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N c C'•23 a) 5al J o oo El L .°. o o a) N oat 3 a U m L 2 T E EU T 5 T N V > C=d« Y c NcCOE ? • ` • 2 O 2 ca aSO3L' UV C ° LpOCCOai a1 ma JUL C dQECy LoC ' N _C 13 ° ZaN 0 ° L m > J c2) cUp.LCy UtUETO▪ C 2- cLEa UatCC3 om Eom - � c ° c �.- � ac7� ` °c00 euc' ° coVW Cc� � w o ? c ` (2 ° ° tEE°° dcNU3oE cwa'E' ' y .3aEoE ° 8 00° a a NU � co a) N OLoN« N0 0Co o v N • N � NCm � in a) coBoy>`'- yoU04COCCC -CN ._ .Ct NOU NC NC � ¢ 31 OJ 1OJ CUUNEyN E C `1O �tN O)tc UO-p aCtU JEl6 �0 �Y aY LCNT car I D=C U N W Tr N TU T'°o O Nt U Et 2 1- N N U N• Uc UrQ L U N N ON) N O O !/1 Ia` E r0n 0 crc Q 3 o m 3 < 1cp c 2 m Q 3)i o°) o . o£ . o . U . U ¢ n).S a5 S c OO 2 .............. "" CITY OF PALM DESERT .._ �� �� 1 INVESTMENT & FINANCE COMMITTEE 4; Minutes m' It : March 24, 2004, 10:30 a.m. ••••Mitz-k 3 Wig° North Wing Conference Room I. CALL TO ORDER A regular meeting was called to order by Chairman Gibson on Wednesday, March 24, 2004 at 10:31 a.m. II. ROLL CALL Present: Absent: Paul S. Gibson, Finance Director None Bob Spiegel, Mayor Buford Crites, Mayor Pro-Temp Thomas Jeffrey, Deputy City Treasurer Carlos Ortega, City Manager Russ Campbell Everett Wood Bill Veazie Dave Erwin, City Attorney Also Present: Steve Aryan, Asst. to the City Manager Jose Luis Espinoza, Assistant Finance Director Dennis Coleman, RDA Finance Manager Diana Leal, Recording Secretary Guests: None. III. ORAL COMMUNICATIONS None. IV. COMMITTEE MEMBER REPORTS None. 1 32404.wpd INVESTMENT & FINANCE®MMITTEE • MINUTES March 24, 2004 V. CONSENT CALENDAR A. Approval of Minutes Motion was made by Mr. Spiegel and seconded by Mr. Crites to approve the Minutes of the February 25, 2004 meeting as submitted. VI. CONSENT ITEMS HELD OVER None, VII. NEW BUSINESS A. 1. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for February 2004 For the month ended February 29, 2004, Mr. Jeffrey reported that the book value of the City Portfolio was approximately $124.9 million. The City earned approximately $143,000 in interest during that month. Portfolio yield-to-maturity was approximately 1.58%. For the month ended February 29, 2004, Mr. Jeffrey reported that the book value of the RDA Portfolio was approximately $164.6 million. The RDA earned approximately $154,000 in interest during that month. Portfolio yield-to-maturity was approximately 1.20%. 2. Cash and Investment Audit Procedures Mr. Gibson said that at the previous Investment and Finance Committee meeting, staff distributed a document regarding the investment review procedures. He said that the auditor reviewed the document and made two recommendations. One recommendation was on the time limits of completing the bank reconciliations. The second recommendation was to have staff follow up on any unidentified item(s) that need to be journalized, or bank errors within the bank reconciliation by the month after having received the bank statement. Mr. Wood asked about the term "haphazard" used in the prior documents given to the committee. Mr. Gibson said that he handed out a memorandum explaining that "haphazard" is a valid term in auditing. Other terms used to describe the type of audit performed are random and systematic. Mr. Campbell asked if the audit was read by someone else, would the term haphazard be questioned. Mr. Wood said that it would make it simpler for the reader to understand if more descriptive words were used in the report. Mr. Espinoza said that he can talk to the auditors to issue a separate report. Mr. Wood said that it would be too 2 324°4.wpd INVESTMENT & FINANCEIWAMITTEE • MINUTES March 24, 2004 much work for staff and that perhaps the words "restricted" and "unrestricted" should be added to the columns to specify the type of funding. Mr. Gibson said that GASB is very critical about the wording used in the reports. Mr. Gibson said that a synopsis can be prepared. Mr. Wood said that this would duplicate the work for staff. Mr. Espinoza said that a non-GASB report is generated for the Redevelopment Agency. This type of report can be done for the committee if desired. Mr. Ortega said that the Finance Department needs to meet certain standards. Mr. Gibson said that the City can be written up for not following the required accounting standards. Motion was made by Mr. Veazie and seconded by Mr. Campbell to approve the Investment Review Procedures and change the auditing procedure to "random" sampling and add the two items recommended by the auditors. Motion carried. 3. City of Rancho Mirage Investments • Mr. Jeffrey said that he was able to obtain an investment portfolio for the City of Rancho Mirage for February 2004. The City of Rancho Mirage portfolio indicates that they were able to obtain a yield of 2 '/2% whereas the City of Palm Desert had a yield of 1.6% for the same time period. The reason for this is that they are going much further out on the yield. Their securities on average will mature in 639 days, our securities will mature in 111 days. One reason they are able to accomplish this is that they do not have a lot of infrastructure expenditures. Mr. Wood asked about the market risk involved. Mr. Jeffrey said that their market risk is higher than that of the City of Palm Desert as they are able to go out further as they have a smaller portfolio with a smaller bank account balance. Mr. Spiegel asked if the $86 million indicated on the City of Rancho Mirage's portfolio was the only amount invested. Mr. Jeffrey said that their portfolio is actually higher because the redevelopment bond proceeds are not included. Mr. Spiegel said that Mr. Ortega and he attended a meeting at the Coachella Valley Association of Governments where each of the Valley cities discussed their concerns of the affects of the State budget cuts. Both the City of La Quinta and the City of Rancho Mirage indicated that they were not as concerned about the proposed budget cuts as they were doing well financially. 3 32404 wpd INVESTMENT & FINANCEMITTEE • MINUTES March 24, 2004 B. City of Palm Desert Single Audit of Federally Assisted Grant Program for fiscal year ended June 30, 2003 Mr. Gibson said that the City of Palm Desert was audited for purposes of Federal and State grants to ensure that the City was in compliance with the Federal and State guidelines. The City of Palm Desert's auditor prepares the report and the City files said report with a state and federal agency. Mr. Spiegel asked if there were any findings. Mr. Gibson said that there were no findings. Motion was made by Mr. Spiegel and seconded by Mr. Erwin to receive and file the City of Palm Desert Single Audit of Federally Assisted Grant Program for Fiscal Year Ended June 30, 2003. Motion carried. C. State of California Local Agency Investment Fund Balance for the month of February 2004 Mr. Gibson stated that the City and RDA LAIF accounts remain maxed out at $40 million each. D. California Asset Management Program (CAMP) February 2004 Statements Mr. Gibson said that Staff continues to invest CAMP funds. E. City and Redevelopment Agency Monthly Financial Report for City Council for February 2004 Mr. Gibson said that he received good news via e-mail from the City's sales tax consultant indicating that the quarter that includes the Christmas season was up 10% over last year. Mr. Spiegel said that last month the Westfield Shoppingtown mall reported a 17% revenue increase. Mr. Gibson said that in regard to the revenues, last year to date was 17.7 million and this year to date is 17.3 million. The bulk of the difference is due to the State subvention of the Department of Motor Vehicle fees that have been reduced for the first three months. F. Parkview Professional Office Buildings - Financial Report for February 2004 Mr. Gibson said that Parkview continues to do well. Supervisor Wilson called and indicated that he is interested in occupying a space at Parkview. Mr. Gibson is waiting for Supervisor Wilson to initiate discussion about the terms 4 32404.wpd INVESTMENT & FINANCE MITTEE • MINUTES March 24, 2004 of the lease, etc. He expects Supervisor Wilson to occupy a space in the complex in June or July. G. Palm Desert Golf Course Facilities Corporation Financial Information for February 2004 Mr. Gibson said that Mr. Young is out of town this week. Mr. Ortega said that in February there was a great leap forward in revenues compared to January. Desert Willow makes most of their money in February, March and April. Mr. Gibson said that he went to Desert Willow yesterday and the restaurant was filled to capacity. The alumni from the University of Washington were seated outside the restaurant and were playing golf. Mr. Ortega said that on Friday Desert Willow is expecting the San Jose State alumni. Mr. Wood asked if most of the money Desert Willow spends is at the beginning of the season for the course and grounds in preparation of the next season. Mr. Ortega said that quite a bit of money is spent in September because of the purchase of the seed for the re-seeding and for staff overtime. One of the things that he has asked staff is whether they should track the number of rounds in relation to the course and grounds. To a great extent maintenance of the grounds affects the services area where more people have to be hired to clean the club. However, for the most part, the golf course needs to be kept in the same shape whether there are 75 players or 275 players. Mr. Wood asked if the money required for seeding can be set in an account and written off over the use of that period so as to even out the financial statement. Mr. Ortega said that they do cash accounting, if they were doing accrual accounting it would be possible. Mr. Gibson said that with the limited amount of people they have at Desert Willow, he does not believe that they will be able to accomplish this task. Mr. Wood said that if a budget is estimated for the work to be done, it seems to him that over the life of budget, it would be possible to do. Mr. Ortega said that typically this is done when you prepay a service before it is completed. For example, you pay for a service six months in advance, however, in reality you do not use the service for the next six months. In this case, the expenditure for the reseeding and overtime is made and used in the same month. Mr. Wood said that it will last for a specified period of time. Mr. Gibson said that if there were enough accounting staff the City could potentially look at that. However, with the work Desert Willow's staff has at this time, he does not think it would be performed easily. VIII. CONTINUED BUSINESS - None. 5 32404.wpd INVESTMENT & FINANCE fl MITTEE • MINUTES March 24, 2004 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 they are moving forward with the assessment district. There are two major landholders that will sell their land. Two of the land owners will place $50,000 in deposit to form an assessment district for the University Park. Cost will be in the neighborhood of$20 million. At this time staff is looking at what infrastructure improvements qualify for the bond issue. One of the things they do is obtain a deposit from the developer to pay for engineering and appraisal costs. The item will be taken before the City Council in the next month or so. He said that the City charges $50,000 for the formation of districts, for the issuing of the bond and for staff time involved. He is in the process of developing a reimbursement policy. Mr. Ortega said that what might be done is charge a percentage for a portion of the bond amount because it presents a quick benefit to the developer. Mr. Crites asked staff to look at what savings was being given to the developer and look at the equitable sharing or profit. Mr. Ortega said that by obtaining the money from a bond a developer obtains a potential 2% savings. Mr. Coleman said that it depends upon whether or not the developer is top-tiered credit worthiness. Mr. Ortega said that staff can look at the potential savings to the developer and report to the committee at a later date. An agreement can be drawn whereby the developer agrees to pay the City a specified amount. X. NEXT MEETING - Wednesday, April 28, 2004 at 10:30 a.m. XI. ADJOURNMENT There being no further business, the meeting was adjourned by Mr. Erwin at 11:02 a.m. Respectfully submitted, Diana Leal, Recording Secretary 6 32404.wptl ® • • (r7-1 / ti finance Department Eg MEMORANDUM To: Records Technician From: Diana Leal, Administrative Secretary Subject: Investment and Finance Committee Meeting Date: Apri129, 2004 Attached, for your records, is a copy of the following: March 24, 2004 April 28, 2004 • Investment and Finance Committee meeting attendance registers. Thank you for your assistance. Attachments (2) G:\Finance\Diana Leal\WpdocsUnvestment Committee\2002 Memos\City Clerk\2003U24428-04attend.wpd • • L % k Q \ \ « tf \ ( j \ ) / « . E / § ! ( \ « u 5 ® / \ $ ® $ # § k \ [ ) 2 \i,N.,_.\ A\ \ ) / ) ) < \ / ( ¥ / ) / m f . E ^ H ® \ /» \ fa & kyQ / } �N - - o . \ 2 \ e \ kk k. AC-! 175ttn \ \11 ' \ ` CI:— / ) - � � �� k � ns I‘.\� \i c _ a r « ,n � « a = - m In » In _ N _ ® I CITY OF PALM DESERT 11 .-,rt! INVESTMENT & FINANCE COMMITTEE if *PI • AGENDA 1. !Mi (. h:` April 28, 2004, 10:30 a.m. '.:°�t `a 3r$ North Wing Conference Room •;q"�'oi9 ti�;i 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 histher 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 March 24, 2004, as submitted. Action: 1 042804.wpd INVESTMENT & FINANCEMMITTEE • AGENDA April 28, 2004 VI. CONSENT ITEMS HELD OVER None. VII. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for March 2004 Rec: Review and submit for the next City Council agenda. Review the presentation on the investment graphs. Review the investment activity for March 2004. Action: B. State of California Local Agency Investment Fund Balance for the month of March 2004 Rec: Informational item for the Committee to review. No action required C. California Asset Management Program (CAMP) March 2004 Statements Rec: Informational item for the Committee to review. No action required D. City and Redevelopment Agency Monthly Financial Report for City Council for March 2004 Rec: Report and submit to City Council Action: E. Parkview Professional Office Buildings - Financial Report for March 2004 Rec: Review and file report Action: F. Palm Desert Golf Course Facilities Corporation Financial Information for March 2004 Rec: Review and file report Action: 2 042604.wpd INVESTMENT & FINANCE.MMITTEE • AGENDA April 28, 2004 VIII. 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 1. Rec: Status report on issuing new bonds Action: 2. Rec: Hiring Citigroup Global Markets, Inc. to Refund the 1995 Project Areas No. 1 and No. 2 Bond Issues Action: X. NEXT MEETING - Wednesday, May 26, 2004 at 10:30 a.m. XI. ADJOURNMENT I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda for the Investment and Finance Committee was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this 21 s` day of April, 2004. D a Leal, Re�di g S retary 3 042804.wpd • • City of Palm Desert /�,I „� , City and Redevelopment Agency Portfolios :.1 �,y COMPLIANCE ANALYSIS AND INVESTMENT REPORT ;` ` IA :re'� � ,. , March 2004 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)will next meet on 4 May to review short-term interest rates. Retail sales and hiring increased significantly in March, suggesting that the U.S. economy is now growing on its own, as the favorable effects of tax cuts and low mortgage rates begin to ebb. Core consumer prices and the Consumer Price Index also surged during the same period, however, leading some economists to believe that the FOMC may raise short-term interest rates as early as August in order to dampen inflation. The Federal Funds futures market has priced in a 0.75% increase in short-term interest rates during 2004. Energy prices, in particular, have risen sharply over the last few weeks. Gasoline is expected to peak at$3.00 per gallon in California during the summer. Inflationary expectations have influenced mortgage rates, which have risen from 5.5% to 6.0% over the last month. If they continue to rise, then they may put downward pressure on housing prices. The FOMC appears to have linked interest rate hikes to the amount of excess capacity. Chairman Greenspan has said that the unemployment rate (currently 5.7%) could go as low as 4% before wage pressures would emerge. Similarly, the FOMC has not increased interest rates when the capacity utilization rate (currently 76.5%) has been below 82%. Pis Qihson5 c.c.M r Treasurer PORTFOLIO STATISTICS Dollars in Thousands MAR-04 FEB-04 JAN-04 DEC-03 NOV-03 OCT-03 CITY Month-End Book Value*** $ 126,691 $ 124,938 $ 127,837 $ 132,836 $ 132,138 $ 134,142 Month-End Market Value*** $ 127,019 $ 125,243 $ 128,091 $ 133,087 $ 132,214 $ 134,231 Paper Gain(Loss) $ 328 $ 305 $ 254 $ 251 $ 76 $ 89 Prior Year Book Variance $ (28,114) $ (39,878) $ (46,315) $ (3,851) $ (10,382) $ (9,912) Interest Earnings $ 161 $ 143 $ 168 $ 172 $ 169 $ 175 Yield-To-Maturity 1.56% 1.58% 1.58% 1.58% 1.61% 1.61% Weighted Maturity(Days) 119 111 100 92 94 94 Effective Duration 0.22 0.21 0.18 0.16 0.17 0.17 RDA Month-End Book Value *`* $ 163,515 $ 164,571 $ 163,130 $ 141,723 $ 144,184 $ 144,220 Month-End Market Value*** $ 165,671 $ 166,715 $ 165,294 $ 143,881 $ 146,322 $ 146,360 Paper Gain (Loss) $ 2,156 $ 2,144 $ 2,164 $ 2,158 $ 2,138 $ 2,140 Prior Year Book Variance $ 58,734 $ 60,901 $ 58,107 $ 48,936 $ 51,423 $ 49,336 Interest Earnings $ 174 $ 154 $ 151 $ 159 $ 155 $ 162 Yield-To-Maturity 1.20% 1.20% 1.24% 1.29% 1.29% 1.30% Weighted Maturity(Days) 91 93 91 89 87 87 Effective Duration 0.04 0.06 0.06 0.03 0.03 0.04 *** Omits SLGSs. • Cit1�f Palm Desert-- Portfolio Characteristics 31 March 2004 Dollars in Thousands Ageing Interval Market Value ( \ < 1 M $ 65,352 General Fund Ageing' <2M - <3M - 100 <6M 12,083 80 - 70 < 1YR 9,718 a -, <2YR - 0 60 - < 3YR - t a° 40 - <4YR 6,012 <5YR - 20 - 13 10 > 5YR - 0 0 0 In In 0 Total: $ 93,165 <1 M <2M <3M <6M c 1YR <2YR Ratings* Market Value Credit Quality' Aaa $ 14,934 l Unrated** 85,956 Aaa Aa 7,219 • 13%� Unrated** A 10,596 77% Al/P1 5,004 I A 10°/ Total: $ 123,709 Aa ` 0% C J Sector Market Value Asset Allocation) Money Market Funds $ 23,116 LAIF LAIF 40,000 35% RDA Loan 32,785 MTNs 20,299 RDA Loan U.S. Treasuy 28% Money Market Federal ral ry -Agency 2,505 Funds Commercial Paper 5,004 20% Total: $ 123,709 MTNs C 17% J Month City Yield LAIF Yield Variance Performance' Apr03 1.45 1.86 -0.41 May 1.62 1.77 -0.15 2.9 Jun 1.58 1.70 -0.12 Jul 1.46 1.65 -0.20 a 2.5 - Aug 1.43 1.63 -0.20 - Sep 1.62 1.64 -0.01 u. 2'1 Oct 1.61 1.60 0.01 r 17 y Nov 1.61 1.57 0.03 r II air r nI _n Dec 1.58 1.55 0.03 1.3 ■' ,® Jan04 1.58 1.53 0.05 Apr03 May Jun Jul Aug Sep Oct Nov DecJan04 Feb Mar Feb 1.58 1.44 0.14 Mar 1.56 1.47 0.09 ®LAIF Yield CI City Yield 2 Moody's Credit Ratings LAIF, and City Loan to RDA Page 2 of 7 • • City of Palm Desert Portfolio Holdings 31 March 2004 Market Ratings Par Value 1 Issuer I Coupon I Maturity Cost YTM Price I Value Moodys Medium-Term Notes $ 2,355,000 CHEVRON-TEXACO 6.63 10/1/04 $ 2,419,261 1.13 102.67 $ 2,417,775 Aa2 $ 3,000,000 FORD 7.20 6/15/07 $ 3,122,549 5.75 109.78 $ 3,293,343 A3 $ 2,500,000 FORD 7.20 6/15/07 $ 2,602,124 5.75 109.78 $ 2,744,453 A3 $ 2,500,000 FORD 7.50 6/15/04 $ 2,523,403 2.84 101.20 $ 2,529,995 A3 $ 2,000,000 FORD 6.70 7/16/04 $ 2,020,030 3.17 101.45 $ 2,029,068 A3 $ 2,425,000 GENERAL ELECTRIC 4.25 1/28/05 $ 2,483,367 1.30 102.41 $ 2,483,336 Aaa $ 2,360,000 NORTHERN TRUST 6.65 11/9/04 $ 2,437,739 1.17 103.19 $ 2,435,206 Aa3 $ 1,270,000 PITNEY BOWES 5.95 2/1/05 $ 1,318,480 1.32 103.25 $ 1,311,274 Aa3 $ 1,000,000 WACHOVIA 7.70 2/15/05 $ 1,054,535 1.38 105.45 $ 1,054,456 Aa3 $ 19,410,000 Subtotal $ 19,981,488 2.93 $ 20,298,905 Commercial Paper--Discount $ 2,510,000 CITIGROUP 1.05 8/12/04 $ 2,498,140 1.07 99.60 $ 2,500,003 P-1 $ 2,517,000 GENERAL ELECTRIC 1.06 9/15/04 $ 2,499,880 1.10 99.47 $ 2,503,727 P-1 $ 5,027,000 Subtotal $ 4,998,020 1.08 $ 5,003,730 - Federal Agencies--Discount $ 2,513,000 FED NATIONAL MTG ASSOC 1.06 7/28/04 $ 2,499,670 1.08 99.67 $ 2,504,707 Aaa $ 2,513,000 Subtotal $ 2,499,670 1.08 $ 2,504,707 LGIP $ 40,000,000 L.A.I.F. 0.00 4/1/04 $ 40,000,000 1.47 100.00 $ 40,000,000 NR $ 40,000,000 Subtotal $ 40,000,000 1.47 $ 40,000,000 LGIP $ 13,170,123 C.A.M.P. 0.00 4/1/04 $ 13,170,123 0.92 100.00 $ 13,170,123 NR $ 13,170,123 Subtotal $ 13,170,123 0.92 $ 13,170,123 Pooled Funds AIM $ 9,946,064 PRIME PORTFOLIO 0.00 4/1/04 $ 9,946,064 0.63 100.00 $ 9,946,064 Aaa $ 9,946,064 Subtotal $ 9,946,064 0.63 $ 9,946,064 City Loan to RDA $ 32,785,480 CITY OF PALM DESERT 0.00 4/1134 $ 32,785,480 1.47 100.00 $ 32,785,480 NR $ 32,785,480 Subtotal $ 32,785,480 1.47 $ 32,785,480 Total Investments $ 122,851,667 $ 123,380,845 1.56 $ 123,709,010 NR= Not Rated Page 3 of 7 City of Palm Desert• • Portfolio Holdings 31 March 2004 Market Ratings I Par Value I Issuer I Coupon I Maturity I Cost I YTM Price I Value Moody's Cash $ 2,443,927 CITY MAIN CHKG 0.00 4/1/04 $ 2,443,927 N/A 100.00 $ 2,443,927 NR $ 323,643 DESERT WILLOW CHKG 0.00 4/1/04 $ 323,643 N/A 100.00 $ 323,643 NR $ 23,003 OFFICE COMPLEX TRUST 0.00 4/1/04 $ 23,003 N/A 100.00 $ 23,003 NR $ 389,010 RECREATIONAL FAC CHKG 0.00 4/1/04 $ 389,010 N/A 100.00 $ 389,010 NR $ 3,179,584 Subtotal $ 3,179,584 $ 3,179,584 Total Investments and Cash $ 126,031,251 $ 126,560,429 $ 126,888,594 NR= Not Rated Page 4of7 • Palm DesertlCedevelopment Agency -- Portfolio Characteristics 31 March 2004 • Dollars in Thousands Ageing Interval Market Value l < 1 M $ 94,318 Portfolio Ageing w/o SLGSsI <2M 3,002 <3M 3,995 100 <6M 13,618 90 - 82 80 - < 1YR e 70 - <2YR - 0 60 - a 50 - <3YR - c 40 - <4YR O. 30 - <5YR - 20 - 12 >5YR - 10 - 3 rl n 0 0 0 0 Total: $ 114,933 < 1M <2M <3M <6M <1YR <2YR <3YR <4YR J Quality* Market Value Credit Quality' Aaa $ 62,109 Unrated** 90,621 0:::DUnrated** Aa - Aaa 59% A - 41% Al/P1 10,511 Total: $ 163,241 2 Sector Market Value ' Asset Allocation, Money Market U.S.Treasury $ 7,117 Funds Money Market Funds 79,125 54% LAIF 60,985 Federal Agency 5,503 Commercial Paper 10,511 Corporate Bonds - U.S.Treasury LAIF Total: $ 163,241 5% 41% K / Month RDA Yield LAIF Yield Variance Performance Apr03 1.74 1.86 -0.12 May 1.71 1.77 -0.06 2.1 Jun 1.71 1.70 0.01 ' Jul 1.56 1.65 -0.09 Aug 1.36 1.63 -0.27 15.1 Sep 1.28 1.64 -0.36 m 1.6 Oct 1.29 1.60 -0.28 5-- Nov 1.29 1.57 -0.28 iI■R.f. Dec 1.29 1.55 -0.25 1.1 Jan04 1.24 1.53 -0.29 Apr03 May Jun Jul Aug Sep Oct Nov Dec Jan04 Feb Mar Feb 1.20 1.44 -0.24 Mar 1.20 1.47 -0.28 0 LAIF Yield O RDA Yield K. J • * Moody's Credit Ratings ** LAIF Page 5 of 7 • Palm Desert Redevelopment Agency Portfolio Characteristics 31 March 2004 Market I Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's Commercial Paper--Discount $ 3,008,000 CITIGROUP 1.04 5/10/04 $ 2,999,223 1.06 99.89 $ 3,004,624 P-1 $ 3,021,000 GENERAL ELECTRIC 1.10 9/22/04 $ 2,999,215 1.14 99.45 $ 3,004,405 P-1 $ 2,008,000 TOYOTA 1.01 6/23/04 $ 1,999,831 1.03 99.76 $ 2,003,080 P-1 $ 2,500,000 WELLS FARGO BANK 0.99 4/22/04 $ 2,494,294 1.01 99.94 $ 2,498,457 P-1 $ 10,537,000 Subtotal $ 10,492,564 1.06 $ 10,510,567 U.S. Treasury--Discount $ 7,143,000 UNITED STATES TREASURY 4.59 8/15/04 $ 4,989,671 5.54 99.64 $ 7,117,036 Aaa $ 7,143,000 Subtotal $ 4,989,671 5.54 $ 7,117,036 Federal Agency--Discount $ 2,000,000 FED NATIONAL MTG ASSOC 1.02 6/23/04 $ 1,991,783 1.04 99.77 $ 1,995,400 Aaa $ 3,523,000 FED NATIONAL MTG ASSOC 1.10 9/3/04 $ 3,499,963 1.14 99.56 $ 3,507,499 Aaa $ 5,523,000 Subtotal $ 5,491,747 1.10 $ 5,502,899 LGIPs $ 40,000,000 L.A.I.F. 0.00 4/1/04 $ 40,000,000 1.47 100.00 $ 40,000,000 NR $ 6,226,680 L.A.I.F. (HOUSING) 0.00 4/1/04 $ 6,226,680 1.47 100.00 $ 6,226,680 NR • $ 9,749,381 L.A.I.F. BOND PROCEEDS 0.00 4/1/04 $ 9,749,381 1.47 100.00 $ 9,749,381 NR $ 5,009,039 L.A.I.F. BOND PROCEEDS 0.00 4/1/04 $ 5,009,039 1.47 100.00 $ 5,009,039 NR $ 60,985,099 Subtotal $ 60,985,099 1.47 $ 60,985,099 LGIP $ 29,635,942 C.A.M.P. 0.00 4/1/04 $ 29,635,942 0.92 100.00 $ 29,635,942 NR $ 29,635,942 Subtotal $ 29,635,942 0.92 $ 29,635,942 Pooled Funds --AIM $ 49 489,152 PRIME PORTFOLIO 0.00 4/1/04 $ 49,489,152 0.63 100.00 $ 49,489,152 Aaa $ 49,489,152 Subtotal $ 49,489,152 0.63 $ 49,489,152 Total Investments $ 163,313,193 $ 161,084,175 1.20 $ 163,240,695 Cash $ 2,111,513 HOUSING AUTH CHKG 0.00 4/1/04 $ 2,111,513 N/A 100.00 $ 2,111,513 NR $ 318,814 HOUSING AUTH TRUST 0.00 4/1/04 $ 318,814 N/A 100.00 $ 318,814 NR $ 2,430,326 Subtotal $ 2,430,326 $ 2,430,326 Total Investments and Cash $ 165,743,520 $ 163,514,501 $ 165,671,021 • 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 31 March 2004,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 28 April 2004, 9,1141.4S. C7Gbjon4 c.c.M.r. City Treasurer SUMMARY OF AUTHORIZED INVESTMENTS California Government Code I 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 Limit 5 Years No Limit 0.0% 3.1% _ 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% 2.0% 3.4% 53601(f) Bankers's Acceptances 180 Days 40% 180 Days 40% A-1 &P-1 - - 53601(g) Commercial Paper 270 Days 25% A-1+or P-1 270 Days 25% A-1+or P-1 4.1% 6.5% 53601(h) Negotiable CDs 5 Years 30% 5 Years 30% AA-or Aa3 - - 53601(i) Repos 1 Year No Limit 30 Days 20% AAA&Aaa - _ - 53601(i) Reverse Repos 92 Days 20% Not Authorized 53601(j) Medium-Term Notes 5 Years 30% A 5 Years 30% A 16.2% . 