Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
2005-01-26 IFC Regular Meeting Agenda Packet
COMMITTEE MEETING WORKSHEET Meeting Description Investment Committee Meeting Date 1/26/05 Time: 10:30 a.m. Location North Wing Conference Room Mailed Agenda 1/19/05 Posted Agenda 1/19/05 Time Convene Adjournment 0: V\C�Mm Staff Members Attending Yes No Others Attending kYesNo 1 Paul Gibson, Chairperson ✓ 11 Dennis Coleman 2 Council Member- Crites 12 Justin McCarthy 3 Council Member- Ferguson 13 Rodney Young 4 ft C ty Attorney V1 14 Recording Secretary 5 Carlos Ortega, City Mgr. V 4 6 Thomas Jeffrey Public Members Attending Guests Attending 7 Russ Campbell 15 8 Bill Veazie 16 t n {a 9 Everett Wood 17 CQ 10 Thomas Wormley 18 19 20 Follow-UpsTrasks Assigned Person Responsible Due Date 1 2 3 4 5 6 7 8 Spoke Mtn.(1) 1 Mtn(2) Y1LLm k ctow Qrj au lllbawI Gt a » in am" GAAA a e 1_ m -%a -® POSTED AGENDA REGULAR MEETING OF THE PALM DESERT INVESTMENT & FINANCE COMMITTEE Wednesday, January 26, 2005 — 10:30 a.m. North Wing Conference Room, City Hall I. CALL TO ORDER II. ROLL CALL III. ORAL COMMUNICATIONS A. Any person who wishes to discuss an item not on the agenda may do so after he/she has given his/her name and street address for the record. Speakers must limit their remarks to three (3) minutes unless the Committee authorizes additional time. B. Any person who wishes to comment on an agenda item may do so. At the Committee's discretion, however, such comments may be deferred until the item is discussed on the agenda. Speakers must limit their remarks to three (3) minutes unless the Committee authorizes additional time. IV. APPROVAL OF MINUTES A. MINUTES of the Meeting of November 24, 2004 Rec: By Minute Motion, approve the Minutes of the regular meeting of the Palm Desert Investment and Finance Committee of November 24, 2004, as presented. V. NEW BUSINESS A. AUDIT REPORTS FOR CITY OF PALM DESERT AND PALM DESERT REDEVELOPMENT AGENCY Rec: Presentation by Lance, Soll and Lunghard W:\Agenda\012605.doc INVESTMENT & FINANCE COMMITTEE AGENDA JANUARY 26, 2005 B. CITY AND REDEVELOPMENT AGENCY INVESTMENT REPORTS FOR NOVEMBER AND DECEMBER 2004 Rec: By Minute Motion, recommend that the City Council approve the City and Redevelopment Agency Investment Reports for the periods ended November 30, 2004 and December 31, 2004. C. CORPORATE SECURITIES ISSUER LISTS FOR 2005 (To be distributed at the meeting) Rec: By Minute Motion, approve the corporate issuer lists for medium- term notes and for discount commercial paper for 2005. D. PALM DESERT 2005 POLICIES AND PROCEDURES REVISIONS (To be distributed at the meeting) Rec: By Minute Motion, recommend that the City Council approve the revisions to the Palm Desert Policies and Procedure Manual for 2005. E. ZIONS BANKS 2005 BROKER CERTIFICATION Rec: By Minute Motion, authorize Zions Bank to do business with the City of Palm Desert in 2005, based upon Zions' compliance with the City's broker certification requirements. F. LOCAL AGENCY INVESTMENT FUND (L.A.I.F.) ACCOUNT STATEMENTS FOR NOVEMBER AND DECEMBER 2004 Rec: Review and file. G. CALIFORNIA ASSET MANAGEMENT PROGRAM (C.A.M.P.) ACCOUNT STATEMENTS FOR NOVEMBER AND DECEMBER 2004 Rec: Review and file. H. CITY AND REDEVELOPMENT AGENCY FINANCIAL REPORTS FOR NOVEMBER AND DECEMBER 2004 Rec: Review and file. I. PARKVIEW PROFESSIONAL OFFICE BUILDINGS FINANCIAL REPORTS FOR NOVEMBER AND DECEMBER 2004 (To be distributed at the meeting) Rec: Review and file. 2 W:IAgenda1012605.doc INVESTMENT & FINANCE COMMITTEE AGENDA JANUARY 26, 2005 J. PALM DESERT GOLF COURSE FACILITIES CORPORATION FINANCIAL REPORTS FOR NOVEMBER AND DECEMBER 2004 (To be distributed at the meeting) Rec: Review and file. VI. CONTINUED BUSINESS None. VII. OLD BUSINESS A. PUBLIC AND PRIVATE PARTNERSHIP BACKGROUND CHECKS Rec: Review and file. B. PALM DESERT FINANCING AUTHORITY BOND ISSUANCE Rec: Review and file. Vill. ADJOURNMENT Rec: By Minute Motion, adjourn the meeting. Next Meeting: Wednesday, February 23, 2005 at 10:30 a.m. in the North Wing Conference Room, City Hall. I hereby certify, under penalty of perjury, under the laws of the State of California, that the foregoing agenda for the Palm Desert Investment and Finance Committee was posted on the City Hall bulletin board not less than seventy-two (72) hours prior to the meeting. Dated this 19th day of January 2005. J Niamh Ortega, Recor l Secretary 3 W l4genda1012605.doc CITY OF PALM DESERT INVESTMENT & FINANCE COMMITTEE Minutes November 24, 2004, 11:30 a.m. Desert Willow Golf Resort Conference Room I. CALL TO ORDER A regular meeting was called to order by Mr. Jeffrey on Wednesday, November 24, 2004, at 11:31 a.m. II. ROLL CALL Present: Absent: Bob Spiegel, Mayor Paul Gibson, City Treasurer Buford Crites, Mayor Pro-Tempore Carlos Ortega, City Manager Thomas Jeffrey, Deputy City Treasurer David Erwin, City Attorney Russ Campbell, Community Member Bill Veazie, Community Member Everett Wood, Community Member Thomas Wormley, Community Member Also Present: Dennis Coleman, RDA/Housing Finance Manager Niamh Ortega, Recording Secretary Rodney Young, General Manager, Desert Willow Paul Cavanaugh, Guest Ill. ORAL COMMUNICATIONS Mr. Jeffrey indicated that he would act as Chair in the absence of Mr. Gibson. Mr. Jeffrey congratulated Mr. Veazie on his recent birthday. IV. COMMITTEE MEMBER REPORTS None. WAMinutes\Minutes 112404.doc INVESTMENT & FINANCE COMMITTEE MINUTES Page 2 of 4 November 24, 2004 V. CONSENT CALENDAR A. Approval of Minutes MOTION was made by Mayor Pro-Tempore Crites and seconded by Mr. Campbell that the Minutes of the September 22, 2004 meeting be approved as submitted. The motion was adopted, with Chairman Jeffrey abstaining. VI. CONSENT ITEMS HELD OVER None. VII. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for October 2004 For the month ended October 31, 2004, Mr. Jeffrey reported that the book value of the City Portfolio was approximately $130.6 million. Interest earnings were approximately $200,000. Portfolio yield-to-maturity was approximately 1.96%. For the month ended October 31, 2004, Mr. Jeffrey reported that the book value of the RDA Portfolio was approximately $149.1 million. Interest earnings were approximately $216,000. Portfolio yield-to-maturity was approximately 1.73%. Mayor Spiegel asked about the direction of interest rates. Chairman Jeffrey responded that it was currently thought that interest rates might be at 3.00% by the end of 2005. Sustainable economic growth requires that short-term interest rates be in the 3.00 — 5.00% range. Mr. Jeffrey noted that the City could begin laddering its portfolio again, starting in January 2005. MOTION made by Mr. Veazie and seconded by Mr. Campbell that the City and RDA investment reports for October 2004 be submitted to the City Council with a recommendation for approval. The motion was adopted. B. State of California Local Agency Investment Fund Balance for the month of October 2004 The report was received and placed on file. INVESTMENT & FINANCE COMMITTEE MINUTES Page 3 of 4 November 24, 2004 C. California Asset Management Program (CAMP) October 2004 Statements The report was received and placed on file. D. City and Redevelopment Agency Monthly Financial Reports for City Council for October 2004 Mr. Jeffrey presented the City's Financial Report October 2004. Mr. Jeffrey observed that the budget was on target, with year-to-date actual revenues nearly matching budgeted revenues, and with actual expenditures well below target. Approximately $102,000 of incremental revenue was added to the "Licenses, Permits, Charges" revenue line item when City Finance staff corrected an error that a business owner had made in calculating his business license fees. Mr. Coleman presented the Redevelopment Agency's Financial Report for October 2004, for the first time. This report will be presented to the Investment and Finance Committee on an ongoing, monthly basis. Mr. Coleman explained that the Redevelopment Agency's cash flow was different from the City's, with property tax increment being received in January and May of each year. Mayor Spiegel asked if money would be available to assist Cal State University San Bernardino in the construction of a third building on campus. Mr. Ortega replied that the Council would need to transfer money from other projects in order to make the funds available. E. Parkview Professional Office Buildings - Financial Report for October 2004 Mr. Jeffrey reported that both buildings were 100% occupied, with no foreseeable vacancies for the next 18 months. F. Palm Desert Golf Course Facilities Corporation Financial Information for October 2004 Rodney Young, General Manager, Desert Willow, presented the financial report for the golf course. October's revenue was down approximately $26,000, with almost $15,000 due to two days of rain. November should perform at $5,000 over budget. Payroll is $25,000 over budget, and utilities are also over budget. For the first four months, revenues were $199,000 higher than prior year. Net operating income was $270,000 higher than prior year. Mr. Young stated that he was happy with the overall figures. INVESTMENT & FINANCE COMMITTEE MINUTES Page 4 of 4 November 24, 2004 G. 2004 Recertification of Brokers Mr. Jeffrey reported that Wells Fargo Bank, Citigroup, Morgan Stanley and Merrill Lynch had submitted the necessary documents for recertification as investment brokers in 2004. MOTION made by Mr. Veazie and seconded by Mr. Campbell that Wells Fargo Bank, Citigroup, Morgan Stanley and Merrill Lynch be reauthorized to do business with the City in 2004 as investment brokers, based upon their compliance with the City's recertification requirements. The motion was adopted. H. 3Q2004 Deferred Compensation Statements The ICMA and Nationwide Deferred Compensation Statements for the period ending September 30, 2004 were received and placed on file. Vill. CONTINUED BUSINESS None. IX. OLD BUSINESS None. X. NEXT MEETING The next meeting will take place on Wednesday, January 27, 2005, at 10:30 a.m. in the North Wing Conference Room. XI. ADJOURNMENT There being no further business, Mr. Jeffrey adjourned the meeting at 12:18 p.m. Respectfully submitted, Niamh Ortega, Recording Secretary CITY OF PALM DESERT FINANCE DEPARTMENT INTEROFFICE MEMORANDUM TO: INVESTMENT & FINANCE COMMITTEE ��tMt���t�S�_ FROM: NIAMH ORTEGA, RECORDING SECRETARY\\M- DATE: JANUARY 20, 2005 SUBJECT: REPORT AND LETTER RECEIVED FROM LANCE, SOLL & LUNGHARD RELATIVE TO FINANCIAL STATEMENT AUDIT Enclosed for your information is a report on compliance and internal control over financial reporting addressed to the Mayor and City Council, and a letter addressed to the Investment and Finance Committee. Please include these items in your agenda packet under Section V. A., Audit Reports for the City of Palm Desert and Palm Desert Redevelopment Agency. Please feel free to contact me at (760) 346-0611, Ext. 382 if you have any questions. Thank you. nmo Distribution: Buford Crites Jim Ferguson Carlos Ortega Paul Gibson Thomas Jeffrey Dennis Coleman Steve Aryan David Erwin Russ Campbell Bill Veazie Everett Wood Thomas Wormley Rodney Young G:TinanceWiamh Ortega\Wpdocs\MemosUnv&fin committee 012005.wpd MLIame Brandon W.Burrows p Donald L.Parker l & Michael K.Chu ghard David E.Hale A P/eM1�Af C9rw.Iaw, Donald G.Slater LLP Richard K.Kikuchi Certified Public Accountants Retired Robert C.Lanca 19141999 Richard C.Soil Fred J.Lunghard,Jr. 19z41999 November 16, 2004 Investment and Finance Committee City of Palm Desert Palm Desert, CA 92260 We have audited the financial statements of the City of Palm Desert for the year ended June 30, 2004, and have issued our report thereon dated September 10, 2004. Professional standards require that we provide you with the following information related to our audit. Our Responsibility under Auditing Standards Generally Accepted in the United States of America and Government Auditing Standards Our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance about whether the financial statements are free of material misstatement and are fairly presented in accordance with accounting standards generally accepted in the United States of America. Because an audit is designed to provide reasonable, but not absolute assurance and because we did not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us. As part of our audit, we considered the internal control of the City of Palm Desert. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the City of Palm Desert's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our tests was not to provide an opinion on compliance with such provisions. Significant Accounting Policies Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the City of Palm Desert are described in the notes to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended June 30, 2004. We noted no transactions entered into by the City of Palm Desert during the year that were both significant and unusual, and of which, under professional standards,we are required to inform you of, or transactions for which there is a lack of authoritative guidance or consensus. 75 Years 1929 2004 of Excellence 203 N. Brea Blvd.• Suite 203• Brea,CA 92821-4056• (714)672-0022• Fax(714)672-0331 • www.lslcpas.com • Lance Soll s LIS Lunghard LLP CERVOED NSC C ACCOUNTANTS Investment and Finance Committee City of Palm Desert Page 2 Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. Where applicable, the City utilized accounting estimates for depreciation on City assets, amortization of bond related issuance costs, premiums/discounts and gains/losses on bond defeasance and for reporting incurred but not reported amounts relating to the liability for claims and judgments. The methodology used during this audit is consistent with that of prior years. We evaluated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Issues Discussed Prior to Retention of Independent Auditors We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing our audit. This information is intended solely for the use of the Governing Board, the Investment and Finance Committee and management of the City of Palm Desert and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, Lance Brandon W.eurrowa v� Donald L.Parker $oil & Michael K.Chu Lunghard David F."ale A Amyr/A L� Donald G. ater LLP Richard K. I K kuchl Certified Public Accountants Retired Robert C.Lance ierrivsa Richard C.Soil Fred J.Lunghard,Jr. rnatess REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council The City of Palm Desert,California We have audited the financial statements of the City of Palm Desert, California, as of and for the year ended June 30, 2004, and have issued our report thereon dated September 10, 2004. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the City of Palm Desert's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Palm Desert's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control structure and its operations that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the City's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. We noted the following matters which we believe to be a reportable conditions: Housing Authority Review During our review of 100 randomly selected tenant files for the various apartment complexes of the Housing Authority, we noted two instances of noncompliance. In one instance, at the One Quail Place Apartments, a tenant was being undercharged. The total amount of the undercharge was $1,104. In the other instance, at the California Villas Apartments, a tenant was being overcharged. The total amount of the overcharge was $912. Per subsequent discussions with the Apartment's management personnel, these two tenants have been informed of the errors and, in the latter instance, a credit was issued on their future bill. 75 Years 1929 2004 of Excellence 203 N. Brea Blvd.• Suite 203• Brea,CA 92821-4056• (714)672-0022• Fax(714)672-0331 • www.lsicpas.com LLSLance1 sghard LLP CERTIFIED PUBLIC ACCOUNTANTS To the Honorable Mayor and Members of the City Council The City of Palm Desert, California City's Management Response In order to minimize future errors, the rent for all new move-ins and re-certifications will be set based on the established rent schedule for the affordable level and family size. Two signatures are required, one of which will be a manager. Also the management company is implementing a more frequent system for internal auditing of files, in an effort to avoid finding in the future. City staff is also recommending additional testing on rent calculation by our auditors. Bid Process Review During our audit, we reviewed compliance with bid procedures for various City departments. As part of our testwork, we noted that no documentation was being kept to allow us to verify that bulletin board postings were being done in instances where the notice inviting bids were being done over the telephone. City's Management Response We agree with the auditor's finding regarding bulletin board posting and will implement the following procedure. Departments that bid over the telephone will be required to have their bid specs stamped by the City Clerk indicating that it was posted in the bulletin board. For a purchase order to be processed, the stamped bid specs must be verified by the Finance Department. Bid Process Review Our review also included testing several public works contracts to verify that the Public Works Department is in compliance with the Public Works Contracts and Bidding Requirements guidelines. During our testwork, we noted that three items were not sent out for bid, each of which were deemed to be sole source suppliers by the Public Works personnel. The details of these three bids are as follows: Vendor P.O. Amount Eagle Arial Imaging $ 2,165.00 One Stop Auto Supplies $ 4,000.00 A American Electric $ 2,225.46 To strengthen controls in this area, we recommend that the City departments follow the proper bid procedures for Public Works contracts as outlined in both the City's purchasing policy and the Public Works Contracts and Bidding Requirements guidelines. With respect to "sole source" purchases, we suggest that the Finance Department be informed of such instances prior to acceptance. City's Management Response We agree with the auditors regarding "Sole Source" finding. The vendors mentioned above were considered sole source because they consistently gave us the best prices and provided certain services that other vendors were not providing. By strict definition, these vendors were not a sole source. The Public Works department has since received authorization from Council to award a yearlong contract to the vendors who provide the best prices or services based on a list of frequently purchased items. It has streamlined the purchasing process to award a contract on a yearly basis rather than to go out to bid for every job when purchasing relatively inexpensive items or services that require bids. MLLuaj,ce So Isghard LLP cEpnFi[o vueiC aLC Wxiaxrs To the Honorable Mayor and Members of the City Council The City of Palm Desert, California A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable conditions noted above are not material weaknesses. This 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 specified parties. 04, q' eVZ44 "o6 September 10, 2004 PALM DESERT REDEVELOPMENT AGENCY PALM DESERT, CALIFORNIA FINANCIAL STATEMENTS JUNE 30, 2004 • LLSLIance Brandon W.Burrows Donald L.Parker & Michael K.Chu ghard David E.Hale ♦Pwft" u rtlPYAU Donald G.Slater LLP Richard K.Kikuchi Certified Public Accountants Retired Robert Lance 19P-I 1999 Richard C.Soil Fred J.Lunghard,Jr. 199a1999 INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council Palm Desert Redevelopment Agency We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Palm Desert Redevelopment Agency, a component unit of the City of Palm Desert, California, as of and for the year ended June 30, 2004, which collectively comprise the Agency's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Palm Desert Redevelopment Agency's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund and the aggregate remaining fund information of the Palm Desert Redevelopment Agency, as of June 30, 2004, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, issued by the Comptroller General of the United States, we have also issued our report dated September 10, 2004 on our consideration of the Palm Desert Redevelopment Agency's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. The accompanying management's discussion and analysis on pages 5 through 10 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. %5 Years 1929� �72004 of E.CCeIle))Ce 203 N. Brea Blvd.• Suite 203 • Brea,CA 92 82 1-4 05 6• (714)672-0022 • Fax (714)672-0331 • www.lslcpas.com PALM DESERT REDEVELOPMENT AGENCY JUNE 30, 2004 TABLE OF CONTENTS Page Number SUPPLEMENTARY INFORMATION (Continued) Schedule 7 - Combining Balance Sheet - Other Governmental Funds - Capital Projects 52 Schedule 8 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Other Governmental Funds - Capital Projects 53 Schedule 9 - Computation of Low and Moderate Housing Excess Surplus Funds 54 PALM DESERT REDEVELOPMENT AGENCY JUNE 30, 2004 TABLE OF CONTENTS Page Number INDEPENDENT AUDITORS' REPORT Financial Audit 1 Compliance Audit 3 MANAGEMENT DISCUSSION AND ANALYSIS 5 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements: Exhibit A - Statement of Net Assets 12 Exhibit B - Statement of Activities 13 Fund Financial Statements: Exhibit C - Balance Sheet-Governmental Funds 14 Exhibit D - Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets 16 Exhibit E - Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Fund Types 18 Exhibit F - Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 20 Notes to Basic Financial Statements 21 SUPPLEMENTARY INFORMATION Schedule 1 - Combining Balance Sheet- Other Governmental Funds 43 Schedule 2 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Other Governmental Funds 44 Schedule 3 - Combining Balance Sheet- Housing Authority Special Revenue Fund 46 Schedule 4 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Housing Authority Special Revenue Fund 48 Schedule 5 - Combining Balance Sheet- Other Governmental Funds - 50 Debt Service Schedule 6 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Other Governmental Funds - Debt Service 51 Lance S011 6 Lunghard LLP CERTIFlED NaUC ACCOUNTANTS To the Honorable Chair and Members of the Governing Board Palm Desert Redevelopment Agency Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Agency's basic financial statements. The combining and individual nonmajor fund financial statements and Computation of Low and Moderate Housing Excess/Surplus Funds are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. September 10, 2004 LLSLIance Brandon W.Burrows & Michael KDonald L.PChuer ghard David E.Hate tea. Gauss" Donald G. LLP Richard K. K likuchi Certified Public Accountants Retired Robert C.Lance 191.1 W Richard C.Soil Fred J.Lunghad,Jr. ma-im REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council Palm Desert Redevelopment Agency We have audited the financial statements of Palm Desert Redevelopment Agency as of and for the year ended June 30, 2004, and have issued our report thereon dated September 10, 2004. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the financial statements of the Palm Desert Redevelopment Agency are free of material misstatements, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Such provisions included those provisions of laws and regulations identified in the Guidelines for Compliance Audits of California Redevelopment Agencies, issued by the State Controller and as interpreted in the Suggested Auditing Procedures for Accomplishing Compliance Audits of California Redevelopment Agencies, issued by the Governmental Accounting and Auditing Committee of the California Society of Certified Public Accountants. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Palm Desert Redevelopment Agency's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. %5 Years 192��+Irsi 9 4Z- Of Eyce flun('e 203 N. Brea Blvd.• Suite 203 • Brea, CA 92821-4056• (714)672-0022 • Fax (714)672-0331 www.lslcpas.com LLSELP hard GERTIFIEOVIIRUC Ap{)ppNTANTS To the Honorable Chair and Members of the Governing Board Palm Desert Redevelopment Agency This report is intended for the information of the audit committee, management, and the State Controller. However, this report is a matter of public record and its distribution is not limited. '74 "t'4 9'-44a� September 10, 2004 CITY OF PALM DESERT MANAGEMENT'S DISCUSSION AND ANALYSIS Our discussion and analysis of the Palm Desert Redevelopment Agency's (Agency)financial performance for the fiscal year ended June 30, 2004 provides a comparison of current year to prior year ending results based on the government-wide statements, an analysis on the Agency's overall financial position and results of operations to assist users in evaluating the Agency's financial position, and a discussion of significant changes that occurred in funds. In addition, it describes the activities during the year for capital assets and long-term debt. We end our discussion and analysis with a description of currently known facts, decisions, and conditions that are expected to have a significant effect on the financial position or results of operations. Please read it in conjunction with the Agency's financial statements. FINANCIAL HIGHLIGHTS • The Agency's governmental activities net assets deficit decreased $12.84 million, or 18.75 percent. • During the year, the Agency had revenues that were $13.40 million more than the $52.13 million in expenses recorded by the Agency in its governmental activities. • The Agency's governmental activities program revenues and general revenues increased $8.95 million, or 15.82 percent from the prior year, while program expenses decreased $7.97 million, or 13.26 percent. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Assets and Statement of Activities (on pages 12 and 13) provide information about the activities of the Agency as a whole and present a long-term view of the Agency's finances. Fund financial statements start on page 14. For governmental activities, these fund statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the Agency's operation in more detail than the government-wide statements by providing information about the Agency's most significant funds as well as the other funds. REPORTING THE AGENCY AS A WHOLE The Statement of Net Assets and the Statement of Activities: Our analysis of the Agency as a whole begins on page 12. One of the most important questions asked about the Agency's finances is, "Is the Agency as a whole better off or worse off as a result of the year's activities?" The Statement of Net Assets and the Statement of Activities report information about the Agency as a whole and about its activities in a way to answer this question. These statements include all assets and liabilities of the Agency using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies, All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the Agency's net assets and changes in them. Net assets are the difference between assets and liabilities, which is one way to measure the Agency's financial health, or financial position. Over time, increases or decreases in the Agency's net assets are an indication of whether its financial health is improving or deteriorating. In the Statement of Net Assets and the Statement of Activities, we separate the Agency into general government, apartment complexes, public works, payments to other agencies and interest on long-term debt. 5 REPORTING THE AGENCY'S MOST SIGNIFICANT FUNDS Fund Financial Statements: The fund financial statements provide detailed information about the most significant funds and other funds - not the Agency as a whole. Some funds are required to be established by State law and by bond covenants. However, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other resources. The Agency only has governmental type funds. Governmental Funds - Most of the Agency's basic services are reported in governmental funds, which focus on how money Flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the Agency's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the Agency's programs. The differences of results in the Governmental Fund financial statements to those in the Government-Wide financial statements are explained in a reconciliation following each Governmental Fund financial statement. THE AGENCY AS A WHOLE The Agency's net assets deficit decreased $12.84 million from $(68.46) million to $(55.62) million. Our analysis below focuses on the net deficit (Table 1) and changes in net deficit (Table 2) of the Agency's governmental activities. TABLE 1 NET ASSETS (IN MILLIONS) As of June 30, 2004 and 2003 Government Activities 2004 2003 Current and restricted assets $ 166.65 $ 142.05 Capital assets 98,54 95.23 TOTAL ASSETS 265.19 237,28 Long-term liabilities outstanding 256.98 236.41 Other liabilities 63.85 69.33 TOTAL LIABILITIES 320.83 305.74 Net assets (deficit): Invested in capital assets, net of related debt 27.16 21.35 Restricted 36.81 33.36 Unrestricted (119.59) (123.17) TOTAL NET ASSETS (DEFICIT) $ (55.62) $ (68.46) 6 Compared to the prior year, net assets deficit of the Agency's governmental activities decreased by $12.84 million. The Agency's Net Assets is made-up of three components: Investment in Capital Assets, Net of Related Debt, Restricted Net Assets and Unrestricted Net Deficit. Unrestricted deficit, the part of net deficit that can be used to finance day-to-day operations, decreased from $(123.17) million to $(119.59) million, or 2.90 percent. The Agency currently has an unrestricted net deficit because of the debt it has issued. Proceeds from the debt were used for capital improvements on behalf of the City or contributed to developers and is not offset by investments in capital assets. The major change in the Agency's governmental activities total assets was from cash and investments, which increased as a result of an increase in tax increment, and issuing of new debt. Total liabilities increased by $15.09 million, the majority of the increase was due to the issuing of new debt. TABLE 2 CHANGES IN NET ASSETS (IN MILLIONS) As of June 30, 2004 and 2003 Government Activities 2004 2003 REVENUES: Program Revenues: Charges for services $ 4.77 $ 4.52 General Revenues: Tax increment 55.99 50.25 Other income 2.75 (0.13) Investment earnings 2.02 1.94 TOTAL REVENUES 65.53 56.58 EXPENSES: General government 6.09 4.77 Apartment complexes 6.13 3.77 Public works 0.78 16.68 Payments to other agencies 24.05 22.14 Interest on long-term debt 15.08 12.74 TOTAL EXPENSES 52.13 60.10 INCREASE (DECREASE) IN NET ASSETS 13.40 (3.52) BEGINNING NET ASSETS (68.46) (64.94) RESTATEMENT OF NET ASSETS (0.56) ENDING NET ASSETS $ (55.62) $ (68.46) 7 Governmental Activities Total revenues increased from $56.58 million to $65.53 million, a 15.81 percent increase. The major factor that contributed to the increase was the following: Increase in property values provided additional tax increment. The following schedule represents the net cost of providing services: Government Activities Net (Expense) Revenue (In Millions) 2004 2003 General Government $ (6.08) $ (4.77) Apartment Complexes (1.36) 0.75 Public Works (0.79) (16.68) Payment to Other Agencies (24.05) (22.14) Interest on Long-Term Debt (15.08) (12.74) TOTAL $ (47.36) $ (55.58) THE AGENCY'S FUNDS On pages 14 and 15, the governmental funds balance sheet is shown. The combined fund balance of $100.71 million increased from $72.07 million, or 39.74 percent. The Agency has reserved $45.52 million for encumbrances, continuing appropriations, loans and notes, debt service, etc. More detailed information about the combined fund balance reserves is presented in Note 11 to the financial statements. Major funds balance changes are noted below: • For the Low and Moderate Income Housing fund, fund balance increased due to the increase in tax increment received by the Redevelopment Agency. • For the Redevelopment Agency Financing Authority Debt Service fund, fund balance increased due to the issuing of new debt. • The Redevelopment Agency Project Area 1, 2 and 4 Debt Service funds, fund balance increased as a result of an increase in tax increment. • The Redevelopment Agency Capital Project Area 1 fund, fund balance increase was due to the issuing of new debt. • The Redevelopment Agency Capital Project Area 4 fund, fund balance increased due to the reimbursement from the City for the sale of land. In addition to the major funds, fund balances of other governmental funds had significant changes. The Housing Authority Special Revenue fund had an increase of $0.12 million from the prior year. This was due to the addition of another apartment complex. Project Area 3 debt service fund balance decreased due to the payment of interest and principal on current debt. Project Area 3 capital project fund balance increased due to the issuing of new debt for projects. Project Area 2 moved from being a major fund in the prior year to being a non-major fund in current year. More detailed information on the fund financial statements balances is presented in the notes to the financial statements. 