HomeMy WebLinkAbout2004-03-24 IFC Regular Meeting Agenda Packet w Mnanee Department
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To: Records Technician
From: Diana Leal, Administrative Secret \arY ,l '.
Subject: Investment and Finance Committee Meeting
Date: April 29, 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 LeaMpdocsUnvestment Committee\2002 Memos\City C1erk\2003\324428-04attend.wpd
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CITY OF PALM DESERT
INVESTMENT & FINANCE COMMITTEE
AGENDA
March 24, 2004, 10:30 a.m.
North Wing Conference Room
1. CALL TO ORDER
II. ROLL CALL
III. ORAL COMMUNICATIONS
A. Any person wishing to discuss any item not on the agenda may
address the Investment and Finance Committee at this point by
giving his/her name and address for the record. Remarks shall be
limited to a maximum of five minutes, unless the Investment and
Finance Committee authorizes additional time.
B. This is the time and place for any person who wishes to comment
on agenda items. It should be noted that at the Investment and
Finance Committee's discretion, these comments may be deferred
until such time on the agenda as the item is discussed. Remarks
shall be limited to a maximum of five minutes, unless the
Investment and Finance Committee authorizes additional time.
IV. COMMITTEE MEMBER REPORTS
V. CONSENT CALENDAR
ALL MATTERS LISTED ON THE CONSENT CALENDAR ARE
CONSIDERED TO BE ROUTINE AND WILL BE ENACTED BY ONE
ROLL CALL VOTE. THERE WILL BE NO SEPARATE DISCUSSION OF
THESE ITEMS UNLESS MEMBERS OF THE INVESTMENT & FINANCE
COMMITTEE OR AUDIENCE REQUEST ITEMS BE REMOVED FROM
THE CONSENT CALENDAR FOR SEPARATE DISCUSSION AND
ACTION UNDER SECTION V. CONSENT ITEMS HELD OVER, OF THE
AGENDA.
A. Aioroval of Minutes
Rec: Approve minutes of the regular meeting of February 25,
2004, as submitted.
Action:
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INVESTMENT & FINANCE MITTEE
AGENDA March 24, 2004
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
Rec: Review and submit for the next City Council agenda.
Review the presentation on the investment graphs.
Review the investment activity for February 2004.
Action:
2. Cash and Investment Audit Procedures
Rec: Review and submit to the next City Council agenda.
Action:
3. City of Rancho Mirage Investments
Rec: Informational item for the Committee to review. No
action required
B. City of Palm Desert Single Audit of Federally Assisted Grant
Program for fiscal year ended June 30, 2003
Rec: Review and submit to the next City Council agenda.
Action:
C. State of California Local Agency Investment Fund Balance for the
month of February 2004
Rec: Informational item for the Committee to review. No action
required
D. California Asset Management Program (CAMP) February 2004
Statements
Rec: Informational item for the Committee to review. No action
required
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INVESTMENT & FINANCE AMITTEE •
AGENDA March 24, 2004
E. City and Redevelopment Agency Monthly Financial Report for City
Council for February 2004
Rec: Report and submit to City Council
Action:
F. Parkview Professional Office Buildings - Financial Report for
February 2004
Rec: Review and file report
Action:
G. Palm Desert Golf Course Facilities Corporation Financial
Information for February 2004
Rec: Review and file report
Action:
Vill. CONTINUED BUSINESS
None.
IX. OLD BUSINESS
A. Status of Public and Private Partnerships Background Checks
Rec: Status report on background checks
Action:
B. Bond Issuance by Palm Desert Financing Authority
Rec: Status report on issuing new bonds
Action:
X. NEXT MEETING - Wednesday, April 28, 2004 at 10:30 a.m.
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INVESTMENT & FINANCE CQI MITTEE •
AGENDA March 24, 2004
XI. ADJOURNMENT
I hereby certify under penalty of perjury under the laws of the State of
California, that the foregoing agenda for the Investment and Finance
Committee was posted on the City Hall bulletin board not less than 72
hours prior to the meeting. Dated this 17'h ay of March, 2004.
Di na a I, R rdi g cretary
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I
Mnance Department
MEMORANDUM
To: Rachelle Klassen, City Clerk
From: Diana Leal, Administrative Secretary,
A W
Subject: Investment and Finance Committee
Date: April 29, 2004
Attached is a copy of the March 24, 2004 minutes of the Investment and Finance Committee
approved by the Committee on April 28, 2004. Please place on the next City Council agenda for
approval thereof.
Thank you for your assistance.
Attachments (1)
GAI'mance\Diana L.eaMpdocs\Investment Committee\Memos\City Clerk\3-24-04 minutes.wpd
_ _ • CITY OF PALM DESERT
�•�
INVESTMENT & FINANCE COMMITTEE
Minutes
March 24, 2004, 10:30 a.m.
North Wing Conference Room
I. CALL TO ORDER
A regular meeting was called to order by Chairman Gibson on Wednesday, 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.
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INVESTMENT & FINANCE dgik"MITTEE
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
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INVESTMENT & FINANCE MITTEE
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-GAS13 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 '/z%
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.
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INVESTMENT & FINANCE WMITTEE
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
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INVESTMENT & FINANCEAWMITTEE
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.
Vill. CONTINUED BUSINESS - None.
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INVESTMENT & FINANCE *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.
X1. ADJOURNMENT
There being no further business, the meeting was adjourned by Mr. Erwin at 11:02 a.m.
Respe ffWsubmtted,
Di In Lea , R rding Secretary
6
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•
City of Palm Desert 4
City and Redevelopment Agency Portfolios
COMPLIANCE ANALYSISFebruaryAND
INVESTMENT REPORT
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) met on 16 March and left short-term interest rates unchanged.
The February jobs report was bleak, showing new job growth only in the public sector; a declining rate of labor force
participation; a decline in average hourly earnings (in real terms); and the highest average duration of unemployment since
1984. In short, the 28-month-old "jobless" recovery continues. There are several causes: 1)the use of technology to
eliminate jobs; 2)the"offshoring"of jobs; 3)the use of temporary labor to fill jobs; 4) renewed merger and acquisition activity;
5)a continued focus on corporate cost controls; and 6)the absence of an economic"multiplier effect'due to a diminished
manufacturing base. The unemployment rate would have risen from 5.6%to 5.8% in February but for 372,000 workers who
gave up looking for jobs.
After the release of the jobs report, the yield on 10-year U.S. Treasuries fell below 4%, a new low, since inflation is not likely to
be an issue in the foreeseeable future. There may be some economic improvement over the coming months when consumer
spending increases due to income tax refunds and a new wave of mortgage refinancings. The amount of home refinancings
may be smaller than last time, however, since so many homeowners extracted equity from their homes in 2003.
Pis rir)ao1V C.C.M, r.
Treasurer
PORTFOLIO STATISTICS
Dollars in Thousands
FEB-04 JAN-04 DEC-03 NOV-03 OCT-03 SEP-03
CITY
Month-End Book Value- $ 124,938 $ 127,837 $ 132,836 $ 132,138 $ 134,142 $ 138,363
Month-End Market Value'** $ 125,243 $ 128,091 $ 133,087 $ 132,214 $ 134,231 $ 138,561
Paper Gain (Loss) $ 305 $ 254 $ 251 $ 76 $ 89 $ 198
Prior Year Book Variance $ (39,878) $ (46,315) $ (3,851) $ (10,382) $ (9,912) $ (32,060)
Interest Earnings $ 143 $ 168 $ 172 $ 169 $ 175 $ 176
Yield-To-Maturity 1.58% 1.58% 1.58% 1.61% 1.61% 1.62%
Weighted Maturity(Days) 111 100 92 94 94 93
Effective Duration 0.21 0.18 0.16 0.17 0.17 0.19
RDA
Month-End Book Value"' $ 164,571 $ 163,130 $ 141,723 $ 144,184 $ 144,220 $ 152,893
Month-End Market Value*** $ 166,715 $ 165,294 $ 143,881 $ 146,322 $ 146,360 $ 155,033
Paper Gain (Loss) $ 2,144 $ 2,164 $ 2,158 $ 2,138 $ 2,140 $ 2,140
Prior Year Book Variance $ 60,901 $ 58,107 $ 48,936 $ 51,423 $ 49,336 $ 53,672
Interest Earnings $ 154 $ 151 $ 159 $ 155 $ 162 $ 161
Yield-To-Maturity 1.20% 1.24% 1.29% 1.29% 1.30% 1.28%
Weighted Maturity(Days) 93 91 89 87 87 82
Effective Duration 0.06 0.06 0.03 0.03 0.04 0.04
` /` J✓
^' i6 'y
Omits SLGSs.