0.0% 53601(k) Mutual Funds 90 Days 20% AAA&Aaa 90 Days 20% (2) AAA&Aaa 8.1% 30.7% 53601(1) Trust Indenture Debt Not Authorized 53601(m) Secured Bank Deposits 5 Years No Limit Not Authorized 53601(k) Local Government AAA&Aaa �AAA&Aaa 10.7% 18.4% Investment Pools 90 Days 20% or Advisor 90 Days 20% (2) or Advisor 53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Authorized Securities AA(Security) 16429 LAW , No Limit No Limit 32.4% 37.9% (1) The City loan to RDA,which is not a bond, has been approved by the Palm Desert City Council. 73.4% 100.0% (2) Maximum limit for mutual funds and local government investment pools,excluding bond proceeds. Certified California Municipal Treasurer Page 7 of 7 STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER • SACRAMENTO g Local Agency Investment Fund PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 March, 2004 Statement CITY OF PALM DESERT Account Number : 98-33-621 Ann: CITY TREASURER 73510 FRED WARING DRIVE PALM DESERT CA 92260 Account Summary Total Deposit : 0.00 Beginning Balance : 40,000,000.00 Total Withdrawal : 0.00 Ending Balance : 40,000,000.00 - AI `,c, 4 Page : 1 of 1 STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER 0 SACRAMENTO rl' Local Agency Investment Fund PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 March, 2004 Statement PALM DESERT REDEVELOPMENT AGENCY Account Number - 65-33-015 Ann: TREASURER 73-510 FRED WARING DRIVE PALM DESERT CA 92260 Account Summary Total Deposit : 0.00 Beginning Balance : 40,000,000.00 Total Withdrawal : 0.00 Ending Balance : 40,000,000.00 ‘_ cv . -a. u„ u2 :A. o.=,=• - Page : 1 of 1 d.<.rr STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER • •SACRAMENTO i 4e.16' Local Agency Investment Fund PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 March, 2004 Statement PALM DESERT HOUSING AUTHORITY Account Number : 25-33-003 Attn: DEPUTY CITY TREASURER 73-510 FRED WARING DRIVE PALM DESERT CA 99260-2578 Account Summary Total Deposit : 0.00 Beginning Balance : 6,226,680.06 Total Withdrawal : 0.00 Ending Balance : 6,226,680.06 �l r ,tc %� �( Page : 1 of I I t ! Rr f I ; 1 CALIFORNIA ASSET I 'jo STATEMENT MANAGEMENT PROGRAM_ '•- 1 ''1 Li/ 15 IOINT POWERS AUTHORITY 50 CA Li FORNIA STREET 23RO FLOOR SAN FRANCISCO CALIFORNIA 941 I 1 FOR ACCOUNT INFORMATION: 800-729-7665 STATEMENT DATE: 3/31/2004 CITY OF PALM DESERT ACCOUNT NUMBER: 553-00 OPERATING FUND ATTN: PAUL GIBSON FUND NAME: Cash Reserve Portfolio 73-510 FRED WARING DRIVE PALM DESERT,CA 92260 Page 1 of 1 ,. _ AccotintFSummarylasof 31%20 t -- , 1!,,i� £, %- I,� " $w.,'. ie�r 4 a#::-Sa „ .c .. �+ �r.,-� — --,,,,se a, r s' - uins�'c�. �n.`win 3:.r' ;&+4«oau....,..$"mho�e4�,^md�d'e.n n ,..n x.,.s'L...Laitlia Statement Income Dividends Capital Gains Total Shares Account Date Pald This Year Paid This Year Owned Value 3/31/2004 $36,065.36 $0.00 13,170,123.140 $13,170,123.14 1Trart aCtIORES MIDa,...or 3/i1/2004 3/3. 004 v � 3 i Beginning Balance Purchases Reinvestments Redemptions Ending Balance $12,860,176.80 $1,000,000.00 $9,946.34 $700,000.00 $13,170,123.14 1 TRADE SETTLE 'I ,_� e e >' -.! - n„� `�-' DOLLARAMOUNT '�SHARE`S SHAHEStTHiS ,TOTAL '§ DATE DA E RA t,,,P T1ONMc OF ANSACTION " I �: � -.1 •;. , ., ,r*fw� . , .,. x , w-w�. xRICE, �� TRANSACTION :SHARF,siOW,NED€ 03/01/04 Beginning Balance 12,860,176.800 03/26/04 3/26/2004 Redemption-Wire Red. $700,000.00- $1.00 700,000.000- 12,160,176.800 03/30/04 3/30/2004 Purchase-Wire Pur. $1,000,000.00 $1.00 1,000,000.000 13,160,176.800 03/31/04 4/1/2004 Accrual Income Div Reinvestment-DIV $9,946.34 $1.00 9,946.340 13,170,123.140 • Message Line: The Monthly Distribution Yield is 0.92%,the Monthly Effective Annual Yield is 0.92%. Shares are distributed by PFMAM, Inc.,member NASD. NASD has a Public Disclosure hotline at 800-289-9999, a website at www.nasdr.com,and a public disclosure brochure. • • °��`'' C ALIFORNI A ASSET STATEMENT MANAGEMENT PROGRAM JOINT POWERS AIJTFIORITT St)CAI IFORNIA SFREET 23RID FLOOR S.AN FRANCISCO CALIFORNIA 9411 I FOR ACCOUNT INFORMATION: 800-729-7665 STATEMENT DATE: 3/31/2004 PALM DESERT REDEVELOPMENT AGENCY ACCOUNT NUMBER: 553-02 GENERAL FUND ATTN: PAUL GIBSON FUND NAME: Cash Reserve Portfolio 73-510 FRED WARING DRIVE PALM DESERT,CA 92260-2578 Page 1 of 1 . ... '."ctx"" Rk9€'MX t any ark "fig. &•Se suerme a 41.3/3a12004 = y €� i it . . I# arSitx..-a,.` .-ist> MaG-L.hF�Sa.:-arx -r• Statement Income Dividends Capital Gains Total Shares Account Date Pald Thls Year Paid Thls Year Owned Value 3/31/2004 $68,188.58 $0.00 29,635,942.090 $29,635,942.09 Transaction Summarylfoi23/1/2004, 3/3+1/2004 el, r _ if_: g a ,, " Beginning Balance Purchases Reinvestments Redemptions Ending Balance $29,812,429.22 $3,000,000.00 $23,512.87 $3,200,000.00 $29,635,942.09 tTRADE ' SETTL" #. to DOLLAR'AMOUNT •SHARE y SHARES IS ..l L "�TOTALI 'g; ' --DATE DATE,, ,TRANSACTIO ."` OF TFIANTACTION -Dili a ';, TRANSAGTIONF., HA O SRES W NEDs, 03/01/04 Beginning Balance 29,812,429.220 03/19/04 3/19/2004 Purchase-Wire Pur. $3,000,000.00 $1.00 3,000,000.000 32,812,429.220 03/24/04 3/24/2004 Redemption-Wire Red. $3,200,000.00- $1.00 3,200,000.000- 29,612,429.220 03/31/04 4/1/2004 Accrual Income Div Reinvestment-DIV $23,512.87 $1.00 23,512.870 29,635,942.090 Message Line: The Monthly Distribution Yield is 0.92%,the Monthly Effective Annual Yield is 0.92%.Shares are distributed by PFMAM, Inc., member NASD. NASD has a Public Disclosure hotline at 800-289-9999, a website at www.nasdr.com,and a public disclosure brochure. iruuw• 8.AAA���///i N O , 0 0 , O 'O b C H = N y 0 7 5. c C C t'' 9Htut a• .* ti7 ,� `< ed3 O. 0 AW,r i rnnro Is O ' 9 m +s; = .. 2 O c cu co d Vt ,r' J. l Col Ul 2 sr. n, n1 C.d f, (p'" TS d G O 01 IA to y n n , ,. ter, ep vO = " i in k n O -< a• w -ryo co nw W J . O\ w O\ V N p O 0• w In In coo LA a I"- C y co A D n AA co V W .D l0 00 O = at -0 t o. N " '13 C W G a O •4 O O O - O 0 O. O1 r N N N N W J .W G. 3 a 0 co OV O O O OV O .00 O OU0 U No U U can -. u J ,' y Li, o w O O O W o • O u. l0 O w O o 00 o U R 1-3 IV O .-• O• Ni O A N O. U 01 Cd O N) O O :H ^ A V 0:1. 't In W _ V W O 10 10 G .+ --.1 O O0 LA a 10 W V. 0, O '0 W v. v. r1 -1 `w .a. N O W o 0 •,S 00 lit 00 0 N y^/W" yyN yyO n) ON yVV c0 //P 0 yO r�/--4 yO O. R O 4 a 4 4 Irl- a a F a y rti r> .l O r o• .— O O A .- IQ LA 0 n O O ,— CO O u. N ,A co n , '-- a .A. o o LUi. Oar 0, 0 y 00 b Li CO 0 N W.Go O0t Q :0 A p�o1^'0p O O V U A O\ m N N lO .a. l0 O cn u. N A o ... '+ U O A w N N N g - �. m aV 00 O A V NO 0 S '• ,"Z d `< .• A N w .- LA cn u. O O N O o .- N W ;.1 4 ni W J NO V. O !NJ V i*1 `4 O. 01 u, il. A NO -a "7 00.. vAi V NO O0 V Ol A C,J in l0 N -4 A V W O O 4 m r , I . A w W l0 W W H A w tO f0 W N N W c o o C V 00 O\ A `'O O0 0. O W O, A N W W O C d V N V lO cn co o0 lD W U lO CA 0'-O �O�p, Cr, w m • o 0 0 0 0 0 ^ p o o c e a s W e ^' z P/ri I . m E FNd y 'xO a m b 1. Itt a c_° J- X lb 371 C cn O a t; :t O N K ., t City of Palm Desert • Parkview Office Complex . Financial Statement 4 for Fiscal Year 2003-2004 March-04 March-04 # % YI'D YTD # % Budget Actual Variance Variance Budget Actual Variance Variance Revenues Rental $ 68,500 $ 72,170 $ 3,670 105.36% - - $ 616,500 $ 641,325 $ 24,825 104.03% Dividends/Interest $ 4,375 $ - $ (4,375) 0.00% $ 39,375 $ 216 $ (39,159) 0.55% t. E Total Revenues $ 72,875 $ 72,170 $ (705) 99.03%1 ` f $ 655,875 $ 641,540 $ (14,335) 97.81% i Expenses 3 s Professional-Accounting&Auditing $ 8,000 $ 8,000 $ - 100.00% $ 72,000 $ 72,000 $ - 100.00% Professional-Consultants $ 6,000 $ 5,555 $ 445 92.58% $ 54,000 $ 50,692 $ 3,308 93.87% Tenant Improvements $ 3,000 $ - $ 3,000 0.00% $ 27,000 $ 7,120 $ 19,880 26.37% Repairs&Maintenance Building $ 8,000 $ 27,860 $ (19,860) 348.25% ! $ 72,000 $ 100,158 $ (28,158) 139.11% Repairs&Maintenance-Landscaping $ 2,300 $ - $ 2,300 0.00% - .I $ 20,700 $ - $ 20,700 0.00% Utilities-Water $ _ 150 $ 108 $ 42 71.94% ._ $ 1,350 $ 964 $ 386 71.38% Utilities-Gas/Electric $ 8,000 $ 4,072 $ 3,928 50.90% { $ 72,000 $ 61,670 $ 10,330 85.65% Utilities-Waste Disposal $ 700 $ 530 $ 170 75.77% . $ 6,300 $ 4,420 $ 1,880 70.15% Telephone $ 200 $ 205 $ (5) 102.68%I _ $ 1,800 $ 1,467 $ 333 81.51% Insurance $ 521 $ - $ 521 0.00%i •: $ 4,687 $ - $ 4,687 0.00% 1 Total Expenses $ 36,871 $ 46,331 $ (9,460) 125.66%( ') $ 331,837 $ 298,491 $ 33,346 89.95°G% OperatingIncome_ $ 36,004 $ 25,839 $(10,165) . 7I;77% - $ 324,038. :$343,049 $ 19,011 105.87% Equipment Replacement Reserve $ 14,000 $ 13,306 $ 694 95.04% $ 126,000 $ 1/9,754 $ 6,246 95.04% Net ln4onte. $. 22,004: $ 1Z533 $ 9,471 SG.96.10 --� ( ° ,:, $19¢,038 =$ 223,295 $ '2$;25T, 112.756A1 2004 Investment Reportinv Report 2004 City of Palm Desert • Parkview Office Complex • Vacancy Rate Schedule by Suite March 2004 Suite Square No. Tenant Feet 73-710 Fred Waring Drive-Two (2) Story Building 100 Hanover 1,915 100A William Bonneheim 645 102 Bergren&Associates 1,360 103 National Multiple Sclerosis 488 104 Arthritis Foundation 960 106 Coachella Valley Economic Partnership 928 108 Assembly Rules Committee-Assemblyman Benoit 450 112 Senator Battin 1,741 114 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 Mountain Conservancy 480 205 Adopt-A-Class 700 208 Alzheimer's Association 960 210 Wilson,Pesota &Pichardo 3,040 2004 Investment ReportVacancy Report 1 City of Palm Desert ® Parkview Office Complex • Vacancy Rate Schedule by Suite March 2004 211 State of California Department of Food&Agriculture 937 217 Joe B. McMillan,. Esq. 775. 220 EPA-Moved From Suite 101A 1,607 222 Cove Commission-Fire Marshal 1,900 222 CITY Storage-Vacant 1,081 Total square footage(2 story Building) 31,562 Vacancy Rate-1,081/31,562= 3.43% 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--1,081/51,191 2.11% Occupancy Rate-50,110/51,191 97.89% 2004 Investment ReportVacancy Report 2 City of Palm Desert • • Desert Willow • Budget Vs Actual For the month of March 2004 Budgeted Actual Budgeted Actual March March $ Percentage Year to Year to S Percentage Revenue 2004 2004 Variance Variance Date Date Variance Variance Course&Ground $ 717,030 $ 823,855 S 106,825 114.90% $ 3,352,710 $ 3,493,402 $ 140,692 104.20% Carts $ 43,417 $ 54,985 $ 11,568 126.64% $ 244,575 $ 276,815 $ 32,240 113.18% Golf Shop $ 101,070 $ 134,661 $ 33,591 133.24% $ 602,075 $ 651,010 $ 48,935 108.13% Range $ 5,100 $ 4,582 $ (518) 89,84% $ 31,785 $ 30,727 $ (1,058) 96.67% Food&Beverage $ 213,699 S 249,741 $ 36,042 116.87% $ 1,158,048 $ 1,210,878 $ 52,830 104.56% Interest Income $ 200 S - $ (200) 0.00% $ 1,900 $ - $ (1.900) 0.00% Total Revenues $ 1.080 516 $ 1,267,824 $ 187,308 117.34% $ 5,391,093 $ 5.l 662 832 $ 271,739 105.04%I Payroll Proshop $ 5,678 $ 2,798 $ 2,880 49.28% $ 48,571 $ 43,569 $ 5,002 89.70% Cart $ 32,124 $ 31,871 5 253 99.21% $ 192,884 $ 196,237 $ (3,353) 101,74% Course&Ground $ 123,314 $ 123,227 S 87 99,93% $ 1,129,243 $ 1,121,521 $ 7,722 99.32% Golf Operations $ 31,974 $ 32,712 S (738) 102.31% $ 247,059 $ 217,401 $ 29,658 88.00% General&Administration S 36,945 $ 44,441 S (7,496) 120.29% $ 328,221 $ 359,384 $ (31,163) 109.49% Food&Beverage $ 78,131 $ 84,332 S (6,201) 107.94% $ 571,835 $ 592,852 $ (21,017) 103.68% Total Payroll $ 30814 gy 66 $ 319,381 S (11,215 103.64% $ 2517813 $ 2530964 $ (13151) 100.52%I �... ...,a,+c.-_s. ,a,-__•_a , .,_. .-. >:. , Other Expenditures Perimeter Landscaping $ - $ - $ - 0.00% $ - $ - $ - 0.00% Proshop $ 3,400 $ 5,325 $ (1,925) 156.62% $ 39,830 $ 50,290 $ (10,460) 126.26% Proshop-COGS $ 52,930 $ 63,363 $ (10,433) 119.71% $ 276,364 $ 265,203 $ 11,161 95.96% Cart $ 12,220 $ 17,747 $ (5,527) 145.23% $ 114,120 $ 117,562 $ (3,442) 103,02% Course&Ground-North Course $ 33,300 $ 29,508 $ 3,792 88.61% $ 538,945 $ 488,799 $ 50,146 90.70% Course&Ground-South Course $ 30,038 S 28,863 $ 1,175 96.09% $ 476,998 $ 561,052 $ (84,054) I17,62% Course&Ground-Desert Pallet-N $ 405 S 302 S 103 74.57% S 6,040 $ 3,791 $ 2,249 62,76% Course&Ground-Desert Pallet-S $ 1,005 $ 330 $ 675 32.84% $ 6,640 S 4,999 $ 1,641 75.29% Golf Operations $ 1,225 $ 1,136 S 89 92.73% $ 11,120 $ 8,895 $ 2,225 79.99% General&Administration $ 73,442 $ 72,159 S 1,283 98.25% $ 599,616 $ 546,416 $ 53,200 91,13% Range $ 150 $ 26 S 124 17,33% $ 11,450 $ 8,971 $ 2,479 78,35% Food&Beverage $ 22,087 $ 27.799 $ (5,712) 125.86% $ 200,027 $ 214,129 $ (14,102) 107.05% Food&Beverage COGS $ 65,303 $ 75,036 $ (9,733) 114.90% $ 355,613 $ 377,199 $ (21.5861 106.07% Management Fee $ 25,000 $ 25,000 $ - 100.00% $ 225,000 $ 225,000 $ - 100,00% Financing/Lease $ 5,294 $ 3,894 $ 1,400 73.55% $ 50,663 $ 47,953 $ 2,710 94.65% Total Other Expenditures $ 325,799 S 350,488 $ (24,689) 107,58% S 2 912,426 $ 2 920,259 S (7,833) 100.27%J Desert Willow Golf Academy Desert Willow Golf Academy $ 18,800 $ 25,448 $ 6,648 135.36% $ 114,700 S 118,614 $ 3,914 103.41% COGS-Merchandise $ (7,204) $ (11,215) $ (4.011) 155.68% S (57,880) $ (67.064) $ (9,184) 115.87% Other Expenditures $ (6,575) $ (10,507) $ (3,932) 159.80% $ (50,625) $ (50.006) $ 619 98.78% $ Learning Center Income(lAss) $ 5,021 $ 3,726 $ (1,295) 74.21% $ 6,195 $ 1,544 $ (4)651) 24.92% Operating lncome(Loss) $ 451,572 $ 601,681 $ 150,109 133.24% $ (32,951) $ 213.153 $ 246,104 -646.88% Equipment Reserve Replacement $ 71,955 $ 67,054 $ (4,901) 93.19% S 647,595 $ 615,580 $ (32.0151 95.06% Net Income Loss) S 379617 $ 534.627 S 155,010 140.83% $ 680,546) $ 402,427) S 278,119 59.13% Snapshot of Golf Rounds Budgeted(mo) Actual(mo) Variance Variance% Budgeted(ytd) Actual(ytd) Variance Variance% Resident 3,100 3,202 102 I03% 14,700 15,239 539 104% Non Resident 5,743 7,433 1,690 I29% 34.707 38,115 3,408 110% Other - 64 64 100% - 260 260 100% Complimentary 375 516 141 138% 2,344 3,169 825 135% Total 9,218 11,215 1.997 122% 51,751 56,783 5,032 110% Folder:Desert Willow 2004:DW2004;Financial Statement Page 1 • N u) O n NO d' l0 • N W OOOIi O CO 0.7 NOO N0 “, ' al co)co) t") 000: 00 O co n to-i o o CO V.y 0 N V) —1 N Inn 7 P ki N 0) n N <+) ' -4N 0 ONON .+ N 7 W .. m 7N10 N ti N Ia NNUJ -4 N - 0 Q M .i N Q N .-i .r l 4) os tW a, m d g in m w 0 Y sa Y 0 o T Fi 7 i 0 o T ,., 7 a w v 00 a y L q k p V c N C D 0 C7 0. 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" .g o ; a N"' i v 1 7 :7 a m N g< _ mvm .o Y . m<e� m oQ m ., _ 3 _ ce o 9 3 a` f F F `a F o • 'E Y ' } i 5 } c c } R L= `o ¢ ° ti o f x to r d E £ _� fl r gE � r5 d E € u r a a Xgg u u ^a su, a E — u xg >" Eyg 3 2 e — m 8 E e `a c r'� ' > 2 r d m �a'J�iBz`�.`^,u".f cl �a'y25 z°O�IYE c� ti �a'�K z'B�LL� v c� �aD D h 0 0 0 o CO It' ■ : CV : ` ° § . 4.4 vs.•o \; k, JH0 . al o e ) ^ I • Li � % . § / - / } . 2 ! 0 . ! a a ) \ , 0) Cr) Cr; I.447 D TsTs | 1 � § f 4.1 £ ,\ t a FP 16 CO CO! - r VIC lb \ / �- )} � 0 � � � � °a $ . al - te ! f ) ( 2 k . ] ) K ) k a / ! / J ; ; | ; § E) 7 u H �\ / ) °» ~ .. \ \ \ & \ • • • Desert Willow Breakdown of Rounds • per point of sale system Desert Willow - Combined Analysis- MARCH 2004 Resident 3,202 $ 144,090 F $ 45.00 28.55% Non-Resident 7,433 $ 731,504 $ 98.41 66.28% Other 64 $ 640 ` $ - 0.57% Complimentary 516 $ 1,465 $ 2.84 4.60% Desert Willow Totals 11,215 $ 877,699 p $ 78.26 p 100.00% • DW2004;POS AVG RD Page 9 • Desert Willow • Breakdown of Rounds per point of sale system FIRECLIFF COURSE- MARCH 2004 Description No. Of Revenue Avg. Per Pct to Rounds I Per POS ' I Round I Total Resident Rounds Resident Fee 1,477 $ 66,465 $ 45.00 25.95% Total Resident ( 1,477 1 $ 66,465 I $ 45.00 1 25.95% I I Non Resident --1---- — Posted 47 $ 8,225 $ 175.00 0.83% IROC Des. PRTY 39 $ 3,218 $ 82.51 0.69% IROC MBR 100 $ 10,720 $ 107.20 1.76% Sunset 492 I $ 31,730 $ 64.49 8.65% Sunrise 265 $ 29,688 $ 112.03 4.66% Prime 1,178 $ 125,317 ' $ 106.38 I 20.70% Midday 193 $ 24,125 $ 125.00 3.39% Twilight 359 $ 33,625 $ 93.66 6.31% Outing 383 $ 45,520 $ 118.85 6.73% Wholesale 333 $ 34,628 $ 103.99 r 5.85% Player's Club 3 $ 240 $ 80.00 0.05% Fee Special Event Variable 390 $ 32,586 $ 83.55 6.85% Total Non Resident Rounds 3,782 $ 379,622 $ 100.38 66.46% Other Rounds Junior Walking 40 $ 400 $ 10.00 0.70% Total Other 40 $ 400 $ - 0.70% Complimentary VIP 58 $ - $ - 1.02% PGA Member 30 $ 495 $ 16.50 0.53% Donation - $ - $ - I 0.00% -COD / PDHS 205 $ - $ - I 3.60% Employee / Employee Guest 99 $ 385 $ 3.89 1.74% Total Complimentary 392 $ 880 $ 2.24 6.89% Total Round (FireCliff) 5,691 $ 447,367 $ 78.61 100.00% DW2004;POS AVG RD Page 10 • • Desert Willow • Breakdown of Rounds per point of sale system MOUNTAINVIEW COURSE- MARCH 2004 1 Description No. Of Revenue Avg. Per I Pet to Rounds Per POS Round I Total Resident Rounds Resident Fee 1,725 $ 77,625 $ 45.00 31.23% 'Total Resident 1,725 $ 77,625 I $ 45.00 31.23% Non Resident Posted Weekday 10 $ 1,750 $ 175.00 0.18% IROC Des. PRTY 29 $ 2,392 $ 82.48 0.52% 1ROC MBR 117 $ 12,352 $ 105.57 2.12% Sunrise 179 $ 19,375 $ 108.24 ' 3.24% Prime 1,125 $ 115,252 $ 102.45 20.37% Midday 255 $ 26,375 $ 103.43 4.62% Twilight 271 $ 25,445 $ 93.89 4.91% Sunset 367 $ 23,815 _ $ 64.89 6.64% Wholesale 200 $ 21,158 $ 105.79 3.62% Outing 741 $ 74,893 $ 101.07 13.41% Players Club/Guest 3 $ 240 $ 80.00 0.05% Fee Special Event Variable 354 $ 28,835 $ 81.45 6.41°l3 Total Non Resident Rounds 3,651 $ 351,882 I $ 96.38 66.09% Other Rounds Junior Walking 24 $ 240 $ 10.00 0.43% Total Other 24 $ 240 I $ - I 0.43% Complimentary VIP 22 $ - $ - 0.40% PGA Member 15 $ 175 $ 11.67 j 0.27% Champions Club 15 I $ - $ - ' 0.27% Employee / Employee Guest , 72 1 $ 410 $ 5.69 1.30% Total Complimentary 124 $ 585 $ 4.72 2.24% Total Round (Mountainview) 5,524 $ 430,332 $ 77.90 I 100% ]W2004;POS AVG RD Page 11 • City of Palm Desert • Desert Willow Cash Reserve Analysis for the month of March 2004 Cash Reserve Analysis One Month Required Reserve ` $ 500,000.00 I Cash on Hand 1 $ 694,971.44 r • Variance- Favorable Unfavorable $ 194,971.44 Page 12 Palmert Recreation Facilities Corpoeon Income Statement Mar-04 Mar-04 M % Budget Actual Variance Variance Food &Beverage Revenues $213,699 $249,741 $36,042 116.87% Total Revenues $213,699 $249,741 $36,042 116.87% Salaries $78,131 $84,332 ($6,201) 107.94% Cost of Goods sold-F&B $65,303 $75,036 ($9,733) 114.90% Food & Beverage Expense $22,087 $27,799 ($5,712) 125.86% Total Expenses $165,521 $187,167 ($21,646) 113.08% Net Income (Loss) $48,178 $62,574 $14,396 129.88% DW2004;PDRFC Budget Page 1 T CITY OF PALM DESERT I aril � f FINANCE DEPARTMENT � ; � 'h MEMORANDUM ♦,°aav3 .. TO: INVESTMENT AND FINANCE COMMITTEE • FROM: DIANA LEAL, RECORDING SECRETARY DATE: APRIL 22, 2004 SUBJECT: INVESTMENT AND FINANCE COMMITTEE REPORT FOR THE MEETING OF APRIL 28, 2004 Enclosed is the following report: IX. OLD BUSINESS B. Bond Issuance by Palm Desert Financing Authority 2. Rec: Hiring Citigroup Global Markets, Inc. to Refund the 1995 Project Areas No. 1 and No. 2 Bond Issues Action: Please incorporate with your Investment and Finance Committee meeting agenda packet. Thank you. IX. OLD BUSINESS B. Bond Issuance by Palm Desert Financing Authority 2. Rec: Hiring Citigroup Global Markets, Inc. to Refund the 1995 Project Areas No. 1 and No. 2 Bond Issues Action: ** Will be mailed under separate cover ** • • r•"'� '"` , PALM DESERT REDEVELOPMENT AGENCY N r" MEMORANDUM k , * f TO: INVESTMENT AND FINANCE COMMITTEE FROM: DENNIS M. COLEMAN, REDEVELOPMENT FINANCE MANAGER DATE: APRIL 21, 2004 SUBJECT: HIRING CITIGROUP GLOBAL MARKETS, INC. (CITIGROUP) TO REFUND THE 1995 PROJECT AREAS NO. 1 AND NO. 2 BOND ISSUES Recommendation: That the Investment and Finance Committee recommend that the Palm Desert Financing Authority hire the Citigroup Global, Inc. to refinance the 1995 Project Area No.1 and Project Area No. 2 bond issues. Background: The current interest rate market has rendered an opportunity to refinance our Project Area No. 1 and Project Area No. 21995 bond issues. There is a potential to extract approximately$1,800,000 of new funds while paying relatively the same debt service on both bond issues. Staff received two proposals, one from the Citigroup Global and the other from Kinsell, Newcomb & DeDios and Stinson Securities Kinsell/Stinson), as a combined proposal. Staff and Ken Dieker, our Financial Advisor, have reviewed both proposals and, based upon the review, recommend that the Investment and Finance Committee endorse staffs recommendation that the Palm Desert Finance Authority hire Citigroup to refund both bond issues. Citigroup's proposal provides greater savings to the Agency than the Kinsell/Stinson proposal. They have proposed a structure using premium coupons throughout the entire issue which lower the issue size. Citigroup has proposed to do the bond issue for a gross spread of$7.50 per($1,000) bond. This amounts to fees of approximately $214,272.06 for both bond issues, totaling $28,585,000. Kinsell/Stinson proposed a gross spread of $11.00 per ($1,000) bond. This amounts to $314,438.50 in fees for both bond issues. This is a difference of $100,166.44. Citigroup has also proposed to hire an underwriter's counsel, at their expense, who will prepare the official statement and the bond purchase agreement. This would save us approximately $20,000 to $25,000 in additional issuance costs. The total impact of these two factors is approximately $120,000. • • Investment and Finance Committee Hiring Citigroup Global, Inc. to Refund the 1995 Project Area No.1 and Project Area No. 2 Bond Issues Page 2 Citigroup also proposed to use a premium pricing structure throughout the entire range of serials. Kinsell/Stinson proposed premiums starting from 2015 through 2025. The advantage with Citigroup's proposal is that we wind up with a smaller bond issue size due to higher premiums. Citigroup proposed yields that were better than the Kinsell/Stinson proposal.This resulted in overall better NPV savings than the Kinsell/Stinson proposal, but the argument can be made that the market will dictate what we ultimately pay. Staff does believe, however, that Citigroup has an exceptional sales distribution capacity. Citigroup has a trading desk with five traders/underwriters and three sales specialists that deal with 35 institutional accounts. They also have 61 offices in California with 1,677 financial consultants throughout California. These financial consultants manage over 888,806 retail accounts for California residents with $145 billion in assets. In addition, Citigroup also has nine offices with 11 sales specialists who handle middle-market institutions. Staff believes that we should hire Citigroup to refund both bond issues. It is our plan to bring this to the Agency Board and the Financing Authority in May. We feel that it is imperative that we get this process started so we can take advantage of this market. This will give us an ability to raise approximately $2 million for projects with the same debt service. We also don't have to do a Report of Excess Tax Increment for the Western Center by using this mechanism. Submitted by: Reviewed and Concur: Dennis M. Coleman avid Yrigoy n Redevelopment Finance Manager Director of Re elo.ment Paul S. Gibson J :ti McCarthy Director of Finance 'C for Redevel.. - DMC:mh 1RDANrnnis Coleman\DADA\WP\CARLOS\ciligmup41t1 wnl vpd 2 ++ .r�'ti 'ram f S + — .1‘ - PALM DESERT FINANCING AUTHORITY Tax Allocation Refunding Bonds (Project Areas No. 1 and 2) Submitted by Kinsell, Newcomb & De Dios, Inc. Stinson