8 Budgetary Highlights During the year, with the recommendation from the Agency's staff, the Agency's Board revised the Agency budget several times. Adjustments were made on a monthly basis as the Agency's staff requested additional appropriations to cover the cost of projects that either had change orders for additional work, or the estimated cost at the beginning of the project was under estimated. At mid-year, adjustments were made as department heads requested increases or decreases to their budgets to maintain their current level of services. At year-end, budgets were adjusted for unanticipated expenditures. The Agency's Board approves all amendments that either increase or decrease appropriations. Formal budgetary integration is employed as a management control device during the year for the special revenue and capital project funds. Budgetary data for the special revenue and capital projects funds are not presented herein, as the budgets for these funds are long-term in nature. More detailed information about the Agency's budget is presented in Note 1 (g)to the financial statements. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At the end of 2004, the Agency had $98.54 million invested in a broad range of capital assets, including land, buildings and improvements, apartment complexes, vehicles and equipment (See Table 3). This amount represents a net increase (including additions and deductions) of $3.31 million, or 3.48 percent over last year. TABLE 3 CAPITAL ASSETS AT YEAR-END (NET OF DEPRECIATION, IN MILLIONS) For the Years Ended June 30, 2004 and 2003 Governmental Activities 2004 2003 Land $ 46.81 $ 47.24 Construction in progress 7,81 5.12 Buildings and improvements 43.87 42.80 Equipment 0.05 0.07 TOTAL $ 98.54 $ 95.23 This year's major additions included (in millions): Property acquisition of Laguna Palms, a low to moderate income apartment complex, and $ 2.85 Construction in progress of Entrada Del Paseo 1.50 $ 4.35 The Agency's fiscal year 2005 capital budget calls for it to spend $21.06 million plus continuing projects of $44.52 million. The majority being the reimbursement to other governments for capital projects, land development, construction of a regional park, construction of low-income family housing, construction of storm drain, and the undergrounding of utilities. More detailed information about the Agency's capital assets is presented in Note 1(d) and Note 6 to the financial statements. 9 Debt At year-end, the Agency's governmental activities had $256.98 million in bonds and notes versus $236 41 million last year, an increase of$20.57 million, or 8.70 percent as shown in Table 4. TABLE 4 OUTSTANDING DEBT AT YEAR END (IN MILLIONS) For the Years Ended June 30, 2004 and 2003 Governmental Activities 2004 2003 Notes payable $ 0.98 $ 1.95 Revenue bonds and notes (backed by specific tax and fee revenues) 256.00 234.46 TOTALS $ 256.98 $ 236.41 Three new bonds were issued during the fiscal year ended June 30, 2004. The Agency was able to meet its current year debt obligation in a timely manner. Debts issued in the prior year have been used to finance various capital projects. An example of this would be the purchase of land, and construction of the City's golf course. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS In preparing the budget for 2005, management looked at the following economic factors: • In prior years, the City had unallocated reserves in its capital projects and special revenue funds that could be used to start and complete Agency's projects in an effort to maximize the Agency's cash flow. In the five-year capital improvement program, all restricted capital funds for the City have been allocated to various projects. Any additional projects would require that the Agency fund their own projects. • Issue of new bonds for capital projects. The City of Palm Desert continues to grow with new hotels, commercial and residential development, construction of a four-year university, street improvements, park construction, and various other improvement projects. The 2005 capital improvement project budget is a reflection of the Agency's commitment to the residents of Palm Desert. A copy of the City's 2004-2005 financial plan can be obtained by contacting the City Finance Department (See below). CONTACTING THE AGENCY'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the Agency's finances and to show the Agency's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the City's Finance Department at the City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert, California 92260-2578, or(760) 346-0611. 10 THIS PAGE INTENTIONALLY LEFT BLANK 11 PALM DESERT REDEVELOPMENT AGENCY Exhibit A STATEMENT OF NET ASSETS JUNE 30,2004 Governmental Activities Assets: Cash and investments $ 96,411,803 Receivables 11,727,806 Property held for resale 865,335 Prepaid items and deposits 19,759 Deferred charges 5,251,888 Restricted assets: Cash with fiscal agent 52,376,892 Capital assets (net of accumulated depreciation) 98,544,775 Total Assets $ 265,198,258 Liabilities: Accounts payable $ 507,932 Accrued liabilities 3,267,138 Deposits payable 309,804 Deferred revenue 85,623 Advances from City of Palm Desert 32,785,480 Amounts due under pass-through agreements 26,889,509 Noncurrent liabilities: Due within one year 5,637,707 Due in more than one year 251,343,949 Total Liabilities $ 320,827,142 Net Assets: Invested in capital assets, net of related debt $ 27,155,223 Restricted for: Special projects 36,805,082 Unrestricted (deficit) (119,589,189) Total Net Assets $ (55,628,884) See Notes to Financial Statements 12 PALM DESERT REDEVELOPMENT AGENCY Exhibit B STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2004 Net (Expense) Revenue and Changes in Program Revenues Net Assets Operating Capital Charges for Grants and Grants and Governmental Functions/Programs Expenses Services Contributions Contributions Activities Primary Government: Governmental Activities: General administration $ 6,083,048 $ - $ $ $ (6,083,048) Apartment complexes 6,128,389 4,767,483 (1,360,906) Public works 784,389 - (784,389) Payments to other agencies 24,051,292 (24,051,292) Interest on long-term debt 15,083,216 - (15,083,216) Total Primary Government $ 52,130,334 $ 4,767,483 $ $ (47,362,851) General Revenues: Taxes: .Tax increment 55,994,780 Rental income 5,509 Gain (loss)on sale of land 924,522 Other revenues 1,812,138 Investment earnings 2,023,724 Total General Revenues 60,760,673 Change in Net Assets 13,397,822 Net Assets- Beginning of Year, as originally reported (68,464,427) Restatement (562,279) Net Assets- Beginning of Year, as restated (69,026,706) Net Assets -End of Year $ (55,628,884) See Notes to Financial Statements 13 PALM DESERT REDEVELOPMENT AGENCY BALANCE SHEET-GOVERNMENTAL FUNDS JUNE 30,2004 Special Revenue Funds Debt Service Funds Low and Moderate Income Project Project Project Housing Area 1 Area 2 Area 4 Assets: Cash and investments $ 15,449,396 $ 44,997,501 $ 9,771,806 $ 8,215,160 Cash with fiscal agent-restricted 4,622,627 - - - Receivables 7,966,847 319,359 210,304 92,778 Due from other funds 94,524 - Property held for resale 865,335 Prepaid items and deposits 2,646 Due from other apartment - - - - Total Assets $ 29,001,375 $ 45,316,860 $ 9,982,110 $ 8,307,938 Liabilities and Fund Balances: Liabilities: Accounts payable $ 66,338 $ - $ - $ - Accrued liabilities 13,951 Deposits payable - Deferred revenue 51,885 Due to other apartment - Due to other funds - - - Advances from the City of Palm Desert - 10,011,857 20,991,060 - Amounts due- pass-through agreement - 17,981,828 1,528,715 6,179,497 Total Liabilities 132,174 27,993,685 22,519,775 6,179,497 Fund Balances (Deficit): Reserved 15,669,340 - Unreserved 13,199,861 17,323,175 (12,537,665) 2,128,441 Total Fund Balances (Deficit) 28,869,201 17,323,175 (12,537,665) 2,128,441 Total Liabilities and Fund Balances $ 29,001,375 $ 45,316,660 $ 9,982,110 $ 8,307,938 See Notes to Financial Statements 14 Exhibit C Debt Service Capital Funds Projects Funds Other Total Financing Project Project Governmental Governmental Authority Area 1 Area 4 Funds Funds $ - $ 2,568,677 $ 24,909 $ 15,384,354 $ 96,411,803 6,647,085 13,922,099 18,615,531 8,569,550 52,376,892 19,020 2,143,407 882,162 93,929 11,727,806 - - - - 94,524 - 865,335 17,113 - 19,759 - - - 552,572 552,572 $ 6,666,105 $ 18,651,296 $ 19,522,602 $ 24,600,405 $ 162,048,691 $ - $ 72,299 $ 39,305 $ 329,990 $ 507,932 6,591 11,722 - 79,550 111,814 - - - 309,804 309,804 - 33,738 85,623 - 552,572 552,572 - 94,524 94,524 - 1,782,563 32,785,480 1,199,469 26,889,509 6,591 84,021 39,305 4,382,210 61,337,258 600,424 12,228,640 9,851,459 13,384,524 51,734,387 6,059,090 6,338,635 9,631,838 6,833,671 48,977,046 6,659,514 18,567,275 19,483,297 20,218,195 100,711,433 $ 6,666,105 $ 18,651,296 $ 19,522,602 $ 24,600,405 $ 162,048,691 15 PALM DESERT REDEVELOPMENT AGENCY Exhibit D RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30, 2004 Total fund balances for governmental funds $100,711,433 Amounts reported for governmental activities in the statement of net assets are different because: When capital assets (land, buildings, equipment)that are to be used in governmental activities are purchased or constructed, the costs of those assets are reported as expenditures in governmental funds. However, the statement of net assets includes those capital assets among the assets of the Agency as a whole: Beginning Balance, net depreciation $ 95,226,072 Current year additions/deletions 5,681,870 Current year restatements (562,279) Current year depreciation (1,800.888) Ending Balance, net depreciation $ 98,544,775 98,544,775 Long-term liabilities applicable to the Agency's governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the statement of net assets. (256,981,656) Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. (3,155,324) The cost of issuing bonds is recognized as an expenditure in the period paid, however, in the statement of net assets, it is amortized over the life of the bonds. 5,251,888 Net assets of governmental activities $ (55,628,884) See Notes to Financial Statements 16 THIS PAGE INTENTIONALLY LEFT BLANK 17 PALM DESERT REDEVELOPMENT AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUND TYPES FOR THE YEAR ENDED JUNE 30,2004 Special Revenue Fund Debt Service Funds Low and Moderate Income Project Project Project Housing Area 1 Area 2 Area 4 Revenues: Taxes $ - $ 33,192,856 $ 12,387,750 $ 8,250,907 Investment income 178,569 177,972 61,096 22,032 Rental income 5,509 - - Other revenues 286,653 479,842 Total Revenues 470,731 33,850,670 12,448,846 8,272,939 Expenditures: Current: General government 1,973,407 3,950 7,794 1,975 Payments to other agencies 13,485,712 5,514,381 4,079,246 Public works - Capital outlay 3,007,528 - - Debt Service: Interest and fiscal charges - 554,115 322,125 Principal retirement - - 122,707 Total Expenditures 4,980,935 14,043,777 5,967,007 4,081,221 Excess of Revenues Over(Under)Expenditures (4,510,204) 19,806,893 6,481,839 4,191,718 Other Financing Sources(Uses): Transfers in from the City of Palm Desert 233,770 Transfers out to the City of Palm Desert - Sale of property 924,522 Long-term debt issued - Payment to refunding bond escrow agent-current issue - Transfers in 11,198,956 Transfers out (4,523,158) (15,596,003) (4,772,328) (3,652,550) Total Other Financing Sources (Uses) 7,834,090 (15,596,003) (4,772,328) (3,652,550) Net Change in Fund Balances 3,323,886 4,210,890 1,709,511 539,168 Fund Balances(Deficit)- Beginning of Year 25,545,315 13,112,285 (14,247,176) 1,589,273 Fund Balances(Deficit)-End of Year $ 28,869,201 $ 17,323,175 $(12,537,665) $ 2,128,441 See Notes to Financial Statements 18 Exhibit E Debt Service Funds Capital Projects Funds Other Total Financing Project Project Governmental Governmental Authority Area 1 Area 4 Funds Funds $ - $ - $ - $ 2,163,267 $ 55,994,780 985,031 301,892 176,176 188,007 2,090,775 - - - 4,488,589 4,494,098 - 177,204 - 214,729 1,158,428 985,031 479,096 176,176 7,054,592 63,738,081 239 3,017,949 180,536 5,092,009 10,277,859 971,953 24,051,292 1,677,335 268,680 883,702 5,837,245 14,313,47-6 55,250 - 27,355 15.272,321 4,955,000 850,000 - 5,927,707 19,268,715 5,600,534 449,216 6,975,019 61,366,424 (18,283,684) (5,121,438) (273,040) 79,573 2,371,657 804,000 - 1,037,770 (511,704) (250,000) - (761,704) - - 924,522 48,690,000 - 48,690,000 (23,620,978) - - - (23,620,978) 17,466,578 20,134,873 388,901 5,001,753 54,191,061 (24,153,420) - (74,691) (1,418,911) (54,191,061) 18,382,180 19,623,169 868,210 3,582,842 26,269,610 98,496 14,501,731 595,170 3,662,415 28,641,267 6,561,018 4,065,544 18,888,127 16,555,780 72,070,166 $ 6,659,514 $18,567,275 $ 19,483,297 $ 20,218,195 $100,711,433 19 PALM DESERT REDEVELOPMENT AGENCY Exhibit F RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES JUNE 30, 2004 Net change in fund balances -total governmental funds $ 28,641,267 Amounts reported for governmental activities in the statement of activities are different because: When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital additions/deletions ($5,681,870)exceeded depreciation ($1,800,888) in the current period. 3,880,982 Repayment of long-term debt is reported as expenditures in governmental funds and, thus, has the effect of reducing fund balance because current financial resources have been used. For the Agency as a whole, however, the principal payments reduce the liabilities in the statement of net assets and do not result in an expense in the statement of activities. 28,122,707 Proceeds of long-term debt are reported as revenue in governmental funds, however, the receipts of long-term debt increase liabilities in the statement of net assets and do not result in revenues in the statement of activities. (48,690,000) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Net change in accrued interest for the current period. (30,591) The cost of issuing bonds is recognized as an expenditure in the period paid, however, in the statement of net assets, it is amortized over the life of the bonds. 1,645,674 Collection of deferred revenues are reported as revenues in governmental funds and, thus, has the effect of increasing fund balances. For the Agency as a whole, however, the collection of these receipts reduces the net assets in the statement of net assets and does not result In revenues in the statement of activities: Reimbursement revenue related to repairs completed by the Agency on behalf of the public library. (172,217) Change in net assets of governmental activities $ 13,397,822 See Notes to Financial Statements 20 PALM DESERT REDEVELOPMENT AGENCY NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2004 I. SIGNIFICANT ACCOUNTING POLICIES Note 1: Summary of Significant Accounting Policies a. Basis of Presentation Government-Wide Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities)report information on all of the activities of the Agency. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovern- mental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The Palm Desert Redevelop- ment Agency has no business-type activities. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for the governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements. Fund Financial Statements The accounting system of the Agency is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues and expenditures. An emphasis is placed on major funds within the governmental category. A fund is considered major if total assets, liabilities, revenues or expenditures of that individual governmental fund are at least 10% of the corresponding total for all funds of that category or type. The funds of the Agency are described below: Governmental Fund Types Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue resources (other than major capital projects) that are legally restricted to expenditures for specified purposes. 21 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term obligation principal, interest and related costs. Capital Proiects Funds - Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities. The Agency's major governmental funds are as follows: The Low and Moderate Income Housing Special Revenue Fund is used to account for the tax increment set-aside to be spent on projects that benefit low and moderate income families. Project Area 1 Debt Service Fund is used to account for the tax increment revenues and expenditures of Project Area 1. Proiect Area 2 Debt Service Fund is used to account for tax increment revenues and expenditures of Project Area 2. Project Area 4 Debt Service Fund is used to account for tax increment revenues and expenditures of Project Area 4. The Financing Authority Debt Service Fund is used to account for the resources and payment of the debt issued by the Palm Desert Financing Authority and loaned to the Redevelopment Agency. Project Area 1 Capital Proiects Fund is used to account for the fiscal activities of Project Area 1 of the Palm Desert Redevelopment Agency. Project Area 4 Capital Projects Fund is used to account for the fiscal activities of Project Area 4 of the Palm Desert Redevelopment Agency. b. Measurement Focus and Basis of Accounting Measurement Focus Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" transactions are recorded regardless of the measurement focus applied. On the government-wide statement of net assets and the statement of activities, activities are presented using the economic resources measurement focus. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the government are reported. In the fund financial statements, all governmental funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balances (net current assets) are considered a measure of"available spendable resources". Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. 22 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies(Continued) Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets, in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources", since they do not represent net current assets. Noncurrent portions of long-term receivables are offset by fund balance reserve accounts. Basis of Accounting In the government-wide statement of net assets and statement of activities, the governmental activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when "measurable and available". Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due. Property taxes, rents and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. c. Differences between Government-Wide Financial Statements and Fund Financial Statements: Explanation of differences between Governmental Funds Balance Sheets and the Statement of Net Assets: Long-Term Debt Reclassifi- Total Capital Transactions/ cations Statement Governmental Related Interest and of Net Funds Items Payable Eliminations Assets Assets: Cash and investments $ 96,411,803 $ - $ - $ - $ 96,411,803 Cash with fiscal agent 52,376,892 - - - 52,376,892 Receivables 11,727,806 - - - 11,727,806 Due from other funds 94,524 - - (94,524) Property held for resale 865,335 - - - 865,335 Due from other apartment 552,572 - - (552,572) - Prepaid items and deposits 19,759 - - - 19,759 Deferred charges - - 5,251,888 - 5,251.888 Capital assets - 98,544,775 - - 98,544,775 Total Assets 162,048,691 98,544,775 5,251,888 (647,096) 265,198,258 23 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Long-Term Debt Reclassifi- Total Capital Transactions/ cations Statement Governmental Related Interest and of Net Funds Items Payable Eliminations Assets Liabilities: Accounts payable 507,932 - - - 507,932 Accrued liabilities 111,814 - 3,155,324 3,267,138 Deposits payable 309,804 - - - 309,804 Deferred revenue 85,623 - - - 85,623 Due to other apartment 552,572 - - (552,572) - Due to other funds 94,524 - - (94,524) - Advances from the City 32,785,480 - - 32,785,480 Amounts due under pass-through agreements 26,889.509 - - 26,889,509 Long-term liabilities-current - - 5,637,707 5,637,707 Long-term liabilities- noncurrent - - 251,343,949 251,343,949 Total Liabilities 61,337,258 - 260,136,980 (647,096) 320,827,142 Net Assets(Deficit) $ 100,711,433 $ 98,544,775 $ (254,885,092) $ - $ (55,628,884) Explanation of differences between Governmental Funds Operating Statements and the Statement of Activities: Long-Temp Debt Reclass- Total Capital Transactions) Other ifications Statement Governmental Related Interest Revenues and of Funds Items Payable Expenses Eliminations Activities Revenues: Taxes $ 55,994,780 $ - $ g - $ - $ 55.994,780 Use of money and property 2,090,775 - - (67,051) 2,023,724 Rental income 4,494.098 - - - (4,488,589) 5.509 Apartment complexes - - - 4,767.483 4.767,483 Other income 1,15BA28 653,710 1.812,138 Total Revenues 63,738,081 865.553 64,603,634 Expenditures: Current: General government 10,277,859 448,868 - (4,643,679) 6.083,048 Payment to other agencies 24,051.292 - - - - 24,051.292 Apartment complexes - 1,484,710 - 4,643,579 6,128,389 Public works - 22,685 - 761,704 784,389 Capital outlay 5,837.245 (5,837,245) - - - Debt service: Interest and fiscal charges 15.272,321 - (1,615,083) - 1,425,978 15.083.216 Principal retirement 5,927,707 (5,927,707) Total Expenditures 61,366.424 (3,880,982) (7,542,790) 2.187,682 52.130,334 24 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Long-Term Debt Reclass- Total Capital Transactions/ Other 8cations Statement Govemmental Related Interest Revenues and of Funds Items Payable Fxpenses Eliminations Activities Other Financing Sources(Uses): Sale of property 924,522 - - - - 924,522 Transfers in from City 1,037,770 - - - (1,037,770) - Transfers out to City (761.704) - - - 761,704 - Transfers in 54,191.061 - - - (54.191.061) - Transfers out (54,191.061) - - - 54,191.061 - Payment to refunding bond agent (23,620.978) - 22,195.000 - 1,425,978 - Bond proceeds 48,690,000 (48,690,000) Total Other Financing 28,269.610 (26,495,000) 1.149,912 924,522 Net Change in Fund Balance $ 28.641.267 $ 3,880.982 $ (18,952,210) $ $ (172,217) $ 13.397.822 d. Capital Assets and Depreciation Capital assets are reported in the government-wide financial statements. Capital assets are defined by the Agency as assets with an initial cost of more than $500 and an estimated life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The Agency had no infrastructure assets. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Property, plant and equipment are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings 40 Improvements other than buildings 20 Machinery and equipment 5 -8 e. Long-Term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance casts are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 25 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) f. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. g. Budgetary Accounting The Agency uses the following procedures in establishing its budgetary data reported in the financial statements: 1. Before the beginning of the fiscal year, the Executive Director submits to the Board of Directors a proposed budget for the year commencing the following July 1. 2. Public hearings are conducted to obtain taxpayer comments. 3. The Budget is subsequently adopted through passage of a resolution. 4. Original appropriations are modified by supplementary appropriations and transfers among budget categories. The Board approves all significant changes. Annual appropriations lapse at year-end. 5. Encumbrances and Continuing Appropriations are rebudgeted as of July 1 by Board action. They are reported as reservations of fund balance in the fund-level financial statements. 6. Formal budgetary integration is employed as a management control device during the year for the Special Revenue and Capital Projects Funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is alternatively achieved through debt indenture provisions. 7. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Budgetary data for the Special Revenue Funds and Capital Projects Funds are not presented herein, as the budgets for these funds are long-term in nature. h. Investments Investments are stated at fair value (quoted market price or the best available estimate thereof). I. Property Held for Resale The Agency purchased land within the Agency's project area. The land held for resale is recorded in the Redevelopment Agency Special Revenue Fund as property held for resale, at the lower of acquisition cost or net realizable value. At June 30, 2004, the cost of the property held for resale for various housing properties in Palm Desert totaled $865,335. 26 Palm Desert Redevelopment Agency Notes to Financial Statements(Continued) Note 1: Summary of Significant Accounting Policies (Continued) j. Prepaid Items and Deposits Certain payments to vendors reflect costs applicable to future accounting periods are recorded as prepaid items in the government-wide and fund financial statements. As of June 30, 2004, the Agency's balance was $18,734. The Agency has deposited $1,025 in escrow to purchase various properties. k. Property Tax Calendar Property taxes are assessed and collected each fiscal year according to the following property tax calendar: Lien Date January 1 Levy Date July 1 to June 30 Due Date November 1 - 1st Installment March 1 -2nd Installment Delinquent Date December 10- 1st Installment April 10-2nd Installment Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are then allocated to the agencies based on complex formulas prescribed by the state statutes. I. Relationship to the City of Palm Desert The Palm Desert Redevelopment Agency is an integral part of the reporting entity of the City of Palm Desert, California. The funds and account groups of the Agency have been included within the scope of the basic financial statements of the City because the City Council of the City of Palm Desert exercises oversight responsibility over the operations of the Agency. Only the funds and account groups of the Agency are included herein and these financial statements, therefore, do not purport to represent the financial position or results of operations of the City of Palm Desert. Note 2: Organization and Tax Increment Financing The Agency is a separate governmental entity as prescribed in the California Community Redevelopment law and as set forth in the Health and Safety Code of the State of California. The Agency consists of Project Area 1, Project Area 2, Project Area 3 and Project Area 4. In addition, the Agency and the City of Palm Desert (the City) have established the Palm Desert Financing Authority as a joint power of authority between the Agency and the City for purposes of financing and funding capital improvements. Transactions related to the joint power for the Agency are recorded in a debt service fund. The Palm Desert Housing Authority was established in January 1998 as a component unit of the Agency and is partly responsible for the administration of providing affordable housing in the City of Palm Desert. The apartment complexes owned by the Housing Authority are operated by a management company. The transactions related to the Housing Authority are reported in a Special Revenue Fund. 27 • Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 2: Organization and Tax Increment Financing (Continued) Agency expenses include capital improvement projects and operating costs which include required staff support and consultant services. The Agency's primary source of revenue comes from property taxes, referred to in the accompanying financial statements as "tax increment revenue". The assessed valuation of all property within each project area was determined on the date of adoption of the Project Area. Except for certain amounts provided by specific agreement (see Note 7), property taxes related to the incremental increase in assessed values after the adoption of the Project Area have been allocated to the Agency, while all property taxes on the "frozen" assessed valuation as of the adoption date have been allocated to the City and other districts. Note 3: Cash and Investments Cash and investments reported in the accompanying financial statements consisted of the following: Cash and investments pooled with the City $ 96,411,803 Cash and investments with fiscal agent 52,376,892 $ 148,788,695 The Agency's funds are pooled with the City of Palm Desert's cash and investments in order to generate optimum interest income. The City has implemented GASB Statement No. 40, Deposit and Investment Risk Disclosures. GASB No. 40 establishes and modifies disclosure requirements related to deposit and investment risks. The information required by GASB Statement No. 40 related to authorized investments, credit risk, etc., is available in the annual report of the City. Note 4: Loans, Notes Receivable and Due from Other Governmental Agencies Receivables consisted of the following at June 30, 2004: Low and Other Moderate Debt service Capital Projects Govern. Total Income Project Project Project Financing Project Project mental Governmental Rousing Area 1 Area 2 Area 4 Authority Area 1 Area 4 Funds Receivables Accounts $ 26.511 $ 319,359 $ 210.304 $ 92,778 $ . $ - $ - $ 68.854 $ 717,806 Interest 54,512 - - - 19,020 211,524 40,719 25,075 350,850 Loans 226.387 - - - - - 226,387 Notes 7,659,437 1,931,883 841,443 10.432,763 $ 7,966,847 $ 319,359 S 210,304 $ 92.778 $ 19,020 $ 2.143.407 $882,162 S 93.929 $ 11,727,806 Loans Receivable a. The Agency has loaned $147,181 in below market loans, secured by deeds of trust, to eligible low-income households. Monthly payments of interest and principal are due over a period of 30 years unless the homes are sold, in which case the entire loan balance is due and payable. b. The Agency has $79,205 in home improvement loans. Payments of interest and principal are due monthly on these loans. 