166,845 $ 165,816 $ 168,362 $ 188,297 Paper Gain (Loss) $ 2,088 $ 2,185 $ 2,207 $ 2,223 $ 2,484 $ 2,519 Interest Earnings $ 453 $ 440 $ 420 $ 448 $ 445 $ 488 Yield-To-Maturity 2.86% 2.92% 3.18% 3.17% 3.27% 3.27% Weighted Maturity(Days) 295 292 338 332 333 325 Effective Duration 0.11 0.13 0.17 0.16 0.18 0.19 RDA Month-End Book Value"' $ 92,648 $ 99,197 $ 101,608 $ 129,595 $ 106,429 $ 85,586 Month-End Market Value"' $ 94,673 $ 101,214 $ 103,579 $ 131,503 $ 108,405 $ 87,496 Paper Gain (Loss) $ 2,025 $ 2,017 $ 1,971 $ 1,908 $ 1,976 $ 1,910 Interest Earnings $ 198 $ 214 $ 232 $ 257 $ 205 $ 184 Yield-To-Maturity 2,37% 2.38% 2.42% 2.28% 2.51% 2.45% Weighted Maturity(Days) 166 158 154 132 160 202 Effective Duration 0.16 0.15 0.16 0.14 0.18 0.24 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 30 June 2002 Dollars in Thousands Ageing Interval Market Value General Fund Ag < 1 M $ 66,978eing <2M - 9,035 <3M 3,000 60 <6M 12,075 61 <1YR 18,066 0 60 <2YR - o <3YR 3 40 >i <4YR y° 20 11 17 <5YR 6 3 0 >5YR c p, f`- Total: $ 109,154 <1M <2M <3M <6M <1YR <2YR Credft Quali Ratings Market Value tY AAAna 2°i A AAA $ 72,000 s 1 ks a 2°/ AA 3,032 A 4,076 Al/Pt Al/P1 15,969 8' Unrated" 98,385 Unrated^ Total: $ 193,462 51�< Sector Market Value Asset Allocation Money Market Commercial U.S.Treasury $ 22,865 Funds Paper av< Federal Agency 27,133 Money Market Funds 55,853 MTNs Commercial Paper 15 969 Federal Agency 5'/ MTNs 10,139 14°/> 1 LAIF 30,500 All s F RDA Loan 31,003 U.S.Treasury Wit` Total: $ 193,462 12% RDA Loan 16% Month City Yield LAIF Yield Variance Performance Ju101 4.53 4.64 -0.11 Aug 4.42 4.50 -0.08 6.5 Sep 4.28 4.35 -0.07 Oct 3.98 3.79 0.19 _ 5.5 Nov 3.69 3.53 0.17 Dec 3.54 3.26 0.28 m 4.5 Jan02 3.27 3.07 0.20 3.5 Feb 3.27 2.97 0.31 6 Mar 3.17 2.86 0.31 2.5 a Apr 3.18 2.85 0.34 Jul01 Aug Sep Oct Nov Dec Jan02 Feb Mar Apr May Jun May 3.06 2.74 0.32 Jun 2.86 2.69 0.18 I]LAIF YeId pCity veld ' Standard and Poor's Credit Ratings LAIF, HighMark, CAMP, and City Loan to RDA Page 2 of 7 City of Palm Desert Portfolio Holdings 30 June 2002 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S a P Medium-Term Notes $ 1,000,000 ASSOCIATES 6.50 8/15/02 $ 1,002,489 4.38 100.54 $ 1.005,442 Aa3 AA- $ 2,000,000 DU PONT 6.75 10/15/02 $ 1,999,652 6.81 101.33 $ 2,026,616 Aa3 AA- $ 2,000,000 GENERAL ELECTRIC 6.52 1018/02 $ 1,998,619 6.80 101,19 $ 2,023,718 Aaa AAA $ 1,000,000 GENERAL ELECTRIC 6.65 9/3/02 $ 1,003.789 4.36 100.77 $ 1,007,736 Aaa AAA $ 4,000,000 GENERAL MOTORS 5.95 3114/03 $ 3,999,894 5.94 101.89 $ 4,075,544 A3 BBB+ is 10,000,000 Subtotals $ 10,004,442 5.97 $ 10,139,055 Commercial Paper-Discount $ 2,030,000 GENERAL ELECTRIC 2.08 1/15/03 $ 1,999,036 2.17 99.00 $ 2,009,689 P-1 A-1+ $ 4,015,000 GENERAL ELECTRIC 1.72 7/15/02 $ 3,999,654 1.75 99.03 $ 4,012,089 P-1 A-1+ $ 6,000,000 GENERAL ELECTRIC 1.76 1/6/03 $ 5,943,387 1.83 , 10.00 $ 5,943,000 P-1 A-1+ $ 2,015,000 MERRILL LYNCH 1.95 11/25/02 $ 1,995,354 2,00 99.26 $ 2,000,006 P-1 A-1+ $ 2,023,000 WELLS FARGO BANK 2.01 12/26/02 $ 1,999,167 2.10 99.10 $ 2,004,794 P-1 A-1 $ 16,083,000 Subtotals $ 15,936,597 1.91 $ 15,969,578 - Agencies-Coupon $ 4,000,000 FED HOME LOAN BANK 3.50 8/6/02 $ 3,999,405 3.66 100.16 $ 4,006,250 Aaa AAA $ 2,000,000 FED HOME LOAN MTG 6.63 8/15/02 $ 1,999,786 6.72 100.56 $ 2,011,250 Aaa AAA $ 2,000,000 FED NATIONAL MTG 6.75 8115/02 $ 2,005,766 4.29 100.59 $ 2,011,875 Aaa AAA $ 8,000,000 Subtotals $ 8,004,957 4.58 $ 8,029,375 Agencies- Discount $ 2,071,000 FED HOME LOAN BANK 3.46 7/30/02 $ 1,999,741 3.65 99.86 $ 2,068,101 Aaa AAA $ 1,000,000 FED HOME LOAN BANK 2.34 7/23/02 $ 980,175 2.44 99.89 $ 998,900 Aaa AAA $ 2,048,000 FED HOME LOAN BANK 2.34 10/7/02 $ 2,000,077 2.45 99.54 $ 2,038,579 