Cit•Palm Desert-- Portfolio Characteristic
28 February 2004
Dollars in Thousands
Ageing Interval Market Value
< 1 M $ 66,682 General Fund Ageing
<2M -
< 3M _ 100
<6M 7,083 80 79
< 1YR 4,988 :
<2YR - 0 60
<3YR tp 40
<4YR 6,012 y°
<5YR 20 g
6
0
> 5YR 0 0 0
Total: $ 84,765 < 1M <2M <3M <6M < 1YR <2YR
Ratings* Market Value Credit Quality
Aaa $ 26,705 Aaa
Unrated" 72,785 24° a
A 10,592
rated
A1/P1 2,502 10% 6%Un 66%
Total: $ 112,584
Sector Market Value Asset Allocation LAIF
Money Market Funds $ 21, 38°/�
IAIF 40,000000
RDA Loan 32,785
MTNs 13,080 RDA Loan
U.S.Treasury - 30%
Federal Agency 2,502 Money Market
Commercial Paper 2,502 Funds
20%
Total: $ 112,584 *MTN*O
12%
Month City Yield LAW Yield Variance Performance
Mar03 1.48 1.90 -0.43
Apr 1.45 1.86 -0.41 2.9
May 1.62 1.77 -0.15
Jun 1.58 1.70 -0.12 2.5
Jul 1.46 1.65 -0.20
Aug 1.43 1.63 -0.20 d 2.1
Sep 1.62 1.64 -0.01 }
Oct 1.61 1.60 0.01 1.7
Nov 1.61 1.57 0.03 1.3 .
b CO
Dec 1.58 1.55 0.03 Mar03Apr May Jun Jul Aug Sep Oct Nov Dec Jan04Feb
Jan04 1.58 1.53 0.05
Feb 1.58 1.44 0.14 13LAIF Yield 13City Yield
Moody's Credit Ratings
" LAIF, and City Loan to RDA Page 2 of 8
• City of Palm Desert •
Portfolio Characteristics
28 February 2004
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value I Moody's
Medium-Term Notes
$ 3,000,000 FORD 7.20 6/15/07 $ 3,125,947 5.75 109.31 $ 3,279,285 A3
$ 2,500,000 FORD 7.20 6/15/07 $ 2,604,956 5.75 109.31 $ 2,732,737 A3
$ 2,500,000 FORD 7.50 6/15/04 $ 2,533,524 2.84 101.71 $ 2,542,788 A3
$ 2,000,000 FORD 6.70 7/16/04 $ 2,026,134 3.17 101.86 $ 2,037,284 A3
$ 10,000,000 Subtotal $ 10,290,561 3.90 $ 10,592,094
Commercial Paper--Discount
$ 2,425,000 GENERAL ELECTRIC 4.25 1/28/05 $ 2,489,655 1.30 102.61 $ 2,488,273 Aaa
$ 2,517,000 GENERAL ELECTRIC 1.06 9/15/04 $ 2,499,880 1.10 99.41 $ 2,502,038 Aaa
$ 4,942,000 Subtotal $ 4,989,535 1.10 $ 4,990,311
Federal Agencies --Discount
$ 2,513,000 FED NATIONAL MTG ASSOC 1.06 7/28/04 $ 2,499,670 1.08 99.58 $ 2,502,445 Aaa
$ 2,513,000 Subtotal $ 2,499,670 1.08 $ 2,502,445
LGIP
$ 40,000,000 L.A.I.F. 0.00 3/1/04 $ 40,000,000 1.44 100.00 $ 40,000,000 NR
$ 40,000,000 Subtotal $ 40,000,000 1.44 $ 40,000,000
LGIP
$ 12,860,177 C.A.M.P. 0.00 3/1/04 $ 12,860,177 0.91 100.00 $ 12,860,177 N/A
$ 12,860,177 Subtotal $ 12,860,177 0.91 $ 12,860,177
Pooled Funds--AIM
$ 8,854 980 PRIME PORTFOLIO 0.00 3/1/04 $ 8,854,980 0.64 100.00 $ 8,854,980 Aaa
$ 8,854,980 Subtotal $ 8,854,980 0.64 $ 8,854,980
City Loan to RDA
$ 32,785,480 CITY OF PALM DESERT 0.00 3/1/34 $ 32,785,480 1.44 100.00 $ 32,785,480 NR
$ 32,785,480 Subtotal $ 32,785,480 1.44 $ 32,785,480
Total Investments
$ 111,955,636 $ 112,280,403 1.58 $ 112,585,487
Cash
$ 12,192,042 CITY MAIN CHKG 0.00 3/1/04 $ 12,192,042 N/A 100.00 $ 12,192,042 NR
$ 235,133 RECREATIONAL FAC CHKG 0.00 3/1/04 $ 235,133 N/A 100.00 $ 235,133 NR
$ 206407 DESERT WILLOW CHKG 0.00 3/1/04 $ 206,407 N/A 100.00 $ 206,407 NR
$ 23,003 OFFICE COMPLEX TRUST 0.00 3/1/04 $ 23,003 N/A 100.00 $ 23,003 NR
$ 12,656,585 Subtotal $ 12,656,585 $ 12,656,585
NR= Not Rated Page 3 of 8
City of Palm Desert •
Portfolio Characteristics
28 February 2004
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moodys
$ 124,612,221 $ 124,936,988 $ 125,242,072
NR= Not Rated Page 4 of 8
Palm Desert Redevelopment Agency-- Portfolio CharaZ!feristics
28 February 2004
Dollars in Thousands
Aoeina Interval Market Value
< 1 M $ 101,405 Portfolio Ageing w/o SLGSs
<2M 2,494
<3M 2,999 100 66
<6M 3,993 80
< 1YR 6,504 a 70
<2YR - 0 60
<3YR 0 50e 40
<4YR - i 30
<5YR - 20
10 2 3 3 6 0 0 0
>5YR - 0
Total: $ 117,395 <1M <2M <3M <6M <1YR <2YR <3YR <4YR
Qualit Market Value Credit Quality
Aaa $ 84,314
Unrated" 60,959
Aaa
Aa - 58%
A
Unrated"
Al/PI 19,004 42%
Total: $ 164,277
Sect r Market Value Asset Allocation
U.S.Treasury $ 7,112 Money Market
u ds
Money Market Funds 71,705 51%
LAIF 60,958
Federal Agency mm , a
Commercial Paper 19,004004
Corporate Bonds - U.S.Treasury LAW
Total; $ 164,277 5% 44%
Montn RDA Yield LAIF Yield Variance Performance
Mar03 1,64 1.90 -0.26
Apr 1.74 1.86 -0.12 2.1
May 1,71 1.77 -0.06 j
Jun 1.71 1.70 0.01
Jul 1.56 1.65 -0.09
Aug 1.36 1.63 -0.27 1.6
Sep 1.28 1.64 -0.36 >-
Oct 1.30 1.60 -0.30
Nov 129 1.57 -0.28 1.1
Dec 1.29 1.55 -0.25 Mar03 Apr May Jun Jul Aug Sep Oct Nov Dec Jan04Feb
Jan04 1.24 1.53 -0.29
Feb 1.20 1.44 -0.24 ❑LAIF Yield 13 Yield
Moody's Credit Ratings
LAW Page 5 of 8
is
Palm Desert Redevelopment Agency
Portfolio Characteristics
28 February 2004
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value I Moodys
Commercial Paper-•Discount
$ 3,008,000 CITIGROUP 1.04 5/10/04 $ 2,999,223 1.06 99.79 $ 3,001,804 P-1
$ 3,004,000 CITIGROUP 1.03 3122104 $ 2,999,531 1.05 99.93 $ 3,002,042 P-1
$ 3,021,000 GENERAL ELECTRIC 1.10 9/22/04 $ 2,999,215 1.14 99.38 $ 3,002,413 P-1
$ 3,004,000 MERRILL LYNCH 1.02 3/18/04 $ 2,999,915 1.04 99.95 $ 3,002,399 P-1
$ 2,008,000 TOYOTA 1.01 6/23104 $ 1,999,831 1.03 99.66 $ 2,001,271 P-1
$ 2,500,000 TOYOTA 0.98 3122/04 $ 2,496,461 1.00 99.94 $ 2,498,387 P-1
$ 2,500,000 WELLS FARGO BANK 0.99 4/22/04 $ 2,494,294 1.01 99.85 $ 2,496,138 P-1
$ 19,045,000 Subtotal $ 18,988,470 1.05 $ 19,004,453
U.S.Treasury--Discount
$ 7,143,000 UNITED STATES TREASURY 4.59 8115J04 $ 4,989,671 5.54 99.56 $ 7,111,578 Aaa
$ 7,143,000 Subtotal $ 4,989,671 5.54 $ 7,111,578
Federal Agency—Discount
$ 2,000,000 FED NATIONAL MTG ASSOC 1.02 6/23/04 $ 1,991,783 1.04 99.69 $ 1,993,800 Aaa
$ 3,523,000 FED NATIONAL MTG ASSOC 1.10 9/3/04 $ 3,499,963 1.14 99.46 $ 3,503,976 Aaa
$ 5,523,000 Subtotal $ 5,491,747 1.10 $ 5,497,776
LGIPs,
$ 40,000,000 L.A.I.F. 0.00 3/1/04 $ 40,000,000 1.44 100.00 $ 40,000,000 NR
$ 6,226,680 L.A.I.F. (HOUSING) 0.00 3/1/04 $ 6,226,680 1.44 100.00 $ 6,226,680 NR
$ 9,722,538 L.A.I.F. BOND PROCEEDS 0.00 311/04 $ 9,722,538 1.44 100.00 $ 9,722,538 NR
$ 5,009,039 L.A.I.F. BOND PROCEEDS 0.00 3/1/04 $ 5,009,039 1.44 100.00 $ 5,009,039 NR