28 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 4: Loans, Notes Receivable and Due from Other Governmental Agencies (Continued) c. The Agency has issued loans for several other projects, all of which are secured by a deed of trust. A valuation allowance equal to the loan balance has been recognized where there is a significant possibility that these loans either become uncollectible or forgiven by the Agency at a future date if all the terms of the loans have been met. Detailed information for these loans is as follows: Balance Interest Maturity Project Name Outstanding Rate Date Secured By Special Provisions of Loan Self-Help $ 429,000 7.25% 30 years Deed of Trust Loan balance and interest Housing Program or 2024 due upon maturity, unpaid balance of loan or interest will bear an interest rate of 12%. Home Improvement 222,176 N/A N/A Deed of Trust Loan is payable upon Loans change or transfer of title, refinancing or upon the death of the borrower. Portola Palms 362,837 5.00% 30 years Deed of Trust Loan balance and interest Mobilehome Park from date due upon maturity. If of loan debtor of loan is not in default with the note, deed of trust, loan agreement or restrictive covenant, then the Agency will forgive 2% per annum of the interest. Desert Rose 2,106,750 3.00% 30 years Deed of Trust Loan will be forgiven at from date maturity unless the debtor of loan is in violation of the unit regulatory agreement or the deed of trust. Acquisition, 52,000 3.00% 30 years Deed of Trust Loan balance and interest Rehabilitation, from date Assignment will be forgiven at maturity Resale of loan of Rent if debtor does not breach the terms and conditions of either the unit regulatory aareement or note. Notes Receivable A loan receivable for the construction of a multi-family affordable housing development dated June 14, 2001 with a balance of $7,659,437 is due from the Palm Desert Development Company. The loan is secured by a Deed of Trust, with assignment to property, rent and fixtures on the housing development located in Palm Desert. Interest is earned and due annually at a rate of 1% per annum from the date on which the final certificate of occupancy is issued. Principal on the loan is based on the applicable agency's percentage of positive net cash flow derived from the operations of the Development. 29 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 4: Loans, Notes Receivable and Due from Other Governmental Agencies (Continued) Due From Other Governmental Agencies The Agency entered into a cooperative agreement with the County of Riverside (County) and Desert Community College District (District) to construct and operate a regional library. On behalf of the County and District, the Agency advanced payments on this project, which are to be repaid from certain County Library and District pass-through funds (see Note 7). The advances earn interest at 6.44% until paid. At June 30, 2004, amounts due from the County and District were$8,116 and$1,923,767, respectively. On April 21, 2003, the Agency entered into a loan agreement with The Regents of the University of California, on behalf of its Riverside Campus, to loan various amounts over a period of time, not to exceed an aggregate amount of$2,000,000. Proceeds of the loan are to be used for capital improvements at the University's Riverside Campus. The outstanding principal balance and interest on the note is due in five annual payments beginning on a future date yet to be determined. As of June 30, 2004, the amount outstanding on the loan was $841,443. Note 5: Interfund Receivable, Payable and Transfers The composition of interfund balances as of June 30, 2004 is as follows: Due To/From Other Funds Due to Other Funds Special Other Governmental Funds Funds Due From Other Funds: Special Revenue Fund: Low and Moderate Income Housing $ 94,524 The due to Low and Moderate Income Housing Fund of $94,524 from nonmajor funds was due to temporary cash shortages in those funds. 30 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 5: Interfund Receivable, Payable and Transfers (Continued) Interfund Transfers Transfers To Special Debt Revenue Service Capital Projects Low and Moderate Other income Financing Project Project Govemmental Housing Authority Area 1 Area 4 Funds Total Transfers In: Special Revenue- Low and Moderate Income Housing $ - $ 4.301.802 $ 221,356 $ - $ - $ 4,523,158 Debt Service Project Area 1 6.638.571 8.957,432 - - - 15.596,003 Debt Service Project Area 2 2,4T7,550 2,244,778 - - - 4,772.328 Debt Service Project Area 4 1,650,181 1.613,468 - 388.901 - 3,652,550 Debt Service Financing Authority - - 19,662,333 - 4.491.087 24,153,420 Capital Projects Project Area 4 - - 74,691 - - 74.691 Other Governmental Funds 432.654 299.098 176,493 - 510,666 1,418,911 Total $ 11.198,956 $ 17.466,578 $ 20,134,873 $ 388.901 $ 5.001,753 $ 54.191,061 Transfers are used to: 1. move receipts restricted to debt service from the funds collecting the receipts to the debt service funds as debt service payments become due, 2. transfer 20% of tax increments received by RDA Debt Service Funds to the Low and Moderate Income Housing Special Revenue Fund, 3. transfer allocation of administrative expenses, 4. transfer revenues to provide for capital projects, 5. reimburse the Low and Moderate Income Housing Special Revenue Fund from RDA Capital Project Area 1 for expenditures related to general redevelopment projects, and 6. transfer bond proceeds to the appropriate funds. 31 Palm Desert Redevelopment Agency Notes to Financial Statements(Continued) Note 6: Capital Assets A summary of changes in capital assets for the year ended June 30, 2004 is as follows: Balance at Balance at July 1,2003, Balance at Primary Government: JuN 1,2003 Adiustments As Adjusted Additions Deletions June 30,2004 Capital assets,not being depreciated: Land $ 47,239,805 $ (562,279) $ 46,877,526 $ 135,690 $ - $ 46,813.216 Construction-in-progress 5,117,261 5,117.261 2,847.574 155,375 7.809,460 Total Capital Assets Not - Being Depreciated 52,357,066 (562,279) 514794,787 2,983.264 155,375 54.622,676 Capital assets,being depreciated. Buildings 53,995,522 - 53,995.522 2,849.725 - 56.845,247 Improvements other than buildings 7,232,558 - 7,232,558 - - 7.232,558 Machinery and equipment 140.256 - 140.256 4,266 11.882 132.630 Total Capital Assets Being Depreciated 61,368.336 61,368,336 2,853.981 11,882 64,210,435 Less accumulated depreciation for. Buildings (17,152.990) - (17,152,990) (1,421,131) - (18.574,121) Improvements other than buildings (1,272,499) - (1,272,499) (361,628) - (1.634,127) Machinery and equipment (73,841) (73,841) (18,129) 11.882 (80,088) Total Accumulated Depredation (18,499,330) (18.499,330) (1,800,888) 11,882 (20,288,336) Net Capital Assets Being Depredated 42,869,006 42,869,006 1.053.093 43,922,099 Net Capital Assets Governmental Activities $ 95.226,072 $ (562,279) $ 94.663,793 $ 4,036,357 $ 155,375 $ 98,W.7'75 The adjustments are results of deletions to equipment due to inventory findings that were completed after closing of the prior year. Note 7: Amounts Due Under Pass-Through Agreements Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are, except where otherwise provided by specific agreement, allocated to the Agency. The Agency has entered into various pass-through agreements with other agencies to allocate its tax increment revenue. 32 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 7: Amounts Due Under Pass-Through Agreements (Continued) At June 30, 2004,the Agency has an obligation of$26,889,509 to other agencies and entities related to specific pass-through agreements as follows: Balance at Balance at Entity July 1, 2003 Additions Payments June 30, 2004 Riverside County- Capital Improvement $ 11,003,160 - $ 8,659,352 $ 4,564,680 $ 15,097,832 Riverside County-Schools 351,108 406,181 351,107 406,182 Riverside County-Library 846,443 ` 921,174 793,253 974,364 Riverside County-Fire 921,252 1,809,932 921,252 1,809,932 Coachella Valley Mosquito Abatement District 322,455 340,399 322,455 340,399 Coachella Valley Water District 2,264,299 991,100 - 3,255,399 Desert Community College District 237,653 ' 575,130 554,448 258,335 Desert Sands Unified School District 2.772,785 - 3,146,129 2,783,044 3,135,870 Coachella Valley Recreation and Park District 228,213 216,496 228,213 216,496 Coachella Valley Resources District 9,929 2,540 - 12,469 Palm Springs Unified School District 44,369 89,104 44,791 88,682 County Juvenile Health District 670,052 1,316,366 1,293,111 693,307 Other Deposits 632,239 24,753 56,750 600,242 $ 20,303,957 $ 18,498,656 $ 11,913,104 $ 26,889,509 `The Redevelopment Agency has used bond proceeds for the construction of capital improvements, which benefit these entities. These entities have agreements with the Redevelopment Agency which will allow it to use a portion of these amounts to offset debt service costs. Note 8: Long-Term Liabilities The changes in long-term liabilities for the year ended June 30, 2004 were as follows: Due Balance at Payments/ Balance at Within July 1, 2003 Additions Defeasance June 30,2004 One Year Tax Allocation Bonds $ 234,460,000 $ 48,690,000 $ 27,150,000 $ 256,000,000 $ 5,515,000 Notes Payable 1,954,363 - 972,707 981,656 122,707 $ 236,414,363 $ 48,690,000 $ 28,122,707 $ 256,981,656 $ 5,637,707 33 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long-Term Liabilities (Continued) A description of long-term liabilities outstanding (excluding defeased debt)of the Agency as of June 30, 2004 follows: a. Tax Allocation Bonds Tax Allocation bonds are special obligations of the Agency and the Financing Authority, (a component unit of the Agency) and are secured by an irrevocable pledge of tax revenues and other funds as provided under the Bond Resolution. The bonds, and any interest thereon, are not a debt of the City, the State of California or any of its political subdivisions and neither the City, the State of California nor any of its political subdivisions is liable on the bonds, nor in any event shall the bonds, and interest thereon, be payable out of any funds or properties other than those provided under the Bond Resolution. 1995 Series Tax Allocation Revenue Bonds(Proiect Area No. 1) In June 1995, the Palm Desert Financing Authority issued $24,025,000 of Tax Allocation Bonds (Project Area No. 1) Series 1995. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No. 1. Interest rates on the bonds vary from 4.40% to 5.95% per annum payable semi-annually on April 1 and October 1 with principal maturing annually. In June 2004, $22,195,000 of these bonds were advance refunded. See Note 10 for additional information. 1995 Series Tax Allocation Revenue Bonds (Proiect Area No.2) In June 1995, the Palm Desert Financing Authority issued $4,090,000 of Tax Allocation Bonds (Project Area No. 2) Series 1995. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No. 2. Interest rates on the bonds vary from 4.40% to 5.95% per annum payable semi-annually on February 1 and August 1 with principal maturing annually on August 1. 1995 Series A-Tax Allocation Revenue Refunding Bonds In August 1995, the Palm Desert Financing Authority issued $6,305,000 in Tax Allocation Revenue Refunding Bonds 1995 Series A. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to provide funds to refund in advance $6,430,000 of the 1988 Tax Allocation Bonds. Interest rates on the bonds vary from 3.80% to 5.55% with interest payable semi-annually on March 1 and September 1 with principal maturing annually on September 1. 1997 Series Tax Allocation Refunding Revenue Bonds On July 24, 1997, the Palm Desert Financing Authority issued $71,955,0()0 in Tax Allocation Refunding Revenue Bonds (Project Area No. 1 as Amended) 1997 Series. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to provide funds to refund in advance a portion of the 1992 Series A Tax Allocation Revenue Bonds. Interest rates on the bonds vary from 4.100% to 5.625% with interest payable semi-annually on April 1 and October 1 with principal maturing annually on April 1. 34 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long-Term Liabilities (Continued) 1998 Series Tax Allocation (Housing Set-Aside) Revenue Bonds In January 1998, the Palm Desert Financing Authority issued $48,760,000 in Tax Allocation (Housing Set-Aside) Revenue Bonds. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to finance the acquisition of seven apartment complexes consisting of 725 rental units from the Housing Authority of the County of Riverside. Interest rates on the bonds vary from 4.0% to 5.1% per annum payable semi-annually on April 1 and October 1 with principal maturing annually on October 1. 1998 Series Tax Allocation Revenue Bonds (Project Area No, 4) On March 1, 1998, the Palm Desert Financing Authority issued $11,020,000 of Tax Allocation Revenue Bonds (Project Area No. 4) Series 1998. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No. 4. Interest rates on the bonds vary from 4.0% to 5.2% per annum payable semi-annually on April 1 and October 1 with principal maturing annually on October 1. 2001 Series Tax Allocation Revenue Bonds (Proiect Area No. 4) In November 2001, the Palm Desert Financing Authority issued $15,695,000 of Tax Allocation Revenue Bonds (Project Area No. 4) Series 2001. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No. 4. Interest rates on the bonds vary from 3.5% to 4.9% per annum payable semi-annually on April 1 and October 1 with principal maturing annually on October 1. 2002 Series A Tax Allocation Refunding Revenue Bonds (Proiect Area No. 1 as Amended In March 2002, the Palm Desert Financing Authority issued $22,070,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 1 as Amended) 2002 Series A. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency. A portion of the proceeds of the loan was used to prepay the prior loan, which effected the current refunding of a like portion of the prior bonds. The remainder was used to finance certain redevelopment activities of the Agency in Project Area No. 4. The bonds consist of serial bonds of$10,905,000 at 5.00% due April 1, 2025 and $11,165,000 in term bonds at 5.10% due April 1, 2030. Interest is payable semi-annually on April 1 and October 1. Mandatory sinking fund redemptions begin April 1, 2024. 2002 Series A Tax Allocation Refunding Revenue Bonds (Project Area No 2) In July 2002, the Palm Desert Financing Authority issued $17,310,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 2). The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to prepay outstanding indebtedness and to finance certain redevelopment activities within or of benefit to the project area. Interest rates on the bonds vary from 3.0% to 5.0% per annum payable semi-annually on February 1 and August 1. Principal payments will be made annually beginning August 1, 2003. 35 palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long-Term Liabilities (Continued) Series 2002 Tax Allocation lHousing Set-Aside) Revenue Bonds In August 2002, the Palm Desert Financing Authority issued $12,100,000 of Tax Allocation (Housing Set-Aside) Revenue Bonds Series 2002. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to finance certain low and moderate housing activities of the Agency and to finance costs of issuance of the bonds. Interest rates on the $6,555,000 serial bonds vary from 2.0% to 4.9% per annum payable semi-annually on March 1 and October 1. Annual principal payments begin October 1, 2003. The $5,545,000 term bonds bear an interest rate of 5.0% per annum and mature October 1, 2031, Series 2003 Tax Allocation Revenue Bonds (Project Area No.2) In March 2003, the Palm Desert Financing Authority issued $15,745,000 of Tax Allocation Revenue Bonds (Project Area No. 2) Series 2003. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No. 2. Interest rates on the bonds vary from 4.5% to 5.0% per annum payable semi- annually on February 1 and August 1 with principal maturing as follows: $ 875,000 Serial Bonds August 1, 2023 910,000 Serial Bonds August 1, 2024 2,485,000 Term Bonds August 1, 2026 11,475,000 Term Bonds August 1, 2033 Series 2003 Tax Allocation Revenue Bonds (Project Area No. 1) In July 2003, the Financing Authority issued $19,000,000 Tax Allocation Revenue Bonds (Project Area No. 1 as Amended) Series 2003. The proceeds of the bonds were disbursed to make a loan to the Redevelopment Agency. The Agency will use the proceeds of the loan to finance certain redevelopment activities of the Agency, and to finance costs of issuance of the bonds. The bonds bear interest at 5.0%. They consist of$7,050,000 serial bonds with principal payments due in 2026 and 2027 and $11,950,000 term bonds due in 2030. Interest will be payable on April 1 and October 1 of each year, beginning April 1, 2004. Principal payments will be on April 1 of the years stated above. Series 2003 Tax Allocation Revenue Bonds (Proiect Area No 3) In July 2003, the Financing Authority issued Tax Allocation Revenue Bonds (Project Area No. 3) Series 2003 in the amount of $4,745,000. The proceeds of the bonds were disbursed to make a loan to the Redevelopment Agency. The Agency will use the proceeds of the loan to finance redevelopment activities within or of benefit to the project area and to finance costs of issuance of the bonds. The bonds bear interest at rates ranging from 3.000% to 5.125%. Principal maturities for the serial bonds of $2,475,000 began April 1, 2004 and continue through October 1, 2031. The term bonds in the amount of$2,270,000 are due in 2033. 36 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long-Term Liabilities (Continued) 2004 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 1 as Amended In June 2004, the Palm Desert Financing Authority issued $24,945,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 1 as Amended) 2004 Series A. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to refinance a portion of the Agency's obligations from 1995 and to finance certain redevelopment activities within or of benefit to the project area. Interest rates on the bonds vary from 3.0% to 5.0% per annum payable semi-annually on April 1 and October 1. Principal payments will be made annually beginning April 1, 2005. b. Notes Payable In May 2000, the Palm Desert Redevelopment Agency borrowed $850,000 to provide funds for land acquisition. The note bore interest at 6.5% per annum with quarterly interest payments commencing August 3, 2000. The note matured on May 3, 2004. The Agency entered into a cooperation agreement with the County of Riverside (the County) on December 15, 1987 regarding the adoption of the Agency's Project Area No. 2. The agreement states that the Agency was to retain 50% of the County's share of tax increment. This was based on the County's share of tax increment being what would be allocated to the County in the absence of a redevelopment project area being adopted. This agreement called for the Agency to retain 50% of the County's share until the gross increment reached $3,500,000. The agreement further states that when gross increment reaches $10,000,000 that the Agency would repay the 50% of the retained County's share of.increment in equal payments over a 10-year period. The gross increment reached the $3,500,000 limit in fiscal year 1991-1992. The Agency reached the $10,000,000 limit in fiscal year 2002-2003. The total amount owed to the County at June 30, 2004 was $981,656. Annual payments on the note are $122,707. 37 Palm Desert Redevelopment Agency Notes to Financial Statements(Continued) Note 8: Long-Term Liabilities (Continued) c. Schedule of Changes The following is a schedule of changes in long-term liabilities of the Agency for the fiscal year ended June 30, 2004: Balance Balance Due Within July 1,2003 Additions Repayments June 30, 2004 One Year Project Area No. 1 ' 1995 Series TARBs,$24,025,000 $ 22,695,000 $ - $ 22,440,000 $ 255,000 $ 255,000 2002A TARRBS,$22,070,000 22,070,000 - - 22,070,000 - Note Payable 850,000 - 850,000 - - 1997 Series TARRBS,$71,955,000 64,025,000 - 2,225,000 61.800,000 2,260.000 2003A TARBs,$19,000,000 - 19,000,000 - 19,000,000 - 2004A TARRBS,$24.945,000 24,945,000 - 24,945,000 495,000 Total $ 109,640,000 $ 43,945,000 $ 25,515,000 $ 128,070,000 $ 3.010,000 Project Area No.2 County Note Payable $ 1,104,363 $ - $ 122,707 $ 981,656 $ 122.707 1995 Series TARBs,$4,090,000 3.975,000 - 35,000 3,940,000 35.000 2002 Series A TARRBS,$17,310,000 17,310,000 - 645.000 16,665,000 665,000 2003 Series TARBs, $15,745,000 15,745,000 - - 15,745,000 - Total $ 38,134,363 $ - $ 802.707 $ 37,331,656 $ 822,707 Project Area No. 3 2003 Series TARBs, $4,745,000 $ - $ 4,745,000 $ 155,000 $ 4,590,000 $ 90,000 Total $ - $ 4,745,000 $ 155,000 $ 4,590,000 $ 90,000 Project Area No.4 1998 Series TARBs,$11,020,000 $ 10,815,000 $ - $ 220,000 $ 10,595,000 $ 225,000 2001 Series TARBs,$15,695,000 15,545,000 - 150,000 15,395,000 160,000 Total $ 26,360,000 $ - $ 370,000 $ 25,990,000 $ 385,000 Combined Low and Moderate Housing 1998 Series TARBs $ 46,785,000 $ - $ 550,000 $ 46,235,000 $ 565,000 2002 Series TARBs 12,100,000 - 235,000 11,865,000 240,000 1995 Series A TARRBS, $6,305,000 3,395,000 - 495,000 2,900,000 525,000 Total $ 62,280,000 $ - $ 1,280,000 $ 61,000,000 $ 1,330,000 Total-All Project Areas Notes $ 1,954,363 $ - $ 972,707 $ 981,656 $ 122,707 Bonds 234,460,000 48,690,000 27,150,000 256,000,000 5,515,000 Total $ 236,414,363 $ 48,690,000 $ 28,122,707 $ 256,981,656 $ 5,637,707 38 • Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long-Term Liabilities (Continued) d. The following schedule illustrates the debt service requirements to maturity for bonds outstanding as of June 30, 2004: Area No. 1 -Tax Allocation Area No. 1 -Tax Allocation Revenue Refunding Bonds,Series 1997- Area No.1 -Tax Allocation Refunding Bonds,Series 1995-$24.025M $71.955M Bonds,2002 Series A•$22.07M Principal Interest Principal Interest Principal Interest 2004-2005 $ 255,000 $ 13,260 $ 2,260,000 $ 3,310,989 8 - $ 1,114,665 2005-2006 - 2,025,000 3,205,899 - 1,114,665 2006-2007 - - 2,065,000 3,110,724 - 1,114,665 2007-2008 - - 2,290,000 3,011,604 - 1,114,665 2008.2009 - 2,255,000 2,899.394 - 1,114,665 2009-2014 - - 13,585,000 12,598,261 - 5.573,325 2014-2019 - - 17,700,000 8,551,769 5,573.325 2019-2024 - - 19,620,000 2,958,750 4,780,000 5,573,325 2024-2029 - - - 14.930,000 2,515,060 2029-2034 2,460,000 125,460 Totals $ 255.000 $ 13,260 $ 61,800.000 $ 39,647,390 $ 22,070,000 $ 24,933,820 Area No.1 -Tax Allocation Area No.1-Tax Allocation Revenue Refunding Bonds,2004 Series A- Area No.2-Tax Allocation Revenue Bonds,Series 2003-$19M $24.945M Bonds,Series 1995-$4.09M Principal Interest Principal Interest Principal Interest 2004•2005 $ - $ 950,000 $ 495,000 $ 875,560 $ 35,000 $ 231,606 2005.2006 - 950.000 855,000 1,123,063 35,000 229,795 2006-2007 - 950,000 940,000 1,097,413 115,000 225,481 2007-2008 - 950,000 850,000 1,059,813 120,000 218,528 2008.2009 - 950,000 1,030,000 1,025,813 125,000 211,279 2009-2014 - 4.750,000 5,490,000 4,383,538 760,000 930,535 2014-2019 - 4,750,000 6.730,000 3,072,513 1,010,000 670,520 2019-2024 - 4,750,000 7,295,000 1,400,100 1,305,000 328,269 2024-2029 14,820,000 3,683,500 1,260,000 63,000 435,000 20,424 2029-2034 4,180,000 209,000 Totals $ 19,000,000 $ 22,892,500 $ 24,945,000 $ 14,100,813 $ 3,940,000 $ 3,066,437 Area No.2-Tax Allocation Refunding Bonds,2002 Series A- Area No.2-Tax Allocation Revenue Area No.3-Tax Allocation Revenue $17.31 M Bonds,Series 2003-$15.745M Bonds,Series 2003-$4.745M Principal Interest Principal Interest Principal Interest 2004-2005 $ 665.000 $ 710,513 $ - $ 769,006 $ 90,000 $ 206,998 2005-2006 690,000 690,188 769,006 90,000 204,298 2006-2007 630,000 671,333 - 769,006 95,000 201,598 2007-2008 650,000 653,078 769,006 95,000 198,748 2008-2009 675,000 631,853 - 769.006 100,000 195,898 2009-2014 3,805,000 2,720,118 - 3,845,031 550,000 929,338 2014-2019 4.780,000 1,759,946 3,845,031 660,000 814,848 2019-2024 4,770,000 491,150 875,000 3.825,344 820,000 656,858 2024-2029 - 6,275,000 2,981,347 1.050,000 433,063 2029.2034 8,595,000 1,117,625 1,040,000 136,581 Totals $ 16,665,000 $ 8,328,179 $ 15,745,000 $ 19,459,408 $ 4,590,000 $ 3,978,228 39 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long-Term Liabilities (Continued) Area No.4-Tax Allocation Bonds, Area No.4-Tax Allocation Bonds, Housing Set-Aside Revenue Bonds, Series 1998-$11.02M Series 2001 -$15.695M 1995 Series A-$6.305M Principal Interest Principal Interest Principal Interest 2004-2005 $ 225,000 $ 531,465 $ 160,000 $ 696,600 $ 525,000 $ 141,195 2005-2006 230,000 520,415 170,000 690,825 555,000 113,378 2006-2007 250.000 508,759 270,000 682,994 585,000 83,445 2007-2005 260,000 496.376 285,000 673,013 600,000 51,593 2008-2009 265,000 483,628 310,000 662,313 635,000 17,621 2009-2014 1.560,000 2,209,836 1,660,000 3,133,884 - - 2014-2019 1,975,000 1,778,371 2,050,000 2,743,198 - - 2019-2024 2,545,000 1198,990 2,565,000 2,214,740 - - 2024-2029 3,285,000 444,470 3,200,000 1,533,120 - - 2029.2034 4,725,000 347.160 Totals $ 10,595,000 $ 8,172,312 $ 15,395,000 $ 13,37,847 $ 2,900,000 $ 407,232 Housing Set-Aside Revenue Bonds, Housing Set-Aside Revenue Bonds, Series 1998-$48.76M Series 2002-$12.1 M Total Principal Interest Principal Interest Principal Interest 2004-2005 $ 565,000 $ 2,301,954 $ 240,000 $ 526,181 $ 5,515,000 $ 12.379,992 2005-2006 590,000 2.277,410 245,000 521,025 5,485,000 12,409,967 2006.2007 615,000 2,251.804 250,000 515,144 5,815,000 12,182,366 2007-2008 655,000 2,224,816 255,000 508,449 6,060,000 11,929,691 2008-2009 685,000 2,196,341 265,000 500,573 6.345,000 11,658,384 2009-2014 7,700,000 9,986,175 1,480,000 2,347,150 36,590,000 53,406,191 2014-2019 9,890,000 7,797,175 1,805,000 2,014,791 46,600,000 43,371,487 2019-2024 12,730,000 4,953,885 2,280.000 1,550,077 59,585,000 29,901,488 2024-2029 12,805,000 1,347,803 2,915,000 911,625 60,875,000 13,933,412 2029.2034 2,130,000 163.250 23,130,000 2,099,076 Totals $ 46,235,000 $ 35.336,363 $ 11,865,000 $ 9,558,265 $ 256,000,000 $ 203,272,054 Note 9: Bond Reserve Requirements At June 30, 2004, the reserve balance requirements and actual balances were as follows: Issue Requirement Actual 1995 Refunding Tax Allocation Bonds $ 290,000 $ 810,979 2001 Tax Allocation Revenue Bonds 310,424 319,229 These actual amounts are included in the Fund Balance reserved or designated for Debt Service (see Note 11). Note 10: Defeased Obligations In June 2004, the Agency issued $24,945,000 Tax Allocation Refunding Revenue Bonds (Project Area No. 1 as Amended) 2004 Series A to advance refund $22,195,000 of outstanding Tax Allocation Revenue Bonds Series 1995. The net proceeds of $23,620,978 (after paying certain issuance costs and depositing moneys in the project fund)were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1995 bonds. As a result, $22,195,000 of the 1995 bonds are considered to be defeased and the liability for these bonds has been removed from the stat3ment of net assets. 40 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 10: Defeased Obligations(Continued) The Agency advanced refunded the 1995 bonds to reduce its total debt service payments over the next 21 years by $209,195 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt)of$796,646. The Agency defeased certain Redevelopment obligations in prior years by placing the proceeds of new obligations in an irrevocable trust to provide for all future debt service payments on the old obligations. Accordingly, the trust account assets and the liability for the defeased obligations are not included in the accompanying financial statements. Amount Issue Outstanding 1996 Series B Tax Allocation Bonds $ 6,840,000 Note 11: Reserves of Fund Balances Special Debt Revenue Service Fund Funds Capital Project Funds Low and Moderate Other Income Financing Project Project Governmental Housing Authority Area 1 Area 4 Funds Total Loans and notes receivable $ 7,882,339 $ - $ 1,931,883 $ 841,443 $ - $ 10,655,665 Property held for resale 865,335 - - - - 865,335 Prepaid items and deposits 2,646 - 17,113 - - 19,759 Encumbrances 663,507 - 619,532 1,460,386 2,965,014 5,708,439 Continuing appropriations 6,160,989 - 9,660,112 7,549,630 4,205,482 27,576,213 Advances to other funds 94,524 - - - - 94,524 Debt service - 600,424 - - - 600,424 Low income purposes - - - 6,214,028 5,214,028 $ 15,669,340 $ 600,424 $ 12.228.640 $ 9,851,459 $13,384,524 $ 51,734,387 Reserved for Loans and Notes Receivables - These reserves are set up to reflect the noncurrent portion receivables so that they will not be considered as current funds available. Reserved for Property Held for Resale-This reserve for property held for resale has been set aside to indicate that it will not be considered as current funds available. Reserved for Prepaid Items and Deposits - These reserves are set up to reflect the noncurrent portion of the deposits so that they will not be considered as current funds available. Reserved for Encumbrances - These reserves represent the portion of purchase orders awarded for which the goods or services had not yet been received at June 30, 2004. Although all appropriations lapse at year-end, even if encumbered, the City intends either to honor the contracts in progress or to cancel them. Reserve for encumbrances are rebudgeted on July 1, by Board action. Reserved for Continuing Appropriations - This reserve is for appropriations for capital projects which are unexpended as of June 30, 2004 and are carried forward as continuing appropriations to be expended in 2004-2005. 