Aaa AAA $ 3,977,000 FED HOME LOAN MTG 2.30 7/18/02 $ 3,900,774 2.40 99.92 $ 3,973,818 Aaa AAA $ 2,000,000 FED HOME LOAN MTG 2.35 10/10/02 $ 1,952,608 2.46 99.52 $ 1,990,400 Aaa AAA $ 4,080,000 FED NATIONAL MTG 2.21 3114/03 $ 3,999,350 2.31 98.76 $ 4,029,408 Aaa AAA $ 2,000,000 FED NATIONAL MTG 1.81 9/16/02 $ 1,985,621 1.85 99.63 $ 1.992,600 Aaa AAA $ 2,034,000 SALLIE MAE 2.13 2/7/03 $ 1,999,461 2.22 98.90 $ 2,011,626 Aaa AAA $ 19,210,000 Subtotals $ 18,817,807 2.45 $ 19,103,432 U.S.Treasury-Coupon $ 1,340,000 U.S.TREASURY 6.25 8/31/02 $ 1,340,785 5.84 100.75 $ 1,350,050 Aaa AAA $ 15,194,000 U.S.TREASURY 5.88 9/30/02 $ 15,194,985 5.84 101.06 $ 15,355,436 Aaa AAA $ 16,534,000 Subtotals $ 16,535,771 5.84 $ 16,705,486 U.S.Treasury-Discount $ 6,170,000 U.S.TREASURY 5.03 8/15/02 $ 4,718,446 5.82 99.83 $ 6,159,264 Aaa AAA $ 6,170,000 Subtotals $ 4,718,446 5.82 $ 6,159,264 NR = Not Rated Page 3 of 7 City of Palm Desert Portfolio Holdings 30 June 2002 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P LGIPs $ 30,500,000 L.A.I.F. 0.00 7/1/02 $ 30,500,000 2.69 100.00 $ 30,500,000 NR NR $ 30,500,000 Subtotals $ 30,500,000 2.69 $ 30,500,000 Pooled Funds-AIM $ 18,970,997 PRIME PORTFOLIO 0.00 7/1/02 $ 18,970,997 1.41 100.00 $ 18,970,997 Aaa AAA $ 18,9 00,997 Subtotals $ 18,970,997 1.41 $ 18,970,997 Pooled Funds-HighMark $ 4,414,615 CITY MAIN SWEEP 0.00 7/1/02 $ 4,414,615 0.76 100.00 $ 4,414,615 NR NR $ 55,000 DESERT WILLOW SWEEP 0.00 7/1/02 $ 55,000 0.76 100.00 $ 55,000 NR NR $ 494,034 GOLF COURSE SWEEP 0.00 7/1/02 $ 494,034 0.76 100.00 $ 494,034 NR NR $ 1,615,056 OFFICE COMPLEX SWEEP 0.00 7/1/02 $ 1,615,056 0.76 100.00 $ 1,615,056 NR NR $ 6,5 88,706 Subtotals $ 6,578,705 0.76 $ 6,578,705 Pooled Funds-CAMP $ 30,303,375 C.A.M.P. 0.00 7/1/02 $ 30,303,375 1.77 100.00 $ 30,303,375 N/A AAA $ 30,3 33,375 Subtotals $ 30,303,376 1.77 $ 30,303,375 City Loan to RDA $ 31,002,917 CITY OF PALM DESERT 0.00 7/1/32 $ 31,002,917 2.69 100.00 $ 31,002,917 NR NR $ 31,002,917 Subtotals $ 31,002,917 2.69 $ 31,002,917 Total Investments $ 193,352,993 $ 191,374,013 2.86 $ 193,462,184. Cash $ 50,618 OFFICE COMPLEX CHKG 0.00 7/1/02 $ 50,618 0.00 100.00 $ 50,618 NR NR $ 4,207,049 CITY MAIN CHKG 0.00 7/1/02 $ 4,207,049 0.00 100.00 $ 4,207,049 NR NR $ 153,218 DESERT WILLOW CHKG 0.00 711/02 $ 153,218 0.00 100.00 $ 153,218 NR NR $ 14,126 CPD GOLF COURSE 0.00 7/1/02 $ 14,126 0.00 100.00 $ 14,126 NR NR $ 30,181 OFFICE COMPLEX TRUST 0.00 7/1/02 $ 30,181 0.00 100.00 $ 30,181 NR NR $ 37,789 RECREATIONAL FAC CHKG 0.00 7/1/02 $ 37,789 0.00 100.00 $ 37,789 NR NR $ - VACATION INN CHKG 0.00 7/1/02 $ - 0.00 100.00 $ - NR NR $ 4,492,981 Subtotals $ 4,492,981 $ 4,492,981 Cash and Investments $ 197,845,975 $ 195,866,994 $ 197,955,165 NR =Not Rated Page 4 of 7 Palm Desert Redevelopment Agency- Portfolio Characteristics 30 June 2002 Dollars in Thousands Ageing Interval Market Value Portfolio Ageing < 1 M $ 83,110 w/o SLGSs <2M - <3M 843 100. <6M so e0 < tYR 196 70 <2YR 1,031 ; 60 50 <3YR 6,713 40 <4YR - a° 30 <5YR 2010 0 1 0 0 1 7 p >5YR 0 Total: $ 91,893 <1M <2M <3M <6M <1YR <2YR <3YR <4YR Quality Market Value Credit Quality AI/PI AAA $ 38,160 0% AA - AAA ` ' .