$ 60,958,257 Subtotal $ 60,958,257 11.44 $ 60,958,257
LGIP
$ 29,812,429 C.A.M.P. 0.00 311104 $ 29,812 429 0.91 100.00 $ 29,812,429 NR
$ 29,812,429 Subtotal $ 29,812,429 0.91 $ 29,812,429
Pooled Funds --AIM
$ 41,892,267 PRIME PORTFOLIO 0.00 311104 $ 41,892,267 0.64 100.00 $ 41,892,267 Aaa
$ 41,892,267 Subtotal $ 41,892,267 0.64 $ 41,892,267
Total Investments
$ 164,373,954 $ 162,132,842 1.20 $ 164,276,761
Cash
$ 2,118,000 HOUSING AUTH CHKG 0.00 3/1/04 $ 2,118,000 N/A 100.00 $ 2,118,000 NR
$ 320,322 HOUSING AUTH TRUST 0.00 3/1/04 $ 320,322 N/A 100.00 $ 320,322 NR
$ 2,438,322 Subtotal $ 2,438,322 $ 2,438,322
NR= Not Rated Page 6 of 8
Palm Desert Redevelopment Agency
Portfolio Characteristics
28 February 2004
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's
Total Cash and Investments
$ 166,812,276 $ 164,571,164 $ 166,715,084
NR= Not Rated Page 7 of 8
STATEMENT OF COMPLIANCE
The investment portfolios of the City of Palm Desert("City")and the Palm Desert Redevelopment Agency('RDA")are
governed by federal, state,and local law. The City Treasurer's"Statement of Investment Policy" is more restrictive than the
California Government Code. The Palm Desert Investment Committee and the Palm Desert City Council review the
Statement of Investment Policy annually.
For the month ended 28 February 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 24 March 2004,
pauLS. tiavory C.C.M.T.
City Treasurer
SUMMARY OF AUTHORIZED INVESTMENTS
California Government Code City Investment Policy
CA Govt Maximum Maximum Quality Maximum Maximum Quality %of City %of RDA
Code Investment Category Maturity Limit S&P/Mdys Maturity Limit S&P/Mdys Portfolio Portfolio
53601(a) Palm Desert Bonds 5 Years No Limit Not Authorized(1)
53601(b) U.S.Treasuries 5 Years No Limit 5 Years No Limit I 1 0.0% 3,10,
53601(c) CA State Debt 5 Years No Limit Not Authorized
53601(d) CA Local Agency Debt 5 Years No Limit Not Authorized
53601(a) Federal Agencies 5 Years No Limit 5 Years 30% 2.2% 3A%
53601(f) BankeWs 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 2.2% 11.7%
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
536010) Medium-Term Notes 5 Years 30% A 5 Years 30% 1 A 1 11.4% 0.0%
53601(k) Mutual Funds 90 Days 20% AAA&Aaa 90 Days 20% (2) 1 AAA&Aaal 7.9% 1 25.8%
53601(I) Trust Indenture Debt Not Authorized
53601(m)l Secured Bank Deposits 5 Years No Limit Not Authorized
53601(k) Local Government AAA&Aaa AAA&Aaa
Investment Pools 90 Days 20% or Advisor 90 Days 20% (2) 1 or Advisor 1 11.5% 18.4%
53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Authorized
Securities AA(Security)
16429 LAIF No Limit I I No Limit 35.6% 37.6%
(1) The City loan to RDA,which is not a bond, has been approved by the Palm Desert City Council. 70.8% 100.0%
(2) Maximum limit for mutual funds and local government investment pools,excluding bond proceeds.
` Certified California Municipal Treasurer Page 8 of 8
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CITY OF PALM DESERT
FINANCE
INTEROFFICE MEMORANDUM
To: Paul Gibson, Director of Finance
From: Jose Luis Espinoza, CPA
Assistant Finance Director ` A�
Date: March 17, 2004
Subject: Audit Sampling
At the February 25 Investment and Finance Committee Meeting there was some
concern on a suggested procedure identified on the Deputy City Treasurer's listing of
audit procedures regarding transactions with the City's cash and investments. The
auditors used the Haphazard sampling method for selecting bank wire transactions.
The term "Haphazardly" is a valid term in auditing. It is described below.
There are four commonly used sampling methods: two under Statistical and two under
Non-Statistical. They are Random sampling (Statistical), Systematic sampling
(Statistical), Haphazard sampling (Non-Statistical) and Judgmental sampling (Non-
Statistical).
Random sampling ensures that all in the population have an equal chance of being
selected.
Systematic sampling involves selecting sampling units using a fixed interval between
selections, the first interval having a random start.
Haphazard sampling is when the samples are selected without following a structured
technique, however avoiding any conscious bias or predictability.
Judgmental sampling is when a bias is placed on the samples, for example, all
sampling units over a certain value, all for a specific type of exception, etc.
All four forms of sampling are acceptable when gathering samples for review or audit;
however, statistical sampling is always preferred because it gives the data your
checking an equal chance of being selected.
In the case with the review the City requested, the auditors must have figured that the
best approach in selecting the sample for bank wires was "Haphazardly".
H:WGGT000CURRENT WORKIRANDOM SAMPLING MEM0.000
CITY OF PALM DESERT
OFFICE OF THE CITY TREASURER
STAFF REPORT
REQUEST: N/A
APPLICANT: N/A
CASE NOS. N/A
DATE: March 241h, 2004
CONTENTS: City of Rancho Mirage Investment Portfolio (Feb. 2004)
Recommendation:
By minute motion: N/A
Background:
The Investment and Finance Committee recently asked the City Treasurer's Office to
review the City of Rancho Mirage's ("Rancho Mirage") investment portfolio for
comparison purposes. In February, the Desert Sun reported that the Rancho Mirage
portfolio had an approximate yield of 2.5 percent (the Palm Desert City Portfolio had an
approximate yield of 1.6 percent for the same period). The Rancho Mirage portfolio for
February 2004 is attached (see "Exhibit A").
Rancho Mirage is able to achieve a higher portfolio yield because it invests farther out
on the yield curve. On average, Rancho Mirage bonds mature within 639 days (21
months), while Palm Desert bonds mature within 111 days (3.5 months). This reflects
differences in the level of economic activity and investment strategy between the two
cities.