41 Palm Desert Redevelopment Agency Notes to Financial Statements (Continued) Note 11: Reserves of Fund Balances (Continued) Reserved for Debt Service - These reserves for Debt Service represent reserves accumulated by the Agency that are legally restricted to the payment of long-term debt principal and interest amounts that mature in future years. Reserved for Advances - These reserves are set up to reflect the advances to the Redevelopment Agency so that they will not be considered as current funds available. Reserved for Low Income Purposes - These reserves represent fund balances related to low income housing which are not considered as current funds available. Note 12: Net Assets Restatement The beginning balance of net assets has been decreased by $562,279 due to a prior period adjustment to capital assets. Note 13: Conduit Debt Obligation Series 1996 - $7,010,000 Lease Revenue Bonds In August 1996, the Palm Desert Financing Authority (the Authority) issued $7,010,000 in Lease Revenue Bonds. The proceeds of the Bonds were used to finance the construction of a County Administrative Center and related facilities upon a site located in the City of Blythe, County of Riverside, fund a reserve account, fund approximately eight months of capitalized interest and pay costs of issuance of the bonds. The Authority will lease the site from the County of Riverside (the County) pursuant to a site lease dated August 1, 1996, by and between the Authority and the County and will lease back to the Authority the site and the facilities (together"the Project") pursuant to a Lease Agreement dated as of August 1, 1996, by and between the Authority and County (Lease). Under the Lease, the County will pay the Trustee Base Rental Payments to the trustee in an amount equal to the scheduled debt service payments on the Bonds. The Authority will assign its right to receive the Base Rental payments to the trustee for the benefit of the owners of the . Bonds. The debt service on the bonds are to be paid solely from lease payments made by the County. The Authority has no obligation to make the debt service payments in the event that the County is not able to make the required base rental payments. During the current fiscal year, these bonds were refunded through the issuance of the 2003 Series A Lease Revenue Bonds. Note 14: Insurance The Agency is covered under the City of Palm Desert's insurance. For additional information, see the City's financial statements. 42 PALM DESERT REDEVELOPMENT AGENCY Schedule 1 COMBINING BALANCE SHEET -OTHER GOVERNMENTAL FUNDS JUNE 30, 2004 Housing Authority Special Debt Capital Revenue Service Projects Fund Fund Funds Totals Assets: Cash and investments $ 8,167,192 $ 2,842,284 $ 4,374,878 $ 15,384,354 Cash with fiscal agent- restricted 310,707 - 8,258,843 8,569,550 Accounts receivable 2,175 66,679 - 68,854 Interest receivable 22,353 - 2,722 25,075 Due from other apartment 552,572 - 552,572 Total Assets $ 9,054,999 $ 2,908,963 $ 12,636,443 $24,600,405 Liabilities and Fund Balances: Liabilities: Accounts payable $ 48,930 $ - $ 281,060 $ 329,990 Accrued liabilities 79,550 - 79,550 Deposits payable 309,804 - 309,804 Deferred revenue 33,738 - 33,738 Due to other apartment 552,572 - 552,572 Due to other funds 94,524 - - 94,524 Advances from the City of Palm Desert - 1,782,563 - 1,782,563 Amount due - pass-through agreements - 1,199,469 - 1,199,469 Total Liabilities 1,119,118 2,982,032 281,060 4,382,210 Fund Balances: Reserved: Encumbrances 330,980 - 2,634,034 2,965,014 Continuing appropriations 1,390,873 2,814,609 4,205,482 Low income purposes 6,214,028 - 6,214,028 Unreserved: Debt service - (73,069) - (73,069) Capital outlay - 6,906,740 6,906,740 Total Fund Balances 7,935,881 (73,069) 12,355,383 20,218,195 Total Liabilities and Fund Balances $ 9,054,999 $ 2,908,963 $ 12,636,443 $24,600,405 43 PALM DESERT REDEVELOPMENT AGENCY Schedule 2 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30,2004 Housing Authority Special Debt Capital Revenue Service Project Fund Fund Fund Totals Revenues: Taxes $ - $ 2,163,267 $ - $ 2,163,267 Other revenue 211,843 2,886 214,729 Rental income 4,488,589 - - 4,488,589 Investment income 67,051 21,480 99,476 188,007 Total Revenues 4,767,483 2,184,747 102,362 7,054,592 Expenditures: Current: General government 4,643,679 448,330 5,092,009 Capital outlay - 883,702 883,702 Payment to other agencies 971,953 - 971,953 Debt service: Interest and fiscal charges - 27,355 - 27,355 Total Expenditures 4,643,679 999,308 1,332,032 6,975,019 Excess(Deficiency) of Revenues Over(Under) Expenditures 123,804 1,185,439 (1,229,670) 79,573 Other Financing Sources (Uses): Transfers in - - 5,001,753 5,001,753 Transfers out (1,237,067) (181,844) (1,418,911) Total Other Financing Sources (Uses) - (1,237,067) 4,819,909 3,582,842 Net Change in Fund Balances 123,804 (51,628) 3,590,239 3,662,415 Fund Balances -Beginning of Year 7,812,077 (21,441) 8,765,144 16.555,780 Fund Balances -End of Year $ 7,935,881 $ (73,069) $ 12,355,383 $ 20,218,195 44 THIS PAGE INTENTIONALLY LEFT BLANK 45 PALM DESERT REDEVELOPMENT AGENCY COMBINING BALANCE SHEET HOUSING AUTHORITY SPECIAL REVENUE FUND JUNE 30, 2004 Complexes Laguna Catalina Desert Las Capital Palms Gardens Pointe Serenas Assets: Cash - checking $ 6,239,394 $ - $ 114,459 $ 141,913 $ 561,742 Cash -trust 1,313 13,634 22,862 21,293 44,450 Cash - petty - 200 150 150 350 Accounts receivable - - - 47 Due from other apartment - - Interest receivable 22,353 - - - Total Assets $ 6,263,060 $ 13,834 $ 137,471 $ 163,356 $ 606,589 Liabilities and Fund Balances: Liabilities: Accounts payable $ 6,649 $ 8,554 $ 3,305 $ 3,495 $ 5,238 Due to other apartment - 262,941 - - - Security deposits - 14,044 22,862 21,293 44,450 Accrued management fees - 992 2,201 1,922 4,464 Accrued payroll - 5,761 2,343 2,690 6,239 Due to other funds 94,524 - Deferred revenue - 2,206 577 1,487 170 Total Liabilities 101,173 294,498 31,288 30,887 60,561 Fund Balances: Reserved: Encumbrances 330,980 Continuing appropriations 1,390,873 - Low income purposes 4,440,034 (280,664) 106,183 132,469 546,028 Total Fund Balances 6,161,887 (280,664) 106,183 132,469 546,028 Total Liabilities and Fund Balances $ 6,263,060 $ 13,834 $ 137,471 $ 163,356 $ 606,589 46 Schedule 3 Complexes (Continued) One California Total Combined Neighbors Quail Pueblos Villas Taos Complexes Total $ 31,091 $ 1,077,043 $ - $ - $ - $ 1,926,248 $ 8,165,642 7,568 158,171 4,455 30,803 6,158 309,394 310,707 50 350 250 50 1,550 1,550 - 798 1,330 - 2,175 2,175 552,572 - 552,572 552,572 - - - - - 22,353 $ 38,709 $ 1,788,934 $ 4,455 $ 32,383 $ 6,208 $ 2,791,939 $ 9,054,999 $ 1,560 $ 16,956 $ 353 $ 2,046 $ 774 $ 42,281 $ 48,930 - - 30,906 249,239 9,486 552,572 552,572 7,568 158,171 4,455 30,803 6,158 309,804 309,804 682 11,563 465 2,852 434 25,575 25,575 265 26,749 775 8,683 470 53,975 53,975 - - - - - 94,524 71 26,576 1,425 1,050 176 33,738 33,738 10,146 240,015 38,379 294,673 17,498 1,017,945 1,119,118 - - - - - 330,980 - - 1,390,873 28,563 1,548,919 (33,924) (262,290) (11,290) 1,773,994 6,214,028 28,563 1,548,919 (33,924) (262,290) (11,290) 1,773,994 7,935,881 $ 38,709 $ 1,788,934 $ 4,455 $ 32,383 $ 6,208 $ 2,791,939 $ 9,054,999 47 PALM DESERT REDEVELOPMENT AGENCY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- HOUSING AUTHORITY SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE,2004 Complexes Laguna Catalina Desert Las Capital Palms Gardens Pointe Serenas Revenues: Rental income $ - $ 220,641 $ 261,561 $ 269,189 $ 694,646 Other revenues 4,527 7,332 2,856 9,796 3,886 Interest income 67,051 - - - - Total Revenues 71,578 227,973 264,417 278,985 698,532 Expenditures: Current: Payroll - 112,098 50,338 50,777 132,799 Administrative 5,699 143,733 130,110 146,382 260,422 Management - 12,452 25,931 22,232 52,914 Capital outlay 277,407 240,354 9,442 20,397 35,949 Total Expenditures 283,106 508,637 215,821 239,788 482,084 Excess(Deficiency)of Revenues Over(Under)Expenditures (211,528) (280,664) 48,596 39,197 216,448 Fund Balances-Beginning of Year 6,373,415 - 57,587 93,272 329,580 Fund Balances-End of Year $ 6,161,887 $ (280,664) $ 106,183 $ 132,469 $ 546,028 48 Schedule 4 Complexes(Continued) One California Total Combined Neighbors Quail Pueblos Villas Taos Complexes Total $ 112,986 $ 2,288,783 $ 53,378 $ 522,043 $ 65,362 $ 4,488,589 $ 4,488,589 3,777 160,984 11 14,902 3,772 207,316 211,843 - - - - - - 67,051 116,763 2,449,767 53,389 536,945 69,134 4,695,905 4,767,483 10,835 573,242 16,493 184,600 11,070 1,142,252 1,142.252 57,955 955,372 33,329 317,401 55,709 2,100,413 2,106,112 8,422 136,063 5,415 39,002 5,444 307,875 307,875 17,645 164,616 2,907 306,971 11,752 810,033 1.087,440 94,857 1,829,293 58,144 847,974 83,975 4,360,573 4,643,679 21,906 620,474 (4,755) (311,029) (14,841) 335,332 123,804 6,657 928,445 (29,169) 48,739 3,551 1,438,662 7,812,077 $ 28,563 $ 1,548,919 $ (33,924) $ (262,290) $ (11,290) $ 1,773,994 $ 7,935,881 49 PALM DESERT REDEVELOPMENT AGENCY Schedule 5 COMBINING BALANCE SHEET -OTHER GOVERNMENTAL FUNDS DEBT SERVICE JUNE 30, 2004 Project Area 3 Totals Assets: Cash and investments $ 2,842,284 $ 2,842,284 Accounts receivable 66,679 66,679 Total Assets $ 2,908,963 $ 2,908,963 Liabilities and Fund Balances: Liabilities: Advances from the City of Palm Desert $ 1,782,563 $ 1,782,563 Amount due- pass-through agreements 1,199,469 1,199,469 Total Liabilities 2,982,032 2,982,032 Fund Balances: Unreserved: Debt service (73,069) (73,069) Total Fund Balances (73,069) (73,069) Total Liabilities and Fund Balances $ 2,908,963 $ 2,908,963 50 PALM DESERT REDEVELOPMENT AGENCY Schedule 6 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS -DEBT SERVICE FOR THE YEAR ENDED JUNE 30, 2004 Project Area 3 Totals Revenues: Taxes $ 2,163,267 $ 2,163,267 Investment income 21,480 21,480 Total Revenues 2,184,747 2,184,747 Expenditures: Payment to other agencies 971,953 971,953 Debt service: Interest and fiscal charges 27,355 27,355 Total Expenditures 999,308 999,308 Excess of Revenues Over (Under) Expenditures 1,185,439 1,185,439 Other Financing Sources (Uses): Transfers out (1,237,067) (1,237,067) Net Change in Fund Balances (51,628) (51,628) Fund Balances - Beginning of Year (21,441) (21,441) Fund Balances - End of Year $ (73,069) $ (73,069) 51 PALM DESERT REDEVELOPMENT AGENCY Schedule 7 COMBINING BALANCE SHEET •OTHER GOVERNMENTAL FUNDS CAPITAL PROJECTS JUNE 30,2004 Project Project Area 2 Area 3 Totals Assets: Cash and investments $ 4,129,921 $ 244,957 $ 4,374,878 Cash with fiscal agent- restricted 3,828,238 4,430,605 8,258,843 Interest receivable 1,552 1,170 2,722 Total Assets $ 7,959,711 $ 4,676,732 $ 12,636,443 Liabilities and Fund Balances: Liabilities: Accounts payable $ 35,640 $ 245,420 $ 281,060 Total Liabilities 35,640 245,420 281,060 Fund Balances: Reserved: Encumbrances 1,589,268 1,044,766 2,634,034 Continuing appropriations 2,270,874 543,735 2,814,609 Unreserved: Capital projects 4,063,929 2,842,811 6,906,740 Total Fund Balances 7,924,071 4,431,312 12,355,383 Total Liabilities and Fund Balances $ 7,959,711 $ 4,676,732 $ 12,636,443 52 PALM DESERT REDEVELOPMENT AGENCY Schedule 8 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -OTHER GOVERNMENTAL FUNDS -CAPITAL PROJECTS FOR THE YEAR ENDED JUNE 30, 2004 Project Project Area 2 Area 3 Totals Revenues: Investment income $ 74,628 $ 24,848 $ 99,476 Other revenue 2,036 850 2,886 Total Revenues 76,664 25,698 102,362 Expenditures: Current: General government 350,133 98,197 448,330 Capital outlay 413,935 469,767 883,702 Total Expenditures 764,068 567,964 1,332,032 Excess (Deficiency) of Revenues Over(Under) Expenditures (687,404) (542,266) (1,229,670) Other Financing Sources (Uses): Transfers in 5,001,753 5,001,753 Transfers out (153,647) (28,197) (181,844) Total Other Financing Sources (Uses) (153,647) 4,973,556 4,819,909 Net Change in Fund Balances (841,051) 4,431,290 3,590,239 Fund Balances - Beginning of Year 8,765,122 22 8,765,144 Fund Balances - End of Year $ 7,924,071 $ 4,431,312 $ 12,355,383 53 PALM DESERT REDEVELOPMENT AGENCY Schedule 9 COMPUTATION OF LOW AND MODERATE HOUSING EXCESS SURPLUS FUNDS AS OF JUNE 30, 2004 Excess Surplus in the Low and Moderate Income Housing Fund is any unexpended or unencumbered amount that exceeds the greater of either $1,000,000 or the aggregate amount deposited in the Low and Moderate Income Housing Fund during the preceding four fiscal years. It is computed at the beginning of the fiscal year to which it relates. Tax Increment Fiscal Deposits to Year Housing Fund 1999-2000 $ 6,347,646 2000-2001 7,768,705 2001-2002 9,057,701 2002-2003 10,049,970 Total $ 33,224,022 Base Limitation $ 1,000,000 Greater Amount $ 33,224,022 Fund Balance of the Low and Moderate Income Housing Fund -July 1, 2003 33,357,392 Less: Unavailable amounts Encumbrances 5,651,036 Loans and notes receivable 4,085,042 Property held for resale 427,797 Prepaid items and deposits 2,867,478 Available Fund Balance of the Low and Moderate Income Housing Fund-July 1, 2003 $ 20,326,039 Computed Excess Surplus -July 1, 2003 $ - 54 City of Palm Desert City and Redevelopment Agency Portfolios COMPLIANCE ANALYSIS AND INVESTMENT REPORT November 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) met on December 14th, and raised the Federal Funds Rate by 25 basis points to 2.25%. This was the fifth consecutive time that the FOMC has raised short-term interest rates. Investors trading futures contracts based upon movements in the Federal Funds Rate have assigned a 100% probability to another 25 basis-point increase at the next FOMC meeting on February 1 st and 2nd, 2005. A number of Federal Reserve officials believe that the risk of inflation may be increasing, due to slowing producitivity growth; a lower dollar; high energy and commodity prices; recent inflation data, and anecdotal evidence of businesses raising prices. So far, however, the declining dollar has only caused a modest increase in import prices, because foreign companies have resisted raising prices, in order to avoid losing market share in the U.S. The yield curve continued to flatten as short-term interest rates rose modestly,while intermediate-and long-term rates fell 10-20 basis points, Solid economic growth and an improving labor market supported a rise in short-term interest rates. Long-term interest rates declined because of the market's perception that long-term inflation would remain stable, despite a rise in oil prices and a decline in the U.S. dollar. Under that scenario, the FOMC would raise short-term interest rates with less urgency, particularly if an economic slowdown in Europe were to travel across the Atlantic. Pis 47avolll C..C..M r. Treasurer PORTFOLIO STATISTICS Dollars in Thousands NOV-04 OCT-04 SEP-04 AUG-04 JUL-04 JUN-04 CITY Month-End Book Value*** $ 128,602 $ 130,550 $ 132,121 $ 136,973 $ 141,472 $ 142,417 Month-End Market Value*** $ 128,877 $ 130,866 $ 132,403 $ 137,299 $ 141,687 $ 142,542 Paper Gain (Loss) $ 275 $ 316 $ 282 $ 326 $ 215 $ 125 Prior Year Book Variance $ (3,536) $ (3,592) $ (6,242) $ (48,236) $ (34,365) $ (35,770) Interest Earnings $ 214 $ 200 $ 191 $ 195 $ 187 $ 174 Yield-To-Maturity 2.08% 1.96% 1.84% 1.74% 1.68% 1.58% Weighted Maturity(Days) 119 124 123 121 128 133 Effective Duration 0.15 0.17 0.18 0.19 0.22 0.23 RDA Month-End Book Value*** $ 148,730 $ 149,149 $ 158,671 $ 160,693 $ 175,311 $ 184,909 Month-End Market Value*** $ 148,761 $ 149,180 $ 158,703 $ 160,783 $ 177,512 $ 187,083 Paper Gain (Loss) $ 31 $ 31 $ 32 $ 90 $ 2,201 $ 2,174 Prior Year Book Variance $ 4,546 $ 4,929 $ 5,778 $ 37,378 $ 74,760 $ 85,643 Interest Earnings $ 221 $ 216 $ 202 $ 217 $ 234 $ 183 Yield-To-Maturity 1.84% 1.73% 1.61% 1.51% 1.53% 1.37% Weighted Maturity(Days) 65 65 62 71 134 128 Effective Duration 0.07 0.09 0.10 0.12 0.13 0.15 * *** Omits SLGSs. City of Palm Desert -- Portfolio Characteristics 30 November 2004 Dollars in Thousands Ageing Interval Market Value < 1 M $ 68,475 General Fund Ageing <2M 5,454 <3M 2.295 100 <6110 11,132 80 73 < 1 YR - e <2YR _ 0 ou <3YR 5,945 40 <4YR - ° IL <5YR _ 20 6 2 12 0 >5YR - p 0 Total: $ 93,301 <1M <2M <3M <6M < 1YR <2YR Ratinas Market Value CreditQuafity AAA AA AAA $ ,181 26% 72 0% Unrated"' 72,785 AA 2,286 A 9,955 A-1 11,053 A Unrated' 9% 65% Total: $ 125,260 Sector Market Value Asset Allocation Money Market Funds $ 19,706 LAIF RDALAIF 32,785 37 � RDA Loan 32,785 MTNs 14,673 U.S.Treasury _ RDA Loan Money Market 31/° Federal Agency 7,043 Funds Commercial Paper 11,053 18% MTNs Total: $ 125,260 t4% Month City Yield LAIF Yield Variance Performance Dec03 1.58 1.55 0.03 Jan04 1.58 1.53 0.05 2.2 Feb 1.58 1.44 0.14 Mar 1.56 1.47 0.09 1.9 Apr 1.54 1.45 0.09 e May 1.53 1.43 0.11 m 1.6 t li s Jun 1.58 1.47 0.11 1.3 {; Jul 1.68 1.60 0.07 L R Aug 1.74 1.67 0.06 1.0 Sep 1.84 1.77 0.07 Dec031an04Feb Mar Apr May Jun Jul Aug Sep Oct Nov Oct 1.96 1.89 0.07 Nov 2.08 2.00 0.08 E3LAIF Yield ❑City Yield Moody's Credit Ratings " LAIF, and City Loan to RDA Page 2 of 8 City of Palm Desert Portfolio Holdings 30 November 2004 Market Ratings Par Value Issuer lCoupol Maturity Cost YTM I Price I Value jMoodys1 S&P Medium-Term Notes $ 2,406,000 ABBOTT LABS 6.80 5/15/2005 $ 2,456,949 2.08 101.70 $ 2,446,911 Al AA $ 3,000,000 FORD 7.20 6/15/2007 $ 3,097,062 5.75 106.76 $ 3,202,845 A3 BBB- $ 2,500,000 FORD 7.20 611512007 $ 2,580,885 5.75 106.76 $ 2,669,038 A3 BBB- $ 1,610,000 FORD 6.75 5/15/2005 $ 1,638,550 2.80 101.62 $ 1,636,125 A3 BBB- $ 2,425,000 GENERAL ELECTRIC 4.25 1/28/2005 $ 2,436,202 1.30 100.30 $ 2,432,163 Aaa AAA $ 1,270,000 PITNEY BOWES 5.95 2/1/2005 $ 1,279,696 1.32 100.46 $ 1,275,875 Aa3 AA $ 1,000,000 WACHOVIA 7.70 2/15/2005 $ 1,012,852 1.38 101.05 $ 1,010,538 Aa3 A $ 14,211,000 Subtotal $ 14,502,196 3.35 $ 14,673,496 Commercial Paper--Discount $ 3,025,000 GENERAL ELECTRIC 1.55 12/15/2004 $ 2,999,603 1.61 99.90 $ 3,022,114 P-1 A-1+ $ 3,031,000 GENERAL ELECTRIC 1.64 1/14/2005 $ 2,999,932 1.70 99.71 $ 3,022,172 P-1 A-1+ $ 5,013,000 WELLS FARGO BANK 1.92 12/20/2004 $ 4,999,899 1.95 99.90 $ 5,008,217 P-1 A-1+ $ 11,069,000 Subtotal $ 10,999,434 1.79 $ 11,052,503 Federal Agency--Discount $ 1,015,000 FED NATIONAL MTG ASSOC 1.92 5/2/2005 $ 997,021 2.00 98.98 $ 1,004,647 Aaa AAA $ 3,035,000 FED NATIONAL MTG ASSOC 1.71 3/3/2005 $ 2,995,644 1.78 99.41 $ 3,017,094 Aaa AAA -$ 3,045,000 FED NATIONAL MTG ASSOC 1.79 4/1/2005 $ 2,999,427 1.86 99.21 $ 3,020,945 Aaa AAA $ 7,095,000 Subtotal $ 6,992,092 1.85 $ 7,042,685 LGIP $ 40,000,000 L.A.I.F. 0.00 12/1/2004 $ 40,000,000 2.00 100.00 $ 40,000,000 U U $ 40,000,000 Subtotal $ 40,000,000 2.00 $ 40,000,000 LGIP $ 11,366,550 C.A.M.P. 0.00 12/1/2004 $ 11,366,550 1.73 100.00 $ 11,366,550 U AAA $ 11,366,550 Subtotal $ 11,366,550 1.73 $ 11,366,550 Pooled Funds--AIM $ 8,339,945 PRIME PORTFOLIO 0.00 12/1/2004 $ 8,339,945 1.58 100.00 $ 8,339,945 Aaa AAA $ 8,339,945 Subtotal $ 8,339,945 1.58 $ 8,339,945 City Loan to RDA $ 32,785,480 CITY OF PALM DESERT 0.00 12/1/2004 $ 32,785,480 2.00 100.00 $ 32,785,480 U U $ 32,785,480 Subtotal $ 32,785,480 2.00 $ 32,785,480 Total Investments $ 124,866,975 $ 124,985,697 2.08 $ 125,260,659 "U"= Unrated Page 3 of 8 City of Palm Desert Portfolio Holdings 30 November 2004 Market Ratings Par Value Issuer lCoupol Maturity Cost YTM I Price I Value IMoodysi S& P Cash $ 3,010,439 CITY MAIN CHKG 0.00 12/1/2004 $ 3,010,439 0.00 100.00 $ 3,010,439 N/A N/A $ 182,231 DESERT WILLOW CHKG 0.00 12/1/2004 $ 182,231 0.00 100.00 $ 182,231 N/A N/A $ 22,874 OFFICE COMPLEX TRUST 0.00 12/1/2004 $ 22,874 0.00 100.00 $ 22,874 N/A N/A $ 400,943 RECREATIONAL FAC CHKG 0.00 12/1/2004 $ 400,943 0.00 100.00 $ 400,943 N/A N/A $ 3,616,487 Subtotal $ 3,616,487 $ 3,616,487 Total Investments and Cash $ 128,483,462 $ 128,602,184 $ 128,877,146 "U"= Unrated Page 4 of 8 Palm Desert Redevelopment Agency-- Portfolio Characteristics 30 November 2004 Dollars in Thousands Ageing Interval Market Value Portfolio Ageing w%o SLGSsI < 1M $ 70,855 <2M - <3M 1,982 100 87 <6M 9,054 80 <1YR 70 <2YR 0 60 50 <3YR r 40 <4YR 0. 30 <5YR 20 11 >5YR _ 10 0 2 0 0 0 0 0 Total: $ 81,891 <1M <2M <3M <6M <1YR <2YR <3YR <4YR Qualit Market Value Credit Quality AAA $ 82,426 AAA AA 0% Unrated** 60,898 56% A AA - 0% A A-1 3,020 A-1 Unrated" Total: $ 146,344 2% 42% Sector Market Value Asset Allocation Money Market U.S.Treasury $ 23,056 a, • , Funds Money Market Funds 51,343 38% LAW 60,899 Federal Agency 8,026 U.S.Treasury Commercial Paper 3,020 17% LAIF Corporate Bonds - 45% Total: $ 146,344 Month RDA Yield LAIF Yield Variance Performance DecO3 1.29 1.55 -0.25 Jan04 1.24 1.53 -0.29 2.2 Feb 1.20 1.44 -0.24 Mar 1.20 1.47 -0.28 1.9 Apr 1.22 1.45 -0.23 May 1.17 1.43 -0.26 m 1.6 Jun 1.37 1.47 -0.10 5. Jul 1.53 1.60 -0.08 1.3 Aug 1.51 1.67 -0.16 1.0 Sep 1.61 1.77 -0.17 Dec031an04Feb Mar Apr May Jun Jul Aug Sep Oct Nov Oct 1.73 1.89 -0.16 Nov 1.84 2.00 -0.17 0 LAIF Yield ❑RDA Yield Moody's Credit Ratings " LAIF Page 5 of 8 Palm Desert Redevelopment Agency Portfolio Holdings 30 November 2004 Market Ratings Par Value Issuer JCouponj maturi7;T Cost YTM I Price I Value Moody's IQ&P Commercial Paper--Discount $ 3,039,000 GENERAL ELECTRIC 1.73 3/1/2005 $ 2,999,569 1.80 99.39 $ 3,020,410 P-1 A-1+ $ 3,039,000 Subtotal $ 2,999,569 1.80 $ 3,020,410 U.S. Treasury--Coupon $ 23,107,000 UNITED STATES TREASURY 1.63 3/31/2005 $ 23,089,206 1.86 99.78 $ 23,056,453 Aaa AAA $ 23,107,000 Subtotal $ 23,089,206 1.86 $ 23,056,453 Federal Agency--Coupon $ 1,983,000 FED HOME LOAN MTG 1.88 1/15/2005 $ 1,983,417 1.70 99.94 $ 1,981,761 Aaa AAA $ 1,983,000 Subtotal $ 1,983,417 1.70 $ 1,981,761 Federal Agency--Discount $ 3,040,000 FED NATIONAL MTG ASSOC 1.75 3/4/2005 $ 2,999,509 1.82 99.41 $ 3,022,064 Aaa AAA $ 3,040,000 FED NATIONAL MTG ASSOC 1.71 3/1/2005 $ 3,001,012 1.78 99.43 $ 3,022,672 Aaa AAA $ 6,080,000 Subtotal $ 6,000,521 1.80 $ 6,044,736 LGIPs .$ 40,000,000 L.A.LF. 0.00 12J112004 $ 40,000,000 2.00 100.00 $ 40,000,000 U U $ 5,997,875 L.A.I.F. (HOUSING) 0.00 12/1/2004 $ 5,997,875 2.00 100.00 $ 5,997,875 U U $ 9,834,304 L.A.I.F. BOND PROCEEDS 0.00 12/1/2004 $ 9,834,304 2.00 100.00 $ 9,834,304 U U $ 5,066,620 L.A.I.F. BOND PROCEEDS 0.00 12/1/2004 $ 5,066,620 2.00 100.00 $ 5,066,620 U U $ 60,898,799 Subtotal $ 60,898,799 2.00 $ 60,898,799 LGIP $ 20,996,130 C.A.M.P. 0.00 12/1/2004 $ 20,996,130 1.73 100.00 $ 20,996,130 U AAA $ 20,996,130 Subtotal $ 20,996,130 1.73 $ 20,996,130 Pooled Funds--AIM $ 30,347,109 PRIME PORTFOLIO 0.00 12/1/2004 $ 30,347,109 1.58 100.00 $ 30,347,109 Aaa AAA $ 30,347,109 Subtotal $ 30,347,109 1.58 $ 30,347,109 Total Investments $ 146,451,038 $ 146,314,750 1.84 $ 146,345,398 Cash $ 2,093,830 HOUSING AUTH CHK 0.00 12/1/2004 $ 2,093,830 0.00 100.00 $ 2,093,830 N/A N/A $ 321,357 HOUSING AUTH TRUST 0.00 12/1/2004 $ 321,357 0.00 100.00 $ 321,357 N/A N/A $ 2,415,187 Subtotal $ 2,415,187 $ 2,415,187 "U"= Unrated Page 6 of 8 Palm Desert Redevelopment Agency Portfolio Holdings 30 November 2004 Market Ratings Par Value Issuer Coupon Maturity Cost YTM I Price I Value IMoodys IS S P Total Investments and Cash $ 148,866,225 $ 148,729,937 $ 148,760,585 "U"= Unrated 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 30 November 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 22 December 2004, pa bs.. 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% 15.8% 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% 5.6% 5.5% 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 8.8% 2.1% 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 - - 536010) Reverse Repos 92 Days 20% Not Authorized 536010) Medium-Term Notes 5 Years 30% A 5 Years 30% A 11.6% 0.0% 53601(k) Mutual Funds 90 Days 20% AAA&Aaa 90 Days 1 20% (2) JAAA&AaaJ 15.8% 1 35.1% 53601(I) Trust Indenture Debt Not Authorized 53601(m) 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 32.0% 41.6% 53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Authorized Securities AA(Security) LAIF No Limit I No Limit (1) The City loan to RDA,which is not a bond, has been approved by the Palm Desert City Council. 73.8% 100.000 (2) Maximum limit for mutual funds and local government investment pools, excluding bond proceeds. Certified California Municipal Treasurer Page 8 of 8 City of Palm Desert City and Redevelopment Agency Portfolios COMPLIANCE ANALYSIS AND INVESTMENT REPORT December 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 meet next on February 1 st and 2nd to review short-term interest rates. Consumer spending numbers for the fourth quarter are expected to be strong. Federal interest-rate increases are not yet restrictive enough to dampen consumers's spending patterns or the strength of the housing market. Merrill Lynch is forecasting four more interest-rate increases, with the Federal Funds Rate at 3.25% by the end of June 2005. Merrill believes that there will be a corresponding slowdown in economic growth during 2005 and 2006. The big news in December was the"early' retirement of Fannie Mae's Chief Executive Officer, the resignation of Fannie Mae's Chief Financial Officer, and the dismissal of Fannie Mae's external auditor, KPMG, all in a single day. The SEC had made a finding that Fannie Mae had broken accounting rules, and would have to restate its earnings for the last four years, in order to recognize $9 billion of losses on derivative contracts. This, in turn, caused Fannie Mae to fall short of its minimum capital requirement by approximately$3 billion. Fannie Mae may be investigated for another two years since its 2002 and 2003 financial statements will have to be reopened. In the meantime, Fannie Mae has reduced its dividend in order to shore up its capital position. Fannie Mae borrows more than $950 billion annually, and finances more that 25% of all U.S. residential mortgages. Pa"s o:ja*0i , C..C..Af r. Treasurer PORTFOLIO STATISTICS Dollars in Thousands DEC-04 NOV-04 OCT-04 SEP-04 AUG-04 JUL-04 CITY Month-End Book Value"' $ 124,724 $ 128,602 $ 130,550 $ 132,121 $ 136,973 $ 141,472 Month-End Market Value"' $ 124,992 $ 128,877 $ 130,866 $ 132,403 $ 137,299 $ 141,687 Paper Gain(Loss) $ 268 $ 275 $ 316 $ 282 $ 326 $ 215 Prior Year Book Variance $ (8,112) $ (3,536) $ (3,592) $ (6,242) $ (48,236) $ (34,365) Interest Earnings $ 222 $ 214 $ 200 $ 191 $ 195 $ 187 Yield-To-Maturity 2.26% 2.08% 1.96% 1.84% 1.74% 1.68% Weighted Maturity(Days) 121 119 124 123 121 128 Effective Duration 0.14 0.15 0.17 0.18 0.19 0.22 RDA Month-End Book Value"' $ 147,802 $ 148,730 $ 149,149 $ 158,671 $ 160,693 $ 175,311 Month-End Market Value"' $ 147,862 $ 148,761 $ 149,180 $ 158,703 $ 160,783 $ 177,512 Paper Gain (Loss) $ 60 $ 31 $ 31 $ 32 $ 90 $ 2,201 Prior Year Book Variance $ 6,079 $ 4,546 $ 4,929 $ 5,778 $ 37,378 $ 74,760 Interest Earnings $ 239 $ 221 $ 216 $ 202 $ 217 $ 234 Yield-To-Maturity 2.00% 1.84% 1.73% 1.61% 1.51% 1.53% Weighted Maturity(Days) 65 65 65 62 71 134 Effective Duration 0.05 0.07 0.09 0.10 0.12 0.13 "' Omits SLGSs. City of Palm Desert-- Portfolio Characteristics 31 December 2004 Dollars in Thousands Ageing Interval Market Value < 1M $ 58,831 General Fund Ageing <2M 2,286 <3M 3,017 100 <6M 8,109 80 75 < 1 YR - e <2YR - 0 60 <3YR 5,872 r 40 <4YR ° a. <5YR - 20 3 4 10 0 0 >5YR - 0 . Total: $ 78,115 < 1M <2M <3M <6M <1YR <2YR R to Ings` Market Value Credit Quality AAA AA AAA $ 72, 25,/ 0% Unrated'• 72,785785 AA 2,278 A 9,935 A Unrated A-1 3,028 g% 66% Total: $ 116,244 Sector Market Value Asset Allocation Money Market Funds $ 18,733 tAIF RDALAIF 32,785 37°/� RDA Loan 32,785 MTNs 14,641 RDA Loan U.S.Treasury 31% Federal Agency 7,057 Money Market Commercial Paper 3,028 Funds 4A0k 18q° MTNs Total: $ 116,244 14% Month City Yield LAW Yield Variance Performance Jan04 1.58 1.53 0.05 Feb 1.58 1.44 0.14 2.4 Mar 1.56 1.47 0.09 Apr 1.54 1.45 0.09 2.1 May 1.53 1.43 0.11 Jun 1.58 1.47 0.11 a 1.7 m Jul 1.68 1.60 0.07 r 1.4 Aug 1.74 1.67 0.06 Sep 1.84 1.77 0.07 1.0 Oct 1.96 1.89 0.07 Jan04 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Nov 2.08 2.00 0.08 Dec 2.26 2.20 0.06 ®LAIF Yield OCity Yield ' Moody's Credit Ratings LAIF, and City Loan to RDA Page 2 of 8 City of Palm Desert Portfolio Holdings 31 December 2004 Market Ratings Par Value Issuer I Couponj Maturity Cost YTM Price Value Moodys S&P Medium-Term Notes $ 2,406,000 ABBOTT LABS 6.80 5/15/2005 $ 2,447,629 2.08 101.33 $ 2,437,901 Al AA $ 3,000,000 FORD 7.20 6/15/2007 $ 3,093,876 5.75 106.66 $ 3,199,935 A3 BBB- $ 2,500,000 FORD 7.20 6/15/2007 $ 2,578,230 5.75 106.66 $ 2,666,613 A3 BBB- $ 1,610,000 FORD 6.75 5/15/2005 $ 1,633,328 2.80 101.29 $ 1,630,793 A3 BBB- $ 2,425,000 GENERAL ELECTRIC 4.25 1/28/2005 $ 2,430,306 1.30 100.11 $ 2,427,777 Aaa AAA $ 1,270,000 PITNEYBOWES 5.95 2/1/2005 $ 1,274,848 1.32 100.20 $ 1,272,479 Aa3 AA $ 1,000,000 WACHOVIA 7.70 2/15/2005 $ 1,007,642 1.38 100.57 $ 1,005,702 Aa3 A $ 14,211,000 Subtotal $ 14,465,859 2.26 $ 14,641,200 Commercial Paper-Discount $ 3,031,000 GENERAL ELECTRIC 1.64 1/14/2005 $ 2,999,932 1.68 99.91 $ 3,028,348 P-1 A-1+ $ 3,031,000 Subtotal $ 2,999,932 1.68 $ 3,028,348 Federal Agencies --Discount $ 1,015,000 FED NATIONAL MTG ASSOC 1.92 5/2/2005 $ 997,021 1.97 99.17 $ 1,006,575 Aaa AAA $ 3,035,000 FED NATIONAL MTG ASSOC 1.71 3/3/2005 $ 2,995,644 1.75 99.62 $ 3,023,467 Aaa AAA $ 3,045,000 FED NATIONAL MTG ASSOC 1.79 4/1/2005 $ 2,999,427 1.84 99.40 $ 3,026,730 Aaa AAA $ 7,095,000 Subtotal $ 6,992,092 1.85 $ 7,056,772 LGIP $ 40,000,000 L.A.I.F. 0.00 1/1/2005 $ 40,000,000 2.20 100.00 $ 40,000,000 U U $ 40,000,000 Subtotal $ 40,000,000 2.20 $ 40,000,000 LGIP $ 10,363,819 C.A.M.P. 0.00 1/1/2005 $ 10,383,819 1.94 100.00 $ 10,383,819 U AAA $ 10,383,819 Subtotal $ 10,383,819 1.94 $ 10,383,819 Pooled Funds --AIM $ 8,348,223 PRIME PORTFOLIO 0.00 1/5/2005 $ 8,348,223 1.81 100.00 $ 8,348,223 Aaa AAA $ 8,348,223 Subtotal $ 8,348,223 1.81 $ 8,348,223 City Loan To RDA $ 32,785,480 CITY OF PALM DESERT 0.00 1/1/2005 $ 32,785,480 2.20 100.00 $ 32,785,480 U U $ 32,785,480 Subtotal $ 32,785,480 2.20 $ 32,785,480 Total Investments $ 115,854,522 $ 115,975,405 2.259 $ 116,243,842 "U"= Not Rated Page 3 of 8 City of Palm Desert Portfolio Holdings 31 December 2004 Market Ratings Par Value Issuer lCouponj Maturity Cost YTM Price I Value MoodYs S&P Cash $ 8,265,677 CITY MAIN CHKG 0.00 1/5/2005 $ 8,265,677 0.00 100.00 $ 8,265,677 N/A N/A $ 185,135 DESERT WILLOW CHKG 0.00 1/5/2005 $ 185,135 0.00 100.00 $ 185,135 N/A N/A $ 22,874 OFFICE COMPLEX TRUST 0.00 1/5/2005 $ 22,874 0.00 100.00 $ 22,874 N/A N/A $ 274,702 RECREATIONAL FAC CHKG 0.00 1/5/2005 $ 274,702 0.00 100.00 $ 274,702 N/A N/A $ 8,748,389 Subtotal $ 8,748,389 $ 8,748,389 Total Investments and Cash "U"= Not Rated Page 4 of 8 Palm Desert Redevelopment Agency-- Portfolio Characteristics 31 December 2004 Dollars in Thousands Aaeina Interval Market Value < 1M $ 72,187 Portfolio Ageing w/o SLGSs <2M 6,043 <3M 3,022 100 89 <6M _ 90 80 < 1YR e 70 <2YR c 60 0 50 <3YR t- 40 <4YR yo 30 <5YR 20 10 7 4 0 0 0 0 0 >5YR - 0 Total: $ 81,252 <1M <2M <3M <6M < 1YR <2YR <3YR <4YR Quail t Market Value Credit Qualityl AA AAA $ 81,799 AAA 56% %0 Unrated`• 60,599 q AA 0% A A-1 3,027 A-1 Unrated` Total: $ 145,425 2% 42% Sector Market Value Asset Allocation Money Market U.S.Treasury $ 23,071 Funds Money Market Funds 50,689 38% LAIF 60,599 Federal Agency 8,039 U.S.Treasury Commercial Paper 3,027 17% LAIF Corporate Bonds - 45% Total: $ 145,425 Month RDA Yield LAIF Yield Variance Performance Jan04 1.24 1.53 -0.29 Feb 1.20 - 1.44 -0.24 2.4 Mar 1.20 1.47 -0.28 Apr 1.22 1.45 -0.23 2.1 May 1,17 1.43 -0.26 it2. Jun 1.37 1.47 •0.10 '- 1.7 m Jul 1.53 1.60 -0.08 1.4 Aug 1.51 1.67 -0.16L L L h Sep 1.61 1.77 -0.17 1.0 . Oct 1.73 1.89 -0.16 Jan04Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Nov 1.84 2.00 -0.17 Dec 2.00 2.20 -0.20 0LAIF Yield ORDA Yield ' Moody's Credit Ratings LAIF Page 5 of 8 Palm Desert Redevelopment Agency Portfolio Holdings 31 December 2004 Market Ratings Par Value Issuer lCouponj Maturity Cost YTM I Price Value I Moody'sl S&P Commercial Paper--Discount $ 3,039,000 GENERAL ELECTRIC 1.73 3/1/2005 $ 2,999,569 1.78 99.60 $ 3,026,743 P-1 A-1+ $ 3,039,000 Subtotal $ 2,999,569 1.78 $ 3,026,743 U.S.Treasury--Coupon $ 23,107,000 UNITED STATES TREASURY 1.63 3/31/2005 $ 23,093,802 1.86 99.84 $ 23,070,895 Aaa AAA $ 23,107,000 Subtotal $ 23,093,802 1.86 $ 23,070,895 Federal Agency--Coupon $ 1,983,000 FED HOME LOAN MORTGAGE 1.88 1/15/2005 $ 1,983,133 1.70 99.97 $ 1,982,380 Aaa AAA $ 1,983,000 Subtotal $ 1,983,133 1.70 $ 1,982,380 Federal Agency--Discount $ 3,040,000 FED NATIONAL MTG ASSOC 1.75 3/4/2005 $ 2,999,509 1.80 99.61 $ 3,028,144 Aaa AAA $ 3,040,000 FED NATIONAL MTG ASSOC 1.71 3/1/2005 $ 3,001,012 1.75 99.63 $ 3,028,752 Aaa AAA $ 6,080,000 Subtotal $ 6,000,521 1.70 $ 6,056,896 LGIP S 40,000,000 L.A.I.F. 0.00 1/1/2005 $ 40,000,000 2.20 100.00 $ 40,000,000 U U $ 5,697,875 L.A.I.F. (HOUSING) 0.00 1/1/2005 $ 5,697,875 2.20 100.00 $ 5,697,875 U U $ 5,066,620 L.A.I.F. BOND PROCEEDS 0.00 1/1/2005 $ 5,066,620 2.20 100.00 $ 5,066,620 U U $ 9,834,304 L.A.I.F. BOND PROCEEDS 0.00 1/1/2005 $ 9,834,304 2.20 100.00 $ 9,834,304 U U $ 60,598,799 Subtotal $ 60,598,799 2.20 $ 60,598,799 LGIP $ 21,030,500 C.A.M.P. 0.00 1/1/2005 $ 21,030,500 1.94 100.00 $ 21,030,500 U AAA $ 21,030,500 Subtotal $ 21,030,500 1.94 $ 21,030,500 Pooled Funds --AIM $ 29,658,770 PRIME PORTFOLIO 0.00 1/1/2005 $ 29,658,770 1.81 100.00 $ 29,658,770 Aaa AAA $ 29,658,770 Subtotal $ 29,658,770 1.81 $ 29,658,770 Total Investments $ 145,497,069 $ 145,365,094 2.00 $ 145,424,984 Cash $ 2,117,262 HOUSING AUTH CHKG 0.00 1/1/2005 $ 2,117,262 0.00 100.00 $ 2,117,262 N/A N/A $ 319,440 HOUSING AUTH TRUST 0.00 1/1/2005 $ 319,440 0.00 100.00 $ 319,440 N/A N/A $ 2,436,702 Subtotal $ 2,436,702 $ 2,436,702 "U"=Unrated Page 6 of 8 Palm Desert Redevelopment Agency Portfolio Holdings 31 December 2004 Market Ratings Par Value Issuer Coupon I Maturity Cost I YTM Price Value I Moodysl S&P Total Investments and Cash $ 147,933,771 $ 147,801,796 $ 147,861,686 "U"= Unrated 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 31 December 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 26 January 2005, Pis 6'aWi , c.C..Mr. 