�* � . A 40°/, +� Unrated" Al/P1r 60% Unrated" 56,409 AA Total: $ 94,569 00/ A 0°/a Money Market Sector Market Value Asset Allocation Funds U.S.Treasury $ 8,782 0,A 37% i Federal Agency - Money Market Funds 35,232 Federal Agency LAIF 50,555 Commercial Paper LAIF Corporate Bonds - U.S.Treasury 54% Total: $ 94,569 Month RDA Yield LAW Yield Variance Pertormance Ju101 4.08 4.64 -0.56 Aug 3.96 4.50 -0.54 7.0 -- Sep 3.69 4.35 -0.66 6.0 Oct 3.04 3.79 -0.74 Nov 2.83 3.53 -0.69 65.0 Dec 2.59 3.26 -0.67 :2 N 4.0 Jan02 2.46 3.07 -0.61 b Feb 2.51 2.97 -0.46 3.0 x Mar 2.28 2.86 -0.59 2.0 ` ` I Apr 2.42 2.85 -0.43 Ju101 Aug Sep Oct Nov Dec Jan02 Feb Mar Apr May Jun May 2.38 2.74 -0.36 Jun 2.37 2.69 -0.32 0LAIF Yield ®RDA Yield ' Standard and Poor's Credit Ratings LAIF and HighMark Sweep Page 5 of 7 Palm Desert Redevelopment Agency Portfolio Holdings 30 June 2002 Market Ratings Par Value Issuer I Coupon Maturity I Cost I YTM Price I Value I Moody's I S&P U.S.Treasury-Coupon $ 422,700 UNITED STATES TREASURY 6.25 8/31/02 $ 423,204 5.43 100.75 $ 425,870 Aaa AAA $ 405,200 UNITED STATES TREASURY 6.25 8/31/02 $ 405,683 5.43 100.75 $ 408,239 Aaa AAA $ 9,100 UNITED STATES TREASURY 6.25 8/31/02 $ 9,111 5.43 100.75 $ 9,168 Aaa AAA $ 837,000 Subtotals $ 837,9% 5.43 $ 843,278 U.S.Treasury-Discount $ 198,000 UNITED STATES TREASURY 4.70 2/15/03 $ 150,793 5.45 98.93 $ 195,889 Aaa AAA $ 181,000 UNITED STATES TREASURY 4.63 2115/04 $ 130,168 5.51 95.82 $ 173,432 Aaa AAA $ 7,143,000 UNITED STATES TREASURY 4.59 8/15/04 $ 4,989,671 5.54 93.97 $ 6,712,563 Aaa AAA. $ 532,400 UNITED STATES TREASURY 4.66 8/15/03 $ 394,279 5.47 97.78 $ 520,586 Aaa AAA $ 344,600 UNITED STATES TREASURY 4.66 8/15/03 $ 255,200 5.47 97.78 $ 336,953 Aaa AAA $ 8,399,000 Subtotals $ 5,920,112 5.53 $ 7,939,424 LGIPs $ 36,500,000 L.A.I.F. 0.00 7/1/02 $ 36,500,000 2.69 100.00 $ 36,500,000 NR NR $ 14,055,000 L.A.I.F. BOND PROCEEDS 0.00 7/1/02 $ 14,055,000 2.69 100.00 $ 14,055,000 NR NR $ 50,555,000 Subtotals $ 50,565,000 2.69 $ 50,555,000 Pooled Funds-AIM $ 29,376,895 PRIME PORTFOLIO 0.00 7/1/02 $ 29,376,895 1.41 100.00 $ 29,376,895 Aaa AAA $ 29,376,895 Subtotals $ 29,376,895 1.41 $ 29,376,895 Pooled Funds-HighMark $ 5,648,512 HOUSING AUTH CHKG 0.00 7/1/02 $ 5,648,512 0.76 100.00 $ 5,648,512 NR NR $ 206,139 HOUSING AUTH TRUST 0.00 7/1/02 $ 206,139 0.76 100.00 $ 206,139 NR NR $ 5,854,651 Subtotals $ 5,854,651 0.76 $ 5,854,651 Investments $ 95,022,546 $ 92,544,657 2.37 $ 94,569,248 Cash $ 50,856 HOUSING AUTH CHKG 0.00 7/1/02 $ 50,856 0.00 100.00 $ 50,856 NR NR $ 52,540 HOUSING AUTH TRUST 0.00 7/1/02 $ 52,540 0.00 100.00 $ 52,540 NR NR $ 103,396 Subtotals $ 103,396 $ 103,396 Cash and Investments $ 95,125,942 $ 92,648,053 $ 94,672,644 NR= Not Rated I Page 6 of 7 U 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 Treasurers '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 30 June 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 24 July 2002, 7vauks 67 C..C..M r. 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)' U.S.Treasuries;.'"" -5,Years,, ,No Limits °'S ' ''5 Years= ,'Nd Lirrnt 11':1,�<, ,,.•7.3% .i 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) , Federal Agencies, 5-Years' No Limit ;,5 Years, 30% `' z. 14 0% "t 53601 f' Bankers's Acceptances 180Days 40%,`" ,` 180'Days' 40% A-f°&'•P 1 53601(g) Commercial Pa er, ; 270 Days` _ 25% .'= A-1+or P=1 270.Da s . ' 25%: , A=1£or P=1 53609(h Nedotiable CDs.' 5 Years 30% 5 Years` , .;30%°' AA=or Aa3 53601 i Re os 1 Year;, No Limit 30_Da's . ;20%� AAA.&Aaa . - `, 53601 i Reverse Re os 92 Days 20% Not Authorized 53601 . ' Medium-Term Notes 5 Years 30% A' 3 Years ' '30%. 'A `5.2% + = 53601(k)_ Mutual Funds - 90 Days 20% AAA&Aaa 90 Days 20% AAA&Aaa f'29.2%' 38.A%•. 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 16429 LAIF No Limit 'No Limit 15.9% 54.69. 