Rancho Mirage has been able to pursue a more aggressive, longer term investment
strategy because it spends relatively little on infrastructure when compared with Palm
Desert. Rancho Mirage, for example, does not undertake road improvements.
Staff Report
City of Rancho Mirage Investment Portfolio
March 24", 2004
Page 2 of 3
The difference in the scale of economic development between the two cities is further
reflected in their bank account balances and investment portfolio sizes. Rancho Mirage
has a bank account balance of $66,000 to cover its outstanding checks, while Palm
Desert has a bank account balance of $2,000,000 to cover must a portion of its
outstanding checks (Palm Desert' s largest outstanding check is currently for $704,000).
Similarly, Rancho Mirage has an $86 million investment portfolio, while Palm Desert has
a $291 million investment portfolio.
Rancho Mirage's investment strategy is apparently to ladder its portfolio over time,
seeking an average return. This is a passive, medium-term investment strategy
that presently entails buying securities with three-to-five year maturities at a time
of historically low interest rates. Although the Rancho Mirage portfolio in Exhibit "A"
does not include an investment benchmark, it is likely that Rancho Mirage is using a
two-year U.S. Treasury note as its benchmark since this would be compatible with the
portfolio's average maturity and security type.
Approximately 54.6% of Rancho Mirage's current securities holdings were purchased
with a maturity date exceeding three years. Within this subgroup, approximately 26%
were purchased with a maturity date exceeding five years. Additionally, approximately
31% of the securities in the overall portfolio were purchased prior to November 2002,
when investment yields rates were significantly higher. There is even a layer of
securities that were purchased prior to April 1999.
Palm Desert's investment strategy, in contrast, is to manage its portfolio actively over
time, seeking to match or outperform LAIF. This is an active, short-term investment
strategy that presently entails shortening portfolio maturity so that the City will
be positioned to take advantage of an expected rise in market interest rates over
the next year. In our view, the Palm Desert portfolios are short-term investment pools,
like LAIF, that are used for liquidity management (matching assets with known
liabilities). Consequently, the City Treasurer's Office is reluctant to lock-in at historically
low rates for a long period of time, except for the purpose of matching a known liability
(e.g., Retiree Health Program).
When the City Treasurer's Office did a survey of local agency investment benchmarks
two years ago, the Cities of Los Angeles and Sacramento were the only local agencies
using LAIF as a benchmark. Several other agencies were dropping their LAIF
benchmark because they could not match it. For the past several months, the yield on
the Palm Desert City Portfolio has surpassed LAIF's, due to investments that Palm
Desert made in Ford Motor Company.
By investing farther out on the yield curve, Rancho Mirage's portfolio is more sensitive
to interest-rate risk than Palm Desert's. If market interest rates continue to fall, then the
market value of Rancho Mirage's portfolio will rise more dramatically than Palm
Staff Report ® •
City of Rancho Mirage Investment Portfolio
March 20, 2004
Page 3 of 3
Desert's. Conversely, if market interest rates begin to rise, then the market value of
Rancho Mirage's portfolio will fall more dramatically than Palm Deserts. Additionally, if
Rancho Mirage has a change in economic development strategy or some unexpected
cash needs, then it may be forced to sell some of its securities prior to maturity in an
environment of rising interest rates. This would put Rancho Mirage at greater risk for a
loss of principal than Palm Desert.
Prepared By:
Thomas W. JeffreU VouttCity Treasurer
INVESTMENT PORTFOLIO UNDER THE�CTION OF CITY TREASURER ®"EXHIBIT A"
(FILE � #1PORTFOLIO)
''PDATED FEBRUARY 27, 2004 PURCHASE MATURITY
INVESTIMENLDTECALLINM DATE DATE YIELD COST PAR
Petty Cash - - 0 $1,600.00 $1,600.00
Ck. Account (10-31-03) - - 0,01 66,551.00 66,561.00
City LAIF(2-20-04 balance; 2-26-04 yield) - - 0.0145 3,160,079.09 3,160,079.09
RDA LAW - - 0.0145 2,670,800.87 2,670,800.87
FHLMG-non-callable 3-7-02 5-15-2004 0.03605 2,955,431.60 2,872,000.00
Treasury Strip 4-26-02 8-15-2004 0.0348 1,001,997.50 1,085,000.00
FNMA- non-callable 3-7-02 9-15-2004 0.0379 2,955,406.08 2,976,000.00
Home Loan Bank-non-callable 4-26-02 10-15-2004 0.0372371 997,750.00 1,000,000.00
Treasury Strip 3-17-99 11-15-2004 0.0533 1,000,147.50 1,347,000.00
Treasury Note 12-3-03 3-31-05 0.016065 2,000,468.75 2,000,000.00
Treasury Note 12-3=03 7-31-05 0.018355 1,989,062.50 2,000,000.00
Treasury Strip 4-26-02 8-15-2005 0.04155 999,424.70 1,145,000.00
Treasury Strip 8-28-03 8-15-05 0.0197 3,999,948.54 4,157,000.00
FHLMC- non-caffable 12-3-03 9-15-05 0.0211 2,026,600.00 2,000,000.00
Farm Credit Bank-non-callable 1-15-04 10-4-05 . 0.01678 983,410.74 909,000.00
Treasury 2-4-04 10-31-05 0.01587893 1,991,243.75 1,990,000.00
Treasury Strip 3-17-99 11-15-2005 0.053 1,000,146.94 , 1,417,000.00
Home Loan Bank-non-callable 4-26-02 11-15-2005 0.04380044 539,855.10 505,000.00
FNMA-callable (5) 11-17-03 11-17-05 0.02228648 2,000,420.00 2,000,000.00
FHLMC-callable (8) 6-19-03 12-19-05 0.02 4.500,000.00 4,500,000.00
Treasury. 2-5-04 2-15-06 0.01733285" 985,626.56 915,000.00
Treasury .2-4-04 2-15-06 0.01730637 878,035.16 815,000.00
Treasury 2-5-04 2-15-06 0.01740797 1,077,03125 1,000,000.00
come Loan Bank 1-15,04 3-6-06 0.0193 981,354.86 920,000.00
Tome Loan bank-callable(9) 6-30-03 6-30-06 0.0222' 4,500,000.00 4,500,000.00
=arm Credit Bank-callable (3) 2-3-04 8-2-06 0.02522919 1,000,819.20 1,005,000.00
Treasur�/Strip 4-26-02 8-15-2006 0.04235 1,001,844.00 1,200,000.00
Treasury Strip 8-28-03 8-15-2006 0.0252 3,992,335.00 4,300,000.00
=HLMC-non-callable 12-3-03 8-15-06 0.02729 990,514.80 990,000.00
7NMA- non-callable 10-25-02 10-15-2006 0.03373 2,592,382.81 2,500,000.00
=arm Credit Bank-non-callable 10-30-03 11-13-06 0.02700028 252,892.50 250,000.00
Treasury Strip 3-17-99 11-15-2006 0.05325 1,000,225.60 1,496,000.00
come Loan Bank- non-callable 4-26-02 11-15-2006 0.04782013 1,957,296.90 1,950,000.00
:arm Credit Bank-callable (11) 11-17-03 11-17-2006 0.0293 1,000,000.00 1,000,000.00
:arm Credit Bank-callable (11) 11-17-03 11-17-2006 0.0293 1,000,000.00 1,000,000.00
=HLMC -callable (10) 10-30-03 12-4-06 0.0285717 1,731,590.00 1,750,000.00
=NMA-callable (4) 2-23-04 2-23-07 0.03 2,000,000.00 2,000,000.00
=HLMC -non-callable 12-3-03 3-15417 0.03026 951,597.00 900,000.00
=NMA - non-callable 10-25-02 4-15-2007 0.03573 2,671,825.00 2,500,000.00
-NMA- non-callable 2-3-04 7-15-07 0.0284 1,995,787.08 1,908,000.00
reasury Strip 3-17-99 11-15-2007 0.05395 1,000,179.18 1,586,000.00
=ederal Home Loan Bank -step up (A) 8-13-03 8-13-08 0.03 9,000,000.00 9,000,000.00
=ederal Home Loan Bank-step up (B) 8-20-03 8-20-08 0.0325 3,000,000.00 3,000,000.00
:arm Credit Bank -callable (13) 10-30-03 10-20-08 0.0454037 997,578.13 1,000,000.00
=arm Credit Bank - callable (12) 11-4-03 11-4-08 0.04003168 1,000,940.00 1,000,000.00
Treasury Strip 3-17-99 11-15-2008 0.0551 1,000,243.41 1,691,000.00
rreasuryStrip 3-17-99 2-15-09 0.05545 1,000,059.60 1,720,000.00
0 . 0.00 0.00
0 0,00 0.00
0 0.00 0.00
00
3RAND TOTAL OF ENTIRE PORTFOLIO 0 0.00 0.00 86 400 51 64 S8q.6g8.030.