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% 15.9% 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% 6% 6.0% 5.5% 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 2.6% 2.1% 53601(h) Negotiable CDs 5 Years 30% 5 Years 30% AA-or Aa3 - - 53601(i) Repos 1 Year No Limit 30 Da vs 20% AAA&Aaa - - 53601(i Reverse Repos 92 Days 20% Not Authorized 53601 G) Medium-Term Notes 5 Years 30% A 5 Years 30% 1 A 1 12.5% 0.0% 53601(k) Mutual Funds 90 Days 20% AAA&Aaa 90 Days 20% (2) 1 AAA&Aaa 1 9.0% 20.4% 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 Investment Pools 90 Days 20% or Advisor 90 Days 20% (2) or Advisor 1 9.0% 14.5% 53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Authorized Securities I I AA(Security) LAW I I No Limit No Limit 34.5% 41.7% (1) The City loan to RDA,which is not a bond, has been approved by the Palm Desert City Council. 73.5% 100.0% (2) Maximum limit for mutual funds and local government investment pools, excluding bond proceeds. Certified California Municipal Treasurer Page 8 of 8 F- F- F_ F- p F- p ♦- p F F- p p d 5 j Z U U U U U U U U E Z M Z Z Z, m w E m E m Q m N m � � E O O O O O O U J O J J " o d " CO Y Y 00 0 00 0 Z Z U Z Z � z 0 Z ~ p' Z Z K 2 2 fY } Q 2 Q Q a w Q Q Q Q 4 Q Q Q J F- Q t- 0 IL YD M co LL LL LL LL LL LL J (n LL U Z (n 0 In In co (n J Z CO Z Z Z> Z Z J J J _l J J E Q J Q Q O m p p W W w Li w W LU L U w U U IL W 2 2 2 (n (n (n (n (n Ln r r r r r r r O 0 0 0 0 0 0 O 0 0 0 0 0 K w c c oa a oa > a) CD a) F Q `a � Q � (n (n (n N N N O O VLn O g O O O ID 1 N to O m O V r 7 Q .- 7 In (D M r m 0 M CO V V' {� N N N N N N N V PM co (n M C) M LL 0 w y Q O M r .- co m N 0 r V O) (D M N O M O V r N _ O m (D 00 0 to .7 J (D m I N V V' 'ITN -It IT 'ITLo M LU Z F- W 00 (O 07 N O O m M V (6 07 (n (D ID (D O (D N N (o v .Q.� F- o m m m m r m m m m m M V— N CD m l} O (� Ld V N N N N C'i M M V M C) N (O WW (fl (» (n (s3 (» (n (.A (p (» (» (» w yi } 2 UH F O O D Cl) r V O �O ° (D (n 0 7 0 co r r� 6 rn U w m N w N N N N N N CD O CD � O W 0) � a= o W N o 0 0 0 0 0 0 O o 0 0 0 0 0 0 0 0 0 0 o O o 0 0 0 0 0 0 co W o 0 0 0 0 0 O 0 0 0 0 O o 0 W F— w O O O O O O O O O N O O O N � O O O CD CDO O O 0 — O O O G Q J O O O O O O O O 0 co O O 0 CD d ; (O Ld CM C) M M C) M M V M M M � V LU d N 64 Ql ffl EA (fl Efl 69 V3 EA EA EA 69 (A (q (n (n a) a) (5 a) (a a) M co M a) a) 'a o Z a a a a a a a Q Q a Q aco 0 m a m a w Z Z Z Z Z Z z o >- oo000 � � � � � � � � Y Y Y U U U U H H O Q Z Q Z Z OOMyF- � = g w 0 m CO Q Q U U U U U Q Q U O Z W OJ OJ J J J J x (n O Q' 0 w J 7 W W W W w w O Z J O a J < J J QJ J F- Q w F- w U 0 oa O Q: Q 0 2 2 O w 7 O F O ZO O w w w w J LL N ry UL LLw w C� (� (7 U 0 O w 0 LL LL LL Q w w m LL LL O N M r m m � � � -- CITY OF PALM DESERT OFFICE OF THE CITY TREASURER STAFF REPORT REQUEST: Review and approve proposed Issuer Lists for Unsecured Commercial Paper and for Medium-Term Notes for 2005. APPLICANT: N/A CASE NOS. N/A DATE: 24 January 2005 CONTENTS: 1) List of Commercial Paper Issuers 2) List of Medium-Term Note Issuers Recommendation: By Minute Motion: That the Investment and Finance Committee approve the proposed Issuer Lists for Commercial Paper and for Medium-Term Notes for 2005. Background: Each year, the Investment and Finance Committee reviews and approves revised Issuer Lists for Commercial Paper and for.Medium-Term Notes. For the current year, all proposed additions are highlighted with gray shading. There is one proposed addition to the Medium-Term Note list -- USAA Capital Corporation. Its history is discussed below. There are five proposed additions to the Commercial Paper list. A short, descriptive summary of each of the proposed companies follows. Staff Report Approved Issuer Lists for CP and MTNs 24 January 2005 Page 2 of 3 Emerson Electric Founded in 1890. .Electrical, electromechanical, and electronic product manufacturer . headquartered in St. Louis, Missouri. $16 billion in annual revenues. 107,800 employees; 245 manufacturing plants; and marketing operations in over 150 countries. A Fortune 150 company that successfully competes with General Electric. Short-term debt rating: Al/Pl. Long-term debt rating: A/A2. First Tennessee (FTN) Founded in 1864. Regional bank holding company headquartered in Memphis, Tennessee.- $28 billion in assets. 200 retail bank branches in Tennessee, Mississippi, and Arkansas. 10,000 employees. 31s` largest U.S. bank holding company. No. 1 retail commercial bank in Tennessee with high customer retention rate. Has not missed a quarterly dividend for 106 years. Owns non-bank subsidiaries (mortgage banking, credit card, and capital markets) that operate in 30 states. Largest primary dealer in U.S. Agency securities. Five-year return on capital is 15% (second-highest in bank industry according to Forbes). One of the stocks listed in Standard and Poor's 500 Index. Short-term debt rating: Al/Pl. Long-term debt rating: A/Al. Sherwin-Williams Founded in 1870. Paint manufacturer, distributor, and seller headquartered in Cleveland, Ohio. $ 5.4 billion in annual revenues. 25,800 employees. Largest paint manufacturer in the U.S., and No. 2 worldwide. A Fortune 350 company. Short-term debt rating: Al/P1. Long-term debt rating: A/A2. SouthTrust Founded in 1887. Regional bank holding company headquartered in Birmingham, Alabama. $51 billion in assets. 700 retail bank branches in Alabama, Georgia, North Carolina, South Carolina, Florida, Virginia, and Texas. 13,000 employees. Offers retail banking, private banking, mortgage banking, insurance, investment, and trust services. S&P 500 company. Owned by Wachovia Bank, the fourth largest bank in the U.S. Short-term debt rating: Al/P1. Long-term debt rating: A/Al. USAA Capital Corporation Founded in 1922. Financial services provider (e.g., banking, real estate, investments, and financial planning) to U.S. military community, headquartered in San Antonio, Texas. Owns and manages $81 billion of assets. Member-owned. Fortune 200 company. Short-term debt rating: Al+/P1. Long-term debt rating: AAA/Aal. Staff Report Approved Issuer Lists for CP and MTNs 24 January 2005 Page 3 of 3 Submitted By: ru'LD1Y�ceA :11J `I,e�{�LWi Thomas W. Jeffrey ty Treasurer Approved By: 0 Paul S. Gibson, C.C.M.T., City Treasurer 1/24/05 CITY OF PALM DESERT 5:59 PM APPROVED COMMERCIAL PAPER ISSUERS JANUARY 2005 S&P/MOODY'S S&P/MOODY'S COMPANY CP RATINGS INDUSTRY MTN RATINGS Abbott Labs (ABT) Al +/P1 Drugs AA/A1 ADP Tax Services (ADPTAX) Al +/P1 Finance AAA/Aaa American Express (AXP) A1/P1 Finance A+/Aa3 American Honda Motor (HNDA) A1/P1 Auto A+IA1 Anheuser Busch (BUD) A1/P1 Beverage A+/A1 Associates Finance (ACAFIN) Al +/P1 Finance Bank of New York (BK) A1/P1 Bank A+/A1 BankAmerica (BAC) A1/P1 Bank A+/Aa2 BellSouth (BLSCRP) A1/P1 Telecomm A/A2 BP America (BPAME) Al +/P1 Petroleum AA+/Aat ChevronTexaco (CHVTX) Al +/P1 Petroleum AA/Aa2 Citigroup (C) Al +/P1 Finance AA-/Aa1 Coca-Cola (KO) A1/P1 Beverage A+/Aa3 Colgate-Palmolive (CL) Al +/P1 Consumer AA-/Aa3 Columbia University (COLUNI) Al +/P1 Education Du Pont (E.I.) de Nemours (DD) Al +/P1 Chemical AA-/Aa3 Duke University (DUKE) Al +/P1 Education Eli Lilly ILLY) Al +/P1 Drugs AA/Aa3 Emerson Electric (EMR) A1/P1 _Electric Equipmt A/A2 Exxon-Mobil (XON) Al +/P1 Petroleum AAA/Aaa First Tennessee Bank (FTN) A1/P1 _ Bank A/All First Union (WB) A1/P1 Bank A/Aa3 Fuji Photo Film Finance U.S.A. (FUJIUS) Al +/P1 Imaging AA/Aa3 General Electric (GECC) Al +/P1 Electric Equipmt AAA/Aaa Gillette (G) Al +/P1 Consumer AA-/Aa3 Goldman Sachs Group (GS) Al +1P1 Securities A+/Aa3 Guardian Industries (GUAIND) A1/P1 Manufacturing A+/A1 Harvard University (HARVRD) Al +/P1 Education AAA/Aaa Hershey Foods (HSY) A1/P1 Food A+/A1 Home Depot (HD) Al +/P1 Retail AA/Aa3 IBM (IBM) A1/P1 Computer A+/A1 Intel (INTC) Al +/P1 Computer A+/A1 International Lease Finance (ILFC) Al +/P1 Finance AA-/A1 J.P. Morgan Chase (JPMCC) A1/P1 Bank A+/A1 John Hopkins University (JHOPKC C) Al +/P1 Education Johnson & Johnson (JNJPP) Al +/P1 Drugs AAA/Aaa Kimberly-Clark (KMBPP) A-1 +/P-1 Consumer AA-/Aa2 Lehman Bros (SLBROS) A1/P1 Securities A+/Aa3 Page 1 of 2 1/24/05 CITY OF PALM DESERT 5:59 PM APPROVED COMMERCIAL PAPER ISSUERS JANUARY 2005 S&P/MOODY'S S&P/MOODY'S COMPANY CP RATINGS INDUSTRY MTN RATINGS McDonald's (MCDPP) A1/P1 Restaurant A/A2 McGraw-Hiff (MHP) A1/P1 Publishing Al Mellon Funding (MELFDG) A1/P1 Bank A+/A1 Merrill Lynch (MER) A1/P1 Securities A+/Aa3 Minnesota Mining & Manufacturing (MMM A1/P1 Manufacturing AA/Aal Morgan Stanley Dean Witter (MS) Al +/P1 Securities A+/Aa3 Northern Trust (NTRS) Al +/P1 Bank AA-/A1 Northwestern University (NWUNI) Al +/P1 Education Paccar Financial (PCAR) Al +/P1 Finance AA-/Al PepsiCo (PEP) A1/P1 Food A+/Aa3 Pitney Bowes (PBI) A1/P1 Office Equipmt A+/Aa3 Princeton University (PRNCTN) Al +/P1 Education AAA/Aaa Proctor & Gamble (PG) Al +/P1 Consumer AA-/Aa3 Salomon Smith Barney (SSB) Al +/P1 Securities AA-/Aal Sherwin-Williams (SHW) A1/P1 -Paint A/A2 SouthTrust Bank (WB) A1/P1 - Bank. A+/Aa2'' State Street Boston (SSBOST) Al +/P1 Bank AA-/Aa3 SunTrust Banks (STI) Al +/P1 Bank AA-/Aa2 Target (TGT) A1/P1 Retail A+/A2 Toyota Motor Credit (TOYCC) Al +/P1 Auto AAA/Aaa United Parcel Service (UPS) Al +/P1 Transportation AAA/Aaa University of California (UNCALB) Al +/P1 Education University of Chicago (UNICHI) Al +/P1 Education USAA Capital (USAACC) Al +/P1 Fin Services AAA/Aal Wachovia (WBCORP) A1/P1 Bank A+/Aa2 Wal-Mart Stores (WMT) Al +/P1 Retail AA/Aa1 Warner-Lambert (WLA) Al +/P1 Drugs AAA/Aaa Washington Gas Light Co. (WGL1 A1/P1 Utility AA-/A2 Wells Fargo (WFC) Al +/P1 Bank AA/Aaa Yale University (YALE) Al +/P1 Education Page 2 of 2 J 1/25/05 CITY OF PALM DESERT 9:21 AM APPROVED MEDIUM-TERM NOTE ISSUERS JANUARY 2005 S&P/MOODY'S COMPANY MTN RATINGS INDUSTRY Abbott Labs (ABT) AA/Al Drugs American Express (AXP) A+/Aa3 Finance American Honda Motor (HNDA) A+/A1 Auto Anheuser Busch (BUD) A+/A1 Beverage Associates Finance (ACAFIN) AA-/Aa1 Finance Bank of New York (BK) A/A1 Bank BankAmerica (BAC) A+/Aa2 Bank BP America (BPAME) AA+/Aa1 Petroleum Chevron/Texaco (CHVTX) AA/Aa2 Petroleum Citigroup Global (CGMH) AA-/Aa1 Finance Coca-Cola (KO) A+/Aa3 Beverage Colgate-Palmolive (CL) AA-/Aa3 Consumer Du Pont (E.I.) de Nemours (DD) AA-/Aa3 Chemical Eli Lilly ILLY) AA/Aa3 Drugs Exxon-Mobil (XOM) AAA/Aaa Petroleum First Tennessee (FTN) A/A1 Bank First Union (WB) A+/Aa2 Bank Ford Motor Credit Corp. (F) BBB-/A3o Auto Finance General Electric (GECC) AAA/Aaa Electric Equipmt Gillette (G) AA-/Aa3 Consumer Goldman Sachs (GS) A+/Aa3 Securities Harvard University (HARVRD) AAA/Aaa Education Hershey Foods (HSY) A+/A1 Food Home Depot (HD) AA/Aa3 Retail IBM (IBM) A+/A1 Computer J.P. Morgan Chase (JPMCC) A+/A1 Bank Johnson & Johnson (JNJ) AAA/Aaa Drugs Kimberly-Clark (KMB) AA-/Aa2 Consumer McDonald's (MCD) A/A2 Restaurant Merck (MRK) AAA/Aaa Drugs Merrill Lynch (MER) A+/Aa3 Securities Minnesota Mining & Manufacturing (MMM AA/Aa1 Manufacturing Morgan Stanley Dean Witter (MS) A+(Aa3 Securities Northern Trust (NTRS) AA-/A1 Bank Paccar Financial Corp (PCAR) AA-/Al Finance Pepisco Inc. (PEP) A+/Aa3 Food Pitney Bowes (PBI) A+/Aa3 Office Equipmt Proctor & Gamble (PG) AA-/Aa3 Consumer Salomon Smith Barney (SSB) AA-/Aa1 Securities Page 1 of 2 1/25/05 CITY OF PALM DESERT 9:21 AM APPROVED MEDIUM-TERM NOTE ISSUERS JANUARY 2005 S&P/MOODY'S COMPANY MTN RATINGS INDUSTRY SouthTrust (WB) A/A1 Bank State Street Boston (SST) AA-/Aa3 Bank SunTrust Banks (STI) AA-/Aa2 Bank Toyota Motor Credit (TOYCC) AAA/Aaa Auto United Parcel Service (UPS) AAA/Aaa Transportation USAA Capital Corporation (USAA) AAA/Aa1 Finance Wachovia (WBCORP) A+/Aa2 Bank Wal-Mart Stores (WMT) AA/Aa1 Retail Wells Fargo (WFC) AA/Aaa Bank Page 2 of 2 O CITY OF PALM'DESERT OFFICE OF THE CITY TREASURER STAFF REPORT REQUEST: Approval of Revisions to Palm Desert Treasury Policies and Procedures for 2004. APPLICANT: N/A CASE NOS. N/A DATE: 26 January 2005 CONTENTS: Palm Desert Treasury Policies and Procedures Nos. 6, 8, 9, 15, and 16 Recommendation: By minute motion: That the Finance Committee recommend that the City Council adopt the revised Palm Desert Treasury Policies and Procedures for 2004, as amended. Background: City policy requires that this manual be updated annually. This is the update for calendar year 2004. Most of the changes this year are minor technical corrections. Policy deletions are highlighted with s#ikeF; policy additions are highlighted with redlining. In Treasury Policy No. 6, the date for the City's annual delivery of instructions to its custodian would be changed from June 30th to January 1st. In Treasury Policy Nos. 8 and 16, the phrases "Finance Committee" and/or "Finance and Investment Committee are replaced with "Investment and Finance Committee." V Staff Report Annual Treasury Policy Review 26 January 2005 Page 2 of 2 In Treasury Policy No. 9, the Information Systems Manager is added as a possible check signer. In Treasury Policy No. 15, various technical changes are made for the purpose of calculating interest allocation. Submitted By: e tc mc, J4• Thomas W. Jeffrey, e Treasurer City of Palm Desert Revision No. 3 Treasury Policies and Procedures Adopted: POLICY NO.: 6 SUBJECT: "CUSTODY AND SAFEKEEPING" POLICY The purpose of this document is to outline the policy and procedure on the custody and safekeeping of securities. It is the policy of the: ➢ City of Palm Desert; ➢ Palm Desert Redevelopment Agency; ➢ Palm Desert Housing Authority; ➢ Palm Desert Financing Authority; and the ➢ City of Palm Desert Golf Course Facilities Corporation (hereafter referred to collectively as the "City") that the City shall retain third- party bank trust companies as clearinghouses for the payment, delivery, receipt, and safekeeping of securities that the City buys or sells. 1 .0 Selection of Custodian and of Trustee A third-party bank trust company shall serve as the City's custodian ("Custodian") for the purpose of settling all of the City's securities transactions that do not involve the investment of the gross proceeds of tax-exempt bonds. A third-party bank trust company shall serve as the City's trustee ("Trustee") for the purpose of settling all of the City's securities transactions that involve the investment of the gross proceeds of tax- exempt bonds. The City shall select both the Custodian and the Trustee through a Request for Proposals ("RFP") process. The City may initiate an RFP process every five years, unless there is an immediate need to fill a vacancy or to replace a trust company. 1 of 7 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 6: "Custody and Safekeeping' Adopted: The City shall subsequently execute separate custody agreements with the selected Custodian and the selected Trustee in order to confirm all legal rights and obligations. The City shall only use safekeeping or custodial agents that are located within the State of California. 2.0 Qualifications of Custodian and of Trustee . The Custodian and the Trustee shall, at a minimum, possess the following qualifications: 2.1 Safekeeping. The ability to clear and safekeep all securities that are authorized by California Government Code Section 53601 . 2.2 Fiduciary Duty. The ability to hold all of the City's investments on a fiduciary basis and to segregate them from the trust company's other assets. 2.3 Bank Charter. Membership in the Federal Reserve System and status as a State of California- or federally-chartered commercial bank, with its accounts insured by the Federal Deposit Insurance Corporation. 3.0 Methods of Delivering Securities All of the City's securities transactions shall be done either on a receipt- versus-payment ("DVP") basis. Both the Custodian and the Trustee shall disburse City monies or deliver City-owned securities to an approved broker only after that broker has delivered to the Custodian or to the Trustee either the securities to be sold or the money to purchase the securities. Both the Custodian and the Trustee shall only process a security transaction after they have received a Bloomberg Trade Ticket from the City which either the City Treasurer or the Assistant Finance Director has signed. The only exceptions to RVP or DVP shall be the purchase or sale of securities that are connected with: (1) local government investment pools; (2) money market mutual funds; or (3) Federal Reserve Banks ("Treasury Direct Program"), since those securities are not deliverable. 2of7 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 6: "Custody and Safekeeping" Adopted: When the City enters into a new custodial relationship, then the securities that the City already owns shall be delivered into safekeeping on a free-delivery basis. The countersignature of either the City Treasurer or the Assistant Finance Director shall be required for the free delivery of securities. Separate custodial accounts shall be maintained for the City of Palm Desert and for the Palm Desert Redevelopment Authority. 4.0 Credit Risk A#of the securities that the City owns shall be registered in the City's name. The ownership of the securities is thus safeguarded by limiting their negotiability. Governmental Accounting Standards Board Statement No. 3, Paragraph 68 requires that all investments, excluding local government investment pools and mutual funds, be classified into one of three categories of credit risk, and disclosed on a governmental entity's balance sheet. The three categories are as follows: 4.1 "Category 1". This applies to investments that are: (1) insured by the Securities Investors Protection Corporation ("SIPC"); (2) physically held by the City or by the City's agent in the City's name; or (3) acquired through the Federal Reserve book-entry system where the broker is separate from the custodian, and the investments are recorded on the broker's book in the City's name. These transactions have the lowest degree of credit risk, they are preferred by the City. 4.2 "Category 2". This applies to uninsured investments that are acquired through a financial institution's trading department and held for safekeeping by the trust department of the same financial institution, and the investments are recorded on the trust department's books in the City's name. These transactions have a higher degree of credit risk. 4.3 "Category 3" This applies to uninsured investments that are: (1 ) acquired through a financial institution's trading department and held for safekeeping by the custodial department of the same financial institution; (2) acquired through a financial institution's trust department and held for safekeeping by the same trust 3of7 ` Palm Desert Treasury Policies and Procedures Revision No. 3 No. 6: "Custody and Safekeeping" Adopted: department; (3) acquired through and held for safekeeping by the same broker; or (4) not recorded on the financial institution's or on the broker's books in the City's name. These transactions have the highest degree of credit risk. 5.0 Authorized Access The following City employees shall be authorized to interface with both the Custodian and the Trustee: 5.1 The City Treasurer. 5.2 The Deputy City Treasurer. 5.3 The Assistant Finance Director. When an authorized employee is no longer employed by the City, then the City shall immediately notify both the Custodian and the Trustee, by telephone, of the expected date and time of the separation, and of the subsequent revocation of the employee's authority to interface with both the Custodian and the Trustee on the City's behalf. The City shall also confirm this, in writing, with both the Custodian and the Trustee within two business days. The written confirmation should be sent to both the Custodian and the Trustee by return receipt, certified mail. No broker or investment advisor shall have access to City monies, accounts, or investments. Any transfer of monies to or through an outside broker must have the City Treasurer's prior written approval. If the City Treasurer is not available, then the Assistant Finance Director shall perform that task. 6.0 Liability of City Treasurer The City Treasurer shall not be liable for securities that are delivered to and received by the Custodian and/or the Trustee, until the City Treasurer has withdrawn them from the Custodian and/or the Trustee pursuant to California Government Code Section 53608. 4of7 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 6: "Custody and Safekeeping" Adopted: 7.0 Monthly Audit The City Treasurer shall receive monthly account statements from both the Custodian and the Trustee that list all of the securities that the Custodian and the Trustee are safekeeping for the City. An Accounting Technician shall complete, prior to each month-end, an audit of the prior month's inventory to ensure that both the Custodian and the Trustee can properly account for all of the City's securities that they should be holding. The Accounting Technician shall retain the monthly account statements in her files. 8.0 Annual Confirmation of Instructions The City Treasurer shall send to both the Custodian and the Trustee annually, by 30 June 1 January, the following documents: (1 ) the current City "Statement of Investment Policy"; (2) delivery instructions for security purchases; and (3) a list of public employees who are authorized to initiate investment transactions. The cover letter shall specify that only the City Treasurer shall be authorized to modify the delivery instructions, in writing. 9.0 Annual Review The City Treasurer shall review all custodial and electronic funds transfer agreements, as needed, in order to ensure that all controls, security provisions, and the responsibilities are being properly followed, and are in compliance with current law. 10.0 Segregation of Broker and Custodial Functions The City shall seek to segregate the provision of brokerage services from the provision of custodial services. If the City, however, uses the same bank or brokerage firm to provide both brokerage and custodial services, then that bank or brokerage firm shall be required to carry liability insurance with the City named as a loss payee, up to the dollar amount of the securities that are held in safekeeping plus an allowance for legal costs in the event of a loss. 5of7 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 6: "Custody and Safekeeping" Adopted: PROCEDURE 1. Receipt-Versus-Payment ("RVP"). The following steps shall be taken when the City buys a security: a. The broker shall have a current set of delivery instructions for the City on file, in advance. b. After closing the trade, the Deputy City Treasurer shall fax a copy of the associated Bloomberg Trade Ticket that has been signed by either the City Treasurer or the Assistant Finance Director, to the Custodian or the Trustee, with City delivery instructions affixed to the Ticket. c. The Deputy City Treasurer shall then telephone the Custodian or the Trustee to confirm receipt of the facsimile transmission and settlement terms. d. The Custodian or the Trustee shall then debit the City's cash account in order to deliver cash to the broker in exchange for the underlying security that the broker simultaneously delivered by electronic funds transfer, to the Custodian or the Trustee. e. An Accounting Technician shall then review the next monthly account statement that the City receives from the Custodian or the Trustee for confirmation of the transaction, and shall retain and file that statement. 2. Delivery-Versus-Payment ("DVP"). The following steps shall be taken when the City sells a security: a. The broker shall have a current set of delivery instructions for the City on file, in advance. b. After closing a trade, the Deputy City Treasurer shall fax a copy of the associated Bloomberg Trade Ticket that has been signed by either the City Treasurer or the Assistant Finance Director, to the Custodian or the Trustee, with City payment instructions affixed to the Ticket. 6of7 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 6: "Custody and Safekeeping" Adopted: c. The Deputy City Treasurer shall then telephone the Custodian or the Trustee to confirm receipt of the facsimile transmission and payment terms. d. The Custodian or the Trustee shall then debit the City's securities account in order to deliver the underlying security to the broker in exchange for cash that the broker simultaneously delivers by electronic funds transfer, to the Custodian or to the Trustee. e. An Accounting Technician shall then review the next monthly account statement that the City receives from the Custodian or the Trustee for confirmation of the transaction, and shall retain and file that statement. 7of7 City of Palm Desert Revision No. 3 Treasury Policies and Procedures Adopted: POLICY NO.: 8 SUBJECT: "REQUESTS FOR PROPOSALS" POLICY The purpose of this document is to outline the policy and procedure on Requests for Proposals ("RFP"). It is the policy of the: ➢ City of Palm Desert; ➢ Palm Desert Redevelopment Agency; ➢ Palm Desert Housing Authority; ➢ Palm Desert Financing Authority; and the ➢ City of Palm Desert Golf Course Facilities Corporation (hereafter referred to collectively as the "City") that the City Treasurer may periodically issue RFPs for banking, custodial, and trustee services to any firms that wish to provide financial services to the City. The City may issue such RFPs every five years unless there is an immediate need to fill a vacancy or to replace an existing financial services provider. The RFP process should normally begin in January. The Deputy City Treasurer shall be responsible for the development of these RFPs. Firms that wish to bid for the City's banking, custodial, and trustee business, may bid for that business in its entirety, or as separate product lines. PROCEDURE 1. Proposal Process. The Deputy City Treasurer shall maintain an active file on all prospects that wish to bid for the City's banking, trustee, and/or custodial service contracts. In January of every fifth year, the Deputy City Treasurer may begin the RFP process. It should consist of the following steps: 1 of 2 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 8: "Requests for Proposals" Adopted: a. Distribution of RFP b. Pre-Proposal Conference c. Proposal Submission d. Proposal Review e. Interview with Top Bidders f. Proposals Accepted by City Council g. Notification to Bidders h. Implementation 2. Technical Evaluation. The Deputy City Treasurer shall be responsible for doing a comparative technical evaluation of all RFPs that the City receives. 