Securities, LLC. March 26, 2004 • • KINSELL, NEWCOMB & DE DIOS, INC. STINSON SECURITIES. LLC. March 26, 2004 Dennis M. Coleman Redevelopment Finance Manager 73-510 Fred Waring Drive Palm Desert, CA 92260 Re: Refunding of Series 1995 Tax Allocation Bonds, Project Area Numbers 1 and 2 Dear Mr. Coleman: In a phone conversation on Wednesday March 24th between Lonnie Odom, Carlos Ortega, and myself regarding the refunding of the Series 1995 tax allocation bonds for Project Area Numbers 1 and 2, Mr. Ortega requested that Kinsell. Newcomb S. De Dios and Stinson Securities send an updated proposal to the City of Palm Desert to provide investment banking services. As you are aware, our two firms have a distinguished history of financing together and with the City of Palm Desert for both tax allocation bonds and assessment district financing. In 2002 we completed a current refunding of the Series 1992 tax allocation bonds for Project Areas 1 and 2. We considered advance refunding the Series 1995 bonds as well, but because the bonds were not callable until April 1, 2005. a refunding at that time was not economically advantageous. In 2003 we completed a new money bond issue for Project Areas 1, 2 and 3 and again discussed, and opted against, refunding the Series 1995 bonds. Today, however, with interest rates at an all-time low and the call date only a year away, an advance refunding of the Series 1995 does makes economic sense. On February 4 of this year. Janees ran a set of advanced refunding numbers (enclosed) for Project Areas 1 and 2, at which time the present value saving was 8.408% for Area I and 5.008% for Area 2. As you recall, you, Lonnie, and I discussed these transactions at dinner in San Francisco in early February. I have also enclosed a revised set of numbers as of today, March 26 that show a present value saving of 10.104% for Area 1 and 6.216% for Area 2. The enclosed numbers have a dated of June 1, 2004, thus we should get started as soon as possible to take advantage of the current market. As always we look forward to working with you on these refunding transactions. Lonnie and I will be in Palm Desert on April 5th and 6'h if you would like to schedule a kick-off meeting. Please contact Janees, Lonnie or me with any questions. Mr. Coleman Redevelopment Finance Manager Pace Two Sincerely, r5 «>w._ Pamela D. Newcomb CC: Carlos Ortega Ken Dieker Lonnie Odom Enclosures • • Table of Contents Section 1995 OS Covers 1 Time Table 2 Numbers (March 26, 2004) 3 Numbers (February 4, 2004) 4 NEW ISSUE RATINGS: • • Moody's: Aaa Standard & Poor's: AAA (See "Ratings" herein) In the opinion of Bond Counsel. under existing law, the)Merest on the Bonds is:exempt from personal income taxes of the State of California and, assuming compliance with the tax covenants describedherein, is excluded from gross income for Federal income tar purposes ands not a specific preference item for purposes of the Federal'alternative'rhinimum•tax. See, however, "CONCLUDING INFORMATION— Tax-Exempt Status of the Bonds"herein regarding.certain other tar considerations. $24,025,000 PALM DESERT FINAN.CING AUTHORITY TAX ALLOCATION REVENUE BONDS (PROJECT AREA NO. .1,.AS AMENDED) SERIES.1995. • Dated: June 1, 1995 - Due: April 1, as shown on the inside front cover hereof .The Palm Desert Financing Authority Tax Allocation Revenue-Bonds(Project Area No. 1,As Amended)Series 1995 (the "Bonds")will be issued as fully registered instruments without coupons, in the denomination of$5,000 or any integral multiple thereof.The principal or redemption price of each Bond will be payable upon the presentation and surrender of such Bond,when due or redeemed, as applicable. at the principal corporate trust office of Bank of America National Trust and Savings Association, Los Angeles, California as trustee for the Bonds (the"Trustee").Interest on the Bonds will be payable on April 1 and October 1 of each year (the "Interest Payment Dates"),commencing,October 1, 1995, by check or draft, mailed on the Interest Payment Date to each Owner of the Bonds as of the-Record Date preceding-such Interest Payment Date, except the Trustee will,at the written request of any Owner of$1,000,000 or more in aggregate principal amount of Bonds,make payments of interest on such Bonds on the Interest Payment Date by wire.transfer to the account in the United States designated by such Owner to the Trustee in writing as described herein. See "THE BONDS - Description of the Bonds" herein. The Bonds are subject to optioiial, mandatory sinking fund;and•extraordinary redemption as described herein. The Bonds will be issued by the Palm Desert Finanding Authority(th&'Auth'onty")under an Indenture of Trust,dated as of June 1, 1995, by and between the Authority and the Trustee(the"Indenture").•Theproceeds of the Bonds will be disbursed to' make a loan(the"Loan")to the Palm Desert Redevelopment Agency(the"Agency').pursuant to a Loan Agreement dated as of June 1, 1995 (the "Loan Agreement") by and'among the Authority;'the'Agency and the Trustee. The Bonds are special obligations of the Authority payable from and secured by Revenues(as defined herein), consisting primarily of amounts payable by the Agency under the Loan Agreement. The Loan Agreement is secured by and payable from Tax Revenues,as defined herein.The Agency has outstanding,and may,pursuant to the terms of the Loan Agreement and the Indenture, issue additional, obligations secured by Tax Revenues on a parity with the Loan (the"Parity Debt"). See "SECUR- ITY FOR THE BONDS" herein. Payment of principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy to be issued simultaneously with the delivery of the Bonds by ' . . The Agency is to use the proceeds of the Loan to finance certain redevelopment activities of the Agency in connection with the Agency's Project Area No. 1,As Amended(the"Project Area");t6 fund a reserve account and to finance costs of issuance of the Bonds. The Bonds are not a debt of the City of Palm Desert or of tfie State of California or any of its political subdivisions, and neither the City of Palm Desert nor the State of California nor any of its political subdivisions is liable therefor.The Loan is not a debt of the City of Palm Desert or of the State of.Cajifornia,or any of-its.political subdivisions (other than the Agency), and neither the City of Palm Desert nor the State of California nor any df its`political subdivisions(other than the Agency)is liable therefor. The interest on, premium, if any, and principal of the Bonds are payable from and secured by a pledge of certain amounts payable by the Agency to the Authority under the Loan Agreement. Neither the Bbnds nor the Loan constitutes an indebtedness within the meaning of any constitutional.or statutory debt limitation or restriction. Neither the members of the Authority nor of the Agency nor any persons executing the Bonds or the Loan Agreement are liable personally thereon.In no event will the obligations of the Agency under the LoanAgreement be'payable out of any funds or properties other than Tax Revenues (as defined herein) of the Agency as set forth in the Loan:Agreement. Maturity Schedule $1,830,000 Serial Bonds Maturity Date Principal Interest Maturity Date Principal Interest (April 1) Amount Rate Price . (April 1). • Amount Rate Price 1997 $160,000 4.40% 100% 2002 $205,000 5.05% 100% 1998 170,000 4.65 100 2003 235,000 5.10 100 1999 180,000 4.75 100 2004 245,000 5.15 100 2000 185,000 4.85 100 2005 255,000 5.20 100 2001 ' 195,000 4.95 100 $15,075,000 5.95% Special Terni Bonds Due'April 1, 2024— Price 100% $7,120,000 5.85% Term Bonds Due April 1, 2025 — Price 100% • The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to the approval as to legality by Richards, Ilatson&Gershon,A Professional Corporation.Los Angeles, California,Bond Counsel. Certain legal matters will be passed on for the Undenwriter by Mudge Rose Guthrie Alexander & Ferdon, Los Angeles, California, and for the Authority by Richards, Watson & Gershon. It is anticipated that the Bonds will be available for delivery on or about June 14, 1995. KINSELL, O'NEAL, NEWCOMB & DE DIOS, INC. The date of this Official Statement is June 5, 1995. (See "Ratings" herein: • hi the opinion of Bond Counsel. r existing lmtt the interest on the Bonds is exe OM personal income taxes or roe Stec: of California and. assuming complia ith the tax covenants described herein. is e chr from gross income for Federal t:comi• tax purposes and is not a specific preference item for purposes of the Federal alternative minimum tar. See, however "CO.\'CL L'D- !VG INFORMATION — Tax Matters" herein regarding certain other tax considerations. $4,090,000 PALM DESERT FINANCING AUTHORITY TAX ALLOCATION REVENUE BONDS (PROJECT AREA NO. 2) SERIES 1995 . Dated: June 1. 1995 Due: August 1, as shown below The Bonds will be issued as fully registered bonds without coupons.in the denomination of$5.000 or any integral multiple thereof,The principal or redemption price of each Bond will be payable upon the presentation and surrender of such Bond. when due or redeemed, as applicable, at the principal corporate trust office of Bank of America National Trust and Savings Association. Los Angeles, California as trustee for the Bonds (the "Trustee"). Interest on the Bonds will he payable on February 1 and August 1 of each year(the "Interest Payment Dates"),commencing August 1. 1995. by check or draft. mailed on the Interest Payment Date to each Owner of the Bonds as of the Record Date preceding such Interest Payment Date. except the Trustee will, at the written request of any Owner of$1,000,000 or more in aggregate principal amount of Bonds, make payments of interest on such Bonds on the Interest Payment Date by wire transfer to the account in the United States designated by such Owner to the Trustee in writing as described herein. See "THE BONDS — Description of the Bonds" herein. The Bonds are subject to optional, mandatory sinking fund, and extraordinary redemption as described herein. The Bonds will be issued by the Palm Desert Financing Authority(the Authority") under an Indenture of Trust,dated as of June 1, 1995,by and between the Authority and the Trustee (the"Indenture"). The proceeds of the Bonds will be disbursed to make a loan(the"Loan")to the Palm Desert Redevelopment Agency(the"Agency")pursuant to a Loan Agreement dated as of June 1. 1995 (the "Loan Agreement") by and among the Authority, the Agency and the Trustee. The Bonds are special obligations of the Authority payable from and secured by Revenues as defined herein consisting primarily of amounts payable by the Agency under the Loan Agreement.The Loan Agreement is secured by and payable from Tax Revenues.as defined herein.The Agency has outstanding,and may,pursuant to the terms of the Loan Agreement and the Indenture,issue additional obligations secured by Tax Revenues on a parity with the Loan (the "Parity Debt"). See"SECUR- ITY FOR THE BONDS" herein. Payment of principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy to be issued simultaneously with the delivers, of the Bonds by AHEM The Agency is to use the proceeds of the Loan to finance certain redevelopment activities of the Agency in connection with the Agency's Project Area No. 2, fund a reserve account and finance costs of issuance of the Bonds. The Bonds are not a debt of the City of Palm Desert or of the State of California or any of its political subdivisions. and neither the City of Palm Desert nor the State of California nor any of its political subdivisions is liable therefor.The Loan is not a debt of the City of Palm Desert or of the State of California or any of its political subdivisions (other than the Agency), and neither the City of Palm Desert nor the State of California nor any of its political subdivisions (other than the Agency) is liable therefor. The interest on, premium, if any, and principal of the Bonds are payable from and secured by a pledge of certain amounts payable by the Agency to the Authority under the Loan Agreement. Neither the Bonds nor the Loan constitutes an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the members of the Authority nor of the Agency nor any persons executing the Bonds or the Loan Agreement are liable personally thereon. In no event will the obligations of the Agency under the Loan Agreement be payable out of any funds or properties other than Tax Revenues (as defined herein) of the Agency as set forth in the Loan Agreement. Maturity Schedule $220,000 Serial Bonds Maturity Date Principal Interest Maturity Date Principal Interest (August 1) Amount Rate Price (August 1) Amount Rate Price 1999 $25,000 4.75% 100% 2003 $35,000 5.10% 100% 2000 30,000 4.85 100 2004 35,000 5.15 100 2001 30,000 4.95 100 2005 35,000 5.20 100 2002 30,000 5.05 100 $2,490,000 5.95% Special Term Bonds Due August 1, 2024 — Price 100% $1,380,000 5.85% Term Bonds Due August 1. 2025 — Price 100% The Bonds are offered when,as and if issued and accepted by the Undencriter subject to the approval as to legality by Richards, Hinson& Gershon.A Professional Corporation, Los Angeles, California. Bond Counsel. Certain legal matters will be passed on for the Underwriter by Mudge Rose Guthrie Alexander&Ferdon. Los Angeles, California. and for the Authority by Richards, Watson& Gershon. It is anticipated that the Bonds will be available for delivery on or about June 14. 1995. KINSELL, O'NEAL, NEWCOMB & DE DIOS, INC. The date of this Official Statement is June 5. 1995. PALM ICI"PERT FINANCING AUOIORITY TAX ALLOACTION REFUNDING BONDS (PROJECT AREA NO. 1 AND 2) Series 2004 .. TIMETABLE: . • APRIL MAY JUNE S M F T I W I T 1 F S S I M T W T F S S M T I W I T I F I S 1 1 2 3 1 1 1 2 l 3 1 4 1 5 4 1 5 1 6 7 ( 8 9 1I 10 ( 2 3 4 5 6 7 8 6 7 8 9 10 11 ( 12 11 12 13 ) 14 15 I 16 117 _ 9 10 ! 11 12 13 14 15 I 13 14 15 16 17 I 18 I 19 _ 18 19 1 20 I 21 22 I 23 24 16 17 I 18 19 20 21 22 20 21 22 23 ( 24 I 25 26 25 I 26 I 27 28 I 29 30 23 24 25 26 27 28 29 27 28 29 30 I I I 130 31 I 1 I I WEEK OF ACTIVITY RESPONSIBILITY April 5 > All hands Meeting (April 6th) ALL April 19 > Circulate First draft Bond Documents BC > Circulate First draft POS DC/FC • April 26 : Comments back on Bond Documents, ALL POS, and Fiscal Report May 3 > Publish Notice of Public Hearing (May 6th) PDFA May 17 > Fiscal Report completed FC > Submit resolution and documents to BC/DC Authority for approval May 24 > Authority approves Bond Financing, PDFA • Documents and hold public hearing(May 2715 ISSUER PDFA PALM DESERT FINANCING AUTHORITY UNDERWRITER UW KINSELL, NEWCOMB& DE DIOS, INC. STINSON SECURITIES, LLC BOND COUNSEL BC RICHARDS, WATSON &GERSHON DISCLOSURE COUNSEL DC FISCAL CONSULTANT RSG ROSENOW SPEVACEK GROUP, INC PALM DIIIIERT FINANCING AU•ORITY TAX ALLOACTION REFUNDING BONDS .(PROJECT AREA NO. 1 AND 2) Series 2004 . • TIMETABLE • - APRIL MAY JUKE S M T W T I F F S S MITIWIT FI5ISIMITIWITIF S 112I3l 1 I I1I F 1112131415 4 5 I 6 7 8 9 I 10 ! 2 I 3 I 4 I 5 I 6 7 8 1 6 I 7 1 8 1 9 10 1 11 1 12 11 I 12 I 13 14 15 16 17 I 9 1 10 I 11 I 12 I 13 I 14 15 I 13 I 14 1 15 I 16. 1 17 I 18 19 18 19 I 20 21 22 23 I 24 I 16 17 18 1 19 20 I 21 1 22 I 20 21 I 22 23 24 25 26 25 26 127 28 29 30 I 123 124 25 26 27 128 29 127 128 129 30 I I I I I I I I I30131 I I i I I I I I WEEK OF ACTIVITY RESPONSIBILITY May 31 > .Print and Mail POS (June 1") PDFA June 7 > Price and Sell Bonds (June S`h) UW June 21 > Pre Close (June 2151) ALL Close (June 222d) ALL ISSUER PDFA PALM DESERT FINANCING AUTHORITY UNDERWRITER UW KINSELL, NEWCOMB & DE DIOS, INC. STINSON SECURITIES. LLC BOND COUNSEL BC RICHARDS, WATSON & GERSHON DISCLOSURE COUNSEL DC FISCAL CONSULTANT RSG ROSENOW SPEVACEK GROUP, INC Prelrminary • • Palm Desert Financing AutB6rit�- Tax Allocation Revune Bonds (Project Area No. 1. As Amended) Series 2004 Sources 8 Uses Dated 06/01/2004 I Delivered 06/01/2004 Sources Of Funds Par Amount of Bonds 823.745.000.0u Rentienng Premium I.099,67S.95 Total Sourre.s 5224.844.678.95 • Uses Of Funds Total Underrnmcr's Discount (I.I110'L0) - _ 261.195.00 Costs of Issuance 175.000.00 Gross Bond Insurance Premium I100.0 hp; 367.427.44 Reserve Surety Pee 54.736.00 • Deposit to Net Cash Escrow Fund __ 23.983.156.97 Rounding Amount 3.113.54 Total Uses S24.844,678.95 3-30-09 I SINGLE PURPOSE 3/30/2004 I 3:34 PM • KinseI Newcomh&_De.Dios; Inc PubltCFinance.= • Y53`,i Page 1 preliminary • Palm Desert Financing Autt oritc Tax Allocation Revune Bonds (Project Area No. I. As Amended) Series 2004 Debt Service Schedule . Date Principal Coupon Interest Total P+I 111 in 21105 635.000.00 1.000% -55.031.25 1.420.031.25 n101.2000 335.000.00 1.250°° (135,03- 50 1.320.637 50 04.III 2007 895.000.00 1.500°%° 921.u25.00 1.Sl9.u25.00 04 0112008 915.000 0(1 1.900°° 911,200.00 .826.200.00 04 III 211119 930.000.00 2.2005° S•93.S155..00 1.323.315 On 01.(11'2010 945.000.00 2.500% ------- S73355.00 _ --�--1.313.355.00 04111'201 I 970.000.00 2.800°° 319.-30.00 1.319.730.00 it111112012 995.000.00 3.000% S22530D0 ).317,570001 04 01 2013 1.030.000.00 3.20040 -92.-20.011 1.322.720.00 lu 01'2014 1.060.000.00 3.350°: -50.-60.0,1 1.319.760.00 04 01 2015 1.095.000.00 _ _ _�000% _ -24'50.00 --- _ _ LS19.250.00 04 01 2016 1.150.000.00 5.0003. 0n9-50).00 1.319.500.00 04401 2017 1.210.000.00 5.000% 612,00000 LS2100000 041112013 1.270.000.00 5.000% 551500.110 1.321.500.00 04 01 2019 1.335.000.00 5.00(% 133,00 0 0. 1.323.000,00 0401 2020 1.400.000.00 5.000% 421.15000 1.32125)00 04 01 2011 1.470.000.00 5.000% 351.250.00 1.321_250,00 1101'202_ 1515.000.00 5.000°. 2--.750 00 I.322.750.u0 ' 0+1112023 1.625.000.00 5.000% 2110.500.00 1.825.500.00 04 012021 1.705.000.00 5.000°,, 110.250.00 1,824.250 00 0.:(II 2025 630,00O.Oo 50003 31.0I ql On 711.0011 U) Total 523.745.000.00 - SI 2.997.743.75 536.742.743.75 Yield Statistics Bond Year Dollars $233.567.50 Avenge I.u0 11,942 Years Average Coupon _ _ .___ _ _ 1.5330507% - Net Interest Cost tNIC) 1.28795960.° True Interest Cost(TIC) .0 153202% Bond field for Arbitrage Purposes 3,91I5226°;, __ _ _ _ . _ _ ___ ..._ .. VII Ind usne Cost(:VCI 1.3903660°;, IRS Form 803B Net Interest Cost _ ' _ 3.9639125°b Weighted Mt:rage\latunty ---_ _ -- ' 12.(181 Years 3-30-04 I SINOuE PURPOSE I 3/3012004 I 3:34 PM Kinsella,.Newcomb &.De:Dios,:Inc. ........ publicl ante Preliminary . Palm Desert Financing Auttity Tax Allocation Revune Bonds (Project Area No. 1, As Amended) Series 2004 Gross Debt Service Comparison Date Principal Coupon Interest New D/S OLD D/S Savings 04/01/2005 635.000.00 1.000% 785.031.25 1,420.031.25 1.550.182.50 130.151.25 04/01'2006 885.000.00 1.250% 935,687.50 1,820.687.50 1.953.482.50 132,795.00 04;01.2007 895.000.00 1.500% 924.625.00 1,819,625.00 1.950.532.50 130.90750 04;01.2008 915.000.00 1.900% 911.200.00 1.826.200.00 1.955.525.00 129.325.00 • 04,012009 930.000.00 2.200°0 893.815.00 1,823.815.00 1.952.880.00 129.065.00 I 04/0112010 945.000.00 2.500% 873,355.00 1.818.355.00 1.947.855.00 129.500.00 I 04;012011 970,000.00 2.800% 849.730.00 1,819.730.00 1,950.460.00 130.730.00 I 04/01:2012 995,000.00 3.000% 822.570.00 1,817,570.00 1,950,125.00 132.555.00 04/01:2013 I,030,000.00 3.200% 792.720.00 1,822.720.00 1.951.835.00 129.115.00 04;01.2014 1.060.000.00 3.350% 759.760.00 1.819.760.00 1.950.272.50 130.51_.50 ' 04,012015 1.095.000.00 5.000% 724 250.00 1,819.250.00 1,950.462.50 131,212.50 ' 04;01/2016 I.I50.000.00 5.000% 669.500.00 1,819,500.00 1,952.117.50 132,61 7.50 04/01;2017 1.210.000.00 5.000% 612.000.00 1,822.000.00 1,954,870.00 132.870.00 04:01:2018 1.270,000.00 5.000% 551,500.00 1.821.500.00 1.953.522.50 132.022.50 04/01/2019 I.335.000.00 5.000% 488.000.00 1,823.000.00 1,953,040.00 130,040.00 04'01'2020 1.400.000.00 5.000% 421.250.00 1.821.250.00 1.953.145.00 131,895.00 04/01/2021 1.470.000.00 5.000% 351.250.00 1,821.250.00 1,953.540.00 132.290.00 04/01.'2022 1.545.000.00 5.000% 277,750.00 1,822,750.00 1,953.882.50 131.132.50 04,01/2023 1.625.000.00 5.000% 200.500.00 1.825.500.00 1.953.900.00 128,400.00 04'01:2024 I.705.000.00 5.000°b 119.250.00 1,824?50.00 1.953?75.00 129.025,00 I. 04;01'2025 680.000.00 5.000% 34,000.00 714,000.00 846,800.00 132.800.00 Total $23.745.000.00 - S12.997.743.75 S36.742.743.75 839.491.705.00 52.748.961.25 PV Analysis Summary(Gross to Gross) Gross PV Debi Service Savings 1.818 650.03 Contingency or Rounding Amount 3.113.54 Net Present Value Benefit 51.821 763.57 Net PV Benefit/S22.420.000Refunded Pnncipal _ 8.126% Net PV Benefit/523.745:000 Refunding Pnncipal _ 7,672% Refunding Bond Information Rcfondmg Dated Date 6/01/2004 Refunding Delivery Date 6/01/2004 • 3-30-04 I SINGLE PURPOSE 13/30/2004 I 3:34 PM •::: `,- Kii'iseli :Newcomb.& De Dios, Inc. ct) :i Public.Fnance: • Page 3 ' • Prehrninary a Palm Desert Financing Autha'Fity • Tax Allocation Revune Bonds (Project Area No. 1. As Amended) Series 200-t Pricing Summary Type of Maturity Bond Coupon Yield Maturity Value Price Dollar Price 04,el'2005 Serial Coupon 1.000°° 1.000% 635.000.00 I00.000(o 635.000 01) 04.01:2006 Serial Coupon 1_250 1_2500 885,000.011 100.000"° 835.00000 04•012007 Serial Coupon 1500% 1.50000 895.000.010 100.0009,i 895.00000 04 01 7011E Serial Coupon 1.900"" 1.900% 915.000.00 100.000.. 915.000 00 04,01'2009 Serval Coupon 2.200% 2.200% 930.000.00 100.0001'. 930.000.06 64 01.2010 Serial Coupon 2.500"u 2.500% 045.000,00 100.1100% 945.000.00 ' 04,01:2011 Senal Coupon 2.800"" 2.800°" 970.000,00 100.000% 970.000 Ott 04 01 2012 Senal Coupon 3.000°" 3.000°,0 995,000.00 100.000% 095.000.Ou 04.01'2013 Serval Coupon 3 200°° 3.200P° 1.030.000.00 IOBoo0"L 1.030.000.0n 114 01 2014 Serial Coupon 3.350"° 3.350% 1.060.000.0o 100,11011°„ 1.060.000.00 04.01 2015 Serial Coupon 5.000"" 3.500°•" 1.095.000,00 112,3849,, c -1.230.604.S0 04.01'2016 Senal Coupon 5.000% 3.650% 1.150.000.00 III_065°° c I.277.247.50 04 0 i'2017 Senal Coupon 5.0000° 3.8000. 1210.000.00 109 764"" c 1.323.144 40 044/1'2013 Senal Coupon 5.000"° 3.900°° 1.270,000.00 I05.907'I,i c 1.383.118.9') 0401'2019 Serial Coupon 5.000"° 4.000%° 1325,000.011 108.053 c 1.442.574.30 , 04 01 2020 Serial Coupon 5.000% 4.100°1 1.400.000,00 107,217G, c 1501.038.00 04 VI 2021 Senal Coupon 5.000% 4.180°" 1,470,000.00 106.550°„ c .566 235.00 04.01 2022 Senal Coupon 5.00001, 4250°° 1.545.000,00 105.971% c .637.251.9 04.01 2023 Senal Coupon 5.000"„ 4.300"" 1.625.000.00 105.5591% c 1.715.333.75 04 01 2024 Serial Coupon 5.000°° 43610°" 1.705.000,00 1o5.0,7'; 5 I.791.392.35 04 01 '2025 Serial Coupon 5.000°0 4.41011° 680.000 00 104.660%,• c 711.688.00 Total - - - 523.745.000.00 - - S24.844.678.95 • Bid Information Par Anwunt of Bonds S23.745.000.06 Renfro-ma Premium or(DiscountI 1,099.675.95 Gross Production -__ $2A.844.678.95 Total underwriters Discount 11.100°°I 5(261.195.0(11 Bid(103.531%I 24,583,4S3.95 Total Purchase Price $24.533,433 95 Bond Year Dollars -_ 5233,507.50 AFLraae Lire _ __ 1.94'_ fears I_. __ .___ __ _ ._ _ _ Accraec Coupon 4.5836507",• Net Interest Cast I NIC) 4,2870596 _ . ._Prue Interest Cost(TIC) 4.1158202",• 3-30-04 I SINGLE PURPOSE I 3/30/2004 I 3:34 PM '`=-_" Kinsell Newcomb.