JNDER DIRECTION OF CITY TREASURER
CAL ALL INFORMATION STEP UP INF ION {
one-time call February 2, 2005 (A)quarterly call beginning February 13, 2004; annL
t• ) semi-annual call beginning February 23, 2005. (B) quarterly call beginning February 20, 2004; anm
(5) Callable at par one time on November 17, 2004
(6) available
(7) available
(8) quarterly call beginning December 19, 2003.
(9) quarterly call beginning September 30, 2003.
.(10) Callable at par one time on June 4,2004.
(11) Callable at par continuously beginning November 17, 2004.
(12) Callable at par continuously beginning November 4, 2004.
(13) Callable at par continuously beginning October 20, 2004.
I
CITY OF PALM DESERT
STAFF REPORT
REQUEST: CITY OF PALM DESERT SINGLE AUDIT OF FEDERALLY
ASSISTED GRANT PROGRAM FOR FISCAL YEAR ENDED
JUNE 30, 2003
SUBMITTED BY: Paul S. Gibson, Director of Finance
Jose Luis Espinoza, CPA
Assistant Finance Director
DATE: March 24, 2004
CONTENTS: Staff Report and Single Audit Report
Recommendation:
Receive and file the City of Palm Desert Single Audit of Federally Assisted Grant
Programs for the year ended June 30, 2003.
Background:
The City was required to undergo an audit of federal funds it received because the City
expended more than $300,000 in the year ended June 30, 2003. Lance, Soil &
Lunghard, LLP was hired to perform and complete an audit on the Schedule of Federal
Financial Assistance for the fiscal year ended June 30, 2003.
The result of the audit disclosed no audit findings or questioned costs. Staff
recommends to receive and file the City of Palm Desert Single Audit of Federally
Assisted Grant Programs for the fiscal year ended June 30, 2003.
Submitted By:
0a4c.,
Paul S. Gibson, Director of Finance
H.0=tg03Nudd031SINGLE AUOIT STAFF REPORT 2003.Inmstment.dot
CITY OF PALM DESERT
SINGLE AUDIT REPORT
JUNE 30, 2003
CITY OF PALM DESERT
JUNE 30, 2003
TABLE OF CONTENTS
Page
Number
eport on Compliance and on Internal Control Over Financial Reporting
Based on an Audit of Financial Statements Performed in Accordance
with Government Auditing Standards 1
eport on Compliance with Requirements Applicable to Each Major
Program and Internal Control Over Compliance in Accordance with
OMB Circular A-133 3
-hedule 1 - Schedule of Expenditures of Federal Awards for the 4
Year Ended June 30, 2003 5
otes to Financial Statements 6
-hedule 2 - Schedule of Findings and Questioned Costs for the
Fiscal Year Ended June 30, 2003 7
I
i
I
i
IiI
I
I
Lance Brandon W.Burrows
LLLoun
Donald L.Parker
O( Michael K.Chu
ghard David E.Hale
A Prolesslopel Corporallon
Donald G.Slater
LLP Richard K.Kikuchi
ed Public Accountants Retired
Robert-1W4 C.Lance
191r199a
Richard C.Soil
Fred J.Lunghard,Jr.
19281999
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL
REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITRVG STANDARDS
the Honorable Mayor and Members of the City Council
3e City of Palm Desert, California
i
re have audited the financial statements of the City of Palm Desert, California,as of and for the year ended
me 30, 2003, and have issued our report thereon dated September 5, 2003. We conducted our audit in f "
:cordance with auditing standards generally accepted in the United States of America and the standards
)plicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
eneral of the United States.
Compliance
I
3 part of obtaining reasonable assurance about whether the City of Palm Desert's financial statements are
:e of material misstatement, we performed tests of its compliance with certain provisions of laws,
gulations, contracts and grants, noncompliance with which could have a direct and material effect on the f_--------
Aermination of financial statement amounts. However, providing an opinion on compliance with those
ovisions was not an objective of our audit and,accordingly,we do not express such an opinion.The results
our tests disclosed no instances of noncompliance that are required to be reported under Government
stditing Standards, issued by the Comptroller General of the United States.
I
Internal Control Over Financial Reporting
planning and performing our audit,we considered the City of Palm Desert's internal control over financial
porting in order to determine our auditing procedures for the purpose of expressing our opinion on the
ancial statements and not to provide assurance on the internal control over financial reporting. However,we
,ted certain matters involving the internal control structure and its operations that we consider to be f
oortable conditions. Reportable conditions involve matters coming to our attention relating to significant
ficiencies in the design or operation of the internal control structure that, in our judgment,could adversely
'ect the City's ability to record,process,summarize and report financial data consistent with the assertions of
3nagement in the financial statements.We noted the following matter which we believe to be a reportable
ndition:
Housing Authority Review
ring our review of 100 randomly selected tenant files for the various apartment complexes of the Housing
thority, we noted two instances (both at the Las Seranas Apartment Complex)where tenants were being
archarged.Per discussions with management personnel at the apartment complex,these two tenants are to
issued credits on their future bills.
Years
V02C04
:ellerace 203 N. Brea Blvd. • Suite 203 • Brea, CA 92821-4056 (714)672-0022 • Fax(714)672-0331 • www.lslcpas.com
1`\J�Lance
II s
Lunghard
ERT/F/ED PUBLIC ACCOUNTANTS
'o the Honorable Mayor and Members of the City Council
'he City of Palm Desert, California
� material weakness is a condition in which the design or operation of one or more of the internal control
omponents does not reduce to a relatively low level the risk that misstatements in amounts that would be
iaterial in relation to the financial statements being audited may occur and not be detected within a timely
eriod by employees in the normal course of performing their assigned functions. Our consideration of the
eternal control over financial reporting would not necessarily disclose all matters in the internal control that
iight be reportable conditions and, accordingly,would not necessarily disclose all reportable conditions that
re also considered to be material weaknesses. However, we believe that the reportable condition noted
bove is not a material weakness.
City's Management Response
I
i
9anagement personnel have issued credits in the two instances noted.In order to minimize future errors,the -
:nt for all new move-ins and re-certifications will be set based on the established rent schedule for the I
ffordable level and family size. Two signatures are required, one of which will be a manager.
f
his report is intended solely for the information of the City Council,management,federal awarding agencies
nd pass-through entities and is not intended to be, and should not be, used by anyone other than these
pecified parties.
eptember 5, 2003
I
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1
I
I
Lance Brandon W.Burrows
Sol & Donald L.Parker
Michael K.Chu
Lunghard David E.Hale
A WaLulanal Carp adon
L LP Donald G.Slater
Richard K.Kikuchi
ied Public Accountants Retired
Robert C.Lance
19141994
Richard C.Soil
Fred J.Lunghard,Jr.
1928-1999
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH
MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN
ACCORDANCE WITH OMB CIRCU4AR A-133
i
'o the Honorable Mayor and Members of the City Council
'he City of Palm Desert, California
Compliance
Ve have audited the compliance of the City of Palm Desert, California, with the type of compliance
;quirements described in the United States Office of Management and Budget (OMB) Circular A-133
:ompliance Supplement that are applicable to each of its major federal programs forthe year ended June 30, j
003. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its
lajor federal programs is the responsibility of the City of Palm Desert's management. Our responsibility is to
xpress an opinion on the City of Palm Desert's compliance based on our audit.
ie conducted our audit of compliance in accordance with auditing standards generally accepted in the United ! ----- ---
tates of America; the standards applicable to financial audits contained in Government Auditing
tandards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of
tates, Local Governments and Non-Profit Organizations.Those standards and OMB Circular A-133 require
let we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the
pes of compliance requirements referred to above that could have a direct and material effect on a major
:deral program occurred. An audit includes examining, on a test basis, evidence about the City of Palm
esert's compliance with those requirements and performing such other procedures as we considered
acessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Our
,Idit does not provide a legal determination on the City of Palm Desert's compliance with those requirements.
our opinion, the City of Palm Desert complied, in all material respects, with the requirements referred to
3ove that are applicable to each of its major federal programs for the year ended June 30, 2003.