83.8% 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 7 of 7 _STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER SACRAMENTO ! _ Local Agency Investment Fund ,• s PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 June,2002 Statement CITY OF PALM DESERT Account Number : 98-33-621 Attn: CITY TREASURER 73510 FRED WARING DRIVE PALM DESERT CA 92260 Transactions Effective Transaction Tran Confirm Authorized Amount Date Date Type Number Caller 06-07-2002 06-07-2002 RW 444191 THOMAS JEFFREY - 3,000,000.00 06-25-2002 06-24-2002 RW 697837 THOMAS JEFFREY - 3,500,000.00 Account Summary Total Deposit : 0.00 Beginning Balance : 37,000,000.00 Total Withdrawal : 6,500,000.00 Ending Balance : 30,500,000.00 Page : I of 1 STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER SACRAMENTO ` „ 1 Local Agency Investment Fund PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 June, 2002 Statement PALM DESERT REDEVELOPMENT AGENCY Account Number : 65-33-015 Attn: TREASURER 73-510 FRED WARING DRIVE PALM DESERT CA 92260 Transactions Effective Transaction Tran Confirm Authorized Amount Date Date Type Number Caller 06-26-2002 06-26-2002 RW 453101 THOMAS W. JEFFREY - 3,500,000.00 Account Summary Total Deposit : 0.00 Beginning Balance : 40,000,000.00 Total Withdrawal : 3,500,000.00 Ending Balance : 36,500,000.00 Page : 1 of 1 CALI FORN I A ASSET STATEMENT MANAGEMENT PROGRAM I C>IN 1' 1•ovn FRs nuTrio R1'rr - .. 50 CAIJPC)RN1A$TRFFT 23R13 PIAX)R y s:kN FRANCISCo C LIFI RNIA es 1 11 FOR ACCOUNT INFORMATION: $00-729-7665 STATEMENT DATE: 6/30/2002 CITY OF PALM DESERT ACCOUNT NUMBER: 553-00 ATTN: PAUL GIBSON 73-510 FRED WARING DRIVE FUND NAME: Cash Reserve Portfolio PALM DESERT,CA 92260 Page 1 of 1 fi 0/2D02 F . Y k y! + k kCCCOUt1t$t1tllmal�la1S�At _ a , ,w,zn. ,' .�. "r. '�' Sm "'": "ft ,x` F " I INEM r Statement Income Dividends Capital Gains Total Shares Account Date Paid This Year Paid This Year Owned Value 6/30/2002 $36,405.00 $0.00 30,303,375.000 $30,303,375.00 Tansac"tior%Sumhlary,#or 6/1y2�2-6/30J2002, •_ !a, .: ; >� 5' , . Beginning Balance Purchases Reinvestments Redemptions Ending Balance $23,268,087.26 $7,000,000.00 $35,287.74 $0.00 $30,303,375.00 ZtTHADE '4POSTING` r°},. DOLLiAR.AMOUNT TSHARE SHARES�THISs/'1 "` «" i't)ATEaDATE** TRANSACrIOtJ ' ,. � .� aOFTRAN5ACilONi� pRICE *TRANSACFIONibSHARES,iOWNEU. 06/01/02 06/01/02 Beginning Balance 23,268,087.260 06/26/02 06/26/02 Purchase-Wire Put. $3,500,000.00 $1.00 3,500,000.000 26,768,087.260 06/27/02 06/27/02 Purchase-Wire Pur. $3,500,000.00 $1.00 3,500,000.000 30,268,087.260 06/30/02 06/30/02 Accrual Income Div Reinvestment-DIV $35,287.74 $1.00 35,287.740 30,303,375.000 Message Line: THE DIVIDEND YIELD FOR THE MONTH IS 1.7716. THE ANNUALIZED YIELD IS 1.78%. Effective June 24,2002,our new address is:50 California Street, Suite 2300,San Francisco,CA 94111. Our other contact information remains the same. m m y F O o Q m m': H m o o cn T -� 'b0.9a^OW. .3.a..1 �Zt�f ppH�o• '"'Crv�7. pX�, nOc�ryC.o CG�N�. .Ht OZF'C�i''11 '1 Pt�eo Hno3 hm�m 7 OQm^ C tv t C 71 mi O o 0 . No3U.. NO. 13 n o' a A o .Ny W W .-• In N Q\ .-• d n biN-• to U O\ vi to O O N O NO O 00 W O � � r N '7 _ C ' n O, w 6 .+ 0 0 0 0 0 0 0 '1 ''. W .-• �-+ .- .-• N W J W Oq H o w O w y o 0 0000o m wco � Oo \000. .a tv tz a on 0 Ys ,D Y 4 y J O oo A A to 01 �D ��yO A O J UZ J A w N 1T11 Z O ' 0 0 0 0 0 0 K v�i o Owi A O O N � ry m v cr _ m 0. O Oo .-• A N Vi l.n a � C N N r+ u N W y DIN\ �tOo �O 00NOs O A A 0 41O1D �^ > V, N Ao 0 — 0' 0fa00 � b fs7 T M m w _ w N C i City of Palm Desert Parkview Office Complex f Financial Statement for Fiscal Year 2001- 2002 June-02 June-02 # % YTD YTD # Budget Actual Variance Variance Budget Actual Variance Variance Revenues t Rental $ 68,500 $ 78,231 $ 9,731 114,21% ] $ 822,000 $ 803,464 $ (18,536) 97.74% Dividends/Interest $ 4,500 $ 1,054 $ (3,446) 23.43% ^ =;� $ 52,500 $ 24,226 $ (28,274) 46.15% Total Revenues $ 73,000 $ 79,286 $ 6,286 108.61% " c $ 874,500 $ 827,690 $ (46,810) 94.65% Expenses Professional-Accounting&Auditing $ 75,600 $ 6,800 $ 68,800 8.99% $ 75,600 $ 81,600 $ (6,000) 107.94% Professional-Consultants $ 72,000 $ 5,616 $ 66,384 7.80% " - $ 72,000 $ 73,680 $ (1,680) 102.33% Tenant Improvements $ 30,000 $ 480 $ 29,520 1.60% `.'