&' De_Dios,,Inc. PubllcFinance • Page 4 . Preliminary . Palm Desert Financing Authafit' Tax Allocation Revenue Bond Project Area No. 2 Series 2004 Sources & Uses Dated 06/01/2004 I Delivered 06/01/2004 I , Sources Of Funds Par Amount of Bonds 54.370.000.00 Reoffenng Premium 209.897.10 Total Sources 54.579.897.10 Uses Of Funds Total Underwriter's Discount I I.100°51 48.070.00 Costs of Issuance 150.000.00 Gross Bond Insurance Premium(100.0 bpi __ _ 65.327.99 Deposit to Net Cash Escrow Fund 4.311.190.57 Rounding Amount 2308.54 • Total Uses 54.579.897.10 it 3-30-04 I SINGLE PURPOSE 13/30/2004 I 3:35 PM Kinsella,Newcomb: &De Dios; Inc. . Public Finance_ Page 1 • Preliminary ® _. • Palm Desert Financing Auth ity Tax Allocation Revenue Bond Project Area No. 2 Series 2004 Debt Service Schedule Date Principal Coupon Interest Total P+I 08/01C004 - - - - 0801/2005 60.000.00 1.000% 203.624.17 263.624.17 08:0112006 170.000.00 1.250% 173.935.00 343 935.00 08'01'2007 170.000.00 1.500% 171.510.00 , 341.510.00 08.01'2(105 170.000.00 1.900% 169.260.00 339.260.00 08/01'2009 --- 175.000.00 2.200% --� 166.030.00 341.030.00 08-01i2010 180.000.00 2.500% 162.130.00 342.130.00 03 01'201 1 180.000.00 2.800% 15 7.650.00 337.680.00 03 01 2012 190.000.00 3.000% 152.640.00 342,640.00 08 01.2013 195.000.00 3.200% 146940.00 341.940.00 03 01 i2014 200,000.00 3.350% 140.700.00 340,700.00 0301'2015 205.000.00 5.000°b ' 134.000.00 339.000.00 08 01.2016 215.000.00 5.000% 123.750.00 338.750.00 08.01:2017 230.000.00 5.000% 113.000.00 343.000.00 08 01/2018 240.000.00 5.000% 101.500.00 341,500.00 03 01.2019 255.000.00 5.000% 89.500.00 344.500.00 08,01/2020 260,000.00 5.000% 76.750.00 336.750.00 08 01.12021 260.000.00 5.000% 63.750.00 323.750.00 03 012022 283.000.00 5.000% 50.750.00 335.750.00 03 01.2023 . . ___ 290.000.00 5.000°n 36.500.00 326.500.00 08 01.2024 310 000.00 5.000°° 22.1100.00 332.000.00 08 01'2025 130,000.00 5.00000 6.500.00 136,500.00 Total S4.370.000.00 - 52.462.799.17 56.832.799.17 Yield Statistics it Bond Year Dollars 853.968.33 Average Life 12.350 Years Average Coupon 4.5634153% Net Interest Cost(NIC1 4.2635596% True Interest Cost(TIC) 4.0887722_% Bond Yield for Arbitrage Purposes__ _ - 3.8878023% All Inclusive Cost tAIC1 4.6269925% IRS Form 8038 Net Interest Cost 3.93836U39;, Weighted Average Maturity 12.489 Years • II 7-30-04 I SINGLE PURPOSE I 3/30R004 I 3:35 PM Kinsella.Newcomb & De_Dios- the. . PublicFinance. Page 2 I. Preliminary • Palm Desert Financing Autll4Fity Tax Allocation Revenue Bond Project Area No. 2 Series 2004 1 Gross Debt Service Comparison . Date Principal Coupon Interest New DIS OLD D/S Savings 08/01/2004 - - - - 151 253.75 151.253.75 08/01/2005 60.000.00 1.000% 203.624.17 263.624.17 265.705.00 2.080.83 08/01/2006 170.000.00 1.250% 173,935.00 343.935.00 343.885.00 (50.00) 08/01/2007 170.000.00 1.500% 171,810.00 341.810.00 342.077.50 267.50 08/01/2008 170.000.00 1.900% 169.260.00 339.260.00 339.977.50 717.50 08101/2009 175.00000 2.200% 166.030.00 341,030.00 342.580.00 1.550.00 08/01/2010 180,000.00 2.500% 162.180.00 342,180.00 344,59250 2,412.50 08/01/2011 180.00000 2.800% 157.680.00 337,680.00 341,015.00 3.335.00 08/01/2012 190,000.00 3.000% 152.640.00 342.640.00 342,145.00 (495.00) 08/01/2013 195.000.00 3.200% 146.940.00 341,940.00 342.680.00 740.00 08/01/2014 200,000.00 3.350% 140,700.00 340.700.00 342.625.00 1.925,00 08/01/2015 205.000.00 5.000% 134,000.00 339.000.00 341.975.00 2,975.00 08/01/2016 215,000.00 5.000% 123,750.00 338,750.00 340,735.00 1,985.00 08/01/2017 230,000.00 5.000% 113.000.00 343.000.00 343,900.00 900.00 08/01/2018 240.000.00 5.000% 101.500.00 341,500.00 341.172.50 (327.50) 08/01/2019 255.000.00 5.000% 89,500.00 344.500.00 342.350.00 (1.650.00) 08/01/2020 260.000.00 5.000% 76,750.00 336.750.00 338,640.00 1,890.00 08/01/2021 260.000.00 5.000% 63,750.00 323.750.00 323.845.00 95.00 08/01/2022 285.000.00 5.000% 50.750.00 335.750.00 339,050.00 3.300.00 08/01/2023 290,000.00 5.000% 36,500.00 326.500.00 327.490.00 990.00 08/01/2024 310,000.00 5.000% 22.000.00 332,000.00 330,637.50 (1362.50) 08/01l2025 130.000.00 5.000% 6.500.00 136.500.00 137.605.00 1,105.00 Total 54.370.000.00 - $2,462,799.17 $6,832,799.17 S7.006.436.25 $173,637.08 • PV Analysis Summary(Gross to Gross) Gross PV Debt Service Savings 168.533.35 Contingency or Rounding Amount 2.308.54 Net Present Value Benefit $170,841 89 Net PV Benefit/ $3.940.000 Refunded Principal 4.336% Net PV Benefit! S4.370.000 Refunding Pnncipa1 3 909% Refunding Bond Information Refunding Dated Date 6/01/2004 Refunding Delivery Date 6/01/2004 3-30-04 1 SINGLE PURPOSE I 3/30/2004 I 3:35 PM Kinsell, Newcomb & De Dios, Inc. Public Finance Page 3 Preliminary �' Palm Desert Financing Autirity Tax Allocation Revenue Bond Project Area No. Series 2004 • Pricing Summary Type of Maturity Maturity Bond Coupon Yield Value Price Dollar Price 08/01/2005 Senal Coupon 1.000% 1.000% 60,000.00 100.000% 60.000.00 08/0172006 Serial Coupon 1.250% 1.250% 170,000.00 100.000% 170.000.00 08/01/2007 Senal Coupon 1.500% 1.500% 170.000.00 100.000% 170.000.00 08/01/2008 Serial Coupon 1.900% 1.900% 170.000.00 100.000% 170.000.00 _08_/01/2009 Serial Coupon 2.200% 2.200% 175.000.00 100.000% 175.000.00 08/01/2010 Serial Coupon 2.500% 2.500% 180.000.00 100.000% 180.000.00 08/01/2011 Serial Coupon 2.800% 2.800% 180.000.00 100.000% 180.000.00 08/01/2012 Serial Coupon 3.000% 3.000% 190,000.00 100.000% 190.000.00 08/01/2013 Serial Coupon 3.200% 3.200% 195,000.00 100.000% 195.000.00 __08/01/2014 Serial Coupon 3.350% 3.350% 200.000.00 100.000% 200,000.00 08/u I/2015 Serial Coupon 5.000% 3.500% 205,000.00 112.734% c 231,104.70 08/01/2016 Serial Coupon 5.000% 3.650% 215.000.00 111.375% c 239,456.25 08/01/2017 Serial Coupon 5.000% 3.800% 230,000.00 110.036% c 253.032.80 08/01/2018 Serial Coupon 5.000% 3.900% 240.000.00 109.154% c 261.969.60 08/0112019 Serial Coupon 5.000% 4.000% 255.000.00 108.280% c 276,114.00 08/01/2020 Serial Coupon 5.000% 4.100% 260.000.00 107 415% c 279,279.00 08/01202I Serial Coupon 5.000% 4.180% 260.000.00 106.729% c 277,495.40 08/01/2022 Senal Coupon 5.000% 4.250% 285.000.00 106.133% c 302.479.0E 08/01/2023 Serial Coupon 5.000% 4.300% 290.000,00 105.710% c 306.559,00 08/01/2024 Serial Coupon 5.000% 4.360% 310.000.00 105.205% c 326.135.50 08/01/2025 Serial Coupon 5.000% 4A10% 130.000.00 104.786% c 136,221.80 Total - - - $4,370.000.00 - - $4.579.897.10 • Bid Information Par Amount of Bonds S4,370,000.00 Reoffering Premium or(Discount) _ 209.897.10 Gross Production S4.579.897.10 Total Underwriter's Discount (1.100%i _ S(48.070.00) Bid(103.703%) 4.531,827.10 Total Purchase Prise S4.531.827.10 Bond Year Dollars S53.965.33 Average Life 12.350 Years Average Coupon _ _ _ ,_ _ - - -_- 4.5634153% Net Interest Cost/NIC) 4 2635596% True Interest Cost(TICI _ - _. -V-4.0887722% 3.30-04 I SINGLE PURPOSE 13/30/2004 I 3:35 PM Kinsell, Newcomb & De Dios, Inc . Public.Finance Page 4 • • I�br: `r.„.„,% V CITY OF PALM DESERT PALM DESERT FINANCE AUTHORITY • .. _ 2004 TAX ALLOCATION REVENUE REFUNDING BONDS MARCH 25, 2004 _ . ., _... •• . CITIGROUP GLOBAL MARKETS INC. 444 S t*H FL11Y FR STREET.27"FLOOR.LOS ANGELES.CA 90071 PHO%;: (21314S64925 Ih3'. (2I31 4S(-01S 3,11 C LLIFoRxla STREET.St ITE 2100.SAN FRANCISCO.CA 94104 PHONE (4151955-1619 FAX: (4151933-1333 atgroupti March 25. 2004 Mr. Dennis M. Coleman Redevelopment Finance Manager City of Palm Desen 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 Dear Dennis: On behalf of Citigroup Global Markets Inc. (formerly Salomon Smith Barney Inc.), we thank you for giving us the opportunity to respond to your request for additional information and fee proposal with respect to the City's outstanding Tax Allocation Bonds. We look forward to the opportunity to work with the City and its Financial Advisor and we believe that our proposal presents a compelling case that Citigroup should be selected to serve as the City's underwriter. As we presented to the City in a memorandum dated March 23, 2004, Citigroup has identified a refunding opportunity that will save the City over S2 million in present value tax allocation debt service. As you are aware, the municipal market has experienced a significant rally in the last few weeks, which will continue to be subject to varying degrees of volatility. We encourage the City to take advantage of this opportunity on a very expedited basis. We have included a detailed discussion of this analysis on page 7 of our proposal. There are important distinctions between the types of service and resources different investment banks offer. We would like to highlight the following capabilities that we believe set Citigroup apart from the competition: ✓ Qualifications and Experience of our California-Based Banking Team — Citigroup is the#1 ranked firm in public finance with substantial capital and human resources. We have California-based bankers focused on Tax Allocation Bond financings and a full-service California-based underwriting, sales and trading desk located in Los Angeles. This combination of resources and Citigroup's demonstrated track record allows us to confidently assert that no other firm can give you the same access to the lowest market rates as Citigroup. ✓ #1 Ranked Underwriting Firm — As you know, the municipal bond underwriting field is extremely competitive. In every year since 1996, Citigroup ranked as the number one municipal bond underwriter in the nation according to the Securities Data Corporation annual rankings. In 2003, for the eighth year in a row, Citigroup ranked as the number one underwriter of public debt in the nation with 691 issues totaling over S52.3 billion. ✓ California's Top Underwriter — Since 1997, Citigroup has senior managed more California bonds than any other firm. Our successful track record underscores our commitment to the California market. Citigroup maintains a significant retail presence in California with 1,677 financial consultants staffed in 61 offices throughout the State. These consultants manage over 900,000 retail accounts for California residents with assets totaling over S146 billion. ✓ Tax Allocation Experience—Citigroup Global Markets Inc. is a leader in the California land secured market. Since 1990, Citigroup Global Markets Inc. has served as the senior managing underwriter of over S 1.8 billion of California land secured bonds, with an average financing size of about 515.6 million. Long a major presence in the competitive land secured market, in 1997 Citigroup hired former Moody's credit analyst and • .tJr. Dennis.tt Coleman City ni Palm Desert .Harck 15. 2004 Page 2 former financial advisor Nikolai J. Sklaroff to lead a growing California land secured practice in Tax Allocation, Assessment and Mello Roos Bonds. ✓ Capital Commitment — Citigroup Global Markets Inc. has sufficient capital to underwrite the City's Tax Allocation Bonds. Citigroup Global Markets Inc. is a wholly owned subsidiary and the investment banking ami of Citigroup Inc., the largest diversified financial services company in the world. with over 3,200 offices in 100 different countries. Given Citigroup Global Markets' current excess net capital as of December 31, 2003, Citigroup has the ability to solely underwrite a transaction of up to 556 billion under current SEC regulations. • ✓ Unsurpassed Distribution Capabilities— We achieved our market leadership by providing broad coverage of both retail and institutional investors. Our retail distribution system consists of almost 12,000 Financial Consultants in 522 offices nationwide. Our relationships with institutional investors make a significant difference. both in terms of trust and the ultimate acceptance of a bond issue by the institution and in the provision of timely feedback. Our distribution resources also include Citibank branches, including those acquired as a product of our acquisition of Cal Fed bank. ✓ Pricing Advantage — Some firms with weak distribution systems will attempt to compensate for that by bidding low underwriting fees. But a slightly lower one-time fee cannot compensate for the higher basis points in annual interest rate costs such firms end up costing their clients due to their inability to effectively access retail and institutional buyers. We invite you to pay special attention to our pricing results: in two recent head to head situations within the past few months. Citigroup Global Markets Inc. priced a transaction on the same day as a competing firm. Citigroup Global Markets Inc. secured yield levels at an average spread ranging from 2.1-6.2 basis points lower than our competitors. These transactions were MBIA insured and came to market on the same day (i.e. faced same market yield levels) with identical underlying credit ratings. Ultimately, an underwriter should be selected for its ability to secure the lowest cost of borrowing for their clients and Citigroup Global Markets Inc. will offer our unmatched pricing leadership to the City's financing. We look forward to the possibility of working with the City and with its Financial Advisor. and hope you will find that Citigroup Global Markets Inc. is uniquely qualified to provide you with the highest level of banking and underwriting services. We appreciate your consideration. Please feel free to contact us with any questions. Sincerely. Nikolai J. Sklaroff Joe Crowley Carmen Vargas Vice President Vice President Associate (415) 955-1619 (213) 486-8925 (213) 486-8995 Cc: Mr. Kenneth L. Dicker. MuniSoft CITY OF PALM DESERT March 25. 2004 Proposal to Provide Underwriting Services Page i CITY OF PALM DESERT 2004 TAX ALLOCATION REVENUE REFUNDING BONDS PROPOSAL TO PROVIDE UNDERWRITING SERVICES Submitted by CITIGROUP GLOBAL MARKETS INC. March 25, 2004 V. .. TABLE OF CONTENTS PAGE 1. FIRM DESCRIPTION 1 2. FIRM STAFFING 3 3. DISTRIBUTION CAPABILITIES 5 4. STRUCTURING RECOMMENDATIONS 7 5. FEE PROPOSAL S APPENDIX A: CITIGROUP'S CALIFORNIA TAX ALLOCATION BOND EXPERIENCE SINCE 1999 APPENDIX B: DEBT SERVICE SIZING citigroup'J CITY OF PALM DESERT • March 25. 2004 Proposal to Provide Underwriting Services Page I : .. 'e.. ..:K :k.G;.>v' Firm Description — Citigroup Global Markets Inc. is the investment-banking arm of Citigroup, the largest diversified financial services firm in the world employing over 250,000 MI-time employees. Formerly known as Salomon Smith Barney. it has been built from the combination of Smith Barney: Salomon Brothers. the corporate banking arm of Citibank and the Shearson retail network. The unmatched retail distribution and equity capabilities of Smith Barney and Shearson. combined with Salomon Brothers' trading and fixed income prowess create unique complementary strengths that are unmatched in the industry. As of December 31, 2003 Citigroup had an excess net capital of over 53.9 billion. Municipal Securities Division — Within the Public Finance Department. Citigroup utilizes a "matrix" organizational structure that integrates industry and specialty groups with our regional offices. This structure allows Citigroup ' ? a ry to combine resources from the regions. which have extensive knowledge of local financing issues, with industry specialists from New York. This +- I ---�> organizational structure emphasizes both expertise in specialized financings as , _ well as a local awareness of the needs and challenges of our clients in each region of the country. Our regional approach to municipal investment banking allows Citigroup to provide the service of a regional firm and the capital underwriting, and marketing strength of Wall Street. Commitment to Public Finance—Citigroup's "r ` commitment to Public Finance is unrivaled and '' uBSFY° 552,363 '' ""°race la'''9' 2 err.l =ca,sev,:¢s e:6 BBS Fnanca.Serves 29a9 Mena 3 M LF-:-. 29A21 3 Lehman Bmmem 25,99: unwavering. During the past six years. while a Marge-Sta'rev 26.529 9 ,PMnrgec 25.165 5 many firms have withdrawn from the industry "`='-Br„"` 6 Metre Lyn,. °'< or contracted their activity. Citigroup o-.. aggressively hired new talent in order to ," c,u9mue 532.855 I. CIu9m"P 519.257 1, Citigroup 526.786 increase our client services. The success of our 2 OBS F"an""Services 26,977 2 UBS F'"anca'Senecas 17076 2 mama Lyn`" 16.753 ] Mem m m Y Lyn 17.020 3 Men..,Lynch '<.533 3 BS Financ:e.Services 16.038 strategy has been demonstrated by our industry ° Gagman Sams 16.811 + G°"'a°sa`ns '0.903 ° [,y`man Sachs 12073 5 Lenmen Banners 15d40 5 Lehman larceners 9,158 5 Lehman Storeys 9,133 performance. In 1996, 1997, 1998, 1999,2000. 2001, 2002, and 2003 Citigroup ranked r-- -_ } ' cwg up 530.542 1. c group 523,v° t Canerap 516.855 first among senior managers of long-term 2 IsaS enamel Serves, 23.255 ^_ USS reran,a,Seines 115471 2 Coleman Secs. is.sos 3 Goiamansacns t S.571 3 Mer:al Lynn 16.510 3 Meryl!Lyecn 16094 negotiated municipal transactions. 4 Memn Wen 15.236 - Gmeman Sawa 13o:5 4 USS Finance serve es 15952 5 Bear Steams '1775: Lencan Br"mers 12,720 5 Lenman Brothers 12,536 Commitment to California — Citigroup has one of the most significant commitments to the California ca°tornia ""^I foal Bond issues Since January 1, 1997 Dollars in Millions market of any national firm. Citigroup has three California regional offices in Los Angeles, San al'9`" ' Francisco. and Sacramento that provide public finance MerriiLynch s27,374 banking services. Our Los Angeles (13 professionals), USS Paineweooer I S16,336 San Francisco (10 professionals) and Sacramento MorganStanley I $20,327 public finance offices work in tandem with our Los LehmanBrotners S20.231 Angeles trading desk (21 professionals). We are the c 4,000 8.000 12.000 16.000 20,000 24,000 28,000 32.000 only major Wall Street firm that maintains a full- service municipal sales, trading. and underwriting source:TM1omson Flnenctal Services,Full creou to Bock Manager desk in California, with five traders..underwriters and 16 municipal bond salespeople based in Los Angeles and dedicated specifically to the California market. Citigroup is ranked first among underwriters in California, having senior managed 623 issues totaling over 534 billion since 1997. CItIgrour CITY OF PALM DESERT March 25. 2004 Proposal to Provide Underwriting Services Page 2 California Tax Allocation Bond Experience: Long a major presence in the competitive tax allocation and land secured bond market. in 1997 Citigroup Global Markets Inc. hired former Moody's credit analyst and financial advisor Nikolai J. Sklaroff to lead a growing California land secured practice in Tax Allocation, Assessment, and Mello-Roos Bonds. Our dedicated team in this area has specialized in "credit engineering"to achieve investment grade ratings and higher ratings on many difficult tax allocation transactions. For example, of special note to the City, Citigroup Global Markets Inc. was hired by the California State University to complete a complex Tax Increment and Mello Roos bond in conjunction with the State's 23rd campus in Camarillo. Citigroup Global Markets Inc., working with colleagues at Citibank and Citimortgage designed a unique financing structure which allowed these raw dirt bonds to acquire municipal bond insurance and therefore to be issued at triple-A rates. Citigroup Global Markets Inc.'s ability to distribute tax Long Term Competitive Sales allocation bonds is best reflected by our ranking as the CaMonte Tax Allocation Financings 1999 to Present underwriter of the most competitively sold California tax :I Number of Transactions allocation bonds since 1999. The reason for the firm's success has been our ability to widely distribute tax Is allocation and other land secured bonds to a broad range of 12 25 investors. including those investors who are least sensitive to 9 19 yield — specifically the retail investors who place a higher ` 12 12 ' value on the name and security of a particular bond. When underwriters of tax allocation bonds are selected solely on CITICROUP Stone Morganslamay urn Banc ofAmenca Youngberg PaineWeooer their ability to deliver the best rates —not based on close ties to developers or other political factors — Citigroup Global Markets Inc. has long been ranked number one. This ranking is important because it clearly exemplifies the •:-- ; --it,ui=e.".' CASE STUDY - strength of the firm's distribution system through our COMMUNITYREDEVELOPMENT AGENCY ability to buy entire bond issues, as well as our CITY OF SANTA ANA demonstrated ability to commit capital on behalf of our •-, ax a SERIES 2003A&B clients. Additionally, in the b 1MT un l t'- past five years, Citigroup ��y 2003,,the Community Redevelopment Agency of the City of Global Markets Inc. has senior-managed 32 California tax Santa•Aoa-issued'.approxuutately S57,085,000 of Tax Allocation allocation bond financings with a total par amount of Bonds forthe City's.Sou16 Main Street Redevelopment Project Area. approximately S650 million. CingroupGlobal Merkets,lne..`served as the sole manager of the bonds Proceeds of.tile 2003i Bonds are expected to be used primarily to finance redevelopment activities related to the expansion A complete listing of Citigroup's California Tax and continuing development of the Santa Ana Auto Mall in the City Allocation bond financing experience in the last five years and inc16i1_c'land"acquisifiop public improvements to adjacent streets and'oother ` -tn&a`stuctiiiie:;•j'he:A enc alsoapplied a Onion of the can be found under Appendix A and we have highlighted 8,•.y >" some of our specific tax allocation transactions below: proceeds .oc the}2003B Bonds tel refinance the;`outstanding $34,985,000 iamount`,,'of:',1993".Tax Allocation Bonds that were callable on:Septemberl.;i2003 4On the same day,'U.S. Bancorp Santa Ana Redevelopment Agency (see case Piper_Jaffmy*priced )ax allocation bonds for :tile'Lancaster study to the right). Citigroup acted as lead Redevetopment14ency:a;On average, Citigroup's Series:2003B manager on approximately S57,085,000 of Tax portion of the bonds priced 6 basis points lower thaw the overall Allocation Bonds for the City's South Main Street average of the I ancaster ttansaction In certain maturities,the Santa cps Redevelopment Project Area in May2003. (Sole Ana issue closed With rbond advantage of over IO hosts points P J compared ro Lancaster.bond issue Manager) Despite.the rtatnhes of the State budget situation and especially i City of Oceanside. Citigroup has served and the Govtols.proposalstegarding redevelopment,Citigroup Global Markets:The:as•able to solicit bond insurance bids from all five continues to serve as the City's underwriter for major bond insiueis.(MBIA,FSA, Ambac, FGIC and XL) through various issues of land secured bonds. Recent credit presentation's'and''site'`visits with the insurers:and rating transactions include a Senior Lien Tax Allocation agencies:':While:FGIC is�not'normally an insurer of California Tax bond issue done in June 2003 and a Subordinate Allocation Bonds, otir rating'and insurance strategy produced an aggressive'wtnning'bid from.FGIC as well as a bid to provide a surety(which replaced the.need to fund a debt service reserve fund). citigroup'J°' CITY OF PALM DESERT • • March 25, 2904 Proposal to Provide Underwriting Services Page 3 Lien Tax Allocation transaction completed in February 2002 for the City's Community Development Commission (Sole Manager). i County of Riverside Redevelopment Agency S90 million new Tax Allocation Bond financing priced in April 2001. (Co-Senior Manager). i City of East Palo Alto S22.8 million new Tax Allocation Bond financing which priced in October 1999. (Sole Manager). i California State University/Channel Islands S49.5 million Tax Increment and Mello-Roos financing for a new CSU campus in Ventura County in June 2001 (Sole Manager). Citigroup will also be underwriting housing revenue bonds to finance vertical construction on the campus. 2 IRI1 STAFFING' *?s>- ;r. .:c,: Citigroup Global Markets Inc. will provide the City with a team of bankers who have relevant experience with California Tax Allocation Bonds financings. Nikolai Sklaroff. a Vice President in San Francisco who specializes in tax allocation bond and other land secured bonds and will serve as co-lead banker with day-to-day responsibility for the City's tax allocation bond financing. Nikolai has recently completed or is currently working on redevelopment transactions for Community Development Commission of the City of Oceanside. City of Alameda. East Palo Alto Redevelopment Agency. Cotati Redevelopment Agency, San Francisco Redevelopment Agency, Riverside County Economic Development Agency, Santa Ana Community Redevelopment Agency and the Channel Islands Site Authority among others. Joe Crowley, a Vice President in Los Angeles will serve as co-lead banker with day-to-day responsibility for the City's Tax Allocation Bond Financings. Carmen Vargas. an Associate in Los Angeles, will provide day-to-day banking support for the City. Carmen has provided transaction and quantitative support for all of the firm's California Tax Allocation financings since 1999. Ashvin Bachireddy, an Analyst with the Jinn's Los Angeles office will be provide quantitative and document support. Brad Thiel. an underwriter and day-to-day participant in the California market, will be responsible for pricing the City's bonds. We have included resumes and contact information of all members of the proposed banking team below. .' s4S r•t r .e f v { t ''�ji'fin k. . .. '.,.