Internal Control Over Compliance
3e management of the City of Palm Desert is responsible for establishing and maintaining effective internal
)ntrol over compliance with requirements of laws, regulations, contracts and grants applicable to federal
ograms. In planning and performing our audit,we considered the City of Palm Desert's internal control over
)mpliance with requirements that could have a direct and material effect on a major federal program in order
determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and
port on internal control over compliance in accordance with OMB Circular A-133.
Years
2004
cellence 203 N. Brea Blvd. • Suite 203 • Brea, CA 92621-4056 • (714)672-0022 • Fax(714)672-0331 • www.lslcpas.com
Lance • •
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Lunghard
LLP
ERTIFIEO YUBUC ACCOUNTANTS
ro the Honorable Mayor and Members of the City Council
the City of Palm Desert, California
Dur consideration of the internal control over compliance would not necessarily disclose all matters in the
nternal control that might be material weaknesses.A material weakness is a condition in which the design or
)peration of one or more of the internal control components does not reduce to a relativity low level the risk
hat noncompliance with applicable requirements of laws, regulations, contracts and grants that would be
naterial in relation to a major federal program being audited may occur and not be detected within a timely
)eriod by employees in the normal course of performing their assigned functions. We noted no matters
nvoiving the internal control over compliance and its operation that we consider to be material weaknesses.
i
Schedule of Expenditures of Federal Awards
Ne have audited the basic financial statements of the City of Palm Desert as of and for the year ended dune
30, 2003, and have issued our report thereon dated September 5, 2003. Our audit was performed for the -"-
wrpose of forming an opinion on the basic financial statements taken as a whole. The accompanying
schedule of expenditures of federal awards is presented for purposes of additional analysis as required by
FMB Circular A-133 and is not a required part of the basic financial statements. Such information has been
;ubjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion,
s fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
Phis report is intended solely for the information of the City Council,management,federal awarding agencies
and pass-through entities and is not intended to be, and should not be, used by anyone other than these
;pecified parties.
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'ebruary 12, 2004
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CITY OF PALM DESERT Schedule 1
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2003
Federal Pass-Through
CFDA Grantor's
-ederal GrantorlPass-Through Grantor/Program Title Number Number Expenditures
J.S. Department of Housing and Urban Development
Community Development Block Grant:
Grant Entitlement Passed Through
the County of Riverside 14.218 B02-UC-06-0506 $ 164,620 -- ---- --
J.S. Department of Transportation
Highway Planning and Construction Program:
Passed Through California Office
of Transportation' 20.205 RPSTPL-5414(007) 1,721,506
CML-6164(011) 10,929
CML-6164(009) 14,003
RS0312 1,971
Total U.S. Department of Transportation 1,748,409
J.S. Department of Justice
Direct Program:
Local Law Enforcement Block Grant 16.592 2002-LB-BX-2973 32,986
Total Federal Expenditures $ 1,946,015
Major Program
i
lote a: Refer to Note 1 to the financial statements for a description of significant accounting policies used in
preparing this schedule.
'ote b: There are no federal awards expended in the form of noncash assistance, insurance in effect or loans
or loan guarantees during the year.
i
ote c: Total amount provided to subrecipients during the year from the Community Development Block
Grant amounted to$101,466.
5
CITY OF PALM DESERT
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
JUNE 30, 2003
Iota 1: Summary of Significant Accounting Policies Applicable to the Schedule of Expenditures
of Federal Awards
a. Scope of Presentation
The accompanying schedule presents only the expenditures incurred by the City of Palm
Desert that are reimbursable under federal programs of federal financial assistance. For the I
purposes of this schedule,federal awards includes both federal financial assistance received
directly from a federal agency, as well as federal funds received indirectly by the City from a
non-federal agency or other organization. Only the portion of program expenditures
reimbursable with such federal funds are reported in the accompanying schedule. Program
expenditures in excess of the maximum federal reimbursement authorized or the portion of
the program expenditures that were funded with state, local or other non-federal funds are
excluded from the accompanying schedule.
b. Basis of Accounting
The expenditures included in the accompanying schedule were reported on the modified
accrual basis of accounting. Under the modified accrual basis of accounting, expenditures
are incurred when the City becomes obligated for payment as a result of the receipt of the
related goods and services. Expenditures reported included any property or equipment ---
acquisitions incurred under the federal program.
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6
CITY OF PALM DESERT Schedule 2
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30,2003
SECTION I-SUMMARY OF AUDITORS' RESULTS
I
-inancial Statements
Type of auditors' report issued: Unqualified
nternal control over financial reporting:
Material weakness(es) identified? _yes x no
Reportable condition(s) identified that are not 1
considered to be material weakness(es)? x yes _none reported
Joncompliance material to financial
statements noted? _yes x no
=ederal Awards i
nternal control over major programs:
Material weakness(es) identified? _yes x no
Reportable condition(s) identified that are not
considered to be material weakness(es)? _yes x none reported
I
ype of auditors'report issued on compliance for major programs: Unqualified
I
kny audit findings disclosed that are required to be
reported in accordance with section 510(a)of
Circular A-1 33? _yes x no
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Jentification of major programs:
CFDA Number(s) Name of Federal Program or Cluster
20.205 Highway Planning and Construction
Lollar threshold used to distinguish
)etween type A and type B program $300,000
i -
,uditee qualified as low-risk auditee? x yes _no
7
0
CITY OF PALM DESERT Schedule 2
(Continued)
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
SECTION II - FINANCIAL STATEMENT FINDINGS
Housing Authority Review
i
uring our review of 100 randomly selected tenant files for the various apartment complexes of the Housing
uthority, we noted two instances (both at the Las Seranas Apartment Complex) where tenants were being
vercharged. Per discussions with management personnel at the apartment complex, these two tenants are to be
sued credits on their future bills.
City's Management Response
lanagement personnel have issued credits in the two instances noted.In order to minimize future errors,the rent for
II new move-ins and re-certifications will be set based on the established rent schedule for the affordable level and
imily size. Two signatures are required, one of which will be a manager.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
o matters were reported.
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8
STATE OF CALIFORNIA ® PHILIP ANGELIDES. Treasurer
OFFICE OF THE TREASURER
SACRAMENTO gi Y
Local Agency Investment F&d'
PO Box 942809 !!I: r,
Sacramento, CA 94209-006P.
(916) 653-3001
February, 2004 Statement
CITY OF PALM DESERT Account Number : 99-33-621
Attn: CITY TREASURER
73510 FRED WAKING 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
Page : 1 of 1
STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer
OFFICE OF THE TREASURER
SACRAMENTO LI 17 ' "' 1 i"q_IV �.Ji_JFiir
Local Agency Investment Fund ( 1'J��h- �` " i'lithEl'�T
PO Box 942809
Sacramento, CA 94209-0001 ca'�I �" 33
(916) 653-3001
February, 2004 Statement
PALM DESERT REDEVELOPMENT AGENCY Account Number : 65-33-015
Attn: 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
Page : I of 1
l r-
CALIFORNCAOAAIP
t o ASSET STATEMENT
MANAGFMF_NT PROGRAM iF
1[;.1I uil? -- fit: 4D
' )O1N"f POWERS AVl'HORITY i• I
50 CALIFORN1A SrikFF"r 23RF)FIAOR
SAN FRANCISCO CAcici RNIA 941 11 FOR ACCOUNT
INFORMATION: 800-729-7665
STATEMENT DATE: 2/2 912 0 0 4
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
Account,Surnmary asofy29/2004 . _ =_
Statement Income Dividends Capital Gains Total Shares Account
Date Paid This Year Paid This Year Owned Value
2/29/2004 $26,119.02 $0.00 12,860,176.800 $12,860,176.80
Frarisactlon{SUmma_A662/1/2004°-2/29/2004
Beginning Balance Purchases Reinvestments Redemptions Ending Balance
$12,850,851.79 $0.00 $9,325.01 $0.00 $12,860,176.80
•T.RADE"-- SEfTIE ` DOLLAR AMOUNT SHARE SHARESrTHIS ' TOTAL
�D`ATE DATE THA�lSACTIOFI t Qp�,TRANSACTIONS PRICETRANSACTI,ON, SHARES OWNED
.fix ?',. -o. .,: .1„... .a.....n.-....'?£:
02/01/04 Beginning Balance 12,850,851.790
02/29/04 3/1/2004 Accrual Income Div Reinvestment-DIV $9,325.01 $1.00 9,325.010 12,860,176.800
Message Line: THE DIVIDEND YIELD FOR THE MONTH IS 0.91%
THE ANNUALIZED YIELD IS 0.92%.