>-' $ 30,000 $ 40,707 $ (10,707) 135.69% Repairs&Maintenance Building $ 96,000 $ 9,519 $ 86,481 9.92% $ 96,000 $ 118,127 $ (22,127) 123,05% Repairs&Maintenance-Landscaping $ 27,600 $ - $ 27,600 0.00% ;� $ 27,600 $ - $ 27,600 0.00% Utilities-Water $ 3,000 $ 107 $ 2,893 3.57% `" . ._ ? $ 3,000 $ 1,272 $ 1,728 42.40% Utilities-Gas/Electric $ 81,000 $ 6,581 $ 74,419 8,12% - $ 81,000 $ 84,170 $ (3,170) 103.91% Utilities-Trash $ 8,400 $ - $ 8,400 0.00% 'a, :' $ 8,400 $ 4,208 $ 4,192 50.09% Telephone $ 1,800 $ 153 $ 1,647 8.50% $ 1,800 $ 1,897 $ (97) 105,39% Insurance $ 6,250 $ - $ 6,250 0.00% ", $ 6,250 $ - $ 6,250 0.00% Total Expenses $ 401,650 $ 29,255 $ 372,395 7.28% $ 401,650 $ 405,660 $ (4,010) 101.00% �{)perahng ltr4'pme_:: = 3?S,b5A)> i 5tlrt13D' $ 1$*b$ .2 "/u$ r,.$.472$$1} .$422r30;`$ {$U,820} :f:',89.25°l0 Equipment Replacement Reserve $ 10,000 $ 12,618 $ (2,618) 126.18% $ 120,000 $ 151,413 $ (31,413) 126.18% fN00neome :p"'.= 5.=-(338;650, $ 37' $375,0 3 2T:OW% ,, , 352�B5C! 2002 Investment Report2002 Invest Report City of Palm Desert Parkview Office Complex Vacancy Rate Schedule by Suite June 2002 Suite Square No. Tenant Feet 73-710 Fred Waring Drive-Two (2) Story Building 100 Hanover 1,915 100A EPA 645 102 Bergren 1,360 103 Multiple Sclerosis 488 104 Arthritis Foundation 960 I 106 Coachella Valley Economic Partnership 928 108 Assemblyman Kelly 785 112 Senator 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 604 203 Vacant 480 205 Vacant 700 208 Alzheimer's Association 960 2002 Investment Report2002 Vacancy Report City of Palm Desert Parkview Office Complex Vacancy Rate Schedule by Suite June 2002 Suite Square No. Tenant Feet 210 Wilson,Pesota&Pichardo 3,040 211 State of California Department of Food &Agriculture 937 217 Joe B. McMillan,. Esq. 775 220 CA. State Dept. of Agriculture 1,607 222 Cove Comission-Fire Marshal 1,900 222 CITY Storage-Vacant 1,081 Total square footage(2 story Building) 31,562 Vacancy Rate-2,261/31,562= 7.16% 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--2,261/51,191 4.42% Occupancy Rate-48,930/51,191 95.58% 2002 Investment Report2002 Vacancy Report City of Palm Desert Desert Willow Golf Resort Summary of significant financial data for the fiscal year ended June 30, 2002 SNAPSHOT OF INCOME STATEMENT Fiscal Year Fiscal Year Percentage 2001-2002 2000-2001 Change Revenues $7,224,217.00 $ 7,210,326.00 0.1900% Expenditures 7,184,093.00 7,441,619.00 -3.4600% Operating Income 40,124.00 (231,293.00) 117.3500% Ancillary Revenues 1,159,719.00 901,540.46 28.6400% Equipment Replacement Reserve (875,339.00) (900,362.00) -2.7800% Net income (Losq) $ 324,504.00 00 SNAPSHOT OF ROUNDS PLAYED (BOTH COURSES SUMMARIZED► Fiscal Year Fiscal Year Percentage 2001-2002 2000-2001 Change Resident 19,943 18,706 6.6100% Non Resident 50,386 42,980 17.2300% Complimentary 5,415 2,786 94.3600% Other 1,427 773 84.6100% 00 Dw2002 The information Annual Summary above has not been audited City of Palm Desert Desert Willow Budget Vs Actual _ For the month of June 2002 Budgeted Actual - Budgeted Actual June June S Percentage Year to Yearto S Percentage Revenue 2002 2002 Variance Variance Date Date Variance t'nrionce Courses Ground S 300.260 S 224,338 S (75,922) 74,71% S 4.876.685 5 4498.022 5 (378.663) Cans S 30,529 S 26,555 S (3,973) 96.99% S 339.309 S 366,545 S 27.236 MS03411 Golf Shop S 52,575 $ 37,808 S (14,767) 71.91% S 915,829 S 771.851 S (143.978) 84'8 Range 5 1,000 S 752 S (248) 75.20% S 15.450 S 34,070 S 18.620 220.52 Foods Beverage S 124,614 S 102,294 $ (22,320) 8209% 5 1,358463 5 1.470.644 S 112.181 Interest Income S 3,000 S 418 $ (2,582) 13.93% S 30.500 S 6,219 S (242S11 20.39°,, "I otal Revenues S 511.977 S 392.165 (119.8121 76.60% 71536,236 7 147 351 ceeriseeex3RR SRS 94.