3. Finance Cemmktee Investment and Finance Committee Review. The Deputy City Treasurer shall present the results of the technical evaluation, along with recommendations, to the Fi^c ee and Investment r^^^mi+*^^ Investment and Finance Committee for review and approval. 4. City Council Review. The City Treasurer shall present the Finance and Investment Committee's recommendations to the City Council for review and approval. 5. Updating City Approved List. If the City Council approves the retention of a new banker, custodian, or trustee, then the Eligible List in the City's "Statement of Investment Policy" shall be amended annually in order to reflect any such changes. 2of2 City of Palm Desert Revision No. 3 Treasury Policies and Procedures Adopted: POLICY NO.: 9 SUBJECT: "BANK ACCOUNTS" POLICY The purpose of this document is to outline the policy and procedure on bank accounts. It is the policy of the: ➢ City of Palm Desert; ➢ Palm Desert Redevelopment Agency; ➢ Palm Desert Housing Authority; ➢ Palm Desert Financing Authority; and the ➢ City of Palm Desert Golf Course Facilities Corporation (hereafter referred to collectively as the "City") to establish bank accounts for the deposit and disbursement of public monies, and to maintain a complete set of bank contracts, including signature cards, for purposes of control, accountability, limitation, and authorization. - The City shall establish as few bank accounts as possible in order to minimize banking costs. All monthly bank statements shall be mailed directly to and processed by the City accounting function. Two signatures shall be required for each bank account. 1 .0 Authorized Signers Only the City Treasurer or, in the City Treasurer's absence, the Assistant Finance Director, shall be authorized to sign as the "Signer of Contract" on bank documents. Certain City Council members, public employees, and employees of private management companies that contract with the City, shall be authorized as signers on various City bank accounts. The current account signers are as follows: 1 of 4 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 9: "Bank Accounts" Adopted: 1.1 City Council 1.1.1 The Mayor. 1 .1 .2 The Mayor Pro-Tempore. 1 .2 City Employees 1 .2.1 The City Treasurer. 1.2.2 The Assistant Finance Director. 1 .2.3 The Information Systems Manager!. 1.3 Kemper Sports Management, Inc. 1 .3.1 J. Rodney Young. 1 .3.2 Brian Miller. 1 .3.3 Michael Osgood. 1 .4 RPM Company 1.4.1 David W. Fisher. 1 .4.2 Barton R. Robertson. 1.4.3 Donnie Garibaldi. 1 .4.4 Robert Pfeil. 2.0 Annual Review The City Treasurer shall review all bank contracts and signature cards, as needed. 2of4 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 9: "Bank Accounts" Adopted: PROCEDURE 1. Opening A Bank Account. The City Treasurer shall determine whether or not a new City bank account is required, and who shall be authorized as an account signer. If a new City account is to be opened, then: a. The Deputy City Treasurer shall request signature cards from the bank; prepare them; and send them to the authorized signers for completion. b. After the authorized signers have completed the signature cards, they shall return them to the City Treasurer for the "Signer of Contract" authorization. c. The Deputy City Treasurer shall then return the original signature cards to the bank, along with the account contract(s). d. The Deputy City Treasurer shall retain and file a photocopy of each account contract and each signature card. 2. Adding Or Deleting A Signer. When an authorized signer is hired, terminated, or transferred, then the Deputy City Treasurer or, in the Deputy City Treasurer's absence, the City Treasurer, shall immediately review all bank signature cards, account contracts, and Funds Transfer Agreements to determine if they require modification. If a modification is necessary, then the Deputy City Treasurer or, in the Deputy City Treasurer's absence, the City Treasurer, shall do the following: a. Prepare a letter instructing the bank to add or delete a signer. This letter shall be signed by the City Treasurer and countersigned by the affected signer, whenever possible. (1) In the case of a terminating employee, the letter shall be sent to the bank by facsimile machine on the same date that notice is received of the employee's forthcoming termination. The original letter shall also be sent to the bank in the mail. (2) In the case of a new employee, the Deputy City Treasurer shall request a new bank signature card or an addendum card from the bank; obtain the necessary signatures; and return the card to the bank. 3of4 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 9: "Bank Accounts" Adopted: b. In all cases, the Deputy City Treasurer shall retain and file a photocopy of the bank documentation. 3. Closing A Bank Account. Only the City Treasurer or, in the City's Treasurer's absence, the Assistant Finance Director, shall be authorized to close a City bank account. a. The Deputy City Treasurer shall draft a letter to the bank for signature by the City Treasurer or, in the City's Treasurer's absence, by the Assistant Finance Director, approving the closure of the account on an effective date. b. The Deputy City Treasurer shall send the original, signed letter to the bank, and retain and file a photocopy of the letter. c. The City accounting function shall confirm the closing of the bank account, and the termination of all related services, upon receipt of the next monthly bank statement. d. The City accounting function shall then notify the City Treasurer that the bank account has been closed; remove the bank account from the general ledger; and retain a file on the closed bank account for the annual financial audit. 4of4 City of Palm Desert Revision No. 3 Treasury Policies and Procedures Adopted: POLICY NO.: 15 SUBJECT: "INTEREST ALLOCATION" POLICY The purpose of this document is to outline the policy and procedure on interest allocation. It is the policy of the: ➢ City of Palm Desert; ➢ Palm Desert Redevelopment Agency; ➢ Palm Desert Housing Authority; ➢ Palm Desert Financing Authority; and the ➢ City of Palm Desert Golf Course Facilities Corporation that all interest income which the aforementioned entities have accrued and received within a fiscal year should be allocated to individual accounting funds in the City of Palm Desert ("City") and the Palm Desert Redevelopment Agency ("RDA") investment portfolios, so that annual audited financial statements may be prepared. 1 .0 Deduction of Management Fee The Deputy City Treasurer's salary and fringe benefits shall be deducted from each accounting fund in order to reflect the cost of investment portfolio management. If any portion of the Deputy City Treasurer's compensation is allocated to the assessment districts as a cost, then it shall be deducted from the amount that is charged to the accounting funds. 2.0 Retention of Work Papers The Assistant Finance Director shall be responsible for retaining and filing all work papers pertaining to interest allocation so that the City's external auditor will have the requisite documentation for the City's annual financial audit. 1 of 11 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: PROCEDURE 1. Start of Fiscal Year. At the beginning of each new fiscal year, the Deputy City Treasurer should begin the process of allocating interest income. a. interest Allocation Workbook. Retrieve the Interest Allocation Workbook of the prior fiscal year from the Excel>Investments> Interest Allocation subdirectory in the Deputy City Treasurer's personal network directory, and access the "Cash Adjustment Worksheet' (see Exhibit "A"). b. Cash Adjustment Worksheet. Update the "Cash Adjustment Worksheet" by changing column dates; deleting individual monthly balances; reviewing adjustment formulas; and renaming and saving the workbook for the target fiscal year. 1) For each account, take the interest rate for the prior June, and copy it as the interest rate for July 1 of the subsequent fiscal year. Otherwise, SymPro will not allow data to be entered for each month of the target fiscal year. c. Pooled Fund Portfolios. Retrieve the City and the RDA Pooled Fund Portfolios of the prior fiscal year, and copy and rename them for the target fiscal year. The SymPro commands would be: Utility>Portfolio Copy/Deletion>Copy (Archive) Portfolio>Code (e.g., PC01 and PR01)>Name (e.g., 2001 CITY POOLED FUNDS and 2001 RDA POOLED FUNDS)>Path (C:\SYMPRO\DATA\POOLED). d. Prior-Year June SymPro Cash Balances. Print the June 30 SymPro cash balances for the prior fiscal year for the unedited City and RDA Pooled Fund Portfolios. The SymPro commands would be: Fixed Income> Reports>Investment Listings>Investments by Fund (FI)>Ending Date (6/30/(prior fiscal year))>Book Value>Select All>Print. e. Fiscal Year-End Close of Pooled Fund Portfolios. Perform a fiscal year- end close on the new Pooled Fund Portfolios. The SymPro commands would be: Utility>Setup>Fiscal Year End Close>(check box that data has been archived and backed up)>(enter prior fiscal year-end). This will clear all prior fiscal year transactions; create a beginning balance for the target fiscal year; and reset the portfolio for the target fiscal year. 2 of 11 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: Check "yes" when asked if the year-end of each portfolio should be processed. f. Data Entry of Prior-Year June SymPro Cash Balances. Enter the June 30 book value cash balances, as calculated in Procedure 1 .d. of this policy, by fund number, into Column C of the "Cash Adjustment Worksheet." g. Data Entry of June Audited Cash Balances (1V Period). Enter the audited cash balances, by fund number,'from the June Bank Reconciliation (Period 15) of the prior fiscal year into Column D of the "Cash Adjustment Worksheet." 1) All cash that is listed, by fund number, for Activity Code Number 101-0000 under the "Active Cash Cumulative" column of each Cash Work Sheet, should be entered. 2) All 1 10-0000-101 sub-accounts should be added together and entered. 3) The preliminary total in the "Cash Adjustment Worksheet' should match the preliminary total in the Cash Work Sheet. 4) The "Active RDA" cash balance in the Statement of Cash Transactions should be entered into the RDA 110 iine item in the "Cash Adjustment Worksheet." h. Data Entry of Other Monthly Cash Balances. Enter the cash balances, by fund number, from the Cash Work Sheets for the months of the target fiscal year into the appropriate monthly columns of the "Cash Adjustment Worksheet." The ending month of June will be 12' Period. 1) All cash that is listed, by fund number, for Activity Code Number 10 1-0000 under the "Active Cash Cumulative" column of each Cash Work Sheet, should be entered for each month. 2) All 1 10-0000-101 sub-accounts should be added together and entered. 3 of 11 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: 3) The preliminary total in the Cash Adjustment Worksheet should reconcile to the preliminary total in the Cash Work Sheet for that month. 4) The "Active RDA" cash balance in the Statement of Cash Transactions should be entered into the RDA 110 line item in the Cash Adjustment Worksheet. After cash balances have been entered into the "Cash Adjustment Worksheet," the "Adjustment to SymPro" column that is adjacent to each month, will automatically calculate an adjustment. I. Backup of Interest Allocation Workbook. Backup the "Interest Allocation Workbook" by using the following Excel commands: c:\backup\(target fiscal year) INTEREST ALLOCATION. j. Data Entry into Pooled Fund Portfolios. Enter each cash adjustment, by month, from the "Cash Adjustment Worksheet7, as a deposit or a withdrawal in the Transactions Field of the appropriate Participant Fund in the City and the RDA Pooled Fund Portfolios. The resulting cash balance in the Participant Fund should match the corresponding cash balance in the "Cash Adjustment Worksheet." The monthly interest rates will be calculated automatically later in the process. 1) No Cash Adjustment. If the cash adjustment is zero, then no data for that month should be entered into the Participant Fund. 2) RDA Cash Balance. In the case of RDA 110 (Active), the opposite sign convention (e.g., a positive for a negative in the "Cash Adjustment Worksheet' should be used when entering data into the Transactions Field of the Participant Fund, and vice-versa). k. Backup of Pooled Fund Portfolios. Backup the City and the RDA Pooled Fund Portfolios by using the following SymPro commands: Utility> Portfolio Copy/Deletion>Copy (Archive) Portfolio>Code (e.g., 01 PC and 1 PR)>Name (e.g., BACKUP-2001 CITY POOLED FUND and BACKUP-2001 RDA POOLED FUND)>Path (H:\(personal directory)\SYMPRO\DATA\BACKUP). 4 of 11 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: I. Report Production. The Deputy City Treasurer should then print the City and the RDA Pooled Funds Reports for the City Treasurer. All reports should be produced on both a cash basis ("CP") and an accrual basis ("AP"). 1) Portfolio Summary and Portfolio Details Reports. The SymPro commands are: Fixed Income>Report>Portfolio Management> Portfolio (PM). These reports should be printed, th by year, for the target fiscal year (Exhibit "B")• m. Creation of Non-Restricted Funds Reports. The Deputy City Treasurer should then retrieve the current "CITY" and "RDA" investment portfolios, and copy and rename them for the target fiscal year. The SymPro commands are: Utility>Portfolio Copy/Deletion>Copy (Archive) Portfolio>Code (e.g., NCO and NR01)>Name (e.g., 2001 CITY NON- RESTRICTED FUNDS and 2001 RDA NON-RESTRICTED FUNDS)>Path (C:\SYMPRO\DATA\NON-RES). n. Report Production. The Deputy City Treasurer should then provide the City Treasurer with the following reports from the unedited City and RDA Non-Restricted Funds Portfolios. 1) Portfolio Reports. The SymPro commands are: Fixed Income> Report>Portfolio Management>Portfolio (PM). Print the "Portfolio Summary'and "Portfolio Details-Investments' reports, by month, for the target fiscal year (see Exhibit "C"). Place a tick mark next to each individual security that is listed, avoiding duplication. 2) Investment Position Reports. The SymPro commands are: Fixed Income>Report>Reference>Investment Position Report (SP). Print the "Investment Position Reports"for all individual securities, except for State and Local Government Series; mutual funds; and local agency investment pools (see Exhibit "D"). The purpose of this report is to identify trustee securities that should be deleted from the City and the RDA Non-Restricted Funds Portfolios. 3) Delete Trustee Records. "Forward" through the SymPro investment records (using Search>Investment Number), and delete all records of trustee-held ("Restricted") securities, except for the following: 5of11 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: a) City: Main Checking Account; Main Sweep Aeeeunt; all custodian-held securities; CAMP; and LAIF. b) RDA: All custodian-held securities; CAMP and LAIF. Also delete "City" SymPro Nos. 18040 and 18041 (Retiree Health investments); all individual securities that have matured prior to the target fiscal year; LAIF (Housing); LAIF (Bond Proceeds); City loan to RDA; and all State and Local Government Series ("SLGS"). All interest income for the deleted records should have been previously booked (as trustee transactions) by the Senior Financial Analyst. 4) Print Edited Non-Restricted Funds Portfolio Reports. The SymPro commands are: Fixed Income>Report>Portfolio Management> Portfolio (PM). Print the "Portfolio Summary" and the "Portfolio Details-Investments" reports, on an-accrual basis, by month, for the targeted fiscal year (see Exhibit "C"). The Deputy City Treasurer should give them to the Assistant• Finance Director or the Senior Financial An_al_y_st for review and verification. n. Backup of Non-Restricted Funds Portfolios. Backup the City and the RDA Non-Restricted Funds Portfolios by using the following SymPro commands: Utility>Portfolio Copy/Deletion>Copy (Archive) Portfolio>Code (e.g., 01 NC and 01 NR)>Name (e.g., BACKUP-2001 CITY NONRESTRICTED and BACKUP-2001 RDA NONRESTRICTED)> Path (H:\(personal directory)\SYMPRO\DATA\BACKUP). 1) Accrued Interest Report. Print the "Accrued Interest (Al) Report"for the City and RDA Non-Restricted Funds Portfolios by using the following SymPro commands: Fixed Income>Report>Interest> Accrued Interest (AII. The reporting period should be from 7/01/(target fiscal year) through 6/30/(target fiscal year). o. Report Production. The Deputy City Treasurer should then provide the City Treasurer with the following reports from the edited City and RDA Non-Restricted Funds Portfolios. All reports should be on both a cash basis ("CP") and an accrual basis ("AP"). 6 of 11 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: 1) Portfolio Summary and Portfolio Details Reports, The SymPro commands are: Fixed Income>Report>Portfolio Management> Portfolio (PM). Print these reports, by month, for the target fiscal year (see Exhibit "E"). 2) Interest Earnings Reports. The SymPro commands are: Fixed Income>Report>Interest>Interest Earnings (IE)>Issuer>Average Value/Annualized Yield. Print these reports for a 12-month period, from July 1 through June 30 of the target fiscal year (see Exhibit „F„) 3) Allocation Account Activity Reports. The SymPro commands are: Earnings Allocation>Report>Allocation Account Activity (LP). Print the Allocation Accounts Activity Reports for a 12-month period, from the 2nd calendar day at the beginning of the target fiscal year through the 2nd calendar day after the end of the target fiscal year, in order to exclude June interest income on the front end, and to add it on the back end (see Exhibit "G"). p. Preparatory Work Prior to Interest Allocation. Prior to allocating interest earnings, either the City Treasurer or the Assistant Finance Director should take the following steps: 1) Accrual Worksheet. Prepare an Excel worksheet which calculates the amount of interest income that was earned in the prior fiscal period but received in the target fiscal period. Since debt securities with interest coupons typically pay interest every six months, interest received up to 31 December might include some accrued interest. 2) Calculation of Accrued Interest Earnings. Review the "Interest Earnings Report' in order to determine what portion of interest earnings that were received in the target fiscal period should be allocated as accrued interest from the prior fiscal period. Then prepare and post all accrued interest to the general ledgers of the edited City and RDA Pooled Fund Portfolios. 31 Calculation of Total Interest Earnings. Then add this accrued interest to interest received during the target fiscal period, in order to calculate the amount of total interest earnings that will be allocated 7 of 11 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: to all accounting funds in the edited City and RDA Pooled Fund Portfolios. 4) Final Allocation Activity Report. The Deputy City Treasurer should then print "Allocation Account Activity Reports"for the edited City and RDA Pooled Fund Portfolios. The time period would be from 7/1/(target fiscal year) thorough 7/2/(subsequent fiscal year)). q. Allocation of Total interest Earnings. The Deputy City Treasurer should then allocate total interest earnings to the accounting funds in the edited Pooled Fund Portfolios. All reports should be on a cash basis ("CP"). The SymPro commands are: 1) Select the Earnings Allocation>Utility>Select Investment Types For Allocation Pool menu options. Type_"Y" in the "Include in Pool?" i_i "yes" is marked in the "Active Column" and"Aetive"e��ells for . 11 "Participant Accounts." management fees .. a to he alle....ted thFe gh iote.est a ed 3) Select the following Activity>Allocate Earnings menu options: a) Amount to Allocate. Enter the beginning and ending dates for each month of the target fiscal year for the appropriate edited Pooled Fund Portfolio. Then enter total earnings for the month in "Amount To Allocate." Total earnings is taken from the intersection of the "Current Month"and "Interest Earnings columns in the "Portfolio Summary" report for the related edited Non-Restricted Funds Portfolio for each month of the target fiscal year, except for June. b) June Total Earnings. Total earnings for the month of June for both the City and the RDA may be calculated as follows: (1)Adjusted Annual Total Earnings.. Reconcile the annual total earnings figure that SymPro has calculated in June with the annual total earnings figure that the Assistant Finance Director has calculated for the same time period. 8 of 11 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: (2)Adjusted June Total Earnings. Add or subtract the difference from the total earnings figure that SymPro has calculated for the month of June. (3)Amount to Allocate. Enter the adjusted total earnings figure into "Amount to Allocation" for the month of June. c) Imputed Interest Rate. SymPro will impute an interest rate for each month of the target fiscal year, based upon the total earnings that have been entered. r. Report Production. The Deputy City Treasurer should then provide the City Treasurer with the following report from the edited City and the RDA Pooled Funds Portfolios. All reports should be on a cash basis ("CP") only. 4) Allocation Account Activity Report. The SymPro commands are: Earnings Allocation>Report>Allocation Account Activity. Print the Allocation Account Activity Reports for a 12-month period, from the 2nd calendar day at the beginning of the target fiscal year through the 2nd calendar day after the end of the target fiscal year. Interest is posted on the first day of each subsequent month. These reports are needed in order to verify the final interest earnings allocation for each month. s. Allocation of Management Fee. The Deputy City Treasurer's services should be charged as a monthly fee to each accounting fund in the City and RDA Pooled Fund Portfolios. This fee shall be defined as the Deputy City Treasurer's salary plus fringe benefits (equivalent to 29.63 percent of salary). The basis for allocating the management fee should be the dollar amount of each accounting fund as a percentage of the dollar amount of all accounting funds within the Pooled Fund Portfolios. The management fee should be allocated to: (1) assessment district trust funds; (2) RDA trust funds; (3) all other City funds; and (4) all other RDA funds. The allocation of the management fee to all RDA funds shall be done concurrently with the allocation of City staff time that has been devoted to RDA projects. t. Posting of Interest Allocation. The City Treasurer or the Assistant Finance Director shall then post the interest earned to all accounting funds in the City and the RDA Pooled Fund Portfolios. The RDA Trust 9of11 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: Fund shall be subdivided in order to subdivide individual pass-through accounts. 3. Fiscal Year-End Close. After monthly data has been entered for June, (the end of the target fiscal year), the Deputy City Treasurer should begin the fiscal year-end close for the "City" and the "RDA" SymPro portfolios by doing the following: a. Verify Updated Interest Schedule. The SymPro commands are: Fixed Income>Activity>Update Interest Schedule by Due Date. Verify that all interest payments have been posted for the target fiscal year. b. Data Backup. Backup SymPro data for the City and the RDA by using the procedures listed in the yellow Monthly Investment Report — Instructions manual. This only needs to be done once. c. Archive Portfolios. The SymPro commands are: Utility>Portfolio Copy/Deletion>Copy (Archive) Portfolio>Code (e.g., FC03 and FR03)>Name (e.g., 2003 CITY PORTFOLIO FYEC and 2003 RDA PORTFOLIO FYEC)>Path (C:\SYMPRO\DATA\FYEC). This will archive the City and the RDA portfolios for the target fiscal year. d. Backup Archive Portfolios. The SymPro commands are: Utility> Portfolio Copy/Deletion>Copy(Archive) Portfolio>Code (e.g., 03FC and 03FR)>Name (e.g., BACKUP-2003 CITY FYEC and BACKUP-2003 RDA FYEC)>Path (W(personal directory)\SYMPRO\BACKUP). This will create an archive copy of the City and the RDA portfolios for the target fiscal year. e. Reindex Portfolio Files. The SymPro commands are: Fixed Income> Utility>Reindex Files. Reindex to remove any deleted records before proceeding with the close. f. The Close. The SymPro commands are: Fixed Income>Utility> Setup>Fiscal Year End Close. Non-amortizing discount instruments should not be converted to amortizing ones. 1) Check box that questions whether data files have been archived and backed up. 2) Enter the last day of the target fiscal year as the "close date". 10 of 11 1 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 15: "Interest Allocation" Adopted: 3) Hit "OK." 4) Confirm the new fiscal year-end date. The SymPro commands are: Fixed Income>Utility>Setup>Portfolio Setup/Preferences. 11 of 11 1 City of Palm Desert Revision No. 3 Treasury Policies and Procedures Adopted: POLICY NO.: 16 SUBJECT: "CASH AND INVESTMENTS AUDIT" POLICY The purpose of this document is to outline the policy and procedure on the audit responsibilities of the Treasury function. It is the policy of the: ➢ City of Palm Desert; ➢ Palm Desert Redevelopment Agency; ➢ Palm Desert Housing Authority; ➢ Palm Desert Financing Authority; and the ➢ City of Palm Desert Golf Course Facilities Corporation (hereafter referred to collectively as the "City") that the City shall engage an external auditor to conduct a cash and investments audit every three years, unless there have been significant prior audit findings or a change in Treasury personnel. If either of the foregoing conditions occurs, then the City Treasurer or then a ' est ''* emmi** m Investment and Finance Comittee may increase the frequency of the audits, as needed. A cash and investments audit shall include among its objectives, a review of: ➢• The effectiveness of the internal controls for the City's investment program. ➢ Staff compliance with treasury policies and procedures. ➢ The description and classification of investments, by fund type, on the City's balance sheet, as well as related disclosures, including restrictions and commitments. ➢ Custody and safekeeping arrangements. 1 of 2 1 Palm Desert Treasury Policies and Procedures Revision No. 3 No. 16: "Cash and Investments Audit" Adopted: The City Treasurer and the Deputy City Treasurer shall cooperate fully with the external auditor, in terms of willingly producing all information and documents requested, as well as responding honestly to all inquiries. The City's annual audit includes certain audit procedures that are related to cash and investments, such as the confirmation of the year-end balances. It is the City's policy, however, to have the external auditor perform additional procedures related to cash and investments. Consequently, the €inane and investment GeFnmmttee Investment and Finance Committee shall identify and communicate to the external auditor what additional testing procedures will be required. The external auditor shall submit its report on these additional procedures to the FinaRe^ and lnvestmeRt G^^,^,i**^^ Investment and Finance Committee by 31 December of that year. PROCEDURE 1. Required Audit Documentation. The Deputy City Treasurer shall provide the external auditor with the following documents for the fiscal year being audited: a. "Statement of Investment Policy". b. Treasury Policies and Procedures Manual. c. Trade Book. d. Wire Log. e. All bank account signature cards. f. All monthly investment reports and schedules. g. All competitive offering documents. h. All broker qualification and requalification documents. I. All trustee, custodian, and bank administrative fee documents. j. All money market fund qualification documents. 2. Confirmation Letters. The Deputy City Treasurer shall ensure that "Confirmation of Marketable Securities Held By A Third Party" letters are prepared for the external auditor to send to the City's custodian and to the City's trustee. 2of2 • DITTY OF PALM DESERT STATEMENT OF INVESTMENT POLICY 2005 Certified by the Municipal Treasurers'Association of the United States and Canada on March 10, 2004 PREPARED BY THE CITY TREASURER'S OFFICE Thomas W. Jeffrey, J.D., M.B.A. Deputy City Treasurer REVIEWED AND APPROVED BY Paul S. Gibson, C.C.M.T. City Treasurer • Adopted by the City Council on 28 October 2004 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • TABLE OF CONTENTS OVERVIEW PAGE 1 .0 Policy ................................................................................ 1 2.0 Scope ............................................................................... 1 3.0 Prudence ........................................................................... 2 4.0 Objectives .......................................................................... 2 INVESTMENT AUTHORITY 5.0 Delegation of Authority ....................................................... 3 5.1 Investment Procedures ........................................................ 4 6.0 Ethics and Conflicts of Interest ............................................. 4 INVESTMENTS 7.0 Authorized Financial Dealers and Institutions........................... 4 8.0 Authorized and Suitable Investments ..................................... 7 8.1 Prohibited Investments ........................................................ 13 9.0 Investment Pools/Mutual Funds ............................................ 13 • PORTFOLIO MANAGEMENT 10.0 Collateralization .................................................................. 14 11.0 Safekeeping and Custody ..................................................... 14 12.0 Diversification ..................................................................... 15 13.0 Maximum Maturities ............................................................ 15 13.1 Portfolio Rebalancing ............................................................ 15 13.2 Credit Downgrading ............................................................. 16 13.3 Bond Proceeds .................................................................... 16 14.0 Internal Controls .................................................................. 