CA L L f O R N I A ASS I-T STATEMENT
VIANAGENIENT PROGRAM
JOINT POWrRS AU"VIAORITY
50 CALIFORNIA SI'RE2T 23RD FLOOR
S,w FRAICUSCO CALIFORN1A 9si I I FOR ACCOUNT
INFORMATION: 800.729-7665
STATEMENT DATE: 2/29/2004
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
Account:Summary as'of<2/29/2004rkk
Statement Income Dividends Capital Gains Total Shares Account
Date Paid This Year Paid This Year Owned Value
2/29/2004 $44,675.71 $0.00 29,812,429.220 $29,812,429.22
TransactitintSuminary'for,,-2/1/2004'-2/29/2004 , fa ,: r #.`. „ _ 4 z ,
Beginning Balance Purchases Reinvestments Redemptions Ending Balance
$29,790,812.01 $0.00 $21,617.21 $0.00 $29,812,429.22
i TFfiADE SETTLE ` aAs.$ I?OLLAN AA�„OUNT" SHARE 'SHARESTHIS "' TOT_Al)**
3r ID''ATE p RANSAC7IQN RAN
OF'I'RANSACTION PRICE_. TRANSACTION SHARES O„W,NED
02/01/04 Beginning Balance 29,790,812.010
02/29/04 3/1/2004 Accrual Income Div Reinvestment-DIV $21,617.21 $1.00 21,617.210 29,812,429.220
Message Line: THE DIVIDEND YIELD FOR THE MONTH IS 0.91%.
THE ANNUALIZED YIELD IS 0.92%.
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t • City of Palm Desert •
Parkview Office Complex
Financial Statement
o for Fiscal Year 2003-2004
February-04 February-04 ti % YTD YTD p %
Budget Actual Variance Variance Budget Actual Variance Variance
Revenues ' . . .
Rental $ 68,500 $ 71,114 $ 2,614 103.82% $ 548,000 $ 569,155 $ 21,155 103.86%
Dividends/Interest $ 4,375 $ - $ (4,375) 0.00% $ 35,000 $ 216 $ (34,784) 0.62%
Total Revenues $ 72,875 $ 71,114 $ (1,761) 97.58%1 < :_ 1 $ 583,000 $ 569,371 $ (13,629) 97.66%
Expenses }
Professional-Accounting&Auditing $ 8,000 $ 8,000 $ - 100.00%1 j $ 64,000 $ 64,000 $ - 100.00%
Professional-Consultants $ 6,000 $ 5,363 $ 638 89.38%1 $ 48,000 $ 45,137 $ 2,863 94.04%
Tenant Improvements $ 3,000 $ - $ 3,000 0.00%1 $ 24,000 $ 7,120 $ 16,880 29,67%
Repairs&Maintenance Building $ 8,000 $ 9,702 $ (1,702) 121.28%1 $ 64,000 $ 72,298 $ (8,298) 112.97%
Repairs&Maintenance-Landscaping $ 2,300 $ - $ 2,300 0.00%1 $ 18,400 $ - $ 18,400 0.00%
Utilities-Water $ 150 $ 103 $ 47 68.52% $ 1,200 $ 856 $ 344 71.31%
Utilities-Gas/Electric $ 8,000 $ 5,225 $ 2,775 65.31%1 $ 64,000 $ 57,598 $ 6,402 90.00%
Utilities-Waste Disposal $ 700 $ 530 $ 170 75.77%1 $ 5,600 $ 3,889 $ 1,711 69.45%
Telephone $ 200 $ 125 $ 75 62.57% $ 1,600 $ 1,262 $ 338 78.86%
Insurance $ 521 $ - $ 521 0.00%1 $ 4,166 $ - $ 4,166 0.00%
Total Expenses $ 36,871 $ 29,048 $ . 7,823 78.78%. -.� $ 294,966 $ 252,161 $ 42,805 85.490/4
}
Operating7ucotne , � ,_ $. 36,004, $. 42,066 $ 6,062 116;849/p $.288,034`:$ 317,210 $ 29,17& 110.13
Equipment Replacement Reserve $ 14,000 $ 13,306 $ 694 95.04% $ 112,000 $ 106,448 $ 5,552 95.04%
Net became $ 22,004 $ 28;760 $ 6,756 '130,70P/o - $ 17b,034: $ 210,752 $ 34,728 119.73/n
_. _. ..
2004 Investment Reportlnv Report 2004
City of Palm Desert
Parkview Office Complex •
Vacancy Rate Schedule by Suite
February 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
` City of Palm Desert •
Parkview Office Complex
Vacancy Rate Schedule by Suite
February 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
February 2004
Budgeted Actual Budgeted Actual
February February S Percentage Yearto Year to S Percentage
Revenue 2004 2004 Variance Variance Date Date Variance Variance
course&Ground S 671,295 $ 721,518 S 50,223 107.48% S 2,635,680 $ 2,669,547 $ 33,867 101.28%
Carts $ 39,113 S 45,620 S 6,507 116.64% $ 20L158 S 221830 $ 20,672 110.28%
Golf Shop $ 95,597 S 105,455 $ 9,858 110.31% $ 501,005 $ 516,349 S 15,344 103.06%
Range $ 5,300 S 5,145 $ (155) 97.08% S 26,685 S 26,145 $ (540) 97,98%
Food&Beverage $ 179,276 $ 185,820 $ 6,544 103.65% $ 944,349 $ 961,137 S 16,788 101.78%
Interest Income $ 100 $ - $ (100) 0.00% S 1,700 S - $ (1700) 0,00%
(Total Revenues S 990 681 S 1063 558 S 72,877 107.36% 4,310,577 S 4,395,008 $ 84,431 101.96%
Payroll
Prushop $ 5,695 $ 2,730 S 2,965 47,94% $ 42,893 S 40,771 S 2,122 95,05%
Can S 29,051 S 30,297 S (1,246) 104.29% S 160,760 S 164.366 S (3,606) 102.24%
Course&Ground $ 117,522 S 117,211 $ 311 99.74% S 1,005,929 $ 998,294 $ 7,635 99.24%
Golf Operations $ 31,594 S 25,916 $ 5,678 82.03% S 215,085 $ 184.689 S 30,396 85.87%
General&Administration S 35,810 $ 38,604 $ (2,794) 107.80% $ 291,276 $ 314,943 S (21667) 108.13%
Food&Beverage $ 67,516 $ 73,289 $ (5,773) 108.55% $ 493,704 S 508,520 S (14,816) 103,00%
Total Pa roll S 287,188 S 288,047 $ 859 100.30% S 2.209.647 S 2.211.583 S 1 936 100.09
Other Expenditures
Perimeter Landscaping S - $ - $ - 0.00% $ - $ - $ - 0.00%
Proshop $ 3.150 $ 2,959 $ 191 93.94% $ 36,430 $ 44,965 S (9,535) 12343%
Proshoo-COGS S 47,061 $ 47,893 $ (832) 101.77% $ 223,434 $ 201,840 $ 21,594 90,34%
Can S 12,595 S 12,411 S 192 99.55% S 101.900 S 99,915 S 2,08S 97,95%
Course&Ground-North Course $ 32,015 $ 27.291 S 4,734 85.22% $ 505,645 S 459,291 S 46,354 90.83%
Course&Ground-South Course $ 30,252 S 29,015 $ 1,237 95,91% S 446,960 $ 532,189 S (85.229) 119.07%
Course&Ground-Desert Pallet-N $ 990 $ 256 $ 734 25.86% S 5,635 $ 3,489 $ 2.146 61.92%
Course&Ground-Desert Pallet-S $ 390 S 79 $ 311 20.26% $ 5,635 $ 4,669 $ 966 82.869%
Goll'Operations $ 840 $ 917 $ (77) 109.17% $ 9,895 $ 7,759 $ 2,136 78.41%