%4 Payroll Proshop S 6.055 S 1,350 $ 4,705 22,30% S 82.916 S 45,431 S 37.465 54 Can S 20,222 $ 23.218 $ (2,996) 114.82% $ 261.749 S 303.961 S (42212) 116.13"„ Course&Ground S 117,920 S 122.180 S (4,260) 103.61% $ L481,708 S 1,430,925 S 50.783 96,579„ Gull Operations- S 19,733 $ 23A05 $ (3.672) 118,61% $ 292,229 S 298,724 S (6.495) General&Administration S 40.879 $ 38,960 $ 1,919 95.31% S 484,721 S 425.026 S 59.695 S7.63's„ Food&Beverage S 57,715 S 60,587 S (2,972) 104.99% S 656,671 S 685,182 5 (28.5111 104-34% Total Pavroll 5 262 5 4 269 700 S _(7,1761 102.73% 3,259,994 3 189 269 70,725 97.B3,. Other Expenditures Perimeter Landscaping S - S - $ - 0.00% 5 - S - S - 0.00^11 Proshop S 1,025 S 1,346 $ (321) 131.32% S 40.525 S 43,878 S ,(3.353) I(1S27,Su Proshop-COGS S 30.315 S 24,304 $ 6,011 80.17% S 473.057 S 432,646 S 40.411 91 46'% Can S 13.000 $ 11,929 S 1,071 91.76% S 175,000 S 149.018 S 25,982 Course&Ground-North Course S 69.094 S 48,148 S 20,946 69.68% % 674,414 $ 729,125 S (54.711) 108.II14. Course&Ground-South Course S 54,723 S 56,772 $ (2,049) 103,74% S 654.820 S 582,357 S 72.463 88 930„ Course&Ground-Desert Pallet-N $ 1,510 $ 889 $ 621 58.87% S 18.675 5 1 L270 S 7.405 60.35°c, Course&Ground-Desert Pallet-S S 1.440 S 809 S 631 $6,18% S 1&690 S 11.876 S 6.814 03.54-,, Golf Operations S - $ 324 $ (324) 100.00% S 14,500 $ 16.901 S (2.401) 116.56% General&Administration S 63,484 S 79,360 $ (15,876) 125.01% $ 872,393 $ 852.906 S 19487 97.77% Range S 150 S 269 $ (119) 179.33% S 15.950 S 19.568 5 (3,618) I2168% Food&Beverage S 12,287 S 12,119 $ 168 9&63% S 178M6 5 216.362 S (38.346) 12154% Food&Beverage COGS $ 38,485 $ 33,677 S 4,808 87.51% S 422.496 S 469273 S (46,777) 111.07% Management Fee S 25,000 S 73,528 $ (48,528) 294.11% $ 300,000 S 348.528 S (4&528) 116.18% Financing/Lease S 544 S (842) S 1,386 -154-78% S 29,371 S 41.834 5 02.463) 14241-- 'Total Cher Ex en itures S 311,057 342,632 (31.575) 110.1 % 3,887,907 3 925 542 (37,635 100.97% Desert Willow Golf Academv Desert Willow Golf Academy S 14,600 S 8,019 S (6,581) 54.92% $ 185.150 $ 76,866 S (108284) 415290 COGS-Merchandise S (4,822) $ (3,653) $ 1.169 75.76% $ (55,829) $ (49.869) S 5960 M 12%, Other Expenditures S (1.620) S (3,135) $ (1.515) 193,52% S (23,110) S (19,413) 5 3,697 84.00Yn Learning Center Income(Loss) $ 8,158 S 1.231 S (6,927) 15.09% $ 106211 S 7.594 .S (99.627) 7.14% Operating Income(Loss) S (53.446) S (21&936) $ (165,490) 409.64% $ 494546 S 40.124 S (454422) S.1I% Equipment Reserve Replacement S 71,955 S 73,285 S 1,330 101.85% S 863.460 $ 875,339 S 11.879 101.38% Net Income Lnss 125401 292221 166820 233.03% 368914 835215 466301 226.40% Snapshot of Golf Rounds Budgeted 1mo Actual mo Variance Variance% Budgeted vtd Actual vtd Variance Variance% Resident 660 395 (265) 60% 17.924 19.943 '2.011) 111:'u Non Resident 5,382 4,488 (894) 83% 50,733 50,386 (347) 99% Other - 51 51 100% - 1,427 1427 100% Com limentary 220 302 82 137% 2,128 5A 15 3.287 254% Total 6,262 5,236 (1,026) 84% 70,785 77,171 6,386 109% Folder'.Desert Willow 2001:Dw2002;Fm.cial Statement Page 1 N v in n T �p cq O O n (O N M M O U; W O \O ODN N + ONN NCG o] 7 O V O A6 t0 O W nMO aO O " O OOn M n n N Y y MMN �D d' 7 n N W m R Ow d d m % R C R O O O b O U UU � zc75 F ua 0 � Iz. dXO F f1 0 s � o 0 m \ U � o R L a O t o M C N w 7 rn O PC Vi m U o C7 A 2 a 0 H iO y1y o '.s L Y L a Y OL C O o .Y. twC C7 7 0 (Y �q p T G O O 0 U v p k O O O ¢ ^ m w v w 7 0 \ O R O r Ri a+ \ R 0 v CLcu G o J u « a 9 U N _ ^ or [y Z C O C ry m a wwwwww w wwwwww w wwwwwwwwwwww w www w w w w « a ;,o wwwwww wwwwww ww------wwww www w w US ' u o TOryF wwwwww wwwwww wwwwwwwwwwww www w w < 0 wwwwww w wwwwww w wwwwwwwwwwww w www w w w w 6 wwwwww w wwwwww w wwwwwwwwwwww w www w w w w wwwwww w wwwwww w wwwwwwwwwwww w www w w w w E .E, z° d o 0 0 0 U LL. 