�. ,DAY-TO-D`AY BRNKINCx�' .,r'� ��t;.' . . NIKOLAI J. SKLAROFF, Vice President San Francisco nikolai.j.sklaroff@citigroup.com Phone (415) 955-1619. Fax (415) 955-1555 Nikolai. a former senior Moody's Investors Service rating agency analyst and member of Moody's rating committee, has more than 18 years of public finance experience as a financial advisor, rating analyst and an investment banker. Nikolai joined Salomon Smith Barney (now Citieroup Global Markets Inc.) in 1997. A specialist in tax allocation and land secured financings and a frequent speaker on the topic. Nikolai was active in rating a broad array of Tax Allocation Bonds. Assessment and Mello Roos Bonds. He has personally worked with many finahcing teams to help them structure financings that addressed investor, bond insurer and rating agency requirements. and to achieve investment grade ratings. Prior to joining Moody's, Nikolai was a financial advisor with Public Financial Management, Inc. in Philadelphia. Nikolai graduated from the University of Pennsylvania's Wharton School with a Bachelor of Science in Economics and a Bachelor of Arts in Political Science from College of Art and Sciences. with a concentration in Public Policy. He received a Master of Arts in Western European Economics and Politics from the University of Durham, University College. in England. He also studied Public Administration at Columbia University's School of International and Public Affairs in New York prior to relocating to San Francisco. Nikolai holds a Series 52 License and a Series 63 License and participates in the following organizations: Former Member. Board of'Directors. .Association for Governmental Leasing & Finance: Member, Technical Advisory Committee, California Debt and Investment Advisory Commission (CDIAC): Cltlgr©upi • • - CITY OF PALM DESERT March 25, 2004 Proposal to Provide Underwriting Services Page 4 Vice President, Bay Area Municipal Forum: Member, CASTOFF (Land Secured Finance Professionals Organization): Member. California Redevelopment Association; Associate Member, California Society of Municipal Finance Professionals. JOE CROWLEY, Vice President Los Angeles joseph.j.crowlev@citigroup.com Phone (213)486-8925. Fax (213) 486-8918 Joe has nine years of public finance investment banking experience primarily serving California issuers. His experience includes over 50 bond issues a total par amount of S9 billion, including transactions for issuers such as the State of California. County of Los Angeles, County of Santa Barbara, County of Riverside, County of Sacramento, City of Long Beach. Metropolitan Water District of Southern California, and San Diego Unified School District as well as numerous other special districts. Joe most recently served as senior manager on the 2003 S143 million County of Los Angeles and 2003 S78 million County of Riverside Refunding Bond issues. Joe earned his B.A. from the University of Washington and his Master's degree in Public Policy from the University of Southern California. He is a Registered Representative with the National Association of Securities Dealers(Series 7 and 63). CARMEN VARGAS,Associate Los Angeles catmen.vargas@citigroup.com Phone (213) 486-8995, Fax (213) 486-8995 Carmen has six years of public finance investment banking experience primarily serving California issuers. In particular, she has provided both quantitative and banking support on the Citigroup's California Land Secured Financings since 1999. She has worked with California clients including RDA of the City of Santa Ana, Redevelopment Commission of the City of Oceanside, Tejon Ranch Public Facilities Financing Authority, CSU Channel Islands, City of Riverside, Los Angeles County, County of Riverside. City of Redwood City and RDA of the City of East Palo Alto, County of San Joaquin. County of Santa Clara, City of Richmond and City of Fresno. Carmen earned Bachelor of Arts Degrees in Political Science and Ethnic Studies from Brown University. She holds Series 52 and 63 Licenses. ''wi>= "" "• -- :. ":` QUANTITATIVE/DOCUMENT SUPPORT • ASHVIN BACHIREDDY,Analyst Los Angeles ashvin.bachireddy@citigroup.com Phone: (213) 486-7138, Fax: (213) 486-8995 Ashvin joined Citigroup in 2002 after graduating from the University of California at San Diego with a BS in economics. Ashvin has two year of experience in public finance at Citigroup. He has provided quantitative support on transactions for the County of Los Angeles, the County of Riverside, El Camino Community College District, State Center CCD, Grossmonet-Cuyamaca CCD. Chino Valley Unified School District and San Bernardino City Unified School District's general obligations bonds. He is proficient in quantitative analyses and excels at advanced computer applications. In addition he worked as a broker assistant for a major Wall Street firm and founded an undergraduate entrepreneurial club at UCSD. He holds Series 52 and 63 Licenses. . . - • UNDERWRITING,SALES AND TRADING • BRAD THEM,Director Los Angeles brad.thiel@citigroup.com Phone (213) 486-8817, Fax (213) 486-7194 Brad has 20 years of experience trading and underwriting municipal securities in California. He joined Citigroup from Lehman Brothers, where he managed trading and underwriting efforts in the Western Region, and in the course of his career has participated in transactions of all sizes for every major California issuer. Currently, Brad manages Wall Street's largest municipal trading and underwriting desk in California, which on average trades between 5300-S350 million California tax-exempt bonds on a weekly basis. Brad graduated from the University of California, Berkeley with a BA in Comparative Literature. Brad holds a Series 53 License and is a Member and former President of the Los Angeles Municipal Bond Club and currently serving on the Board of the California PSA. ' ` citigroupJ • CITY OF PALM DESERT • • March 25. 2004 Proposal to Provide Underwriting Services Page 5 AS'!t"'�2.''�"i :3n^" "'A•- . ,. 3?DISTRIB[iTI omen PABItITTESa' r' .".�;. ,: .. •..•.a Citicroup's leadership position in the municipal bond industry has been achieved through a combination of superior client service, technical expertise, and efficient distribution of bonds. The firm is strong in all bond distribution channels: retail. middle market, and institutional. These complementary distribution networks enable us to take advantage of"pockets of demand" from all types of investors and sell securities at the lowest possible interest rates. Our marketing capabilities are summarized below: ;M1ttwlclrALRorD DISTRIBUFION+,.. < - - ' '4<",", •*- - . vN%il\'ONIU 'INNIIIVIIONAIA NIIDDL6\IAKK,.,, IIIRIWET NATIONAI. II OFFICES 55 OFFICES 522 OFFICES )n UNDERWRITERS I11 SALES SPECIALISTS 11.939 FINANCIAL CONSULTANTS. 20 SALES SPECIALISTS 9.500 INTERMEDIATE 5.9 MILLION RETAIL ACCOUNTS 300 ACCOUNTS ACCOUNTS S808.1 BILLION TOTAL ASSETS S94.9 BILLION ML NI BOND ASSETS CALIFORNIA LA BASED SALES,TRADING& 9 OFFICES 61 OFFICES UNDERWRITING DESK I I SALES SPECIALISTS 1.677 FINANCIAL CONSULTANTS 5 TRADERYCN'DERWRITERS 1,200 INTERMEDIATE 888.806 RETAIL ACCOUNTS 3 SALES SPECIALISTS ACCOUNTS S 144.6 BILLION TOTAL ASSETS 35 ACCOUNTS S 16.7 BILLION NILNI BOND ASSETS Institutional Distribution Capabilities—Our position as the leading municipal bond underwriter stems in part from our strong relationships with institutional investors. Our relationships with institutional investors make a significant difference. both in terms of trust and the ultimate acceptance of a bond issue by the institution and in the provision of timely feedback. Such feedback helps us: 1) ascertain the volume of institutional demand for the bonds at a given level and 2) tailor an issue to meet the needs of specific institutional purchasers. Unsurpassed Institutional Capabilities—Citigroup was ranked number one in municipal bonds. global investment- grade debt, high yield debt, asset-backed securities, and global bonds in the April 2001 issue of Investment Dealers' Digest. We were also ranked number one in institutional bond trading and marketing in Institutional Investor magazine's November 1999. November 2000 and November 2001 issues—these were the only years the survey was conducted. Regional Institutional Coverage—Citigroup augments its New York institutional sales efforts with 11 regional municipal trading offices to maximize TT ---------- ., institutional placement options for its clients. Unlike most firms. Citigroup " C � > establishes its institutional sales offices where these key institutional buyers are `� located. as emphasized by the map on the right. Dallas. Los Angeles. Chicago. and Seattle are examples of Citigroup institutional sales offices covering "local _� accounts" that manage California municipal trades. Coverage of Middle-Market Institutions—Unusual for a major Wall Street firm, we maintain a formal, managed, nationwide distribution system geared to small and medium-sized institutional investors. Our middle-market program includes more than 222 specialists in 81 locations nationwide who focus exclusively on these smaller institutional investors, as well as approximately 40 fixed-income-oriented retail Financial Consultants who cover middle-market institutions along with their retail accounts. Investment banking firms without retail distribution systems are not in a position to effectively access middle-market institutions. since they lack the network of offices that foster local relationships and allow for daily contact with investors. This sector is less yield sensitive than larger institutions and therefore is a key investor sector. citigroup • • CITY OF PALM DESERT • March 25, 2004 Proposal to Provide Underwriting Services Page 6 Retail Distribution Capabilities—Retail investors own more than 35% of all tax-exempt bonds. Retail investors are an important distribution outlet because these investors are the least yield sensitive buyers. A strong book of retail orders helps diminish the bargaining power institutional investors may otherwise hold. The following information demonstrates our unparalleled capabilities in this area. National Retail Sales Force—Citigroup has a national distribution network that allows us to focus on retail investor demand for tax-exempt bonds across the country. Citigroup has a national distribution network that allows us to focus on retail investor demand for the bonds across the country. With over 11,939 financial consultants in 522 offices nationwide we service more than S5.9 million retail accounts collectively representing over $95 billion of direct holdings of tax- exempt municipal bonds. In addition, Citigroup's total secondary market daily trading volume for municipals is approximately S300 million, of which approximately S200 million is accounted for by retail trades. California Retail Sales Force—Citigroup maintains a significant retail presence in California with 1,677 financial Citigroup's California Distribution Network, consultants based in 61 offices throughout the State. These consultants manage over 888,806 retail accounts for California City•od Branch Number OTC's an and Brooch'amber NEC, V Bakersfield i-540 25 Palo Alto-565 130'110 46 residents which contain over 5145 billion of assets. Our Berkeley579 40 Pasadena-235 17 Beverly Hlls Bedford 55<1196 66 Pasadena-538 38 bankers work closely with our California retail finance offices Beverly3Glls-Camden-555 30 Pleasanton-575 30 Brca-500 15 Rancho Bernardo-50A 12 to ensure that our California brokers understand our clients' Cepilola-516 9 Rancho Santa Fe-515 16 Caal,bad•642 30 Riverside-0+01 Sat of CA 95271 7 P rograms and financing goals. Due to the high state income tax mryCiry-557 25 Rolling BIBS-569 36 nt 517 19 Sacramento-602 25 in California. the ability to maximize urt penetration of the in-state costokaM-o5,a05-Su 26 Salinas-5931 Sat or CAr50L 13 E g San Diego-673 37 retail market is crucial to achieving the lowest possible interest ;Rlwo:507 31 SanFrannfc0'1546 9° rates for the City. Glendale•529 29 San Francisco-2a 46 Irvine-561 40 San lose 36 Laguna Hills n 826 14 San Mateoee-568 15 Laguna Ntguel-793 26 Santa Barbara-918 30 La lnlla-0h- 41 Santa Clara 23 High-Net-Worth Program— One aspect of our retail sales Lang Beach074 21 Santa Rosa-551 31 Long Beach Marino 6261Sat of CAn0]dl Il Scotto Valley 56D Sat of CA+5161 3 operation that sets Citigroup apart from its competitors is our LosAngeles-CLigroup Center 20u63D 57 Sherman oakss.571 34 Los Angeles Library Tower-662153A 42 Torrance•509 24 Fixed-Income High-Net-Worth program, which is the largest on MMananbaCou ty-52_g 52B 14 Ventura-660 u n County 5' 17 Visalia-6d6 6 Wall Street. This program accesses over 32,900 separate high- H n1oP:r s a 50D 31 Westlake C Village 3 27net-worth portfolios with assets totaling over 577.5 billion, the M9desto.531 •2 Westwood Plaza-669,68A 35 O Mom<rno-53B(Sat of CA+4I8) 6 Whittier-5181 Sat of CA+50131 vast majority of which are invested in municipal bonds. The Ontapmn-SBA ISa6MMf CA r5271 55 Woodland Hill'.349 41 12 cornerstone of the program is a team of 21 municipal portfolio Ptlmg0e esev 635 x9 Tonal FC'S 1.677 specialists that includes high-net-worth representatives located Number of Offices 61 on our regional desks across the country. One aspect of our retail sales operation that sets Citigroup apart from its competitors is our Retail Liaison Program. The Retail Liaison is selected because of their specific expertise in Municipal Bonds along with their large and diverse clients base which consist of individuals who are frequent investors in municipal bonds. Citigroup has a Retail Liaison in each of our regional Smith Barney offices that provides hands on support for the banking staff in the dissemination of information to brokers which allows Citigroup to further penetrate specific pockets of retail participation and allows any underwritings in the region to get the full attention of the retail staff. citigroup.i • CITY OF PALM DESERT • • March 25. 2004 Proposal to Provide Underwriting Services Page 7 •' a;.:4s.$TRUCI'QRIN(r�RECOM1IMENDATIONSs�i- . �� . . Given the current low interest rate environment. we have reviewed the outstanding indebtedness of the City of Palm Desert in order to identify potential refunding candidates and other cost-saving ideas. Based on this review, we have identified the Palm Desert Financing Authority's Series 1995 Tax Allocation Revenue Bonds (Project Area No. I. As Amended) in addition to the Series 1995 (Project Area No. 2) as refunding candidates with the potential to provide the City with significant debt service savings. Per your request, we have also analyzed the amount of new money proceeds that can be generated with the savings from the refunding issues. As the City is aware, both the Series of 1995 Project Area No. 1 and 2 Tax .Allocation Revenue Bonds were issued as new money bonds and therefore are advance refundable. Our analysis of these two issues assumes the refunding of callable bonds outstanding, a market interest rate scale as of March 23, 2004 and conservative issuance costs including an 80 basis point insurance premium. Assuming a delivery date of June I, 2004. a traditional fixed rate advance refunding of these bonds would generate net present value savings for the City of Palm Desert of approximately S2.2 million on the Project Area No. 1 Refunding and 8355.699 on the Project Area No. 2 refunding (see chart below). If the City were to utilize the savings from the refundings to issue new money bonds, it would have the ability to generate approximately S2.3 million of additional proceeds to be used for new projects, while maintaining at least one dollar of savings in the refunding. Detailed bond numerical schedules are included under Appendix B. i ` s ;; ..: ;`- M1.L'roleetrArearN if Plaject'AreatNii#2 ;:Cif dofPtalnrDesertRefundiug Resultsi.', r r fosucedEFstxed Insured Ftxedt 'u Ca '-r er t ._. . is 'Rate RefuntitS- • . Rate Refunding' 1:. Refunded Par: I S22.195.000 S3,870,000 Refunding Par: S22,420.000 S3.985.000 Net Present Value (NPV) Savings: S2.238.669 S355,699 NPV Savings as % of Refunded Bonds: 10.09% 9.19% Cash Flow Savings on FY 2005: S433,878 S103,935 Average Annual Cash Flow Savings FY 2006-2025 I S134.317 I S18,175 FF All-In True Interest Cost: 4.18% 4.14% Note: Market Rates as of 3/23/04.subject to market conditions,documentation.and credit approval. c;tigroup ' CITY OF PALM DESERT • • March 25. 2004 Proposal to Provide Underwriting Services Page 8 . .. S=FEEPROPOSAI1_:::. %...v- __a:r< Citigroup is eager to work with the City of Palm Desert and is prepared to work hard to earn the City's business. We believe the aggressive fee that we've proposed below demonstrates our strong desire to do business with you. No other firm can match the bond distribution resources and capabilities of Citigroup. No investment banking firm can match the capital Citigroup commits to municipal finance. What this means to the City is that Citigroup is able to secure the lowest available rates in the market. As the largest underwriter in the market. Citigroup's ability to command strong demand. cannot be beaten. Smaller firms or firms with less extensive sales and distribution capabilities can offer low fees, but can only access a limited number of predominantly institutional accounts. However. only by accessing as many investors as possible— namely a full array of institutional, middle market and individual retail investors — marketing to them aggressively, and thereby creating competition for the City's bonds, Citigroup can obtain the lowest possible borrowing costs. 2004 Tax Allocation Revenue Refunding and New Money Bonds UNDERWRITER'S TOTAL TOTAL DISCOUNT' S/1.000 AMOUNT EXPENSES S/1,000 AMOUNT Average Takedown & S6.27 S179,227.95 Underwriter's Counsel i 0.875 S25,000.00 Management Fee Underwriter's Risk 0.00 0.00 CDIAC 0.105 3.000.00 Expenses (as Itemized) 1.23 35.044.11 CUSIP 0.014 400.00 Total Gross Spread S7.50 S214,272.06 Dalcomp 0.063 1.78656 Day Loan 0.030 857.55 Travel/Misc. 0.140 4.000.00 Expenses Total 1.227 S35.044.11 We believe the City of Palm Desert will not find a firm that has better bond distribution and underwriting capabilities than Citigroup Global Markets Inc. We believe we can demonstrate how this distribution capability will produce lower borrowing costs for the City's bonds. The last thing we want is for fee to become an obstacle in our selection. If there is any aspect of our fee proposal which is of concern or which requires further clarification. we are happy to negotiate andor clarify our fee proposal. Assumes a combined refunding and new money par amount of S28.585.000 and assumes distribution of Aaa/AAA Insured Bonds Assumes Underwriter's Counsel prepares disclosure document. citigroup CITY OF PALM DESERT • March 25. 201)4 Proposal to Provide Underwriting ces Prior to entering into any transaction contemplated hereby (a "Transaction") you should determine, without reliance upon us or our affiliates. the economic risks and merits (and independently determine that you are able to assume these risks), as well as the legal. tax and accounting characterizations and consequences of any such Transaction. In this regard, by accepting this presentation. you acknowledge that(a)we are not in the business of providing(and you are not relying on us for)legal,tax or accounting advice,(b)there may be legal. tax or accounting risks associated with any Transaction,(c)you should receive(and rely on) separate and qualified legal, tax and accounting advice and (d) you should apprise senior management in your organization as to such legal. tax and accounting advice(and any risks associated with any Transaction)and our disclaimer as to these matters. Any terms set forth in this presentation are intended for discussion purposes only and are subject to the final expression of the terms as set forth in separate definitive written agreements. Notwithstanding anything herein or in any agreement we may enter into to the contrary, you (and each of your employees, representatives or other agents) may disclose to any and all persons. without limitation of any kind, the U.S. tax treatment and U.S. tax structure of any Transaction and all materials of any kind(including opinions or other tax analyses) that are provided to you relating to such U.S. tax treatment and U.S. tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws. Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers. These indications are provided solely for your information and consideration. are subject to change at any time without notice and are not intended as a solicitation with respect to the purchase or sale of any instrument. The information contained in.this presentation may include results of analyses from a quantitative model which represent potential future events that may or may not be realized,and is not a complete analysis of every material fact representing any product. Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice. We and/or our affiliates may make a market in these instruments for our customers and for our own account. Accordingly,we may have a position in any such instrument at any time. We maintain a policy of strict compliance with the anti-tying provisions of the Bank Holding Company Act of 1956, as amended. and the regulations issued by the Federal Reserve Board implementing the anti-tying rules(collectively, the "Anti-tying Rules"). Moreover our credit policies provide that credit must be underwritten in a safe and sound manner and be consistent with Section 23B of the Federal Reserve Act and the requirements of federal law. Consistent with these requirements and our policy: • You will not be required to accept any product or service offered by Citibank or any of its affiliates as a condition to the extension of commercial loans or other products or services to you by Citibank,unless such a condition is permitted under an exception to the Anti-tyingRules. As used in this paragraph and the next three paragraphs, "Citibank" means, collectively, Citibank,N.A. and its subsidiaries. • Citibank will not vary the price or other terms of any Citibank product or service based on a condition that you purchase any other product or service from Citibank or by any of its affiliates,unless Citibank is authorized to do so under an exception to the Anti-tying Rules. • Citibank will not require you to provide property or services to Citibank or any affiliate of Citibank as a condition to the extension of a commercial loan to you by Citibank, unless such a requirement is reasonably required to protect the safety and soundness of the loan. • Citibank will not require you to refrain from doing business with a competitor of Citibank or any of its affiliates as a condition to receiving a commercial loan from Citibank,unless the requirement is reasonably designed to ensure the soundness of the loan. Although this material may contain publicly available information about Smith Barney Research, Citigroup policies prohibit analysts from participating in any efforts to solicit investment banking business; accordingly, Smith Barney research analysts may not have any communications with companies for the purpose of soliciting investment banking business. Moreover, Citigroup policy (i) prohibits research analysts from participating in road show meetings and (ii) prohibits investment banking personnel from having any input into company-specific research coverage decisions and from directing research analysts to engage in marketing or selling efforts to investors with respect to an investment banking transaction. 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Issue New Money with Refunding Savings Series 2004 Series 2004 Refunding 1995 New Money- Refunding 1995 New Money- TABs-Project Project Area TABs-Project Project Area Sources: Areas#1 #1 Areas#2 #2 Total Bond Proceeds: Par Amount 22,420,000.00 2,010,000.00 3,985,000.00 170,000.00 28,585,000.00 Premium 1,936,702.70 144,937.55 358,259.00 16,256.65 2,456,155.90 24,356,702.70 2,154,937.55 4,343,259.00 186,256.65 31,041,155.90 Series 2004 Series 2004 Refunding 1995 New Money- Refunding 1995 New Money- TABs-Project Project Area TABs-Project Project Area Uses: Areas#1 #1 Areas#2 #2 Total Refunding Escrow Deposits: Cash Deposit 893.74 727.50 1,621.24 Open Market Purchases 23.741.123.53 _. 