17 PERFORMANCE MEASUREMENT 15.0 Performance Standards ......................................................... 17 15.1 Market Yield (Benchmark) ..................................................... 18 16.0 Reporting ............................................................................ 18 LEGAL REQUIREMENTS 17.0 Investment Policy Adoption ................................................. 18 18.0 Regulatory Submission ........................................................ 19 APPENDICES • A: List of Authorized Financial institutions ................................. 20 B: Glossary ........................................................................... 21 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • 1 .0 Policy It is the policy of the: ➢ City of Palm Desert; ➢ Palm Desert Redevelopment Agency; ➢ Palm Desert Housing Authority; ➢ Palm Desert Financing Authority; and the ➢ Palm Desert Recreational Facilities Corporation (hereafter referred to collectively as the "City") to predicate their investment policies, procedures, and practices upon the following three principles: (1 ) compliance with federal, state, and local laws governing the investment of public monies under the City Treasurer's control; (2) protection of the principal monies entrusted to the City; and (3) maximization of profit within the parameters of prudent risk management, as defined by this Statement of Investment Policy. For the purposes of this policy, "Investment Officers" shall be defined as the City Treasurer and the Deputy City Treasurer. • This policy shall be effective 1 January 2005 through 31 December 2005, unless amended. 2.0 Scope This policy shall apply to all funds that are under the City Treasurer's control including, but not limited to, the general fund; special revenue funds; debt service funds; capital project funds; enterprise funds; and trust and agency funds. These funds are accounted for in the City's Comprehensive Annual Financial Report. The City's Deferred Compensation Plan ("Plan") shall be excluded from the scope of this policy if the following three conditions exist: 2.0.1 A third-party administrator manages the Plan. 2.0.2 Individual plan participants have control over the selection of investments. 2.0.3 The City has no fiduciary responsibility to act as a "trustee" for the Plan. • Page 1 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • The only exception to the foregoing shall be that if the City retains the fiduciary responsibility to act as a trustee for the Plan, then the Plan shall be deemed to be within the scope of this policy. The City Treasurer shall provide the Investment and Finance Committee and the Palm Desert City Council ("City Council") with a quarterly report on the investment of Plan assets. 3.0 Prudence Pursuant to California Government Code Section 53600.3, Investment Officers, as trustees of public monies, shall adhere to the "prudent investor" standard when managing the City's investment portfolios. They shall invest "...with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency." • Investment Officers who follow the provisions of this policy and who exercise due diligence shall be relieved of personal responsibility for a security's credit risk or market price risk: provided, that they report substantial deviations from expectations to the City Manager and to the Investment and Finance Committee in a timely manner, and that they take appropriate action to control adverse developments. "Substantial deviations" shall be defined as either a decline of 10 percent or more in the market value of a security due to issuer default or a credit risk downgrade; or the sale of a security prior to maturity at 10 percent or more below its acquisition cost. 4.0 Objectives The City's investment objectives, in order of priority, shall be: 4.0.1 Safety. Safety of principal shall be the foremost objective. Investments shall be made with the aim of avoiding capital losses due to issuer default; broker default; or market value erosion. Principal shall be preserved by mitigating: • Page 2 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • Credit Risk, the risk of loss due to the failure of the issuer of the security, shall be mitigated by investing in only the highest quality securities; by diversifying investments; and by pre-qualifying broker- dealers and public depositories; and Market Risk, the risk of loss due to a decline in bond prices because of rising market interest rates, shall be mitigated by structuring the portfolios so that issues mature concurrently with the City's anticipated cash requirements, thereby eliminating the need to sell securities prematurely on the open market. It is recognized, however, that in a diversified portfolio, occasional measured losses are inevitable, and must be considered within the context of overall investment return. 4.0.2 Liquidity. An adequate percentage of the portfolios shall be maintained in liquid, short-term securities that can be converted to cash, if necessary, to meet disbursement requirements. Since all cash requirements cannot be anticipated, the portfolios should consist • largely of securities with active secondary markets. These securities should have a relatively low sensitivity to market risk. Maximum overall portfolio maturities are referenced on page 15, section 13.0 of this policy. 4.0.3 Yield. Yield shall be considered only after the basic requirements of safety and liquidity have been met. Whenever possible and in a manner consistent with the objectives of safety and liquidity, a yield higher than the market rate of return shall be sought. 5.0 Delegation of Authority California Government Code Sections 53607 and 53608 authorize the legislative body of a local agency to invest, deposit, and provide for the safekeeping of the local agency's funds or to delegate those responsibilities to the treasurer of the local agency. City of Palm Desert Municipal Code Section 3.08.010 delegates the authority to invest, deposit, and provide for the safekeeping of City public monies to the City Treasurer. • Page 3 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • City of Palm Desert Municipal Code Section 2.16.010 authorizes the City Director of Finance to serve ex officio as City Treasurer. The City Treasurer shall be responsible for all investment transactions that are executed on behalf of the City. The City Treasurer and the Deputy City Treasurer shall have exclusive authority to buy and sell securities on behalf of the City. The Deputy City Treasurer may execute investment transactions on behalf of the City only if the City Treasurer has previously authorized the transactions. If the City Treasurer is unavailable, then the Assistant Finance Director must authorize the investment transactions prior to execution. 5.1 Investment Procedures The City Treasurer shall establish written procedures for the operation of the City's investment program that are consistent with the provisions of this policy. The procedures shall include reference to: safekeeping, PSA repurchase agreements, banking service contracts, and collateral/depository agreements. Such procedures shall include explicit delegation of authority to • persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and under the procedures that the City Treasurer establishes. 6.0 Ethics and Conflicts of Interest Investment Officers shall refrain from personal business activity that could conflict with the proper execution of the City's investment program or impair their ability to make impartial investment decisions. They shall disclose to the City Council any material financial interest in financial institutions that conduct business within the City's jurisdiction. They shall also disclose any personal investment positions that could be related to the performance of the City's investment portfolios. Investment Officers shall subordinate their personal investment transactions to those of the City, particularly with regard to the timing of securities purchases and sales, and shall avoid transactions that might impair public confidence. Investment Officers and their immediate relatives shall not accept or solicit any gifts, gratuities, honorariums, or favors from persons or entities who • provide or who are seeking to provide financial services to the City. Page 4 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • 7.0 Authorized Financial Dealers and Institutions The City Treasurer shall maintain an authorized list (see page 20) of all securities brokers that the Investment and Finance Committee and the City Council have authorized to transact securities business with the City. This list shall be provided to all members of the City Council and the Investment and Finance Committee. Any broker that has made a political contribution within any consecutive four-year period following 1 January 1996 in an amount that exceeds the limits in Municipal Securities Rulemaking Board ("MSRB") Rule G-37, to any member of or candidate for the City Council, the Redevelopment Agency Board, the Housing Authority Commission, or the Investment and Finance Committee shall not be eligible to transact business with the City. Only primary government securities dealers ("primary dealers') that regularly report to the Federal Reserve Bank of New York shall be eligible for inclusion on the City's authorized list. The only exception to the foregoing requirement shall be that the Investment and Finance Committee and the City Council may, at their discretion, accept, review, and approve Requests for Information ("RFI") from secondary brokers that: (1 ) have been in existence for more than five years; (2) have a net capital position in excess of $100 million; (3) are licensed as brokers by the State of California; and (4) are headquartered or have a branch office in California. The number of primary dealers and secondary brokers on the authorized list shall not exceed a combined total of five at any single time. The City shall accept and review new broker applications only when there is an immediate need to fill a vacancy on the authorized list. In all cases, the City shall only accept RFIs from and transact business with the institutional securities sales departments of primary dealers and secondary brokers. The City shall not transact business with an authorized securities firm until all of the documentation that both parties requires, has been executed and delivered. All brokers that wish to apply for inclusion on the authorized list must, at a minimum, provide the City Treasurer with a copy of the following documents, unless otherwise noted: • 7.0.1 Completed "Primary Dealer Request for Information" (signed original only). Page 5 of 26 1 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • 7.0.2 The firm's most recent Annual Report and Securities and Exchange Commission ("SEC") Form 10-K or 20-F. 7.0.3 The firm's National Association of Securities Dealers ("NASD") Form BD — Uniform Application for Broker-Dealer Registration or, in the case of an investment department within a commercial bank, SEC Form MSD. 7.0.4 The firm's current NASD Form BD Status Report. 7.0.5 NASD Form U-4 -- Uniform Application for Securities Industry Registration or Transfer for each employee would who might be trading with the City. 7.0.6 Current NASD Form U-4 Status Report on each employee who might be trading with the City. 7.0.7 A resume from each of the firm's employees who might be trading • with the City. 7.0.8 The firm's delivery and wiring instructions. 7.0.9 An executed corporate resolution that identifies employees who are authorized to trade, and who might be trading with the City. In addition to the above documents, secondary brokers must also submit: 7.0.10 The firm's most recent SEC Form X-17 A-5 or, in the case of an investment department within a commercial bank, SEC Consolidated Reports of Condition and Income for A Bank With Domestic and Foreign Offices — FFIEC 031. Investment Officers shall investigate all broker applicants in order to determine if they: (1 ) are adequately capitalized; (2) are subject to pending legal action (either the firm or the trader); (3) make markets in securities that are appropriate for the City's needs; (4) are licensed as a broker by the State of California Department of Corporations; and (5) are a member of the NASD. Broker applicants shall be required to provide state or local government references from within California. • Page 6 of 26 1 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10128104 • The Investment and Finance Committee and the City Council shall review the submitted documents, along with the Investment Officers' recommendations, and decide if any new brokers should be added to the authorized list. If, in the City's opinion, a broker's RFI is missing, incomplete, late (submitted after the specified deadline), or contains false or misleading information, or if the broker has not submitted all of the documents that the City requires, then the City shall automatically reject that broker's RFI, and the broker shall not be eligible to submit another RFI to the City for three years. The City Treasurer shall provide all authorized brokers annually, in May, with a copy of the City's current investment policy and a certification form. Each broker shall be required to complete and submit the certification form as proof that it has received the City's investment policy, read it, and intends to comply with it. Each broker shall also submit its annual financial statements to the City Treasurer for review and filing. The City Treasurer shall maintain an authorized list (see page 20) of all commercial banks, savings associations, and federal associations (as defined by California Financial Code Section 5102) and trust companies that the • Investment and Finance Committee and the City Council have authorized as public depositories of City monies. This List shall be provided to all members of the City Council and the Investment and Finance Committee. The City shall only deposit public monies in financial institutions that have: 7.0.11 At least $5 billion in total assets. 7.0.12 A core capital-to-total assets ratio of at least five percent. 7.0.13 Favorable statistical ratings from a nationally recognized rating service, as determined by the City Treasurer. 7.0.14 A federal or a state charter. 7.0.15 A branch office within Riverside County. 7.0.16 A "satisfactory" overall rating in their most recent evaluation by the appropriate federal financial supervisory agency, in terms of meeting the credit needs of California communities, pursuant to federal law. • Page 7 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 Under no circumstances shall the City's deposits in a financial institution exceed the total shareholders's equity of that institution. 8.0 Authorized and Suitable Investments The City Treasurer shall be authorized to invest in the following financial instruments pursuant to California Government Code Section 53600 et seq. The City's investment policy is more conservative than state law. Page 8 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • % of Portfolio No. Type of Investment Authorized Other Restrictions 1 . United States Treasury bills, notes, bonds, 100% Maximum maturity: 5 years or certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest. 2. Federal Agency or United States 100% Maximum maturity: 5 years government-sponsored enterprise ("GSE") obligations, participations, or other No more than 30% of the instruments, including those issued by or portfolio may be invested in any fully guaranteed as to principal and one issuer (excluding the interest by Federal Agencies or by proceeds of tax-exempt bondsl. GSE. Banker's Acceptances ("BA") issued by 40% Rated "A-1 " or higher by S&P or commercial banks. "P-1 " by Moody's. Maximum maturity: 180 days No more than 30% of the portfolio may be invested in any one BA issuer. 4. Commercial Paper ("CP") issued by general 25% Rated "A-1 + " by S&P of corporations organized and operating in "P-1 " by Moody's. the United States with assets exceeding $500 million. Maximum maturity: 270 days No more than 10% of the outstanding CP of any one issuer may be purchased. Page 8 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • % of Portfolio No. Type of Investment Authorized Other Restrictions 5. Negotiable Certificates of Deposit ("NCD") 30% Long-term debt rated "AA-" issued by a nationally- or state-chartered higher by S&P or by Moody's. bank, a savings association, a federal association, or by a state-licensed branch Maximum maturity: 5 years of a foreign bank. 6. Time Certificates of Deposit ("TCD") 15% TCDs exceeding $100,000 must issued by qualified public depositories. be collateralized. TCDs must be centralized at one location for each bank or S&L. Maximum maturity: 1 year If TCD is uncollateralized, then no more than $90,000 may be invested. Issuing public depository must meet qualifying criteria on page 7, section 1 .7 of this SOIP. 7. Repurchase Agreements ("RP") sold by 20% Maximum maturity: 30 days authorized brokers. Collateral must be United States Treasury, Federal Agency, or GSE obligations. Zero coupon and stripped coupon instruments are not acceptable as collateral. Page 9 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 % of Portfolio No. Type of Investment Authorized Other Restrictions 7. Repurchase Agreements (continued) 20% Collateral must be valued at 102% of cost and adjusted weekly. City must have first lien and security interest in all collateral. City's custodian must hold collateral. An authorized broker must file a Public Securities Association (PSA) Master Repurchase Agreement with the City Treasurer, and the City Attorney must review the agreement, prior to the transaction of RP business with that broker. 8. Medium-Term Notes issued by 30% Rated "A" or higher by S&P or corporations organized and operating in the by Moody's. United States, or by depository institutions operating in the United States and licensed Maximum maturity: 5 Years by the United States or by any state. No more than 15% of the portfolio may be invested in any one issuer. • Page 10 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • % of Portfolio No. Type of Investment Authorized Other Restrictions 9. Money Market Mutual Funds ("MMF") that 20% Either rated "AAA" by S&P, are registered with the SEC under the (excluding "Aaa" by Moody's, or "AAA-V- Investment Act of 1940. bond 1 + " by Fitch (2 of 3), or retains proceeds) an investment advisor registered or exempt from registration with SEC, with at least 5 years of experience managing a MMF with $500 million or more in assets. MMF must have dollar-weighted average maturity of 90 days or less. MMF must buy securities that mature in 13 months or less. • No commission may be charged. 10. State of California Local Agency See note 4 $40 million limit per account Investment Fund ("LAIF") that is managed with LAIF, except for bond by the State Treasurer's Office. trustee accounts (no limit). City Council and Redevelopment Agency approved participation in LAIF on 12/12/81 in Resolution No. 81-161 . • Page 11 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 0 % of Portfolio No. Type of Investment Authorized Other Restrictions 1 1 . Structured Notes in the form of callable 20% Maximum maturity: 5 years securities or "STRIPS" issued by the United States Treasury or by Federal Agencies or government-sponsored enterprises ("GSE"). 12. Asset-Backed Commercial Paper ("ABCP") 25% Rated "Al + " by S&P or issued by special purpose corporations "P1 " by Moody's. ("SPC"), trusts, or limited liability companies ("LLC") organized and operating Restricted to programs in the United States with assets exceeding sponsored by commercial banks $500 million, that is supported by credit or finance companies. enhancement facilities (e.g., over- collateralization, letters of credit, surety Foreign banks limited to those bonds, etc.). of Canada, United Kingdom, Australia, France, Belgium, Netherlands, Switzerland, and Germany. Program must have credit facilities that provide at least 100% liquidity. Serialized ABCP programs are not eligible. Maximum maturity: 270 days Unsecured commercial paper holdings must be included when calculating the 25% maximum concentration limit. 13. Local Government Investment Pools 20% Must meet above criteria for ("LGIPS") (excluding MMFs (except for LAIF). bond proceeds) Page 12 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • 8.1 Prohibited Investments Investment Officers shall not invest public monies in financial instruments that are not authorized under this policy. Prohibited investments shall include, but shall not be limited to, equity securities, bond mutual funds, reverse repurchase agreements, and derivative contracts (forwards, futures, and options). The purchase of derivative securities shall be prohibited, unless specifically authorized in this policy. Investment Officers shall not engage in securities lending, short selling, or other hedging strategies. LAIF and MMFs shall be exempt from the prohibitions on derivative contracts, derivative securities, reverse repurchase agreements, securities lending, short selling, and other hedging strategies. 9.0 Investment Pools/Mutual Funds • A thorough investigation of the pool/fund is required prior to investing, and on a continual basis. There shall be a questionnaire developed which will answer the following general questions: 9.0.1 A description of eligible investment securities, and a written statement of investment policy and objectives. 9.0.2 A description of interest calculations and how it is distributed, and how gains and losses are treated. 9.0.3 A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. 9.0.4 A description of who may invest in the program, how often, what size deposit and withdrawal are allowed. 9.0.5 A schedule for receiving statements and portfolio listings. 9.0.6 A verification on whether or not reserves or retain earnings are utilized by the pool/fund. • 9.0.7 A fee schedule, and when and how it is assessed. Page 13 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • 9.0.8 The eligibility of the pool/fund for bond proceeds and whether it will accept such proceeds. 10.0 Collateralization Investment Officers shall ensure that all demand deposits and all non- negotiable certificates of deposit that exceed $100,000 shall be fully collateralized with securities authorized under state law and under this SOIP. Collateral may be waived for the first $100,000 since this will be insured by the Federal Deposit Insurance Corporation. Any amount on deposit over $100,000 plus accrued interest, however, shall be collateralized with United States Treasury or federal agency securities at a constant margin ratio of 110 percent or with mortgage-backed collateral at a constant margin ratio of 150 percent. Collateralized investments and demand deposits may require substitution of collateral. The City Treasurer must approve all requests from financial institutions for substitution of collateral that involve interchanging classes of security. • An independent third party with which the City has a current custodial agreement shall always hold the collateral. The independent third party shall provide the City Treasurer with a safekeeping receipt that he shall retain. 11 .0 Safekeeping and Custody Investment Officers shall conduct all security transactions on a delivery- versus-payment ("DVP") or on a receipt-versus-payment ("RVP") basis. A third-party bank trust department ("Custodian") that acts as an agent for the City under the terms of a custody agreement executed between both parties shall hold the securities. The City's Custodian shall be represented on the authorized list (see page 20). The only exception to the foregoing shall be securities purchases made with: 11 .0.1 Local government investment pools. 11 .0.1 Money market mutual funds. 11 .0.2 Federal Reserve Banks ("Treasury Direct Program") since the • purchased securities are not deliverable. Page 14 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • No securities broker or investment advisor shall have access to City monies, accounts, or investments. Any transfer of monies to or through a securities broker must have the City Treasurer's prior written approval. If the City Treasurer is unavailable, then the Assistant Finance Director must authorize the transfer, in writing. The City shall require Broker Trade Confirmations for all trades. Investment Officers shall review these confirmations immediately upon receipt, for conformity with the terms of the City's Trade Sheets. 12.0 Diversification Investment Officers shall diversify the City's investment portfolios by security type and by issuer, except for bond reserve monies; bond escrow monies; and any other monies that the City Council or the Investment and Finance Committee designates. 13.0 Maximum Maturities • Investment Officers shall not invest in securities with maturities exceeding five years. The Investment and Finance Committee and the City Council, however, may approve longer maturities for the investment of bond reserve, bond escrow, and other funds if the maturities of such investments are expected to coincide with the expected use of the funds. The weighted-average maturity of the City portfolio shall not exceed 540 da ys. 13.1 Portfolio Rebalancing If portfolio percentage constraints are violated due to a temporary imbalance in the portfolio, then Investment Officers shall hold the affected securities to maturity in order to avoid capital losses. If no capital losses would be realized upon sale, however, then Investment Officers shall consider rebalancing the portfolio after evaluating the expected length of time that it will be imbalanced. Portfolio percentage limits are in place in order to ensure diversification of the City investment portfolio; a small, temporary imbalance will not • significantly impair that strategy. Page 15 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • 13.2 Credit Downgrading This policy sets forth minimum credit risk criteria for each type of security. This credit risk criteria applies to the initial purchase of a security; it does not automatically force the sale of a security if its credit risk ratings fall below policy limits. If a security is downgraded below the minimum credit risk criteria specified in this policy, then Investment Officers shall evaluate the downgrade on a case-by-case basis in order to determine the security should be held or sold. The City Treasurer shall inform the Investment and Finance Committee at its next monthly meeting of the credit downgrade and of the Investment Officers's decision to hold or sell the downgraded security. Investment Officers shall review the credit standing of all securities in the City's investment portfolios annually, at a minimum. 13.3 Bond Proceeds • The City Treasurer shall segregate the gross proceeds of tax-exempt bonds from the City general pool and shall keep them in a separate pool. They shall be invested pursuant to the instructions in the respective bond indentures of trust. If the bond indenture authorizes investments that conflict with this policy, then such investments shall be made only with the Investment and Finance Committee's prior approval. All securities shall be held in third-party safekeeping with the bond trustee ("Trustee") and all DVP and RVP rules shall apply. The Trustee shall be represented on the authorized list (see page 20). Investment Officers shall use competitive offerings, whenever practical, for all investment transactions that involve the gross proceeds of tax-exempt bonds. The City shall obtain a minimum of three competitive offers. Any exceptions to this policy shall be documented and shall be reported to the Investment and Finance Committee at its next monthly meeting. The City is required under the "U.S. Tax Reform Act of 1986" to perform annual arbitrage calculations and to rebate excess earnings to the United States Treasury from the investment of the gross proceeds of tax-exempt bonds that were sold after the effective date of that law. The City Treasurer • may contract with qualified outside financial consultants to provide the necessary technical expertise that is required to comply with this law. Page 16 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • 14,0 Internal Controls The City Treasurer shall ensure that all investment transactions comply with the City's policy, and shall establish internal controls that are designed to prevent losses due to fraud, negligence, and third-party misrepresentation. Internal controls deemed most important shall include: avoidance of collusion; separation of duties and administrative controls; separating transaction authority from accounting and record keeping; custodial safekeeping; clear delegation of authority; management approval and review of investment transactions; specific limitations regarding securities losses and remedial action; written confirmation of telephone transactions; documentation of investment transactions and strategies; and monitoring of results. The City Treasurer shall establish a process of independent review by an external audit firm of the City's investment program every three years. The external auditor shall review the program's management in terms of compliance with the internal controls that are specified in the City's Treasury • Policies and Procedures Manual. An Investment and Finance Committee consisting of City officials and community representatives shall be responsible for reviewing the City investment reports, transactions, policies and procedures, and strategies, on a monthly basis. The Mayor; the Mayor Pro Tempore; the City Manager; the City Attorney; the Redevelopment Agency Executive Director; the City Treasurer; the Deputy City Treasurer; and various citizens who are appointed by the City Council pursuant to City ordinance, shall sit on this committee. 15.0 Performance Standards The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with investment risk constraints and cash flow needs. 15.1 Market Yield (Benchmark) The City's investment portfolios, shall be passively managed with portfolio securities being held to maturity. On selected occasions, however, the City's portfolios may be actively managed for purposes of improving portfolio • risk structure, liquidity, or yield in response to market conditions or to meet City requirements. Profit-taking may only be done if the capital gains would: Page 17 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 15.1 .1 Exceed the return that would be realized by holding the security to maturity; and 15.1 .2 More than offset any income reduction due to reinvestment rate risk. The City shall adopt a benchmark that approximates the composition and weighted-average maturity of each City portfolio, in order to measure whether or not the City's portfolio yields are matching or surpassing the market yield. 