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Y 4 e V E o a v C O o b a m F i aN m W c dJ tl F a s 3 y o h N u Q « « o 0 "n � C (.0i Y y ([ 0 Y y � � •- n m 3 m m ^ t- o g � = y , o � Q Q i« A k F o in r` o � z° c z m `o e a O C w 93 L « E L E p C Y m 9 a O O Y « $ a z o o e° m V a o q 0 a � a Kcd , \ a0 � o 0 0 x o yLo a v ^' � g s Desert Willow Breakdown of Rounds per point of sale system Desert Willow - Combined Analysis- June 2002 Resident _ _39_5_ $ 15,800 $ 40.00 7.50% Non-Resident 4,488 $ 199,695 $ 44.50 85.70% Other _ _ _ _ 51 $ 510 $ 10.00 1.00% Complimentary 302 $ 1,725 $ 5.71 5.80% Desert Willow Totals 5,236 217,730 41.58 100.007 i Dw2002;POS AVG RD page 11 Desert Willow Breakdown of Rounds per point of sale system FIRECLIFF COURSE- JUNE 2002 Description No. Of Revenue Avg. Per Pct to Rounds Per POS Round Total Resident Rounds Resident Fee- Weekend 67 $ 2,680 $ 40.00 3.34% Resident Fee-Weekday 26 $ 12040 $ 40.00 1.30/° Resident -Twilight 6 240 $ 40.00 0.30% Total Resident 99 3,960 40.00 4.94% Non Resident - - - Posted Weekend - -- 138 $ 10,305 $ 74.67 6.88% Posted Weekday 66 $ 4,290 $ 65.00 3.29% IROC Des. PRTY - Weekday 21 $ 683 $ 32.52 1.05% IROC Des. PRTY - Weekend 78 $ 2,925 $ 37.50 3.89% IROC Member Guest- Weekday 4 $ 208 $ 52.00 0.20% IROC Member Guest- Weekend 15 $ 900 Si60.00 0.75/o Wholesale Weekend 162 $ 8,782 $ 54.21 8.08% Wholesale Weekday_ _ 45 : $ 2,178 $ _48.40 2.24% Twilight _ _ 284 $ 11,095 $ 39.07 14.16% Passbook- Weekday 80 $ 3,656 $ 45.63 3.99% Passbook- Weekend 65 $ 3,575 $ 55.00 3.24% Posted Replay 9 $ 360 $ 40.00 0.45% Fee Special Event Variable 846 $ 33,852 $ 40.01 42.19% Total Non Resident Rounds 1,813 82,803 45.67 90.42% Other Rounds Junior Walking 12 $ 120 $ 10.00 0.60% Total Other 12 120 10.00 0.60% Complimentary, VIP — - -6 $ - $ 0.30% PGA Member --- - - - - 37 $ 425 $ 11.49 1.85% Donation 12 $ 125 $ 10.42 0.60% Employee / Employee Guest 26 $ $ - 1.30% Total Complimentary 81 550 6.79 4.04% Total Round (FireCliff) 2,005 $ 87,433 $ 43.61 100.00°h Dw2002;P0s AVG RD Page 12 Desert Willow Breakdown of Rounds per point of sale system MOUNTAINVIEW COURSE- JUNE 2002 Description No. Of Revenue Avg. Per Pct to Rounds Per POS Round Total Resident Rounds Resident Fee- Weekend 193 $ 7,720 $ 40.00 5.97/o Resident Fee-Weekday 9_9_ $ 3_1960 $ 40.00 3.06% Resident Twilight J 4 $ 160 $ 40.00 0.12% Total Resident 296 $ 11,840 $ 40.00 9.16% Non Resident Posted Weekend 96 $ _7,200 $ 75.00 2.97% Posted Weekday 112 $ 7,280 $ 65.00 3.47% IROC Des. PRTY- Weekday 72 $ 2,340 $ 32.50 2.23% IROC Des. PRTY- Weekend 153 $ 5,737 $ 37.50 4.74% IROC Member Guest- Weekend 37 $ 1,924 $ 52.00 1.15% IROC Member Guest - Weekend 31 $ 1,860 $ 60.00 0.96% Wholesale Weekend _ _ 184 $ 8,884 $ 48.28 5.69% Wholesale Weekday 1_2_6 $ 5,714 $ 45.35 3.90% Passbook- Weekday 176 $ 7,980 $ 45.34 5.45% sb Pasook- Weekend 46 $ 2,560 $ 55.65 1.42% Fee Pass - Card _ 2 $ 150 $ 75.00 0.06% Replay _ 5 $ 100 $ 20.00 0.15% Twilight _ 551 $ 21,640_ $ 39.27 17.05% Fee Special Event Variable 1,084 $ 43,523 $ 40.15 33.55% Total Non Resident Rounds 2,675 116,892 43.70 82.79% Other Rounds Junior Walking 39 $ 390 $ 10.00 1.21% Total Other 39 390 10.00 1.21% Complimentary VIP 52 $ 1,100 $ 21.15 1.61% PGA Member 37 $ $ - 1.15% Donation 18 $ 75 $ 4.17 0.56% Employee / Employee Guest 112 $ $ - 3.47/o COD / PDHS — -- -- 2 „$- ----- _ $ 0.06% Total Complimentary 221 1,175 