4,230,051.09 27.971.174.62 23,742,017.27 4,230,778.59 27,972,795.86 Delivery Date Expenses: Cost of Issuance 156,865.49 14,063.32 27,881.76 1,189.43 200,000.00 Underwriter's Discount 168.150.00 15,075.00 29,887.50 1,275.00 214,387.50 Bond Insurance(@ 80 bps) 289.078.23 _ 24,510.73 51,722.90 2,103.93 367,415.79 614,093.72 53,649.05 109,492.16 4,568.36 781,803.29 Other Uses of Funds: Additional Proceeds 591.71 2,101,288.50 2,988.25 181,688.29 2,286,556.75 24,356,702.70 2,154,937.55 4,343,259.00 186,256.65 31,041,155.90 • Notes: Per City's FY 2003 CAFR, a surety bond was issued by MBIA. ' Per City's and Financial Advisors direction,we have not included an analysis of issuing a 2004 surety bond. Analysis is preliminary and subject to change. N 0 0 0 . 01 A a - o o Ofi (0 Z cI c . V > 01 O co N , m ccoo co M N OP) N Cr) to N I N O N t7 Q 1 r N> pl r N jp E o N ' (7 N _ I Tr 0.0 0 0 Z.j m Oi oi 01 In — I m I . D o Z.' I 0 0 1 0 V I • N mo M W . 0 N N N N f 0 acci co cc;I O1 m m m ttl c VINmm Un N ID N NZ O m m N O 0 1 a c> U N N 0 N• yO (N N (00 0 0 0 CD fn In In J 3 CC c co N D) D m N O Q E L 9 m } mmorl;for I i m� Z_ 0a 02 cic'inr ri D Z 8m Z c a`0= a O 0 o 0 o o O o O O w LL '� D co T a O O o 0 O ll o O N d o I 0 0 0 0 O 0 a) 9 N m C cc ci Lai O coN N 9 NNt7 m Na Q• E Y N N N N }N Z 10 v m Z 0 yy D ag 0) 3 0 N _ O N O U CO o . ¢ aw II I I I. F 0 0 . _ N (p tt N ' zt co co i �Q aa)i< 11 Na W Q N ¢ N cl o. U Q O . L 87 , 2 ' co aadr N ' N t V w c 0 c Q) a CO COO .•O a 3r ; N 0 A N0) N 9 m` 01ZmZ . m E ma ma a a C O c 0 ail N p N 9 N C Ea N S-m`m 'I E N V N 0 0 m CO a CO 2 to o ' 2 Z . lit Mar 30,2004 12:28 pm Prepared by Citigroual Markets Inc. 0 Page 3 SUMMARY OF BONDS REFUNDED Palm Desert Financing Authority 2004 Refunding of Project Area#1 and#2 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Maturity Interest Par Call Call Bond Date Rate Amount Date Price Series 1995 Tax Allocation Revenue Bonds-#1, 19951: TERM24 04/01/2024 5.950% 15,075,000.00 04/01/2005 102.000 TERM25 04/01/2025 5.850% 7,120,000.00 04/01/2005 102.000 22,195,000.00 • Series 1995 Tax Allocation Revenue Bonds-#2, 19952: 2024 08/01/2024 5.950% 2,490,000.00 08/01/2005 102.000 2025 08/01/2025 5.850% 1,380,000.00 08/01/2005 102.000 3,870,000.00 26,065,000.00 Note: Analysis is preliminary and subject to change. Mar 30,2004 12:28 pm Prepared by Citigrou bal Markets Inc. • Page 4 SUMMARY OF REFUNDING RESULTS Palm Desert Financing Authority Refunding 1995 TABs-Project Areas m1 Market Scale as of March 23, 2004. Issue New Money with Refunding Savings Dated Date 06/01/2004 Delivery Date 06/01/2004 . Arbitrage yield 3.816663% Escrow yield 1.079875% ' Bond Par Amount 22,420,000.00 True Interest Cost 4.175281% Net Interest Cost 4.329749% Average Coupon 4.906313% Average Life 12.468 Par amount of refunded bonds 22,195,000.00 Average coupon of refunded bonds 5.915156% Average life of refunded bonds 12.828 PV of prior debt to 06/01/2004 @ 3.816663% 26,938,710.51 Net PV Savings 2,238,669.30 Percentage savings of refunded bonds 10.086368% Percentage savings of refunding bonds 9.985144% Note: Analysis is preliminary and subject to change. Mar 30.2004 12:28 pm Prepared by Citigroup�al Markets Inc. • Page 5 SAVINGS Palm Desert Financing Authority Refunding 1995 TABs-Project Areas#1 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Present Value Prior Refunding to 06/01/2004 Date Debt Service Debt Service Savings @ 3.8166632% 06/30/2005 1,313,482:50 879,604.17 433,878.33 426,059.75 06/30/2006 1,953,482.50 1,820,525.00 132,957.50 126,350.48 06/30/2007 1,950,532.50 1,816,400.00 134,132.50 122.556.98 • 06/30/2008 1,955,525.00 1,823,000.00 132,525.00 116,482.25 06/30/2009 1,952,880.00 1,820,600.00 132,280.00 111,875.11 06/30/2010 1,947,85 5.00 1,812,80 0.00 135,055.00 109,894.89 06/30/2011 1,950,460.00 1,813,650.00 136,810.00 107,112.32 06/30/2012 1,950,125.00 1,817,700.00 132,425.00 99,810.72 06/30/2013 1,951,835.00 1,814,500.00 137,335.00 99,520.47 06/30/2014 1,950,272.50 1,815,000.00 135,272.50 94,359.55 06/30/2015 1,950,462.50 1,813,000.00 137,462.50 92,263.23 06/30/2016 1,952,117.50 1,818,500.00 133,617.50 86,328.09 06/30/2017 1,954,870.00 1,821,000.00 133,870.00 83,223.39 06/30/2018 1,953,522.50 1,820,500.00 133,022.50 79,571.99 06/30/2019 1,953,040.00 1,817,000.00 136,040.00 78,276.75 06/30/2020 1,953,145.00 1,820,500.00 132,645.00 73,436.54 06/30/2021 1,953,540.00 1,820,500.00 133,040.00 70,847.24 06/30/2022 1,953,882.50 1,817,000.00 136.882.50 70,098.11 06/30/2023 1,953,900.00 1,820,000.00 133,900.00 65,949.84 06130/2024 1,953,275.00 1,819,000.00 134,275.00 63,591.72 06/30/2025 846,800.00 714,000.00 132,800.00 60,468.17 39,255,005.00 36,134,779.17 3,120,225.83 2,238,077.59 Savings Summary PV of savings from cash flow 2,238,077.59 • • Plus:Refunding funds on hand 591.71 Net PV Savings 2,238,669.30 • Note: Analysis is preliminary and subject to change. • Mar 30,2004 12:28 pm Prepared by Citigroubal Markets Inc. • Page 6 PRIOR BOND DEBT SERVICE Palm Desert Financing Authority Refunding 1995 TABs-Project Areas#1 Market Scale as of March 23.2004. Issue New Money with Refunding Savings Series 1995 Tax Allocation Revenue Bonds-#1 (199511 Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/01/2004 10/01/2004 656,741.25 656,741.25 04/01/2005 656,741.25 656,741.25 06/30/2005 1,313,482.50 10/01/2005 656,741.25 656.741.25 04/01/2006 640,000 656,741.25 1,296,741.25 06/30/2006 1,953,482.50 10/01/2006 637,766.25 637,766.25 04/01/2007 675.000 637,766.25 1,312,766.25 06/30/2007 1.950.532.50 10/01/2007 617,762.50 617,762.50 04/01/2008 720,000 617,762.50 1,337,762.50 06/30/2008 1,955,525.00 10/01/2008 596,440.00 596,440.00 04/01/2009 760,000 596,440.00 1,356,440.00 06/30/2009 1,952,880.00 10/01/2009 573,927.50 573,927.50 04/01/2010 800,000 573,927.50 1,373,927.50 06/30/2010 1,947,855.00 10/01/2010 550.230.00 550,230.00 04/01/2011 850,000 1' 550,230.00 1.400.230.00 06/30/2011 1,950,460.00 10/01/2011 525.062.50 525.062.50 04/01/2012 900,000 525.062.50 1,425,062.50 06/30/2012 1,950,125.00 10/01/2012 498.417.50 498.417.50 04/01/2013 955.000 498,417.50 1,453,417.50 ' 06/30/2013 1,951,835.00 10/01/2013 470,136.25 470,136.25 04/01/2014 1,010.000 470,136.25 1,480,136.25 06/30/2014 1,950,272.50 10/01/2014 440,231.25 440.231.25 04/01/2015 1,070,000 — 440,231.25 440,231.25 1,510,231.25 06/30/2015 1,950,462.50 10/01/2015 408.558.75 408,558.75 04/01/2016 1,135.000 — 408,558.75 408,558.75 1,543,558.75 06/30/2016 1,952,117.50 10/01/2016 374,935.00 374,935.00 04/01/2017 1,205.000 374,935.00 1,579,935.00 06/30/2017 1,954,870.00 10/01/2017 339.261.25 339,261.25 04/01/2018 1,275,000 '• 339,261.25 1,614,261.25 06/30/2018 1,953,522.50 10/01/2018 301,520.00 301,520.00 04/01/2019 1,350,000 301,520.00 1,651,520.00 06/30/2019 1,953,040.00 10/01/2019 261.572.50 261.572.50 04/01/2020 1,430,000 261.572.50 1,691,572.50 06/30/2020 1,953,145.00 10/01/2020 219,270.00 219,270.00 04/01/2021 1,515,000 219,270.00 1,734,270.00 06/30/2021 1,953,540.00 10/01/2021 174,441.25 174,441.25 04/01/2022 1,605,000 — 174441.25 1,779,441.25 06/30/2022 1,953,882.50 10/01/2022 126,950.00 126,950.00 04/01/2023 1,700,000 126,950.00 1,826,950.00 06/30/2023 1,953,900.00 10/01/2023 76,637.50 76,637.50 04/01/2024 1,800,000 76,637.50 1,876,637.50 •Mar 30.2004 12:28 pm Prepared by Citigroubal Markets Inc. • Page 7 _ PRIOR BOND DEBT SERVICE Palm Desert Financing Authority Refunding 1995 TABs-Project Areas 41 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Series 1995 Tax Allocation Revenue Bonds-#1 /199511 Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/30/2024 1,953,275.00 10/01/2024 23.400.00 23,400.00 04/01/2025 800.000 5.850% 23,400.00 823,400.00 06/30/2025 846.800.00 22.195.000 17,060,005.00 39,255,005.00 39,255,005.00 • Note: Analysis is preliminary and subject to change. Mar 30,2004 12:28 pm Prepared by CitigroLSbal Markets Inc. • Page s DETAILED BOND DEBT SERVICE Palm Desert Financing Authority Refunding 1995 TABs-Project Areas#1 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Serial Bond(SERIAL? Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/01/2004 10/01/2004 351,841.67 351,841.67 04/01/2005 527,762.50 527,762.50 06/30/2005 879.604,17 10/01/2005 527,762.50 527,762.50 04/01/2006 765,000 2.500% 527,762.50 1,292,762.50 06/30/2006 1,820,525.00 10/01/2006 518,200.00 518,200.00 04/01/2007 780.000 3.000% 518,200.00 1,298200.00 06/30/2007. 1.816.400.00 10/01/2007 506,500.00 506,500.00 04/01/2008 810,000 4.000% 506,500.00 1,316,500.00 06/30/2008 1,823000.00 10/01/2008 490,300.00 490,300.00 04/01/2009 840,000 4.500% 490,300.00 1,330,300.00 06/30/2009 1,820,600.00 1010112009 471,400.00 471,400.00 04/01/2010 870,000 4.500% 471,400.00 1,341,400.00 06/30/2010 1,812,800.00 10/01/2010 451,825.00 451,825.00 04/01/2011 910,000 4.500% 451,825.00 1,361,825.00 06/30/2011 1,813,650.00 10/01/2011 431,350.00 431,350.00 04/01/2012 955,000 4.000% 431,350.00 1,386,350.00 06/30/2012 1,817,700.00 10/0112012 412,250.00 412,250.00 04/01/2013 990.000 5.000% 412,250.00 1,402,250.00 06/30/2013 1,814,500.00 10/01/2013 387,500.00 387,500.00 04/01/2014 1,040,000 5.000% 387,500.00 1,427,500.00 06/30/2014 1,815,000.00 10/01/2014 361,500.00 361,500.00 04/01/2015 1.090,000 5.000% 361,500.00 , 1451,500.00 06/30/2015 1,813,000.00 10/01/2015 334,250.00 334,250.00 04/01/2016 1,150,000 5.000% 334,250.00 1484,250.00 06/30/2016 1,818,500.00 10/01/2016 305,500.00 305,500.00 04/01/2017 1,210,000 5.000% 305,500.00 1,515,500.00 06/30/2017 1,821,000.00 10/01/2017 275,250.00 275,250.00 04/01/2018 1,270,000 5.000% 275,250.00 1,540250.00 06/30/2018 1,820,500.00 1010112018 243,500.00 243,500.00 04/01/2019 1,330,000 5.000% 243,500.00 1,573,500.00 06/30/2019 1,817,000.00 10/01/2019 210;250.00 210,250.00 04/01/2020 1,400,000 5.000% 210250.00 1,610,250.00 06/30/2020 1,820,500.00 10/01/2020 175,250.00 175,250.00 04/01/2021 1,470,000 5.000% 175,250.00 1,645,250.00 06/30/2021 1,820500.00 10/01/2021 138,500.00 138,500.00 04/01/2022 1,540,000 5.000% 138,500.00 1,678,500.00 • 06/30/2022 1,817,000.00 10/01/2022 100,000.00 100,000.00 04/01/2023 1.620.000 5.000% 100,000.00 1,720,000.00 06/30/2023 1,820,000.00 10/01/2023 59,500.00 59.500.00 04/01/2024 1,700,000 5.000% 59,500.00 1,759,500.00 Mar 30.2004 12:28 pm Prepared by Citigroup4l6bal Markets Inc. • Pace DETAILED BOND DEBT SERVICE Palm Desert Financing Authority Refunding 1995 TABs-Project Areas F1 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Serial Bond(SERIAL) Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/30/2024 1,819,000.00 10/01/2024 17,000.00 17,000.00 04/01/2025 680,000 5.000% 17,000.00 697.000.00 06/30/2025 714,000.00 22,420,000 13,714,779.17 36,134,779.17 36,134,779.17 Note: Analysis is preliminary and subject to change. • Mar 30,2004 12:28 pm Prepared by CitigrouphTobal Markets Inc. Page 10 BOND SOLUTION Palm Desert Financing Authority Refunding 1995 TABs-Project Areas#1 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Period Proposed Proposed Total Adj Revenue Unused Debt Sery Ending Principal Debt Service Debt Service Constraints Revenues Coverage 04/01/2004 04/01/2005 879,604 879,604 1.313,463 433,878 149.32654% 04/01/2006 765.000 1.820.525 1,820,525 1,953,483 132.958 107.30325% 04/01/2007 780,000 1,816.400 1,816,400 1,950,533 134,133 107.38452% 04/01/2008 810,000 1,823,000 1,823,000 1,955,525 132,525 107.26961% 04101/2009 840.000 1,820,600 1,820,600 1,952,880 132,280 107.26574% 04/01/2010 870,000 1,812,800 1,812,800 1,947,855 135,055 107.45008% 04/01/2011 910,000 1,813,650 1,813,650 1,950,460 136.810 107.54335% 04/01/2012 955,000 1,817,700 1,817,700 1,950,125 132,425 107.28531% 04/01/2013 990,000 1,814,500 1,814,500 1,951,835 137,335 107.56875% 04/01/2014 1,040,000 1,815,000 1,815,000 1,950,273 135,273 107.45303% 04/01/2015 1.090,000 1,813.000 1,813,000 1,950,463 137,463 107.58205% 04/01/2016 1,150,000 1,818,500 1,818,500 1,952,118 133,618 107.34768% 04/01/2017 1,210,000 1,821,000 1,821,000 1,954,870 133,870 107.35146% 04/01/2018 1.270,000 1.820,500 1,820,500 1,953,523 133,023 107.30692% 04/01/2019 1,330,000 1,817,000 1,817,000 1,953,040 136,040 107.48707% 04/01/2020 1,400,000 1,820,500 1,820,500 1,953,145 132,645 107.28619% 04/01/2021 1,470,000 1,820,500 1,820,500 1,953,540 133,040 107.30788% 04/01/2022 1,540,000 1,817,000 1,817,000 1,953,883 136,883 107.53343% 04/01/2023 1,620,000 1.820.000 1,820,000 1.953.900 133,900 107.35714% 04/01/2024 1,700,000 1,819,000 1,819.000 1,953,275 134,275 107.38180% 04/01/2025 680,000 714,000 714,000 846,800 132,800 118.59944% 22.420.000 36,134,779 36,134,779 39,255,005 3,120,226 Note: Analysis is preliminary and subject to change. Mar 30.2004 12:28 pm Prepared by Citigroupbal Markets Inc. • Page 11 DETAILED BOND DEBT SERVICE Palm Desen Financing Authority Series 2004 New Money-Project Area it Market Scale as of March 23.2004. Issue New Money with Refunding Savings Serial Bond(SERIAL' Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/01/2004 • 10/01/2004 29,016.67 29,016.67 04/01/2005 360,000 2.500% 43,525.00 403,525.00 06/30/2005 432.541.67 10/01/2005 39,025.00 39.025.00 04/01/2006 50,000 2.500% 39,025.00 89,025.00 06/30/2006 128.050.00 10/01/2006 38,400.00 38.400.00 04/01/2007 55,000 3.000% 38,400.00 93.400.00 06/30/2007 131,800.00 10/01/2007 37,575.00 37,575.00 04/01/2008 55,000 4.000% 37,575.00 92,575.00 06/30/2008 130.150.00 10/01/2008 36,475.00 36,475.00 04/01/2009 55.000 4.500% 36475.00 91,475.00 06/30/2009 127.950.00 10/01/2009 35,237.50 35.237.50 04/01/2010 60.000 4.500% 35,237.50 95,237.50 06/30/2010 130.475.00 10/01/2010 33,887.50 33.887.50 04/01/2011 65.000 4.500% 33,887.50 98.887.50 06/30/2011 132.775.00 10/01/2011 32,425.00 32.425.00 04/01/2012 65,000 4.000% 32,425.00 97425.00 06/30/2012 129.850.00 10/01/2012 31,125.00 31.125.00 04/01/2013 75,000 5.000% 31,125.00 106.125.00 06/30/2013 137,250.00 10/01/2013 29,250.00 29.250.00 04/01/2014 75,000 5.000% 29,250.00 ' 104250.00 06/30/2014 133,500.00 10/01/2014 27,375.00 27.375,00 04/01/2015 80,000 5.000% 27,375.00 107,375.00 06/30/2015 134,750.00 10/01/2015 25,375.00 25.375.00 04/01/2016 80,000 5.000% 25,375.00 105.375.00 • 06/30/2016 130,750.00 10/01/2016 23,375.00 23,375.00 04/01/2017 85.000 5.000% 23,375.00 108.375.00 06/30/2017 131,750.00 10/01/2017 21,250.00 21.250.00 04/01/2018 90.000 5.000% 21,250.00 111,250.00 06/30/2018 132,500.00 10/01/2018 19,000.00 19,000.00 04/01/2019 95.000 5.000% 19,000.00 114,000.00 06/30/2019 133,000.00 10/01/2019 16,625.00 16,625.00 04/01/2020 95.000 5.000% 16,625.00 111,625.00 06/30/2020 128,250.00 10/01/2020 14,250.00 14,250.00 04/01/2021 100,000 5.000% 14,250.00 114,250.00 06/30/2021 128,500.00 10/01/2021 11.750.00 11,750.00 04/01/2022 110.000 5.000% 11,750.00 121,750.00 06/30/2022 133,500.00 10/01/2022 9,000.00 9,000.00 04/01/2023 115.000 5.000% 9,000.00 124.000.00 06/30/2023 133,000.00 10/01/2023 6,125.00 6.125.00 04/01/2024 120.000 5.000% 6,125.00 126,125.00 Mar 30.2004 12:28 pm Prepared by Citigroual Markets Inc. • Page 12 DETAILED BOND DEBT SERVICE Palm Desert Financing Authority Series 2004 New Money-Project Area #1 Market Scale as of March 23.2004. Issue New Money with Refunding Savings Serial Bond{SERIAL? Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/30/2024 132,250.00 10/01/2024 3,125.00 3,125.00 04/01/2025 125,000 5.000% 3,125.00 128,125.00 06/30/2025 131,250.00 2.010,000 1,053,841.67 3,063,841.67 3,063,841.67 Note: Analysis is preliminary and subject to change. Mar 30,2004 12:28 pm Prepared by Citigroubal Markets Inc. Page 13 BOND SOLUTION Palm Desert Financing Authority Series 2004 New Money-Project Area #1 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Period Proposed Proposed Total Adj Revenue Unused Debt Sery • Ending Principal Debt Service Debt Service Constraints Revenues Coverage 04/01/2004 04/01/2005 360.000 432.542 432.542 433,878 1.337 100.30902% 04/01/2006 50,000 128.050 128,050 132,958 4,908 103.83249% 04/01/2007 55.000 131,800 131,800 134.133 2.333 101.76973% 04/01/2008 55,000 130.150 130,150 132,525 2.375 101.82482% 04/01/2009 55,000 127.950 127,950 132,280 4,330 103.38413% 04/01/2010 60.000 130.475 130.475 135,055 4,580 103.51025% 04/01/2011 65,000 132,775 132,775 136.810 4.035 103.03898% 04/01/2012 65,000 129,850 129,850 132,425 2.575 101.98306% 04/01/2073 75,000 137,250 137,250 137.335 85 100.06193% 04/01/2014 75,000 133,500 133,500 135,273 1,773 101.32772% 04/01/2015 80.000 134,750 134,750 137.463 2,713 102.01299% 04/01/2016 80.000 130.750 130,750 133,618 2.868 102.19312% 04/01/2017 85.000 131,750 131,750 133,870 2.120 101.60911% 04/01/2018 90.000 132.500 132.500 133.023 523 100.39434% • 04/01/2019 95,000 133,000 133,000 136.040 3,040 102.28571% 04/01/2020 95,000 128,250 128.250 132.645 4.395 103.42690% 04/01/2021 100,000 128,500 128,500 133.040 4.540 103.53307% 04/01/2022 110,000 133.500 133,500 136.883 3.383 102.53371% 04/01/2023 115.000 133.000 133,000 133.900 900 100,67669% 04/01/2024 120,000 132,250 132.250 134.275 2.025 101.53119% ' 04/01/2025 125,000 131,250 131,250 132.800 1,550 101,18095% • 2.010,000 3.063.842 3,063.842 3,120.226 56.384 Note: Analysis is preliminary and subject to change. 111 Mar 30.2004 12:28 pm Prepared by Citigroupbal Markets Inc. • Page 14 SUMMARY OF REFUNDING RESULTS Palm Desert Financing Authority Refunding 1995 TABs-Project Areas#2 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Refunding Analysis Only Dated Date 06/01/2004 Delivery Date 06/01/2004 Arbitrage yield 3.816663% Escrow yield 1.303542% Bond Par Amount 3,985,000.00 True Interest Cost 4.141377% Net Interest Cost 4.305567% Average Coupon 4.899078% Average Life 12.705 Par amount of refunded bonds 3,870,000.00 Average coupon of refunded bonds 5.912710% Average life of refunded bonds 13.052 PV of prior debt to 06/01/2004 @ 3.816663"/ 4,745,714.67 Net PV Savings 355,699.16 Percentage savings of refunded bonds 9.191193% Percentage savings of refunding bonds 8.925951% • Notes: Analysis is preliminary and subject to change. Analysis is preliminary and subject to change. Mar 30,2004 12:28 pm Prepared by Citigroup bal Markets Inc. • Pace 15 SAVINGS Palm Desert Financing Authority Refunding 1995 TABs-Project Areas F2 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Refunding Analysis Only Present Value Prior Refunding to 06/01/2004 Date Debt Service Debt Service Savings @ 3.8166632% 06/30/2005 228,885.00 124,950,00 103,935.00 103.477.67 06/30/2006 228,885.00 187,425.00 41,460.00 39,299,58 06/30/2007 340,481.25 325,675.00 14,806.25 13,312.61 06/30/2008 338,527.50 321,825.00 16,702.50 14,525,08 06/30/2009 336.278.75 321,825,00 14 453.75 12,077.96 06/30/2010 338,586.25 320,550.00 18,036.25 14,586,19 06/30/2011 340,303,75 323,575.00 16,728.75 13.019.65 . 06/30/2012 336,580.00 321,262,50 15,317.50 11.470.63 06/30/2013 337,412.50 319,150.00 18,262.50 13,226,06 06/30/2014 337,652.50 321,250.00 16,402.50 11,427.12 06/30/2015 337,300.00 322,000.00 15,300.00 10.259.82 06/30/2016 336,355.00 317,375.00 18,980.00 12,300.98 06/30/2017 334,817.50 317,375.00 17,442.50 10.883,36 06/30/2018 337,536.25 321,750.00 15,786.25 9,482.62 06/30/2019 334,511.25 320,500.00 14,011.25 8,101.85 06/30/2020 335,745.00 318,750.00 16,995.00 9,494.57 06/30/2021 331,242.50 316.500.00 14,742.50 7,931.56 06/30/2022 316,447.50 299.125.00 17,322.50 8,997.93 06/30/2023 330,770.00 316.125.00 14,645.00 7.330.10 06/30/2024 319,063.75 302.375.00 16,688.75 8,062.42 06/30/2025 321,621.25 308,125.00 13,496.25 6,288,25 06/30/2026 133,802.50 117,875.00 15,927.50 7,154,91 6,932,805.00 6,465,362.50 467.442.50 352,710.91 Savings Summary PV of savings from cash flow 352,710.91 Plus:Refunding funds on hand 2.988.25 Net PV Savings 355.699,16 • Notes: Analysis is preliminary and subject to change. Analysis is preliminary and subject to change. Mar 30,2004 12:28 pm Prepared by Citigroup`6fobal Markets Inc. • Page 16 PRIOR BOND DEBT SERVICE Palm Desert Financing Authority Refunding 1995 TABs-Project Areas#2 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Refunding Analysis Only Series 1995 Tax Allocation Revenue Bonds-#2(199521 Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/01/2004 08/01/2004 114,442.50 114,442.50 02/01/2005 114,442.50 114,442.50 06/30/2005 228,885.00 08/01/2005 114,442.50 114,442.50 02/01/2006 114,442.50 114,442.50 06/30/2006 228,885.00 08/01/2006 115,000 114,442.50 229,442.50 02/01/2007 111,038.75 111,038.75 06/30/2007 340,481.25 08/01/2007 120,000 111,038.75 231,038.75 02/01/2008 107,488.75 107,488.75 06/30/2008 338,527.50 08/01/2008 125,000 " 107,488.75 232,488.75 02/01/2009 103,790.00 103,790.00 06/30/2009 336,278.75 08/01/2009 135,000 " 103,790.00 238,790.00 02/01/2010 99,796.25 99,796.25 06/30/2010 338,586.25 08/01/2010 145,000 99,796.25 244,796.25 02/01/2011 95,507.50 95,507.50 06/30/2011 340,303.75 08/01/2011 150.000 " 95,507.50 245,507.50 02/01/2012 91,072.50 91,072.50 06/30/2012 336.580.00 08/01/2012 160,000 91,072.50 251,072.50 02/01/2013 86,340.00 86,340.00 06/30/2013 337,412.50 08/01/2013 170.000 " 86,340.00 256,340.00 02/01/2014 81,312.50 81,312.50 06/30/2014 337,652.50 08/01/2014 180,000 81,312.50 261,312.50 02/01/2015 75,987.50 75,987.50 06/30/2015 337,300.00 08/01/2015 190,000 75,987.50 265,987.50 02/01/2016 70,367.50 70,367.50 06/30/2016 336,355.00 08/01/2016 200,000 70,367.50 270,367.50 02/01/2017 64,450.00 64,450.00 06/30/2017 334,817.50 08/01/2017 215,000 64,450.00 279,450.00 02/01/2018 58,086.25 58,086.25 06/30/2018 337,536.25 ' 08/01/2018 225.000 " 58,086.25 283,086.25 02/01/2019 51,425.00 51.425.00 06/30/2019 334,511.25 08/01/2019 240,000 51,425.00 291,425.00 02/01/2020 44,320.00 44,320.00 06/30/2020 335,745.00 08/01/2020 250,000 44,320.00 294,320.00 02/01/2021 36,922.50 36,922.50 06/30/2021 331,242.50 08/01/2021 250.000 " 36,922.50 286,922.50 02/01/2022 29,525.00 29,525.00 06/30/2022 316,447.50 08/01/2022 280,000 29,525.00 309,525.00 02/01/2023 21,245.00 21,245.00 06/30/2023 330,770.00 08/01/2023 285,000 " 21,245.00 306,245.00 • Mar 30.2004 12:28 pm Prepared by Citigrouptiiobal Markets Inc. I Page 17 PRIOR BOND DEBT SERVICE Palm Desert Financing Authority Refunding 1995 TABs-Project Areas#2 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Refunding Analysis Only Series 1995 Tax Allocation Revenue Bonds-#2(199521 Period Annual Ending Principal Coupon Interest Debt Service Debt Service 02/01/2024 12,818.75 12,818.75 06/30/2024 319,063.75 08/01/2024 305,000 12.818.75 317.818,75 02/01/2025 3,802.50 3,802.50 06/30/2025 321,621.25 08/01/2025 130.000 5.650% 3,602.50 133,8,02.50 06/30/2026 133,802.50 3,870,000 3,062,805.00 6.932.805.00 6,932,805.00 Notes: Analysis is preliminary and subject to change. Analysis is preliminary and subject to change. Mar 30,2004 12:28 pm Prepared by Citigroup UTobal Markets Inc. Page 18 DETAILED BOND DEBT SERVICE Palm Desert Financing Authority Refunding 1995 TABs-Project Areas#2 Market Scate as of March 23,2004, Issue New Money with Refunding Savings Refunding Analysis Only Serial Bond(SERIAL1 Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/01/2004 ,02/01/2005 124,950.00 124,950.00 06/30/2005 124,950.00 08/01/2005 93,712.50 93,712.50 02/01/2006 93,712.50 93,712.50 06/30/2006 187,425.00 08/01/2006 140,000 2.500% 93,712.50 233,712.50 02/01/2007 91,962.50 91,962.50 06/30/2007 325,675.00 08/01/2007 140,000 3.000% 91,962.50 231,962.50 02/01/2008 89,862.50 89,862.50 06/30/2008 321,825.00 08/01/2008 145,000 4.000% 89,862.50 234,862.50 02/01/2009 86,962.50 86,962.50 06/30/2009 321,825.00 08/01/2009 150,000 4.500% 86,962.50 236,962.50 02/01/2010 83,587.50 83,587.50 06/30/2010 320,550.00 08/01/2010 160,000 4.500% 83,587.50 243,587.50 02/01/2011 79,987.50 79,987.50 06/30/2011 323,575.00 08/01/2011 165,000 4.500% 79,987.50 244,987.50 02/01/2012 76.275.00 76,275.00 06/30/2012 321,262.50 08/01/2012 170,000 4.000% 76,275.00 246,275.00 02/01/2013 72,875.00 72,875.00 06/30/2013 319.150.00 08/01/2013 180,000 5.000% 72,875.00 252,875.00 02/01/2014 68,375.00 68,375.00 O6/30/2014 321,250.00 08/01/2014 190,000 5.000% 68,375.00 258,375.00 02/01/2015 63,625.00 63,625.00 06/30/2015 322,000.00 08/01/2015 195,000 5.000% 63,625.00 258.625.00 02/01/2016 58,750.00 58,750.00 05/30/2016 317,375.00 08/01/2016 205,000 5.000% 58,750.00 263,750.00 02/01/2017 53,625.00 53,625.00 06/30/2017 317.375.00 08/01/2017 220,000 5.000% 53,625.00 273,625.00 02/01/2018 48,125.00 48,125.00 06/30/2018 321,750.00 0B/01/2018 230,000 5.000% 48,125.00 