General&Administration S 70.592 $ 57,560 $ 13,032 91.54% $ 526,174 $ 474,257 $ 51917 90.13%
Range $ 1.125 S 93 $ 1,032 8.27% S 11,300 $ 8,945 S 2,355 79.16%
Food&Beverage $ 22,237 $ 23,561 $ 0,324) 105,95% $ 177,940 $ 186,330 S (8,390) 104.72%
Food&Beverage COGS S 54,622 S 55,323 S (701) 101.28% S 290,310 S 302,163 $ (11853) 104.08%
Management Fee $ 25,000 $ 25,000 S - 100.00% $ 200,000 $ 200,000 $ - 100,00%
FinanoingfLease $ 5,477 S 5,168 S 309 94.36% S 45,369 $ 44,059 $ 1310 97.11%
Total Other Ex endi[ur s S 306.356 S 287 528 S 18,828 93.45% S 2.586.62.7 S 2 669,771 S 16 856 99.15
Desert Willow Golf Academy
Desert Willow Golf Academy $ 23,950 $ 11,859 S (12,091) 49.52% $ 95,900 S 93,166 S (2,734) 97.15%
COGS-Merchandise $ (7,126) $ (8,431) $ (1,305) 118.31% S (50,676) S (55,849) S (5,173) 110.21%
Other Expenditures $ (9,900) S (3,843) $ 6,057 38.82% $ (44,050) $ (39,499) S 4,551 89,67%
S
Learning Center Income(Loss) S 6,924 $ (415) S (7,339) -5.99% $ 1,174 $ (2,182) $ (3,356) -185.86%
Operating Income(Loss) $ 404,061 $ 497,568 S 83,507 120.67% $ (484,523) $ (388,529) $ 95,995 80.19%
Equipment Reserve Replacement $ 71955 $ 67,054 $ (4,901) 93.19% $ 575,640 $ 548,526 S (27,114) 95.29%
Net[.come HAW S 332 106 S 420 514 S 88,408 2&62% $ 1060163 $ (937,051) S 123 109 88.39%
Snaps of of Golf Rounds Budgeted(mar) Actual am Variance Variance% Budgeted (d) Actual td Variance Variance
Resident 2,425 2,652 227 109% 11,600 12,037 437 1049%
Non Resident 5,597 6,289 692 112% 29,964 30,682 1,718 106%
Other - 35 35 100% - 196 196 100%
Con,uhmentary 300 319 18 106% 1969 2653 684 13M/h
Total 8,322 9,294 972 112% 42,533 45,568 3,035 107%
Folder:Desert Willow 2004:DW2004;Financial Statement Page l
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Desert Willow
® Breakdown of Rounds is
per point of sale system
Desert Willow - Combined Analysis- February 2004
Resident 2,652 $ 119,340 $ 45.00 28.53%
Non-Resident 6,289 $ 650,454 $ 103.43 67.67%
Complimentary 318 $ 1,600 $ 5.03 1 3.42%
Other 35 350 $ 10.00 0.38°/u
Desert Willow Totals 9,294 771,744 83.04 100.00%
DW2004;POS AVG RD Page 9
Desert Willow
• Breakdown of Rounds
per point of sale system
FIRECLIFF COURSE- FEBRUARY 2004
Description No. Of Reveaue Avg. Per Pet to
Rounds Per POS Round Total
Resident Rounds
Resident Fee-Weekday 1,279 $ 57,555 $ 45.00 26.99%
Total Resident 1,279 57,555 45.00 26.99%
Non Resident
Posted 34 $ 5,950 $ 175.00 0.729%.
IROC Des. PRTY 22 $ 1,815 $ 82.50 0.46%
IROC MBR/Guest 58 $ 6,920 $ 119.31 1.22%
Sunrise 192 $ 21,813 $ 113.61 4.05%
Prime 997 $ 107,085 $ 107.41 21.04%
Midday 192 $ 21,812 $ 113.60 4.05%
Sunset 190 $ 12,350 $ 65.00 4.01%
Wholesale 380 $ 40,088 $ 105.49 8.02%
Twilight 238 $ 22,370 $ 93.99 5.02%
Players Club 6 $ 440 $ 73.33 0.13%
Outing 673 $ 74,285 $ 110.38 14.20%
Fee Special Event Variable 291 $ 25,023 $ 85.99 6,14%
Total Non Resident Rounds 3,273 339,951 103.87 69.07%
Other Rounds
Junior Walking 22 $ 220 $ 10.00 0.46%
Total Other 22 220 10.001 0.46%
Complimentary
PGA Member 48 $ 870 $ 18.13 1.01%
VIY_ 45 $ - $ 0.95%
Champions Club 23 $ - $ 0.49%
Employee/ Employee Guest 49 $ 190 $ 1.03%
Total Complimentary 165 1,060 6.42 3.48%
Total Rounds (FireClift) 4,739 $ 398,786 $ 84.15 I 100.00%
DW2004;POS AVG RD Page 10
Desert Willow •
Breakdown of Rounds
per point of sale system
MOUNTAINVIEW COURSE- FEBRUARY 2004
_ Description No. Of Revenue Avg. Per Pct to
Rounds Per POS Round Total
Resident Rounds
Resident Fee-Weekday 1,373 $ 61,785 $ 45.00 30.14%
Total Resident 1,373 61,785 45.00 30.14%
I i
Non Resident
Posted Weekday 7 $ 1,225 $ 175.00 0.15%
IROC Des. PRTY 19 $ 1,568 $ 82.53 0.42%
IROC-MBR Guest 89 $ 10,340 $ 116.18 1.95%
Sunrise 107 $ 12,250 $ 114.49 2.35%
Prime 934 $ 98,422 $ 105.38 20.50%
Midday 175 $ 18,500 1 $ 105.71 3.84%
Sunset 150 $ 9,750 $ 55.00 3.29%
Wholesale 236 $ 24,220 $ 102.63 5.18%
Outings 854 $ 95,887 $ 112.28 18.750/o
Twilight 212 $ 20,140 $ 95.00 4.65%
Player's Club 3 $ 220 $ 73.33 0.07%
Fee Special Event Variable 230 $ 17,981 $ 78.18 1 5.05%
Total Non Resident Rounds 1 3,0161 $ 310,503 j $ 102,95 1 66.21%
Other Rounds
Junior Walking 13 $ 130 $ 10.00 0.29%
Total Other 13 130 10.00 1 0.29%
Complimentary
VIP 13 $ $ 0.29%
PGA Member 22 $ 225 $ 10.23 0.48%
Champions Club 10 $ $ 0.22%
COD / PDHS 49 $ $ - 1.08%
Employee/Employee Guest 59 $ 315 $ 5.34 1.30%
Total Complimentary 153 540 3.53 3.3797
Total Rounds (Mountainview) 4,555 $ 372,958 $ 81.88 100%
DW2004;POS AVG RD Page 11
City of Palm Desert
Desert Willow
Cash Reserve Analysis
for the month of
February 2004
Cash Reserve Analysis One Month
Required Reserve 1$ 500,000.00
l�cash on Hand 1 $ 538,793.27
Variance- Favorable Unfavorable $ 38,793.27
Page 12
Palmsert Recreation Facilities Corposon
Income Statement
Feb-04 Feb-04 N %
Budget Actual Variance Variance
Food & Beverage Revenues $179,276 $185,820 $6,544 103.65%
Total Revenues $179,276 $185,820 $6,544 103.65%
Salaries $67,516 $73,289 ($5,773) 108.55%
Cost of Goods Sold-F&B $54,622 $55,323 ($701) 101.28%
Food & Beverage Expense $22,237 $23,561 ($1,324) 105.95%
Total Expenses $144,375 $152,173 ($7,798) 105.40%
Net Income (Loss) $34,901 $33,647 ($1,254) 96.41%
Note: The above revenues and expenditures are also included in the Desert Willow analysis.
DW2004;PDRFC Budget Page 1