5.32 6.84% Total Round (Mountainview( 3,231 $ 130,297 $ 40.33 100% Dw2002;POS AVO RD Page 13 City of Palm Desert Desert Willow Cash Reserve Analysis for the month of June 2002 Cash Reserve Analysis One Month Required Reserve 8 500,000.00 Cash on Hand $ 732,081.73 Variance- Favorable ( Unfavorable $ 232,081.73 Page 14 i PalmDesert Recreation Facilities Corporation Income Statement Jun-02 Jun-02 # % Budget Actual Variance Variance Food & Beverage Revenues $124,614 $102,294 ($22,320) 82.09% Total Revenues $124,614 $102,294 ($22,320) 82.09% Salaries $57,715 $60,587 ($2,872) 104.98% Cost of Goods Sold-F&B $38,485 $33,677 $4,808 87.51% Food & Beverage Expense $12,287 $12,119 $168 98.63% Total Expenses $108,487 $106,383 $2,104 98.06% Net Income (Loss) $16,127 ($4,089) ($20,216) -25.35% Note: The above revenues and expenditures are also included in the Desert Willow analysis. III Dw2002;PDRFC Budget Page 1 City of Palm Desert Parkview Office Complex Financial Statement for Fiscal Year 2001-2002 I June-02 June-02 # % YTD YTD # % Budget Actual Variance Variance Budget Actual Variance Variance Revenues Rental $ 68,500 $ 78,231 $ 9,731 114.21% $ 822,000 $ 803,464 $ (18,536) 97.74% Dividends/Interest $ 4,500 $ 1,054 $ (3,446) 23.43% $ 52,500 $ 24,226 $ (28,274) 46.15% Total Revenues $ 73,000 $ 79,286 5 6,286 108.61% $ 874,500 $ 827,690 $ (46,810) 94.65% Expenses Professional-Accounting&Auditing $ 5,800 $ 6,800 $ (1,000) 117,24% >:_ $ 75,600 $ 81,600 $ (6,000) 107,94% Professional-Consultants $ 6,000 $ 5,616 $ 384 93.60% - $ 72,000 $ 73,680 $ (1,680) 102.33% Tenant Improvements $ Z500 $ 480 $ Z020 19.19% $ 30,000 $ 40,707 $ (10,707) 135,69% Repairs&Maintenance Building $ 8,000 $ 9,519 $ (1,519) 118.99% ?-" :' ` $ 96,000 $ 118,127 $ (22,127) 123.05% Repairs&Maintenance-Landscaping $ 2,300 $ - $ 2,300 0.00% $ 27,600 $ - $ 27,600 0.00% Utilities-Water $ 250 $ 107 $ 143 42.79% "%;` '` $ 3,000 $ 1,272 $ 1,728 42.40% Utilities-Gas/Electric $ 5,000 $ 6,581 $ (1,581) 131.61% > $ 81,000 $ 84,170 $ (3,170) 103.91% Utilities-Trash $ 700 $ - $ 700 0.00% t. $ 8,400 $ 4,208 $ 4,192 50.09% Telephone $ 150 $ 153 $ (3) 102.01% �__*'' %-' $ 1,800 $ 1,897 $ (97) 105.39% Insurance $ 521 $ - $ 521 0,00% .:. `.•i:, . $ 6,250 $ - $ 6,250 0.00% Total Expenses $ 31,221 $ 29,255 $ 1,966 93.70% t $ 401,650 $ 405,660 $ (4,010) 101.00% iOperaEnglncume. . - $ •41,77.4 $' '3t};.tl;3Q"' $ P$i'25_.. „ 1.9.'S"f" +, , "'$47�2;$54".1$422;030.n`., (50820) -*', 89:25°l0 Equipment Replacement Reserve $ 10,000 $ 12,618 $ (2,618) 126.18% $ 120,000 $ 151,413 $ (31,413) 126.18% 2002 Investment Report2002 Invest Report City of Palm Desert Parkview Office Complex �+ Vacancy Rate Schedule by Suite June 2002 Suite Square No. Tenant Feet 73-710 Fred Waring Drive-Two (2) Story Building 100 Hanover 1,915 100A EPA 645 102 Bergren 1,360 103 Multiple Sclerosis 488 104 Arthritis Foundation 960 106 Coachella Valley Economic Partnership 928 108 Assemblyman Kelly 785 112 Senator 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 604 203 Vacant 480 205 Vacant 700 208 Alzheimer's Association 960 2002 Investment Report2002 Vacancy Report City of Palm Desert Parkview Office Complex Vacancy Rate Schedule by Suite June 2002 Suite Square No. Tenant Feet 210 Wilson,Pesota&Pichardo 3,040 211 State of California Department of Food &Agriculture 937 217 Joe B. McMillan,. Esq. 775 L 220 CA.State Dept. of Agriculture 1,607 222 Cove Comission-Fire Marshal 1,900 222 CITY Storage-Vacant 1,081 Total square footage(2 story Building) 31,562 Vacancy Rate-2,261/31,562= 7.16% 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--2,261/51,191 4.42% Occupancy Rate-48,930/51,191 95.58% 2002 Investment Report2002 Vacancy Report