278,125.00 02/01/2019 42,375.00 42,375.00 O6/30/2019 320,500.00 08/01/2019 240,000 5.000% 42,375.00 282,375.00 02/01/2020 36.375.00 36,375.00 06/30/2020 318,750.00 08/01/2020 250.000 5.000% 36.375.00 286,375.00 02101/2021 30,125.00 30,125.00 06/30/2021 316,500.00 08/01/2021 245,000 5.000% 30,125.00 275,125.00 02/01/2022 24,000.00 24,000.00 06/30/2022 299.125.00 08/01/2022 275,000 5.000% 24,000.00 299,000.00 02/01/2023 17,125.00 17,125.00 0613012023 316,125.00 08/01/2023 275,000 5.000% 17,125.00 292,125.00 02/01/2024 10,250.00 10,250.00 gio Mar 30.2004 12:28 pm Prepared by Citigroubal Markets Inc. • Page 19 DETAILED BOND DEBT SERVICE Palm Desert Financing Authority Refunding 1995 TABs-Project Areas F2 Market Scale as of March 23, 2004. Issue New Money with Refunding Savings Refunding Analysis Only Serial Bond(SERIAL] Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/30/2024 302.375.00 08/01/2024 295,000 5.000% 10,250.00 305.250.00 02/01/2025 2,875.00 2,875.00 06/30/2025 308,125.00 08/01/2025 115,000 5.000% 2,875.00 117,875.00 06/30/2026 117.875.00 3,985.000 2,480,362.50 6,465,362.50 6.465.362.50 Notes: Analysis is preliminary and subject to change. Analysis is preliminary and subject to change. Mar 30,2004 12:28 pm Prepared by Citigroup u abal Markets Inc. • Page 20 BOND SOLUTION Palm Desert Financing Authority Refunding 1995 TABs-Project Areas#2 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Refunding Analysis Only Period Proposed Proposed Total Adj Revenue Unused Debt Sery Ending Principal Debt Service Debt Service Constraints Revenues Coverage 08/01/2004 114,443 114,443 08/01/2005 218,663 218,663 228.885 10.223 104.67501% 08/01/2006 140,000 327.425 327,425 343,885 16.460 105.02711% 08/01/2007 140.000 323,925 323,925 342,078 18,153 105.60392% 08/01/2008 145,000 324,725 324,725 339,978 15,253 104.69705% 08/01/2009 150,000 323,925 323.925 342,580 18,655 105,75905% 08/01/2010 160,000 327,175 327,175 344,593 17.418 105.32360% 08/01/2011 165,000 324.975 324.975 341.015 16,040 104.93576% 08/0112012 170,000 322,550 322,550 342,145 19,595 106.07503% 08/01/2013 180,000 325,750 325,750 342,680 16,930 105.19724% 08/01/2014 190,000 326,750 326,750 342,625 15,875 104.85845% 08/01/2015 195.000 322,250 322,250 341,975 19,725 106.12102% 08/01/2016 205,000 322,500 322,500 340.735 18,235 105.65426% 08/01/2017 220,000 327,250 327,250 343,900 16,650 105.08785% 08/01/2018 230,000 326,250 326,250 341,173 14,923 104.57395% 08/01/2019 240,000 324,750 324,750 342,850 18,100 105.57352% 08/01/2020 250,000 322,750 322,750 338,640 15,890 104.92332% 08/01/2021 245,000 305,250 305,250 323.845 18,595 106.09173% 08/01/2022 275.000 323,000 323,000 339,050 16,050 104.96904% 08/01/2023 275,000 309,250 309.250 327,490 18,240 105.89814% 08/01/2024 295,000 315,500 315,500 330,638 15,138 104.79794% 08/01/2025 115,000 120,750 120,750 137,605 16,855 113.95859% 3,985.000 6465,363 6,465,363 6,932,805 467,443 • • Notes: Analysis is preliminary and subject to change. Analysis is preliminary and subject to change. Mar 30.2004 12:28 pm Prepared by Citigroup�6bal Markets Inc. • Page 21 DETAILED BOND DEBT SERVICE Palm Desert Financing Authority Series 2004 New Money-Project Area#2 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Serial Bond(SERIALI Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/01/2004 02/01/2005 5,266.67 5,266.67 06/30/2005 5,266.67 08/01/2005 3,950.00 3.950.00 02/01/2006 3,950.00 3,950.00 06/30/2006 7,900.00 08/01/2006 5,000 2.500% 3,950.00 8.950.00 02/01/2007 3,887.50 3.887.50 06/30/2007 12,837.50 08/01/2007 10.000 3.000% 3,887.50 13,887.50 02/01/2008 3,737.50 3.737.50 06/30/2008 17,625.00 08/01/2008 5,000 4.000% 3,737.50 8.737.50 02/01/2009 3,637.50 3.637.50 06/30/2009 12,375.00 08/01/2009 10,000 4.500% 3,637.50 13.637.50 02/01/2010 3,412.50 3,412.50 06/30/2010 17,050.00 08/01/2010 10.000 4.500% 3,412.50 13.412.50 02/01/2011 3,187.50 3.187.50 06/30/2011 16,600.00 08/01/2011 5.000 4.500% 3,187.50 8.187.50 02/01/2012 3,075.00 3,075.00 06/30/2012 11,262.50 08/01/2012 10,000 4.000% 3,075.00 13.075.00 02/01/2013 2,875.00 2,875.00 06/30/2013 15,950.00 08/01/2013 10,000 5.000% 2,875.00 12.875.00 02/01/2014 2,625.00 2.625.00 06/30/2014 15.500.00 08/01/2014 10,000 5.000% 2,625.00 12.625.00 02/01/2015 2,375.00 2.375.00 06/30/2015 15.000.00 08/01/2015 10,000 5.000% 2,375.00 12.375.00 02/01/2016 2,125.00 2.125.00 06/30/2016 14,500.00 08/01/2016 10,000 5.000% 2,125.00 12,125.00 02/01/2017 1,875.00 1.875.00 06/30/2017 14,000.00 08/01/2017 10,000 5.000% 1,875.00 11.875.00 02/01/2018 1,625.00 1.625.00 06/30/2018 13,500.00 08/01/2018 10,000 5.000% 1,625.00 11.625.00 02101/2019 1,375.00 1,375.00 06/30/2019 13.000.00 08/01/2019 15.000 5.000% 1,375.00 15,375.00 02/01/2020 1,000.00 1.000.00 06/30/2020 17,375.00 08/01/2020 10,000 5.000% 1,000.00 11,000.00 02/01/2021 750.00 750.00 06/30/2021 11,750.00 08/01/2021 15,000 5.000% 750.00 15.750.00 02101/2022 375.00 375.00 06/30/2022 16,125.00 08/01/2022 15,000 5.000% 375.00 15.375.00 06/30/2023 15,375.00 170,000 92.991.67 262.991.67 262,991.67 Mar 30,2004 12:28 pm Prepared by Citigroup Global Markets Inc. • Page 22 DETAILED BOND DEBT SERVICE Palm Desert Financing Authority Series 2004 New Money-Project Area#2 Market Scale as of March 23,2004. Issue New Money with Refunding Savings Note: Analysis is preliminary and subject to change. Mar 30,2004 12:28 pm Prepared by Cligroup iobal Markets lnc. • Page 23 BOND SOLUTION Palm Desert Financing Authority Series 2004 New Money-Project Area#2 Market Scale as of March 23.2004. issue New Money with Refunding Savings Period Proposed Proposed Total Adj Revenue Unused Debt Sery Ending Principal Debt Service Debt Service Constraints Revenues Coverage 08/01/2004 08/01/2005 9,217 9,217 10.223 1.006 110.91316% 08/01/2006 5,000 12,900 12,900 16,460 3.560 127.59690% 08/01/2007 10,000 17,775 17,775 18,153 378 102.12377% 08/01/2008 5,000 12,475 12.475 15,253 2,778 122.26453°% 08/01/2009 10,000 17.275 17,275 18.655 1,380 107.98842% 08/01/2010 10,000 16,825 16,825 17,418 593 103.52155% 08/01/2011 5,000 11,375 11,375 16,040 4.665 141.01099% 08/01/2012 10,000 16,150 16,150 19.595 3,445 121.33127% 08/01/2013 10.000 15.750 15,750 16.930 1,180 107.49206% 08/01/2014 10,000 15,250 15.250 15.875 625 104.09836% 08/01/2015 10,000 14,750 14.750 19,725 4,975 133.72881 08/01/2016 10,000 14.250 14.250 18,235 3,985 127.96491% 08/01/2017 10,000 13.750 13,750 16.650 2.900 121.09091% 08/01/2018 10,000 13,250 13,250 14.923 1.673 112.62264% 08/01/2019 15,000 17,750 17,750 18,100 350 101.97183% 08/01/2020 10,000 12,000 12,000 15,890 3,890 132.41667% 08/01/2021 15,000 16,500 16.500 18,595 2,095 112.69697% 08/01/2022 15,000 15,750 15,750 16.050 300 101.90476% 08/01/2023 18.240 18,240 08/01/2024 15.138 15,138 08/01/2025 16.855 16,855 170,000 262,992 262,992 353,000 90,008 Note: Analysis is preliminary and subject to change. r� CITY OF PALM DESERT yTI N� FINANCE DEPARTMENT Qom% . = ! : MEMORANDUM t,9orF-a-9 S3 M.,�' TO: INVESTMENT AND FINANCE COMMITTEE FROM: DIANA LEAL, RECORDING SECRETARY DATE: APRIL 22, 2004 SUBJECT: INVESTMENT AND FINANCE COMMITTEE REPORT FOR THE MEETING OF APRIL 28, 2004 Enclosed is the following repo IX. OLD BUSINESS B. Bond Issuance by Palm Desert Financing Authority 2. Rec: Hiring Citigroup Global Markets, Inc. to Refund the 1995 Project Areas No. 1 and No. 2 Bond Issues Action: Please incorporate with your Investment and Finance Committee meeting agenda packet. Thank you. • CITY OF PALM DESERT a it4p OFFICE OF THE CITY TREASURER .o� .- 'ti bt� yet. . s.. a••,..• INTEROFFICE MEMORANDUM To: Members of the Investment and Finance Committee From: Paul S. Gibson, C.C.M.T., City Treasurer Date: 28 April 2004 Subject: Quarterly Account Statements on Deferred Compensation Plans Enclosed are quarterly account statements from Nationwide Retirement Solutions and from ICMA Retirement Corporation on the 457 Deferred Compensation Plans that they are administering on behalf of the City of Palm Desert ("City"). They are for the quarter ending 31 March 2004. I am providing these statements to you for your review and information. The State Treasurer of California, Philip Angelides, has issued an opinion which states that local agencies should provide their governing bodies with periodic disclosure reports on all 457 Plan assets that are held in trust for employees. Although City employees determine: (1) how many of their cafeteria credits, if any, are to be applied to a 457 Plan; (2) who the plan administrator shall be; and (3) the investment option(s) to be selected, 457 Plan assets are technically considered to be City assets since they are held in the City's name. While this affords 457 Plan assets favorable tax treatment under the Internal Revenue Code, it also triggers a reporting requirement for the City. • H:ITJEFFREYIWORD 20001MEMORANDAIFINANCE COMMITTEE,457 PLAN ACCOUNT STATEMENTS.DOC Q erly Financial Report for Your Deferred Compensation Pla j �I F: a j `-- ICMA RETIREMENT CORPORATION I ^ 01/01/2004 through 03/31/2004 Page 1 of7 • n .. Liv A Message from ICMA RG=i Save time and energy by using our new On-Line PAUL S GIBSON 001-0365 Withdrawal feature. Once implemented, participants CITY OF PALM DESERT can request withdrawals when they separate from = 73 510 FRED WARING DRIVE service on Account Access. Call Employer Services at PALM DESERT CA 92260-2564 800-326-7272 to request this new service. _ I1r1,ulliln ld.Hnh1,,,nirlll Iiil n,linin nj111lninil1 - Plan Summary infonna..ttolt For the Period Ending 03/31/2004 WaggalniggflIIMAEnding Fund Balance 3,615,034.25 Plan No 302129 Contributory 3,425,710.26 Rollover 189,323.99 Total Contributions this Period $62,703.90 Pre-Tax, 189,323.99 Contributory $62,703.90 - Total Plan Assets $3,615,034.25 Summary by Fund Year Current Savings Conservative Traditional To Date Quarter Oriented Grog: Growth Beginning Balance Migg40. ,536,531,79, $3,538,531 T9,; $240,515.64 $92,059.72 $46,348.94 Contributions irigignii•OZZOTOOM:Abme:0A404ty 7,607.76 3,413.04 2,340.98 Roll-Ins 1,24179 1241j9:. 0.00 • . 0.00 11.06 Distributions 36,7it8 37- 36` 37 0.00 0.00 9,371.70-. Adjustments fl dR? 0.00 0.00 0.00 • 0.00 Fund-to-Fund Transfers i 0 00 0 00 si 0.00 0.00 ., 22,241.89 . Earnings :i 49345 14i I '`.49,34S id 2,739.54 1,523.87 1,418.83 Ending Balanceiii-ii 53,615,034 25:j $3i615,034'25'! $250,863.14 $96,996.63 $62,990.00 Percentage Invested 7% 3% 2°/ Smmizn,ary"by Fund cons. I tfng Term An Squit}r i PLUS dash Gore Bond Growth Growth Fund ice anagetnent ;index Beginning Balance $40,748.57 $84,322.75 $1,349,485.86 $24,514.17 $36,417.40 Contributions 2,965.40 3,738.48 16,933.74 3,696.00 742,78 Roll-Ins 0.00 0.00 704.81 0.00 0.00 Distributions 0.00 0.00 13,183.81- 0.00 0.00 Adjustments 0.00 0.00 0.00 0.00 000 Fund-to-Fund Transfers 22,241.89- 0.00 752.73 0.00 404.81- Earnings 867.21 2,606.12 10,881.65 0.00 917.25 Ending Balance $22,339.29 $90,667.35 $1,365,574.98 $28,210.17 $37,672.62 Percentage Invested 1% 2°/ 38% 1% 1% • Please review your statement carefully. If you believe there is an error due to a transaction not previously confirmed,please notify ICMA-RC at 800-326-7272(en Espanol 800-669-8216)within 90 days of quarter end. Failure to do so may prevent ICMA-RC from adjusting your account. 777 North Capitol Street, NE•Washington,DC•20002-4240•www.icmarc.org ICMA-RC Services,LLC. is a broker/dealer affiliate of the ICMA Retirement Corporation, member NASD and SIPC. (gOrterly Financial Report for • Your 457 Deferred Compensation Plan 01/01/2004 through 03/31/2004 Page 2 of 7 Plan Name GiTY OF PALM DESERT Plan No 30212e iRigffigMEHRENSUMMEMON • Summaryby�Fund coat E; US :Asset VT Fidelity . Equity 500 Stock;: nmentAll Gover ocation ? Puritan Income '` Index Beginning Balance $1,529.84 $106,457.89 $1,191.66 $12,337.29 $43,936.56 Contributions 206.28 377.40 12.50 472.56 2,280.08 Roll-Ins 0.00 0.00 0.00 0.00 15.62 Distributions 0.00 0.00 0.00 6,049.47- 0.00 • Adjustments 0.00 0.00 0.00 0.00 0.00 Fund-to-Fund Transfers 0.00 0.00 0.00 0.00 0.00 Earnings 29.97 2,195.17 22.80 331.25 633.00 Ending Balance $1,766.09 $109,030.46 $1,226.96 $7,091.63 $46,865.26 Percentage Invested Less than 1 % 3% Less than 1% Less than 1% 1% Summary by Fund coatiiii!iiii iiiiiii!Niiiiiii###t*EinIliiNiAtiAit sikociowt.Lord Abbet .'VT Amer'Cent Growth z &.Income l;< a index Lg Co.Value 'Value ':: .Fund Beginning Balance $39,948.61 $115,453.15 $405.15 $12,746.55 $1,011,456.62 Contributions 865.38 507.66 30.00 1,731.66 4,829.36 Roll-Ins 221.51 0.00 0.00 0.00 45.46 Distributions 3,209.18- 0.00 0.00 0.00 0.00 Adjustments 0.00 0.00 0.00 0.00 0.00 Fund-to-Fund Transfers 0.00 0.00 145.74 0.00 1,142.49 • . Earnings .. . 770.70 2,654.04 12.10 407.68 9,561.08 Ending Balance $38,597.02 $118,614.85 $592.99 $14,885.89 $1,027,035.01 Percentage Invested 1% 3% Less than 1% Less than 1% 28% Summary by Fund coat. VT Fidelity VrFideiity VTGabelli VTMFS VTAmerCeitom nt ffiiMEERNEENCOngiRimii Mantra Magellan Value LgCo Growth T7tra Beginning Balance $24,463.63 $34,836.17 $15,287.16 $22,235.22 $46,261.56 Contributions 336.36 1,038.42 0.00 1,297.84 1,227.16 Roll-Ins 144.10 0.00 0.00 41.32 45.76 Distributions 0.00 4,974.21- 0.00 0.00 0.00 Adjustments 0.00 0.00 0.00 . 0.00 0.00 Fund-to-Fund Transfers 0.00 0.00 0.00 1,609.94- 0.00 Earnings 882.32 515.28 416.25 160.66 1,489.45 Ending Balance $25,826.41 $31,415.66 $15,703.41 $22,125.10 $49,023.93 Percentage Invested 1% 1% Less than 1% 1% 1/° • I0350A202-001-0365 I1111110101111111111 Ell 111111111 OF 111111111 II11111111111111111111111111I111111II 1111 u _` terly Financial Report for Your W7 Deferred Compensation Na ICMA RETIREMENT CORPORATION ' 01/01/2004 through 03/31/2004 Page 3 of 7 e Plan"Name CITY OF PALM DESERT Platt No 302129 Sum nary"by,Fund cont.• Aggressive V f?Rowe Pr Ep Inwesco E ppor Smt Cap Stock Sm Co Growth International: :: Beginning Balance $59,103.34 $1,062.72 $3,444.70 $71,960.72 . Contributions 3,325.62 100.68 60.00 2,566.76 Roll-Ins 0.00 0.00 0.00 12.15 Distributions 0.00 0.00 0.00 0.00 Adjustments 3,757.99 0.00 3,757.99- 0.00 Fund-to-Fund Transfers 315.15- 0.00 0.00 288.94 Earnings 4,493.10 48.55 253.29 3,513.98 Ending Balance $70,364.90 $1,211.95 $0.00 $78,342.55 _ Percentage Invested 2% Less than 1% 0% 2% ,_ Note:Amounts shown net of applicable fees and expenses. Earnings include dividends, interest and realized and unrealized gains and losses. 4acount Batanatt clouts compares,your IC4fr1Sel*1e4 5 asset Fwtitnea5 tiliI4 cstmeat type)to#CMA-RCplans nattonatry .. YourTCA7t1.`ItCPlansBalance .. s : klllIG.d1t1.AGPIa1uNatloaally AftS1:!f::\•;tilritikletk-fk. At `j :Y. .. ram., s C .:.�., • .v s. ®Domestic Equities 48% id,. Domestic Equities 56% Q Fixed Income 47% 0 Fixed Income 37% International 3% International 5% 0 Cash Management 1% ❑ Cash Management 3% Fund category must equal at least 0.5%of assets to be displayed. Due to rounding,percentages may not sum to 100%. shareiValue• ' . Shares on 01/0112004 Shares on 01/01 12004 shares.on 03/31/2004 I It Shares Value of It Shares Value of It Shares Value of Owned Once Share Owned One Share Owned One Share;::; Savings Oriented 13,619.2439 $17.66 13,619.2439 $17.66 14,046.0877 $17.86 Conservative Growth 5,613.3977 16.40 5,613.3977 16.40 5,818.6339 16.67 Traditional Growth 2,718.4138 17.05 2,718.4138 17.05 3,611.8119 17.44 Long-Term Growth 2,294.4019 17.76 2,294.4019 17.76 1,221.3943 18.29 All-Equity Growth 4,482.8681 18.81 4,482.8681 18.81 4,675.9849 19.39 Cash Management 1,728.7849 14.18 1,728.7849 14.18 1,989.4339 14.18 Core Bond Index 2,020.9426 18.02 2,020.9426 18.02 2,039.6649 18.47 US Government 88.9440 17.20 88.9440 17.20 100.8041 17.52 Asset Allocation 4,482.4374 23.75 4,482.4374 23.75 4,497.9563 24.24 VT Fidelity Puritan 56.8810 20.95 56.8810 20.95 57.4690 21.35 777 North Capitol Street,NE•Washington,DC•20002-4240•www.icmarc.org ICMA-RC Services, LLC.is a broker/dealer affiliate of the ICMA Retirement Corporation,member NASD and SIPC. larterly Financial Report for • Your 457 Deferred Compensation Plan 01/01/2004 through 03/31/2004 Page 4of7 Plan Name CITYOF PALM DESERT Plan No 302129 Share Value.:; Shares on O1/01/2004II Shares on 01/Oi/2004 Shares,on 03/31/2004 #Shrees ;'Vallue ofa 1f Shares .':Value of # Shares :Value of z' Owned dine Share.: Owned One Share,? Owned One Shate Equity Income 403.0472 30.61 403.0472 30.61 227.6607 31.15 500 Stock Index 3,244.9454 13.54 3,244.9454 13.54 3,410.8634 13.74 Growth &Income 2,560.8080 15.60 2,560.8080 15.60 2,430.5427 15.88 Broad Market Index 4,501.0974 25.65 4,501.0974 • 25.65 4,520.3831 26.24 VT Lord Abbet Lg Co Valu 39.5264 10.25 39.5264 10.25 56.5833 10.48 VT Amer Cent Value 822.8895 15.49 822.8895 15.49 931.5328 15.98 Growth Fund 38,473.0555 26.29 38,473.0555 26.29 38,697.6263 26.54 VT Fidelity Contra 1,121.6705 21.81 1,121.6705 21.81 1,143.2674 22.59 VT Fidelity Magellan 2,069.8849 16.83 2,069.8849 16.83 1,843.6416 17.04 VT Gabelli Value 570.2037 26.81 570.2037 26.81 570.2037 27.54 VT MFS Lg Co Growth 2,068.3928 10.75 2,068.3928 10.75 2,039.1793 10.85 VT Amer Cent Ultra 2,802.0331 16.51 2,802.0331 16.51 2,876.9920 17.04 Aggressive Oppor 2,337.0242 25.29 2,337.0242 25.29 2,588.8491 27.18 VT T Rowe Pr Sm Cap Sto 88.0467 12.07 88.0467 12.07 96.1099 12.61 • EF Invesco Sm Co Growth 589.8457 5.84 589.8457 5.84 0.0000 6.04 International 5,334.3747 13.49 5,334.3747 13.49 5,540.4924 14.14 Summary by Account Type • . T(Yi,tlTr` Contributory Rollol er Beginning Balance $3,538,531.79 $3,339,830.47 $198,701.32 Contributions 62,703.90 62,703.90 0.00 . Roll-Ins 1,241.79 0.00 1,241.79 Distributions 36,788.37- 21,486.75- 15,301.62- Eamings 49,345.14 44,662.64 - 4,682.50 • Ending Balance $3,615,034.25 $3,425,710.26 $189,323.99 Percentage by Type 100% 95% 5% Contribution Listing • Date TOTAL contributory 01/16/2004 $10,547.29 $10,547.29 01/30/2004 10,547.29 10,547.29 02/12/2004 10,371.08 10,371.08 02/26/2004 10,371.08 10,371.08 03/12/2004 10,371.08 10,371.08 03/29/2004 10,496.08 10,496.08 Cash received from Employer 62,703.90 Total Contributions $62,703.90 10350n202 00,-0365 I1111111111I11i O it illll111III II IIII I III I IIII IIII 1111111111I 311IIIII IIIi 1111111IIII u Performance Report For • Your 4b7 Deferred Compensation Plan ICMA RETIREMENT CORPORATION Page 5 of 7 Plan Name CtTVEDE PALM DESERT PtariNQ 302123 :; As of MARCH 31, 2004 AVERAGE ANNUAL RETURNS ICMA-RC 1st Qtr Year- 'I-Year 3-Year 5-Year 10-Year Inception Funds 2004 to- or Since Date Date Inception [port oli ds Savings Oriented 1.13% 1.13% 11.49% 3.71% 4.11% 6.55% 02/09/1995 Conservative Growth 1.65% 1.65% 17.48% 3.56% 3.70% 6.59% 04/01/1996 Traditional Growth 2.29% 2.29% 26.01% 3.06% 3.35% 7.20% 04/01/1996 , , Long Term Growth 2.98% 2.98% 35.16% 2.73% 3.94% 7.84% 04/01/1996 All-Equity Growth 3.08% 3.08% 44.49% 1.38% - .4.17% 10/02/2000 Benchmarks: U.S.30 Day T-Bills 0.22% 0.22% 0.95% 1.7S% 3.21% 4.12% Lehman Aggregate Bond Index 2.65% 2.65% 5.40% 7.44% 7.29% 7.54% Wilshire 5000 Index 2.61% 2.61% 39.39% 2.78% 0.19% 11.29% MSCI EAFE Index 4.41% 4.41% 58.15% 3.80% 0.83% 4.86% Money Markel&,:Fixed Income PLUS Fund(1) 3.32% 3.32% 3.43% 4.01% 4.57% 5.38% 01/01/1991 Cash Management 0.00% 0.00% 0.00% 0.91% 2.50% 3.55% 02/01/1989 Core Bond Index 2.50% 2.50% 4.29% 6.46% 6.19% 6.33% 12/01/1974 _ids\ US Government Securities 1.66% 1.86% 2.28% 5.06% 5.40% 5.77% 07/01/1992 VT PIMCO Total Return 244% 2.44% 5.20% - - 7.74% 07/29/2002 VT PIMCO High Yield 0.65% 0.65% 15.96% - - 21.64% 07/292002 Benchmarks: 90-Day T-Bills 0.24% 0.24% 1.08% 2.02% 3.49% 4.38% Lehman Aggregate Bond Index 2.65% 2.65% 5.40% 7,44% 7.29% 7.54% Memll Lynch US High Yld BB-B 241% 2.41% 19.04% 7.45% 4.93% - t-Because there is no trading market for investment contracts.PLUS Fund returns consist of yield only.Returns are annualized for ease of comparison with other stable value investments.Minimum annualized effective yield for the three month period ending 03/31/2004 is 3.13%. Asset ANocattori:&Balanced Asset Allocation 2.06% 2.06% 32.39% 3.65% 0.99% 9.26% 12/01/1974 VT Fidelity Puritan 1.91% 1.91% 27.92% 4.84% 3.72% 8.96% 06/06/1995 Benchmarks: 60%S&P500140%Lehman Gov/Cr 2.26% 2.26% 22.96% 4.00% 2.65% 10.41% Equity Income&;Value ,-AL Equity Income 1.76% 1.76% 42.24% 5.42% 5.07% 12.03% 04/01/1994 Benchmarks: S&P/BARRA Value Index 3.35% 3.35% 44.15% 0.60% 2.05% 11.28% Russell 1000 Value Index 3.02% 3.02% 40.81% 4.31% 3.89% 12.61% 4 Funds available in your plan may be oneretl by several sources and are designated as follows:All funds managed by the ICMA Retirement Corporation are denoted by the Vrantagepoint !• toga. ICMA-RC lands with aVP prefix ere Vanmgepant Mufual Funds. All other ICMA-RC funds are VantageTrust FundsNon-ICMA-RC funds(no logo)with a Vi prefix are oneretl by the VantageTrust Corporation. Funds with neither the logo nor a VT prefix are non-ICMA-RC funds offered outside the VantageTrust Corporation. Funds preceded by'EF'are selected by your employer and are offered outside the ICMA Retirement Corporation and the VantageTrust Corporation. 777 North Capitol Street, NE•Washington, DC•20002-4240•www.icmarc.org ICMA-RC Services, LLC.is a broker/dealer affiliate of the ICMA Retirement Corporation,member NASD and SI PC. lid Performance Report For • Your 457 Deferred Compensation Plan Page 6 of 7 Rlan Name frET (IF PALM DESERT • Plait No 302129 FUND PERFORMANCE CONTINUED As of MARCH 31, 2004 AVERAGE ANNUAL RETURNS ICMA-RC 1st Qtr Year- 1-Year 3-Year 5-Year 10-Year Inception Funds 2004 to- or Since Date Date Inception Growth &income . 500 Stock Index Fund 1.48% 1.48% 33.79% -0.39% -2.22% 4.76% 06/02/1997 a Growth&Income 1.79% 1.79% 35.96% 1.81% 3.22% 8.77% 10/01/1998 a Broad Market Index 2.30% 2.30% 37.96% 1.53% -0.80% 10.23% 10/01/1994 VT Lord Abbetl Large Co Value 2.24% 2.24% 40.86% 2.75% 1.35% 10/02/2000 VT American Century Value 2.90% 2.90% 39.69% 9.18% 9.16% 7.38% 09/02/1997 Benchmarks: S&P500 Index 1.70% 1.70% 35.14% 0.63% -1.20% 11.68% Wilshire 5000 Index 2.61% 2.61% 39.39% 2.78% 0.19% 11.29% Growth Growth 0.95% 0.95% 33.23% 0.19% 0.96% 10.25% 04/01/1963 VT Fidelity Contrafund 3.58% 3.58% 34.70% 5.75% 2.20% 10.38% 01/02/1996 VT Fidelity Magellan 1.25% 1.25% 29.38% -1.54% -2.91% 6.67% 01/02/1996 VTGabelii Value 2.72% 2.72% 40.80% 5.36% 5.58% 12.66% 10/02/1995 VT Calved Social Investment -1.02% -1.02% 25.87% - - 14.73% 07/26/2002 VTMFS Large Company Growth 0.93% 0.93% 25.43% -6.09% -4.49% 1.49% 10/01/1998 VT American Century Ultra 3.21% 3.21% 30.78% 0.43% -3.29% 6.67% 01/02/1996 Benchmarks: S&P500 Index 1.70% 1.70% 35.14% 0.63% -1.20% 11.68% Wilshire 5000 Index 2.61% 2.61% 39.39% 2.78% 0.19% 11.29% S&P/BARRA Growth Index 0.02% 0.02% 26.73% 0.49% -4.76% 11.61% Aggressive Growth &SIlmali Ca Mid/Small Company Index Fund 5.73% 5.73% 54.90% 9.03% 4.46% 6.44% 06/02/1997 a Aggressive Opportunities 7.47% 7.47% 61.79% -0.84% 2.38% 11.09% 10/01/1994 VT T.Rowe Price Small Cap Val 6.58% 6.58% 50.74% - - 23.61% 07/29/2002 VT T.Rowe Price Small Cap Stk 4.47% 4.47% 44.28% 10.60% - 6.86% 10/02/2000 Benchmarks: Wilshire 4500 Index 5.84% 5.84% 57.33% 10.52% 5.36% 10.83% Russell2000 Index 6.26% 6.26% 63.83% 10.90% 9.66% 10.44% 4 Funds available in your plan may be offered by several isources and ere designated es follows:All funds managed by the ICMA Retirement Corporation are denoted by the Vantagepoinl 9• logo. ICMA-RC funds with a VP prefix are Vantagepoinl Mutual Funds. All other ICMA-RC funds are VantagoTrust Funds.Non-ICMA-RC funds(no logo)with a VT prefix are offered by the VantageTmst Corporation. Funds with neither the logo nor a VT prefix are non-ICMA-RC funds offered outside the VantageTrusl Corporation. Funds preceded by'EF'are selected by your employer and are offered outside the ICMA Retirement Corporation and the VantageTrust Corporation. 10350A202-001-0365 I IIIII IIIII IIII IIIII EN II1I0I 1 1111111111111111111111111111111111111111111111111111111111 10d Performance Report For • Your 457 Deferred Compensation Plan ICMA RETIREMENT CORPORATION Page 7 of 7 Plan:Name CITVQF PALM DESERT Plan:Na,A02129 f FUND PERFORMANCE CONTINUED As of MARCH 31, 2004 AVERAGE ANNUAL RETURNS ICMA-RC Ist Qtr Year- I-Year 3-Year 5-Year 10-Year Inception Fonds 2004 to- or Since Date Date Inception •lnternatlonal Global Overseas Equity Index Fund 4.25% 4.25% 55.93% 2.24% A.73% 1.46% 06102/1997 International 4.82% 4.82% 55.04% 1.33% 0.86% 3.71% 10/01/1994 Benchmarks: MSCI SAFE Index 4.41% 4.41% 58.15% 3.80% 0.83% 4.86% MSCI World Index 2.73% 2.73% 44.56% 1.90% -0.57% 7.79% Funds available in your plan may be offered by several sources and are designated as follows All funds managed by the ICMA Retirement Corporation are denoted by the Vantagepoint logo. ICMA-RC funds with a VP prefix are Vantagepoint Mutual Funds. All other ICMA-RC funds are VantageTrust Funds.Non-ICMA-RC funds(no logo)with a VT prefix era offered by the VantageTrust Corporation. Funds with neither the logo nor a VT prefix are non-ICMA-RC funds offered outside the VantageTrust Corporation. Funds preceded by'EF'am selected by your employer and are offered outside the ICMA Retirement Corporation and the VantageTrust Corporation. This information is being provided for educational purposes only and is not intended to be construed as or relied upon as investment advice.This information was compiled from various sources and is presumed to be correct and accurate.Performance for benchmarks may not reflect the same time periods as for the funds themselves and therefore should not be used solely when evaluating performance or determining an appropriate investment selection.Individuals seeking more current performance are advised to view the daily fund performance available through the VantageLink website: www.icmarc.org.Performance reflected above represents past performance.Investment returns and principal value of an investment will fluctuate so that an investors shares,when redeemed,may be worth more or less than their original cost.Past performance is not indicative of future returns. Returns are annualized for periods greater than 1 year.Individuals are advised to consider any new investment strategies carefully prior to implementing.Please consult both the current Vantagepoint Funds prospectus and MAKING SOUND INVESTMENT DECISIONS:A Retirement Investment Guide, which contains additional information on management fees,other fund expenses,and investment risks and objectives carelutly prior to investing any money.Vantagepoint securities are distributed by ICMA-RC Services,LLC,a broker dealer affiliate of ICMA-RC.member NASD/SIPC. • 777 North Capitol Street, NE•Washington, DC•20002-4240•www.icmarc.org ICMA-RC Services, LLC. is a broker/dealer affiliate of the ICMA Retirement Corporation, member NASD and SIPC. • • 10350A202-001-0365 I IIIIII IIIII IIIII IIIII III I IIIIII IIII IIIII IIIII IIII IIIII IIIII IIIII IIII IIIIII IIIII IIII IIIII IIII IIII Nationwide' CITY OF PALM DESERT Retirement Solutions wide r A alp m ^„y Defe ed Compensation Program 57) ` . - if Statement of Account ' ' i :i tyi, 1111....i.II,I,I1111,1111„11111111111111,11411111111.1111Ill PAUL GIBSON no 1 of 3 FINANCE DIRECTOR Entity: 0516 73510 FRED WARING DR PALM DESERT CA 92260-2524 • • Please review your statement carefully. Corrections may not be accepted more than 30 days after the closing date of the statement. ' u , `h P Your Account, Value fps Qf March,31a 2004 $2,849,302.93 Yt74rr Tota'I p fey ralalTra nslers 11 To' t atsigimmill $2,898,744.65 your Total AtithdiraWats/Tranifera QutTo Dateliss - $940,715.35 - h TYQur T+ata{ C#�argesfCreditslllll iEr't'ETo ate,4 $422.00 Your Total Gain/Loss, T a,fate yri i%, $891,695.63 The amount shown above in Total Charges/Credits Ton Date is the total amount of charges or credits since you have joined the plan. If applicable, Total Gain/Loss To Date' includes asset fees charged against core accounts and/or asset fees associated with Self Directed Option (SDO). For information about asset fees, contact your customer service center. Report Period: January 01, 2004 Thru March 31, 2004 N O (') O IF J ii V ur 457 Deferred +pmpa' isa¢�a�,1 flan Account Values.By Fgnd /:1rs : siti 12/31/2003 Deferrals/ Withdrawals/ Charges/ 03/31/2004 Fund Name Value Transfers Exchanges Transfers Credits Gain/Loss Value so sea Am Cent Value Ic 18,339.73 488.85 3.411.59 -3,360.70 0.00 484.69 19,364.16 Drwn Cap Mgmt Sml Co Fd Ic 12,979.86 346,80 0.00 -823.90 0,00 224.11 12,726.87 �o Drey Appreciation Fnd Inc 8,842.44 342.30 0.00 -372.53 0.00 42.68 8,854.89 a Drey Preen Mdcapstk Cis A 2,939.35 120.00 0.00 0.00 0.00 93,04 3,152.39 Drey S&P 500 Index Fund 44,700.65 1,002.40 0.00 -302.87 0.00 591.38 45,991.56 o Drey Prm3rdcnt Fad CIs Z 13,470.31 201.12 - 14 029.40 0,00 0.00 357.97 0.00 ags, Fid Asset Manager 37,896.90 964.62 0.00 - 1,211.50 0.00 508.83 38,158.89 - Fid Conirafund 96,500.25 1 374.14 0.00 -476.88 0.00 3,394.64 100,792.15 Fid Equity Income Fnd 61,040.84 1,019.48 0.00 -480.00 0.00 924.49 62,504.81 CUSTOMER SERVICE (877)677-3678 (ESPANOL) (800)649-9494 TDD: (800)848-0833 Web Site: WWW.NRSFORU.COM If you have any questions or concerns about your account, please call the Customer Service number, or write to the following address: NATIONWIDE RETIREMENT SOLUTIONS PO BOX 182797 COLUMBUS OH 43218-2797 959819958000000469 Report Period: January 01, 2004 thru Ma•1, 2004 •ge: 2 of 3 CITY OF PALM DESERT vi Entity: 0516 Your 457 C?eferred Compensation .Plan Account VatuesirBy Fund Are 12/31/2003 Deferrals/ Withdrawals/ Charges/ 03/31/2004 Fund Name Value Transfers Exchanges Transfers Credits Gain/Loss Value Fed US G'tsc Fnd 2-5 Ys Is 8,861.51 517.50 0.00 -325.60 0.00 160.09 9,213.50 Nationwide Fixed Account 1,651,064.97 27,193.55 -345.54 -26,680.84 0,00 18,324.38 1,669,556.52 Fid Magellan Fnd 87,911.11 632.92 0,00 0,00 0.00 1,038.68 89,582.71 Franklin Balsheet Inv Fd A 20.599.36 196.14 0,00 -257.60 0.00 1,058.31 21,596.21 Grwth Fnd of America, Inc. 34,767.99 657.18 0.00 - 1,766,80 0,00 1,108.70 34,767.07 Gartmore lnvdes Aggr Sc 10,221.63 1,079.80 0.00 0.00 0.00 318.60 11,620.03 Gartmore lnvdes Modcons Sc 3,480.89 284.40 0.00 0.00 0.00 68.20 3,833,49 Invesco Dyn End Ic 28,377.86 963.12 0.00 -33.15 0.00 748.89 30,056,72 Gartmore lnvdes Modaggr Sc 5,953.93 594.80 0.00 0.00 0.00 167.29 6,716.02 Gartmore lnvdes Mod Sc 1,174.88 94.80 0.00 0.00 0.00 27.82 1,297.50 Gartmore lnvdes Cons Sc 1,140.20 94.80 0.00 0.00 0.00 17.83 1,252.83 Incm Fnd of America, Inc. 35,328.35 736.80 0,00 0.00 0.00 627.74 36,692.89 Am Cent Income&Grwth Ic 3,119.54 206.25 -3,411.59 0.00 0,00 85,80 0.00 Janus Adv Intl Grth I Shs 72.09 0.00 -73.95 0.00 0,00 1.86 0.00 Janus Fund 105,335.91 4,782.02 5,816.12 -294.65 0.00 -3,262.79 112,376.61 Jpm Midcap Value A 0.00 0.00 170.61 0.00 0.00 7.86 178.47 Jpm Flem Intl Eq Ed Select 0.00 0.00 4,787.33 0.00 0,00 -53.65 4,733.68 Ms Ift Fixed Incm Port Ic 541.88 60.00 78.70 0.00 0.00 9.53 690.11 Ms Ift Equity Grth Port B 8.73 0.00 0.00 0.00 0.00 0.05 8.78 Mass Inv Grthstk Fnd as A 18,278.93 0.00 0.00 0.00 0.00 173.19 18,452.12 Gartmore Money Mkt Fd Ps 53,273.08 600.00 -5,819.60 -308.00 0.00 -32.16 47,713.32 Grtmre Mod Stable Vat Ret 9,545.68 201.78 63.91 -508.20 0.00 58.30 9,361.47 Gartmore Bond Index Fund A 2,087.44 105.00 0.00 0.00 0.00 47.09 2,239,53 Neu Ber Eq Soc Resp Fd Ic 0.00 201.12 14,029.40 0.00 0.00 - 108.33 14,122.19 Gartmore Nationwide Fund D 83,510.72 2,617.32 0.00 - 1,955.22 0.00 1,662.97 85,835.79 Neu Ber Genesis Ed Tc ' 439.96 0.00 0.00 0.00 0.00 21.77 461.73 Gartmore Intl Index Fund A 0.00 170.04 181.18 0.00 0.00 4.37 355.59 Gartmore S&P 500 Index Ise 15,393.80 1,603.86 15.13 -37.95 0.00 209.97 17,184.81 Gartmore Midcap Mkt Indx A 179.23 0.00 0.00 0.00 0.00 8.41 187.64 Gartmore Small Cap Index A 247.64 52.50 0.00 0.00 0.00 15.65 315.79 Opp Global Fnd as A 7,627.20 324.30 14.85 0.00 0.00 315.67 8,282.02 One Group Midcap Grth Fd A 160.76 0.00 0.00 0.00 0.00 7.98 168,74 lGrp Midcapval Fnd Cls A 5.32 0.00 31.92 0.00 0.00 0.82 38.06 Putnam Intnatl Equity Fd A 4,728.26 0.00 -4,935.87 0.00 0.00 207,61 0.00 Pimco Ttlretrn Fnd Cis A 72,364.97 317.76 -5,643.43 0.00 0.00 1,645.25 68,684.55 Natwde Small Cap Inst Sry 9,882.04 849.18 5,624.60 0.00 0.00 950.67 17,506.49 Ptnm Voyager Fnd CIs A 46,369.23 1,014.19 -87.06 -243.20 0.00 342.89 47,396.05 Gvit Small Company I 19,945.86 225.00 0.00 0.00 0.00 961.72 21,132.58 Strg Oppor End 167.53 0.00 - 170.61 0.00 0.00 3.08 0,00 Am Cent Growth End Ic 12,564.80 893.58 0.00 -561.00 0.00 175.22 13,072.60 Am Cent Intl Disc Ic 5,230.77 0.00 0.00 0.00 0.00 486,07 5,716.84 Am Cent Ultra Ic 91,539.35 1,588.10 0.00 -415.24 0.00 2,908.43 95,620.64 Temp Foreign End CIs A 35,926.64 262.50 5,26 -222.40 0.00 1,379.66 37,351.66 Vankamp Growth&Inc Fd A 11,219.93 490.38 9.67 0.00 0.00 172.97 11,892.95 W&R Advisor High Income Y 733.39 201.78 76.78 -530.20 0.00 9.16 490.91 Totals: 2,796.093.73 55.672.18 0.00 -41,168.43 0,00 38,705.45 2.849,302.93 • As Of M *rch 31, 2t11?4• Your 0aterrals Are Rein In17estecl As Follows. Fund Description Percent Unit Value Units ACV Am Cent Value Ic 1.5194 12,744.5163 BSC Brwn Cap M9mt SmI Co Fd Ic 1.4630 8,699.0874 DAF Drey Appreciation Fnd Inc 1.0394 8,519.3821 DPM Drey Prem Mdcapstk CIs A 1.4662 2,149.9930 DSP Drey S&P 500 Index Fund 1.4119 32,574.0159 FAM Fid Asset Manager 2.0297 18,800.3113 FCN Fid Contrafund 3.8021 26,509.2534 FEI Fid Equity Income Fnd 8.8554 7,058.4232 FIG Fed US G'tsc Fnd 2-5 Ys Is 1.6836 5,472.4173 FIX Nationwide Fixed Account FMG Fid Magellan Fnd 2.9021 30,868.4968 FRB Franklin Balsheet Inv Fd A 1.2622 17,110.1099 GFA Grwth End of America, Inc. 6.1879 5,618.5446 DA Gartmore lnvdes Aggr Sc 1.0513 11,053.5184 DC Gartmore 'nudes Modcons Sc 1.0870 3,526.5908 DF Invesco Dyn End Ic 1.1377 26,418,0339 DM Gartmore lnvdes Modaggr Sc 1.0639 6,312.4739 DS Gartmore lnvdes Mod Sc 1.0734 1,208.7639 DV Gartmore lnvdes Cons Sc 1.0884 1,151.0325 FA Incm Fnd of America, Inc. 3.8411 9,552,6232 JF Janus Fund 2.1947 51,202.9767 JPM Jpm Midcap Value A 1.0494 170.0639 JPS Jpm Flem Intl Eq Ed Select 1.0005 4,731.4442 MFI Ms Ift Fixed Mom Port Ic 1.8754 367.9823 95987995P000000470 Report Period: January 01, 2004 thru Mall, 2004 lige: 3 of 3 CITY OF PALM DESERT Entity: 0516 I ' s, As Cif March 31 2uoi Your (r eferrals Are Being Invested As Follows, Fund Description Percent Unit Value Units MIE Ms Itt Equity Grth Port B 1.0132 8.6646 MIG Mass Inv Grthstk Fnd Cls A 18.3186 1,007.2896 MMF Gartmore Money Mkt Fd Ps 3.5138 . 13,578.8240 MSU Grtmre Mod Stable WI Ret 1.2198 7,674.6165 NBI Gartmore Bond Index Fund A 1.1775 1,901.9373 NBS Neu Ber Eq Soc Resp RI lc 0.9809 14,397.6558 NF Gartmore Nationwide Fund D 23.7539 3,613.5377 NGS Neu Ber Genesis Fd Tc 1.3069 353.3048 NII Gartmore Intl Index Fund A 0.9812 362.3914 NIY Gartmore S&P 500 Index Ise 1.0051 17,097.6516 NMC Gartmore Midcap Mkt Indx A 1.2033 155.9406 NSC Gartmore Small Cap index A 1.2396 254.7471 OGF Opp Global Fnd Cls A 1.7862 4,636.7842 OGG One Group Midcap Grth Fd A 1.3538 124.6452 OGV 1Grp Midcapval Fnd Cis A 1.4112 26.9690 PMT Pimco Ttlretrn Fnd Cis A 1.2235 56,138.3653 PRS Natwde Small Cap Inst Sry 1.6735 10,461.1346 PVF Ptnm Voyager Fnd CIs A 4.2266 11,213.8508 SCF Gvit Small Company I 1.7563 12,032.5731 TCG Am Cent Growth Fnd Ic 6.5706 1,989.5509 TCI Am Cent Intl Disc Ic 1.9010 3,007.2336 TCL Am Cent Ultra Ic 3.0967 30,877.9262 TFF Temp Foreign Fnd Cls A 2.6022 14,353.7641 VKG Vankamp Growth&Inc Fd A 1.0950 10,861.0714 Will W&R Advisor High Income Y 1.1706 419.3628 >.F Your Life.Insurance Information fi �;a w 1 $ o' ' i Policy Premium Report Period Account Surrender Death the Option Number Per Pay Premiums Value Value Benefit Unlversalife 93.63 339.22 17,815.59 12,980.29 301,139.00 Plan I (Universal Life) 97.48 584.88 12,326.75 9,273.57 261,616.00 mm ..t V. .KF4d r i .. _. + .i R r i t a, k =,i.i i#,,tRoF,an1;��1ft?r_:R1at1iiM1 t w .5 4 i. CV crl o Our online eWorkshops offer hands-on learning to help you understand and apply various financial concepts. Learn at your own pace, anytime and anywhere you e choose. Try an eWorkshop today at www.NRSFORU.com. The 2nd quarter effective interest yield for the Nationviide fixed return option MIMI is 4.45%. The 2004 guaranteed minimum effective interest yield is 4.00%. ✓ e 0 a • 959879951)000000411 • • 95987995P000000472 • CITY OF PALM DESERT A e Annualized Total Return:Standardized 1st Quarter 20 1111 The results shown represent past performance and do not represent expected future performance or experience. Past performance does not guarantee future results. rr Investment return and principal value of an investment will fluctuate so that an investor's units,when redeemed,may be worth more or less than their original cost. Current performance may be lower or higher than the data quoted. Performance data current to the most recent month-end may be obtained by visiting.: WvVVV,NRSFORU.COM. Please consider the fund's investment objectives, risks,and charges and expenses carefully beim°Investing. Both the underlying fund prospectuses and Informational brochure contain this and other important Information, and are available by calling 1-877-677-3678. Read carefully before investing. Please see other important disclosures at the end of this report. 1 Year 5 Years 10 Years Since inception/ Morningstar 04/01/03- 04/01/99- 04/01/94- incept/ Adoption Investment Options Category YTD 0321/04 03/31/04 03/31/04 Adoption Date 624 Gartmore Investor Destinations Aggressive Fund•Service Class(b) (+) N/A 3.05% 42.35% N/A N/A 1.87% 07/19/01 623 Gartmore Investor Destinations Moderately Aggressive Fund- Service Class(13)(+) N/A 2.72% 34.47% N/A N/A 2.32% 07/19/01 622 Garbnore Investor Destinations Moderate Fund•Service Class(b) (*) N/A 2.33% 25.08% NIA NIA 2.66% 07/19/01 . 621 Gartmore Investor Destinations Moderately Conservative Fund- Service Class(b)(+) N/A 1.92% 16.77% N/A N/A 3.14% 07/19/01 620 Gartmore investor Destinations Conservative Fund•Service Class (b)(+) N/A 1.53% 9.10% N/A N/A 3.19% 07/19/01 . intonationoliStocia....:.- i:::........:_ !:........!!::!,;f,;:lifs!...f.......................,...Ewarifi;q-• ,. ... . . _. . 538 American Century International Discovery Fund•Investor Class(a) (89 Foreign Stock 929% 6920% 10.68% NIA 12.68% 11113/98 592 Janus Adviser International Growth Fund•I Shares(a)(0) Foreign Stock 11.11% 65-52% N/A N/A •1,49% 04/25/01 456 Putnam International Equity Fund•Class A(a)(0) Foreign Stock 2.99% 43.80% N/A N/A -6,01% 05/01/00 529 Templeton Foreign Fund-Class A(U) Foreign Stock 3.83% 48.46% 6.74% 6.56% 8.80% 11102/92 612 Gartmore International Index Fund-Class A(V) N/A 3.77% 5456% N/A N/A •0.64% 04/25/01 316 JPMorgan Fleming International Equity Fund-Select Shares(0) N/A 3.87% N/A N/A N/A 0.05% 01/23/04 408 Oppenheimer Global Fund A(0) World Stock 4.10% 60.74% 929% N/A 11.38% 11/13/98 ,,,:,..........,,,,,SrgalLeanteck&a,L9:9..........,'..........',;'•'..... ''''....-za,.s.::::: :TAtyiffilit':_,__aza•c:................:::::7fT51'."--""""Nfti""---"'"-'"'%"'""•::::::77TET.T.71:==7::::::Tj,17:;;;:d;a4 594 Gartmore Small Cap Index Fund•Class A(a) N/A 6.02% 60.83% NIA N/A 7.60% 04/25/01 384 GVIT Small Company Fund.Class I(0) N/A 4.81% 52.45% 12.08% N/A 9.19% 01/02/98 • 607 Nationwide 0 Small Cap Fund-Institutional Service Class(+) N/A 7.54% 66.36% 10.72% N/A 10.04% 11/13198 388 Neuberger Berman Equity Trust 0 •Genesis Fund-Trust Class Shares(0) Small Blend 4.95% 42.14% N/A N/A 13.43% 02/14/02 130 Brown Capital Management Small Company Fund-Institutional Class(a) Small Growth 1.41% 49.70% N/A N/A 8.83% 10/01/99 284 INVESCOSmal1Company Growth Fund-Investor Class(a)(0) Small Growth 3.48% 42.80% N/A N/A -4.19% 04/25/01 214 Franklin Value Investors Trust:Franklin Balance Sheet Investment Fund•Class A(tr) Small Value 5.15% 42.38% N/A N/A 11.58% 02/1002 :.J.TiL...........Inikftik til(OWE:....17 .... . .......l......C.-........1;armpEgeiguyirreL 158 Dreyfus Premier Mid Cap Stock Fund•Class A(0) Mid-Cap Blend 3.14% 38.82% 6.82% N/A 7.37% 11/13/98 278 INVESCO Dynamics Fund-Investor Class(Y) Mid-Cap Growth 2.65% 4228% •227% N/A 2.43% 11/13/98 632 One Group 49 Mid Cap Growth Fund•Class A(0) . Mid-Cap Growth 4.96% 35.57% N/A N/A 29.19% 01/24/03 Ce 536 American Century Value Fund-Investor Class(0) Mid-Cap Value 2.88% 39.54% N/A N/A 1128% 05/01/00 es cf 620 One Group®Mid Cap Value Fund-Class A(I) Mid-Cap Value 3.97% 45.81% N/A N/A 33.81% 01/24/03 2 613 Gartmore MId Cap Market Index Fund-Class A(a) NIA 4.70% 46.63% N/A N/A 6.51% 0425/01 314 JPMorgan Mid Cap Value Fund•Class A(U) N/A 522% N/A N/A N/A 4.94% 01/05/04 !;.. •taitistlipStockal::';:y;;;;;;;;;;;,,,h....,,...........;.;,',..:.....,;,,,,, ,,f,,R;;;;DE;.....................Pr;:;91;;;M;;Iii;;;;E„.,:,&e=.:...:,: .....::!!......... (..;;;............... .-.. ....,..,........... !::;;;;;':::.. .........!:7::-:::::::::;,:rx.........1 149 Dreyfus Appreciation Fund,Inc.(0) Large Blend 0.49% 25.63% -1.34% N/A 0 72% 11/13/98 = 160 Dre•ylus S&P 500 Index Fund r) Large Wand 1.33% 33.19% •2.65% N/A 511% 0521/97 = 101 Fidelity Contrafund() Large Blend 3.50% 34.39% 1.95% 11.63% 1242% 11/02/92 m=2_ 193 Fidelity Magellan 0 Fund(') Large Blend 1.18% 29.11% -3.13% 8.46% 9.09% 01/02/92 see_l_ml 367 Gartmore Nationwide Fund-Class D(0) Large Blend 2.00% 33.42% -1.97% 10.07% 11.88% 01/02/85 - 3/2 Gartmore S&P 500 Index Fund-Institutional Service Class(0) Large Blend 1.41% 3324% •2.54% NIA 0.09% 1111398 = 392 Neuberger Berman Equity Funds®-Socially Responsive Fund- maw Investor Class Shams On Large Blend 1.06% N/A N/A N/A •1.91% 0123/04 sem= _ 539 American Century Growth Fund-Investor Class ri Isms Growth 1.38% 27.98% •4.95% 6.74% 11.10% 01/02/85 -r=._- 543 American Century Dina Fund-Investor Class(1 Large Growth 3.17% 30.49% -351% 8.41% 9.56% 11(15/91 ,e111 289 Janus Fund() Large Growth •2.74% 2958% •5.93% 7.69% 7.47% 05/03/93 e'-' 343 Massachusetts Investors Growth Stock Fund-Class A(In Large Growth 0.95% 25.37% -4.59% 1020% 11.59% 01/02185 ilsill ..- . 356 Morgan Stanley institutional Fund Inc.-Equity Growth Portfolio- m:-T--.a: Class B(U) Large Growth 0.51% 26.42% -3.07% N/A 0.24% 11/13/98 m-r-- 459 Putnam Voyager Fund-Class A(0) Large Growth 0.75% 26.78% •3.30% 8.58% 10.99% 04/30190 103 The Dreytus Premier Third Century Fund,Inc.-Class Z(3)(0) Large Growth 1.19% 29.90% -6.57% 6.93% 7.58% 04/01/87 259 The Growth Fund of America 0,Inc.-Class A r) Large Growth 322% 39.68% 5.79% 13.10% 12.14% 0521/91 537 American Century Income&Growth Fund-Investor Class(a)(a) Large Value 2.52% 37.10% -0.43% N/A 1.66% 11/13/98 183 Fidelity Equity-Income Fund(1 Large Value 1.51% 39.79% 242% 1028% 11.17% 01/02/85 586 Van Kampen Growth and Income Fund-Class A(in Large Value 1.56% 35.54% N/A N/A 4.36% 02/14/02 , . . .... ._..................,..„. 277 The Income Fund of America 09,Inc.-Class A(a)(*) Conservative Allocation 1.77% 28.03% 6.36% 10.14% 10.31% 04/30/90 173 Fidelity Asset Manager Ts(') Moderate Allocation 1.34% 19.01% 2.77% 7.51% 7.04% 11/01/93 ... 355 MFS IP High Income Fund•Class A(a)( ) High Yield Bond 0.86% 17.57% 2.69% 5.43% 7.50% 01/02/85 . 428 PIMCO Total Return Fund-Class A(I) Intermedlate-Te 2.38% 4.84% N/A N/A 6.95% 03/30/01 323 Morgan Stanley institutional Fund Trust•MSIF Core Plus Fixed Income Portfolio-Institutional Class(.) intermediate-Term Bond 1.58% 5.09% 5.81% N/A 6.78% 09/01/94 611 Gartmore Bond Index Fund-Class A(0) N/A 222% 3.70% N/A N/A 5.59% 03/30/01 642 Waddell&Reed Advisors High Income Bond Fund•Class Y(a) N/A 1.33% 14.74% N/A N/A 1425% 01/24/03 171 Federated U.S.Government Securities Fund:2-5 Years•Institutional Shares(•) Short Government 1.82% 2.31% 5.47% 5.32% 4.89% 04/30/93 95987995P000000473 • • CITY OF PALM DESERT Average Annualized Total Return:Standardized 1st Quarter 200 • 1 Year 5 Years 10 Years Since Inception/ Morningstar 04/01/03- 04/01/99* 04/01/94- Incept./ Adoption Investment Options Category YTD 03/31/04 03/31/04 03/31/04 Adoption Date (;1113iiigeastiN2332 iiiiiii Iiipinillin!!!!f!!!'""Tningiff7!f;;;F:Blipplifigr7 T 'n i a�: ....... ....Jf l '�° :°:� � r1 i 373 Gartmore Money Market Fund•Prime Shams(c)(0)CURRENT YIELD:- 27% N/A •0.07% -025% 2.11% 3.12% 4.14% 01/02/85 354 Gartmore Morley Stable Value Retirement Fund-DCVA(d)(#) N/A 0.62% 2.85% 4.35% 4.67% 4.32% 07/3189 Risk Disclosures Stocks of small or emerging companies may have less liquidity than those of larger,established companies and may be subject to greater price volatility and risk than the overall stock market.Investing internationally involves risks not associated with investing solely in the U.S.,such as currency fluctuation,political risk,differences in accounting and the limited availability of information.Portfolios that invest in high-yield securities are subject to greater credit risk and price fluctuations than portfolios that Invest in higher-quality securities.An investment in a money market fund is not guaranteed by the Federal Deposit Insurance Corporation or any other federal government agency.Although the fund seeks to preserve the value of your investment at$1.00 per share,it is possble to lose money by investing in the fund.Funds that concentrate in a specific sector or focus on a relatively small number of securities may be subject to greater volatility than a more diversified investment. Footnotes a) These funds are not open to new participants. b) The Gartmore Investor Destinations Funds are designed to provide diversification and asset allocation across several types of investments and asset classes,primarily by Investing in underlying funds. Therefore,in addition to the expenses of the Investor Destination Funds,you are indirectly paying a proportionate share of the applicable fees and expenses of the underlying funds. c) The money market current yield is the annualized historical yield for the 7-day period ending on the last day of the calendar quarter. Yield quotation more closely reflects the current earnings of the Money market fund than the total return quotation. d) This fund may not be available in all plans. This option is offered outside the group variable annuity contract.The funds Initial investments will be In units of Morley Financiers Stable Value Fund. Return history pertains to the Stable Value Fund managed by the same fund manager since inception in December 1993. Fee Disclosures The Standardized illustration represents performance based on a$1,000 hypothetical investment,and reflects the deduction of the following fees: •denotes a Fee of 0.95% 8 denotes a Fee of 0.80% +denotes a Fee of 0.70% The participant account maintenance charge,up to a maximum of$50,will not be assessed unless agreed to by the entity. Options in bold are options in a group variable annuity contract. Fees indicated for those options are Variable Account Expense Fees and are in addition to the fees disclosed n the underlying fund prospectus. Important Disclosures Investing may involve market risk,including the possble loss of principal.Certain underlying funds discussed here are only available as investment options in group variable annuity contracts issued by life insurance companies.They are not offered or made available directly to the general public.These portfolios contain different investments than similarly named mutual funds offered by the money manager and investment returns may be higher or lower. Inception Date is the date the undertying fund was established.Non-Standardized performance for UlOs includes hypothetical performance for periods before the UIO was available in the annuity,where applicable,applying contract charges to actual fund NAVs to determine the performance the U10 would have achieved inside the separate account.For Standardized performance Adoption Date is the date the underlying fund was included in the separate account. Performance numbers in the YTD(Year To Date)column are not annualized retums and represent the total percentage change in unit value from the beginning of the year to the date of this report Fund category data provided by Morningstar®.02003 Morningstar,Inc.All Rights Reserved.The Morningstar information contained herein:(1)is proprietary to Momingstar and/or its content providers;(2)may not be copied or distributed;and(3)is not warranted to be accurate,complete or timely.Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.Although data is gathered from reliable sources,data accuracy and completeness cannot be guaranteed. Securities offered through Nationwide Investment Services Corporation,member NASD.In Michigan only:Nationwide Investment Svcs.Corporation.Group variable and fixed annuities are issued by Nationwide Life Insurance Company, Columbus,OH. Contract its:TSP-556;TSP-557;APO-2355;APO-2424 • 95987995P000000474