16.0 Reporting The City Treasurer shall provide the Investment and Finance Committee and the City Council with a monthly investment report within 30 days of each month-end or at the next scheduled City Council meeting following an Finance Committee meeting. Pursuant to Governmental Accounting Standards Board ("GASB") Statement • Number 40, as amended March 2003, the monthly investment report shall: 16.0.1 Organized individual securities by investment type (e.g., U.S. Treasuries, corporate bonds, commercial paper, etc.). Dissimilar investments (e.g., U.S. Treasury bills and Treasury strips) should not be aggregated. 16.0.2 List credit risk ratings for each security, mutual fund, or investment pool from at least two nationally recognized statistical rating organizations ("NRSRO"). If the security, mutual fund, or investment pool has not rating, then it shall be shown as "unrated". 16.0.3 Disclose the amount of individual securities and corresponding issuers if they exceed five percent of net plan assets, except for securities guaranteed by the U.S. Government, money market mutual funds, and external investment pools. 16.0.4 Use the specific identification method to reflect interest-rate risk by investment type and amount. This report shall include a complete portfolio inventory with details on issue, • par value, book value, coupon/rate, original settlement date of purchase, final maturity date, CUSIP number, average weighted yield, average days to Page 18 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • maturity, and market value (including source of market valuation). The report will include a statement on compliance or noncompliance with the City's SOIP and a statement on whether there are or are not sufficient funds to meet the City's anticipated cash requirements for the next six months. 17.0 Investment Policy Adoption The City Treasurer shall submit a Statement of Investment Policy to the Investment and Finance Committee; the City Council; the Redevelopment Agency Board; the Housing Authority Commission; the Financing Authority Commission; and the Recreational Facilities Corporation Board of Directors annually for their review and adoption. 18.0 Regulatory Submission The City Treasurer shall provide the California Debt and Investment Advisory Commission ("CDIAC") with: 18.0.1 Second- and fourth-quarter fiscal year investment reports within 60 . days of those quarter-ends. 18.0.2 The City's Statement of Investment Policy within 60 days of 30 June or within 60 days of any amendment thereto. All submissions to CDIAC shall be sent return receipt, certified mail. • Page 19 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • Appendix A: List of Authorized Financial Institutions The City Treasurer's Office is authorized to transact investment and depository business with the following financial institutions. Investment and depository transactions with firms other than those appearing on this list are prohibited. UNITED STATES GOVERNMENT 1 . Federal Reserve Bank PRIMARY DEALERS 1 . Merrill Lynch & Company, Inc. 2. Morgan Stanley & Company, Inc. 3. Citigroup Global Markets, Inc. SECONDARY BROKERS • 1 . Wells Fargo Institutional Securities, LLC 2. Zions Bank PUBLIC DEPOSITORIES 1 . Bank of America 2. California Federal Bank 3. Downey Savings & Loan 4. Northern Trust Bank 5. Union Bank of California 6. Washington Mutual Bank 7. Wells Fargo Bank CUSTODIAN 1 . Union Bank of California TRUSTEE 1 . Bank of New York • Page 20 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • Appendix B: Glossary AGENCIES. Federal agency and instrumentality securities. ASKED. The price at which securities are offered. BANKERS'S ACCEPTANCE ("BA"). A draft, bill, or exchange accepted by a bank or a trust company. Both the issuer and the accepting institution guarantee payment of the bill. BID. The price offered by a buyer of securities (when one sells securities, one asks for a bid). See "Offer". BROKER. A broker brings buyers and sellers together so that he can earn a commission. CERTIFICATE OF DEPOSIT ("CD"). A time deposit with a specific maturity, as evidenced by a certificate. Large-denomination CDs are typically negotiable. • COLLATERAL. Securities, evidence of deposit, or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. COMPREHENSIVE ANNUAL FINANCIAL REPORT ("CAFR"). The official annual report for the City of Palm Desert. It includes five combined statements for each individual fund and account group, that are prepared in conformity with GAAP. It also includes supporting schedules that are necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed statistical section. COUPON. (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. (b) A certificate attached to a bond, that evidences interest due on a payment date. DEALER. A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE. A bond secured only by the general credit of the issuer. • Page 21 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • DELIVERY VERSUS PAYMENT. There are two methods of delivery of securities: (1) delivery versus payment (DVP); and (2) delivery versus receipt (DVR). DVP is delivery of securities with an exchange of money for the securities. DVR is delivery of securities with an exchange of a signed receipt for the securities. DERIVATIVES. (1 ) Financial instruments that are linked to, or derived from, the movement of one or more underlying indexes or securities, and may include a leveraging factor; or (2) financial contracts based upon a notional amount whose value is derived from an underlying index or security (e.g., interest rates, foreign exchange rates, equities, or commodities). DISCOUNT. The difference between the acquisition cost of a security and its value at maturity, when quoted at lower than face value. A security that sells below original offering price shortly after sale, is also is considered to be at a discount. DISCOUNT SECURITIES. Non-interest bearing money market instruments that are issued a discount and that are redeemed at maturity for full face value (e.g., U.S. Treasury Bills). • DIVERSIFICATION. Dividing investment funds among a variety of securities that offer independent returns. FEDERAL CREDIT AGENCIES. Agencies of the Federal Government that were established to supply credit to various classes of institutions and individuals (e.g., S&Ls, small business firms, students, farmers, farm cooperatives, and exporters). FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"). A federal agency that insures bank deposits, currently up to $100,000 per deposit. FEDERAL FUNDS RATE. The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market.operations. FEDERAL HOME LOAN BANKS ("FHLB"). Government-sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks; thrift institutions, credit unions, and insurance companies. The mission of the FHLBs is to liquefy the housing-related assets of its members, who must purchase stock in their District Bank. • Page 22 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • FEDERAL NATIONAL MORTGAGE ASSOCIATION ("FNMA"). FNMA, like GNMA, was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL OPEN MARKET COMMITTEE ("FOMC"). The FOMC consists of seven members of the Federal Reserve Board and five of the 12 Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of government securities in the open market, as a means of influencing the volume of bank credit and money. FEDERAL RESERVE SYSTEM. The central bank of the United States created by Congress and consisting of a seven-member Board of Governors in Washington, D.C., 12 regional banks, and about 5,700 commercial banks that are members of the system. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION ("GNMA" or "Ginnie Mae"). Securities that influence the volume of bank credit that is guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. A security holder is protected by the full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FMHM mortgages. The term "pass-throughs" is often used to describe Ginnie Maes. LIQUIDITY. A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow, and reasonable size can be done at those quotes. LOCAL GOVERNMENT INVESTMENT FUND ("LAIF"). Monies from local governmental units may be remitted to the California State Treasurer for deposit in this special fund for the purpose of investment. • Page 23 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • MARKET VALUE. The price at which a security is trading and could presumably be purchased or sold. MASTER REPURCHASE AGREEMENT. A written contract covering all future transactions between the parties to repurchase-reverse repurchase agreements, that establishes each party's rights in the transactions. A master agreement will often specify, among other things, the right of the buyer (lender) to liquidate the underlying securities in the event of default by the seller (borrower). MATURITY. The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET. The market in which short-term debt instruments (e.g., bills, commercial paper, bankers's acceptances) are issued and traded. OFFER. The price asked by a seller of securities (when one buys securities, one asks for an offer). See Asked" and "Bid". OPEN MARKET OPERATIONS. Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank, as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and most flexible monetary policy tool. PORTFOLIO. A collection of securities that an investor holds. PRIMARY DEALER. A group of government securities dealers that submit daily reports of market activity and positions, and monthly financial statements to the Federal Reserve Bank of New York, and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC) -- registered securities broker-dealers, banks, and a few unregulated firms. PRUDENT INVESTOR RULE. An investment standard. A fiduciary, such as a trustee, may invest in a security if it is one that would be bought by a prudent investor acting in like capacity, who is seeking reasonable income and preservation of capital. • Page 24 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • QUALIFIED PUBLIC DEPOSITORIES. A financial institution that: (1 ) does not claim exemption from the payment of any sales, compensating use, or ad valorem taxes under the laws of this state; (2) has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability; and (3) has been approved by the Public Deposit Protection Commission to hold public deposits. RATE OF RETURN. The yield obtainable on a security based on its purchase price or its current market price. REPURCHASE AGREEMENT ("RP" OR "REPO"). A holder of securities sells them to an investor with an agreement to repurchase the securities at a fixed price on a fixed date. The security "buyer", in effect, lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: when the Fed is said to be doing RP, it is lending money (increasing bank reserves)• SAFEKEEPING. A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults • for protection. SECONDARY MARKET. A market made for the purchase and sale of outstanding issues following the initial distribution. SECURITIES AND EXCHANGE COMMISSION. An agency created by Congress to administer securities legislation for the purpose of protecting investors in securities transactions. SEC RULE 15c3-1. See "Uniform Net Capital Rule". STRUCTURED NOTES. Notes issued by instrumentalities (e.g., FHLB, FNMA, SLMA) and by corporations, that have imbedded options (e.g., call features, step- up coupons, floating rate coupons, derivative-based returns) in their debt structure. The market performance of structured notes is affected by fluctuating interest rates; the volatility of imbedded options; and shifts in the yield curve. TREASURY BILLS. A non-interest bearing discount security that is issued by the U.S. Treasury to finance the national debt. Most T-bills are issued to mature in three months, six months, or one year. Page 25 of 26 Palm Desert Treasury Policies and Procedures Revision No. 13 No. 2: "Statement of Investment Policy" Adopted: 10/28/04 • TREASURY BONDS. Long-term, coupon-bearing U.S. Treasury securities that are issued as direct obligations of the U.S. Government, and having initial maturities of more than 10 years. TREASURY NOTES. Medium-term, coupon-bearing U.S. Treasury securities that are issued as direct obligations of the U.S. Government, and having initial maturities of two to 10 years. UNIFORM NET CAPITAL RULE. SEC requirement that member firms, as well as non-member broker-dealers in securities, maintain a maximum ratio of indebtedness-to-liquid capital of 15 to one. Also called net capital rule and net capita ratio. Indebtedness covers all money that is owed to a firm, including margin loans and commitments to purchase securities (one reason that new public issues are spread among members of underwriting syndicates). Liquid capital includes cash and assets easily converted into cash. YIELD. The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. Page 26 of 26 BROKER ER CERTIFICATION 2005 I hereby certify that I have read and that I understand the investment policies and objectives of the City of Palm Desert,the Palm Desert Redevelopment Agency,the Palm Desert Housing Authority, the Palm Desert Financing Authority, and the Palm Desert Recreational Facilities Corporation (hereafter referred to collectively as the "City"), as represented in the City's "Statement of Investment Policy", adopted 28 October 2004. My firm will ensure that all affected sales personnel will be routinely informed of the City's investment objectives, horizon, outlook, strategies, and risk constraints, as the City provides such information. My firm will notify the City Treasurer in the event of a material adverse change in its financial condition, or of any violation of Municipal Securities Rulemaking Board Rule G-37. My firm pledges to exercise due diligence in informing the City Treasurer of all foreseeable risks associated with any financial transactions that my firm undertakes with the city. This section must be signed by the sales representative who is assigned to the City. Firm: Zions First National Bank Signed: mr, Title: Institutional Investment Officer Date: 12/13/2004 This section must be countersigned by the Managing Director or by the most senior person in charge of the government securities operations section. Firm: Zions First National Bank Signed: C Title: Senior Vice President, Capital Markets Manager Date: 12/13/2004 STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER SACRAMENTO Local Agency Investment Furid PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 November, 2004 Statement CITY OF PALM DESERT Account Number : 98-33-621 Arm: 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 �z =r� ww c)z _ J� a w V% �0 — Lj-LIJ 0 0 W z O L)E Page : 1 of 1 STATE OF CALIFORNIA PHILIP ANGELIDES. Treasurer OFFICE OF THE TREASURER SACRAMENTO CITY OF PALM DESERT Local Agency Investment Fund FINANCE DEPARTMENT PO Box 942909 pmy DEC 13 PR 105 Sacramento, CA 94209-0001 (916) 653-3001 November, 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 : 1 of I STATE OF CALIFORNIA PHILIP ANGELIDES. Treasurer OFFICE OF THE TREASURER SACRAMENTO ..,m Local Agency Investment Fund PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 November, 2004 Statement PALM DESERT HOUSING AUTHORITY Account Number • 25-33-003 Attn: DEPUTY CITY TREASURER 73-510 FRED WARING DRIVE PALM DESERT CA 99260-2575 Account Summary Total Deposit : 0.00 Beginning Balance : 5,997,874.50 Total Withdrawal : 0.00 Ending Balance : 5,997,874.50 Page : 1 of 1 CAELAlk C A L1roRN + ,x ASS VT STATEMENT MANAGLMENT PROGRAM -0"r ik5 AU'1'110 H i'rr St)(A[-11:( 1RNIA\1'ttYL f 231i1J r[,Q JH s;.>.Z FRANCISCO CAT-WORNL\na 111 FOR ACCOUNT INFORMATION: 800-729-7665 STATEMENT DATE: 11/30/2004 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 Account Summary a of 1 i730/2004 =j � �. �_ Statement Income Dividends Capital Gains Total Shares Account Date Paid This Year Paid This Year Owned Value 11/30/2004 $132,492.56 $0.00 11,366,550.340 $11,366,550.34 Transaction Summa fo 1!1l200A1r1l30/2004 - Beginning Balance Purchases Reinvestments Redemptions Ending Balance $11,350,525.80 $0.00 $16,024.54 $0.00 $11,366,550.34 `TRkbE SETTLE RAN A ON , AO _ AMOUNT A E SHARES THIS T6 M , t- D �E AT SACTIO PRICE TRANSA ON SHARES OWNED 11/01/04 Beginning Balance 11,350,525.800 11/30/04 1211/2004 Accrual Income Div Reinvestment-DIV $16,024.54 $1.00 16,024.540 11,366,550.340 lessage Line: The Monthly Distribution Yield is 1.72%. The Monthly Effective Annual Yield is 1.73%. CA L. IFORNI A ASSET STATEMENT y1ANAGEIti113NT PROGRAM 101N'r Folv"s xu-rtu�RirN 541 L'A UFORNIA Srren'r 25I:I1 VLpJR s A.> FRANCisro CATAVORNtA a I t i FOR ACCOUNT INFORMATION: 800-729-7665 STATEMENT DATE: 11/30J2004 PALM DESERT REDEVELOPMENT AGENCY ACCOUNT NUMBER: 553-02 GENERALFUND ATTN: PAUL GIBSON FUND NAME: Cash Reserve Portfolio 73-510 FRED WARING DRIVE PALM DESERT,CA 92260-2578 Page 1 of 1 Account Summary s rO /120/200 ? ; Statement Income Dividends Capital Gains Total Shares Account Date Paid This Year Paid This Year Owned Value 11/30/2004 $278,376.61 $0.00 20,996,130.120 $20,996,130.12 Transaction Summary' o t �1120t14� �`�FT/30/2UQ¢ -`� 6 ��': . 3eginning Balance Purchases Reinvestments Redemptions Ending Balance $20,966,529.81 $0.00 $29,600.31 $0.00 $20,996,130,12 SETTLE RANSAC O ,., , vt �. 0 RAR . TANSAGTION TOT HARES OWNED 1/01/04 Beginning Balance 20,966,529.810 1/30/04 12/1/2004 Accrual Income Div Reinvestment•DIV $29,600.31 $1.00 29,600,310 20,996,130.120 ;sage Line: The Monthly Distribution Yield is 1.72%. The Monthly Effective Annual Yield is 1.73%. a v 0 0 0 a ? - ® 7 N E L U co F- Z � « o e e o o e o 0 o i o 0 0 o e o 'O ® W �r �� " _a O ` A C T Q R \ o e .O •.^C. 6M.�4 n, WO Spy Q rn ID m N ry o o r q o o Oo N o o E W LC CpLLQ Z ® O yOy ? O O N = � . . � ? Cl CO N M ^ M r C' r r 00 � O O N O p � Vf .. z q = F r y 12 0 O M O O h 0 O � 7 V 0 6 r O r ul N h O C A y N r r oo M r rV C O N (y Q Q N � U . C fp R( 4l N A Y N N w o ° ° Z E 9 W E C C C - LLU) 0 oo � > � ate. = � L 'v' �0 O c'^`. o. .•u• avai :n � � :? E.Q., q z 'v z e d fYYJ p •, V v N O N O 5 C O L w �o „® � C C7 C T C �d eu O Ow O O OLU ff. ® Ul e s Y T M a O �o aa r� W ,gp Q � 'q' N --- --� O O O O •-- � M 7 '. !+ N O M � T U � i U ® p p ti v av' a E W o 0 o v LL Q cc ® Z , LL ce ® O � — �nrao •- ormN rnM -- oorr �n � o ,orn L O O u oo - v, 00ao �n u rnv �n -- -moo 0 ow ^ `D 00oo �nNov� c �000 a" N °� �or000 v o o `�'- " OO '� 00 O O M O C) 0 0o O O O V M V' +� o noov� orn � <r o ai� or �nvi �n o c � v M N N N M 0. 0 O N O O M O M � •O 'd o "• M 7 4 C Ca Q Q C9 c ofA y. °� oo l0 7 M O M �n p ° ,n V ,,O .� C O w ni � a o y v o a A > c o .o a a • 3 _ u v ai E ' � � � ° c W u o 0 0 � oo 'nm in h � � 6. }}�. y y 'a � „��" ❑ C> 3° c � U mQ y � � � COZ hi C'Q fn L L .° C w F a o v ❑ o c F 4 'z N �v, nFr7a c, � v Qo W wC7aa U FOiw ' z City of Palm Desert Parkview Office Complex Financial Statement for Fiscal Year 2004-2005 November-04 November-04 A % YTD YTD If % Budget Actual Variance Variance Budget Actual Variance Variance Revenues Rental $ 69,000 $ 74,165 $ 5,165 107.49% $ 343,500 $ 366,905 $ 23,405 106.81% Dividends/Interest $ 700 $ - $ (700) 0.00% $ 3,500 $ - $ (3,500) 0.00% Total Revenues $ 69,700 $ 74,165 $ 4,465 106.41%1 1 $ 347,000 $ 366,905 $ 19,905 105.74% Expenses Professional-Accounting&Auditing $ 8,500 $ 8,829 $ (329) 103.87% $ 42,500 $ 44,145 $ (1,645) 103.87% Professional-Consultants $ 6,000 $ 5,557 $ 443 92.62% $ 30,000 $ 27,200 $ 2,800 90.67% Tenant Improvements $ 3,000 $ - $ 3,000 0.00% $ 15,000 $ 39,597 1 $ (24,597) 263.98% Repairs&Maintenance Building $ 8,000 $ 7,261 $ 739 90.76% $ 40,000 $ 46,276 $ (6,276) 115.69% Repairs&Maintenance-landscaping $ 2,300 $ 650 $ 1,650 28.26% ` $ 11,500 $ 650 $ 10,850 5.65% Uthties-Water $ 150 $ 116 $ 34 77.35% $ 750 $ 457 $ 293 60.89% Utilities-Gas/Electric $ 7,000 $ 5,309 $ 1,691 75.84% $ 35,000 $ 30,735 $ 4,265 87.81% Utilities-Waste Disposal $ 600 $ - $ 600 0.00% $ 3,000 $ Z692 $ 308 89.72% Telephone $ 250 $ - $ 250 0.00% $ 1,250 $ 1,384 $ (134) 110.72% Insurance $ 521 $ - $ 521 0.00% $ 2,603 $ - $ 2,603 0.00% Total Expenses $ 36,321 $ 27,722 $ 8599 76.32% If $ 181,603 $ 193,135 $ (11532) 106.35% 'Operafing Income $ 33,379 $ 46,443 $ 13,064 13� $ 165,397 $:173,769 $ 833�2, 105.06%{ Equipment Replacement Reserve $ 16,700 $ 16,666 $ 34 99.80% $ 83,500 $ 83,330 $ 170 99.80% Net lncome� $ 16,679 $ 29,777 $ 13,098' 178.53°/a'.: ,$: 81,897. $'- 90,439', $, 8,547 110.43% 1-Note:The tenant improvements for The Riverside County Supervisor, Roy Wilson are recorded as an expenditure for the purpose of this investment report, however,at the end of the year the tenant improvements will be capitalized as fixed assets and depreciated over the useful life of the asset. 2005 Investment Reportlnv Report 2005 City of Palm Desert Parkview Office Complex Vacancy Rate Schedule by Suite. November 2004 Suite Square No. Tenant Feet 73-710 Fred Waring Drive -Two (2) Story Building 100 Hanover 1,915 (Approved a 1 year lease with a 90 Day notice to quit) 100A William Bonneheim 645 (Approved a 1 year lease with a 90 Day notice to quit) 102 Cove Commission-Fire Marshal 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 3,040 211 State of California Department of Food&Agriculture 937 217 Joe B. McMillan,.Esq. 775 2005 Investment ReportVacancy Report t City of Palm Desert Parkview Office Complex Vacancy Rate Schedule by Suite November 2004 220 Environmental Products Applications 1,607 222 Riverside County Supervisor-Roy Wilson 3,348 Total square footage(2 story Building) 31,929 Vacancy Rate-0.00% 0.00% 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-0.00% 0.00% Occupancy Rate-100% 100.00% 2005 Investment ReportVacancy Report City of Palm Desert Parkview Office Complex Financial Statement l for Fiscal Year 2004-2005 December-04 December-04 N % YTD YCD 0 Budget Actual Variance Variance Budget Actual Variance Variance I Revenues Rental $ 69,000 $ 74,328 $ 5,328 107.72% $412,500 $ 441,233 $ 28,733 106.97% Dividends/Interest $ 700 $ - $ (700) 0.00% I $ 4,200 $ - $ (4,200) 0.00% Total Revenues $ 69,700 $ 74,328 $ 4,628 306.64%' j $ 416,700 $ 441,233 $ 24,533 105.89% Expenses Professional-Accounting&Auditing $ 8,500 $ 5,829 $ (329) 103.87% ! $ 51,000 $ 52,974 $ (1,974) 103.87% Professional-Consultants $ 6,000 $ 5,991 $ 9 99.84%', $ 36,000 $ 33,190 $ 2,810 92,20% Tenant Improvements $ 3,000 $ - $ 3,000 0.00%I $ 18,000 $ 39,597 1 $ (21,597) 219.98% Repairs&Maintenance Building $ 8,000 $ 9,172 $ (1,172) 114.65% $ 48,000 $ 55,449 $ (7,449) 115.52% Repairs&Maintenance-Landscaping $ 2,300 $ 650 $ 1,650 28.26%' ` $ 13,800 $ 1,300 $ 12,500 9.42% Utilities-Water $ 150 $ 146 $ , 4 9T08%� V $ 900 $ 602 $ 298 66.92% Utilities-Gas/Electric $ 7,000 $ 3,919 $ 3,081 55.98%I $ 42,000 $ 34,654 $ 7,346 82.51% Utilities-Waste Disposal $ 600 $ 561 $ 39 93.43%I i $ 3,600 $ 3,252 $ 348 90.34% Telephone $ 250 $ 231 $ 19 92.58%- i $ 1,500 $ 1,616 $ (116) 107.70% Insurance $ 521 $ - $ 521 0.00%: $ 3,124 $ - $ 3,124 0.00% i Total Expenses $ 36,321 $ 29,498 $ 6,823 81.2.2% $ 217,924 $ 222,634 $ (4,710) 102.16% I 1 _. _ _ O erntin incwue $ 33,379 $. 94,830 $ 11/151 134„31"/u � �p g $�198,776 $ 218,599 $ 19,8.3 109.9T%1 Equipment Replacement Reserve $ 16,700 $ 16,666 $ 34 99.80% $ 100,200 $ 99,996 $ 204 99.80% :Net Income $ 16,679 $ 28,164 $ 11,485 168.86"/0 $ 98,576 $ 118,603�$ 20,027 120.329/4 1-Note:The tenant improvements for The Riverside County Supervisor, Roy Wilson are recorded as an expenditure for the purpose of this investment report, however,at the end of the year the tenant improvements will be capitalized as fixed assets and depreciated over the useful life of the asset. 2005 Investment Reportlnv Report 2005 City of Palm Desert Parkview Office Complex i Vacancy Rate Schedule by Suite December 2004 Suite Square No. Tenant Feet 73-710 Fred Waring Drive -Two (2) Story Building 100 Hanover 1,915 (Approved a 1 year lease with a 90 Day notice to quit) 100A William Bonneheim 645 (Approved a 1 year lease with a 90 Day notice to quit) 102 Cove Commission-Fire Marshal 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 3,040 211 State of California Department of Food &Agriculture 937 217 Joe B. McMillan,. Esq. 775 2005 Investment ReportVacancy Report a City of Palm Desert Parkview Office Complex Vacancy Rate Schedule by Suite December 2004 220 Environmental Products Applications 1,607 222 Riverside County Supervisor-Roy Wilson 3,348 Total square footage(2 story Building) 31,929 Vacancy Rate-0.00% 0.00% 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--0.00% 0.00% Occupancy Rate-100% 100.00% 2005 Investment ReportVacancy Report City of Palm Desert Desert Willow Budget Vs Actual For the month of November 2004 Budgeted Actual Budgeted Actual November November $ Percentage Yeartu Year to $ Percentage Revenue 2004 2004 Variance Variance Date Date Variance Variance Come&Ground $ 422,560 $ 414,516 S (8,044) 98,10% S 1,231,277 $ 1,295,435 $ 64,158 105.21% Carts _ $ 28.158 $ 28,515 $ 357 101.27% $ 111,954 $ 96,245 $ (15,709) 85.97% Golf Shop $ 78,445 S 82,055 $ 3,610 104.60% $ 254,902 S 240,966 $ (13,936) 94.53% Range $ 4,500 S 4,395 $ (105) 9T67% $ 9.100 $ 9,291 S 191 102.10% Food&Beverage S 136,069 S 143,810 $ 7,741 105.69% $ 458,945 $ 513,602 S 54,657 111.91% Interest Income $ - $ - S 0.00% S - $ - $ - 0 00% Total Revenues S 669,732 S 673 291 $ 3 559 ]00.53% $ 2 066,178 $ 2.155.539 S 89.361 104.32% Payroll Proshop $ 3,014 $ 1,546 $ 1,468 51.29% $ 13,587 $ 6.343 S 7,244 46.68% Can $ 22,581 $ 22,795 S (214) 100.95% $ 89,179 $ 84,706 $ 4,473 94.98% Course&Ground $ 136,835 $ 133,436 $ 3.399 97.52% $ 650,922 $ 639,618 $ 11,304 98.26% Golf Operations $ 25,843 $ 21,745 $ 4,098 84.14% S 115,712 $ 103,517 $ 12,195 89,46% General&Administration $ 41,035 $ 35,820 $ 5,215 87.29% $ 205,854 $ 192,814 $ 13,040 93.67% Food&Beverage $ 67,586 $ 74,418 S (6,832) 110.11% $ 290,379 S 306,105 S (15,726) 105.42% Total Payroll $ 296 R94 $ 289 760 7 134 97.60% S 1.365.633 S 1333103 $ 32 530 97.62 Other Expenditures Perimeter Landscaping S - S - S - 0.00% $ - S - $ - 0,00% Proshop S 5,850 $ 4,411 S 1.439 75.40% $ 16,500 $ 16,683 $ (183) 101.11% Proshop-COGS $ 29,161 S 28,237 S 924 96.83% $ 112,075 $ 106,535 S 5.540 95.06% Can $ 13,890 $ 12,994 S 896 93.55% $ 74,750 $ 69,456 $ 5,294 92,92% Course&Ground-North Course $ 39,628 S 33,300 S 6,328 84.03% $ 377,725 S 377,721 S 4 100.00% Course&Ground-South Course S 146,389 S 120,509 S 25,890 82.32% S 332,890 $ 331,697 $ 1,193 99.64% Course&Ground-Desert Pallet-N $ 425 S 585 $ (160) 137,65% $ 2,725 $ 4,081 $ (1,356) 149.76% Course&Ground-Desert Pallet-S $ 425 $ 574 $ (149) 135.06% $ 3,325 $ 2,275 $ 1,050 68.42% Golf Operations $ 325 $ 497 $ (172) 152.92% S 3,575 S 6,669 S (3,094) 186,55% General&Administration $ 67,423 $ 65,189 $ 2,234 96.69% $ 303,384 $ 278,249 $ 25,135 9172% Range S 145 S 35 S 110 24.14% $ 11,555 $ 13,339 $ (1,784) 115.44% Food&Beverage $ 22,083 $ 45,060 $ (22,977) 204.05% $ IM215 $ 162,687 $ (62,472) 162.34% Food&Beverage COGS $ 42,585 -$ 51,100 $ ($515) 120.00% S 143,311 S 176,494 $ (33,183) 123.15% Management Fee S 25,000 $ 25,000 $ - 100.00% $ 125,000 $ 125,000 $ - 100,00% Financing/Lease S 4,329 $ 4.108 S 221 94.89% $ 21,765 S 20,752 S 1,013 95.35% Total Other Expenditures S 397,658 S 391,599 S 6,059 98.48% S 1,6281795 S 1691.638 $ (62.8431 103.86 Desert Willow Golf Academy Desert Willow Golf Academy $ 16,650 S 13,623 S (3,027) 81.82% $ 49,850 S 49,966 S (984) 98.23% COGS.Merchandise $ (5,863) $ (5,052) $ 811 86.17% S (32.097) $ (36,614) $ (4,517) 114,07% Other Expenditures $ (3,800) $ (1,407) $ 2,393 37.03% $ (18,850) $ (15,585) $ 3,265 82.68% S Learning Center Income(Loss) $ 6,987 $ 7,164 $ 177 102.53% S (1,097) $ (3,233) S (2,136) 294.71% Operating Income(Loss) $ (17,833) $ (904) $ 16.929 5.07% $ (929,347) $ (872,435) $ 56.912 93.88% Equipment Reserve Replacement $ 70,000 $ 69,183 S (817) 98.83% S 350,000 S 346,054 $ (3,946) 98.87% Net Inemn Lass $ (87,833) S (70.087) $ 17,746 79.80% $ 1 279 347 $ 1 218 489 $ 60.858 95.24% Sna shot of Golf Rounds Bud eted no Actual(me) Variance Variance% Budgeted td Actual lytaft Variance Variance% Resident 1,625 1,323 (302) 81% 4,620 4,704 84 102% Non Resident 4,042 4,263 221 105% 17,850 20,363 2,513 114% Other - 179 179 100% - 245 245 100% complimentary 325 33 292 10% 1451 1266 185 87% Total 5,992 5,798 (194) 97% 23,921 26,578 2,657 111% .Folder.Desert Will..2004:DW2005;Finan6al Statement Page 1 03 y j � \ _ \ ; / ; E ) § ° ■ � \ � \ � \ \/ } � \ /\ \ \� � \ / ) \ \ {) \ ) ) ) \ ƒ \ / / \ ) ) / ] § 3 / ; � - © - ) � d G ; { ® § � ) { [ � ; � a ! ) Cd ] � k ; cq_ E : ) ) a } \ { ` ` - ( 3 { \ m 0. xXXN $ '• X . mB Xxrv $ „ a „ a X XXX X X X x X XX° XX mC - e_ d' > $ryna•O�, �R -P� - n ry�mi,ve on ry v 8 a a $v r ''ImOO v r _ _ _ a•c ry m a „ .� � N n o n_ e< m ,N° .<• .,, P o _ MS ^e °° W6 •" °N. = �m 'n° $ ^ nP - _ - V R G - a 6 ««w»»«»w»»w« www w w w r. V ^ B 6� < � mr v o _ ^ aF •B �� .rme < �'',', � v °° '°^ a 4 $^r � m aaEu a $ Sa _ � .a, ^o °N. B = Be _ •° � _ e � r9 - _ B _ S < $ - � - U U o < � .a 8 °m' a � oe $_: •"J $ o °'• � _ = oAao ,C � = _ 08 ^. _ reN _ 4 _ u "Lm � Pv ry vlr m rym ^ ,4n • v n.0 v .�v v •° _ v v v q C L Z 6 c E � O_ a 9 ° m= " u 3 e S s S n E 6e ° u u 6 =g8SS 0o dd °Soc" ° sLL f � � o �j o` k \ � 00 Cli § cq ;. q � > oj - {� }) 0Cd ; % § § : ) /\ o _ u % } g A � } k � § � \ m m a 0 0 o O N N nl V O O O O N N ❑ ❑ O O O N p � a ui en to M R � � O M O O A O N CD O o N 4 M o O 4 O N � L W m y >, m O �JO _N � o d 2 i o Li �F x n .� w a a wE � � m O O rn a C n W W O O O N E o 0 00 o V L o l0 G7 en a !0 V Iq LLL o ... o0 0 N 0 c E m n c_ d a J 0 U N U Lu E m a o 1�1OS31E'J � p ce ce ce � ce � c U L Y U 43 O N a A > O m � a u � sa 0 WceceWce tR � aH�n�o eYi u F a� om U `00 F 6Q 6R U Y La UU ttR ZR W W W $F- y NmmNm O w 1 U > > A Rfi U > om z 02 BF 6e 6Q BQ y W qr � g O QOq SI rl N N b_ Om vql m 'CO m p ry �O = yy z m O y N O p N U N Wt� q Om N 6y` O vvv{{{ y Nd V BF w BQ NZ 6Q 6F ox BQ BQ BQ �. BNF N b N � q `-' � '� .w M vNi vNi b q •� O N �� \O U fV o Oy p U p q v1 p x o� S�z Fam Y' 9 7 F F F O p ; a � oz c� ; a � o` z U ; a �Xo` z 0z cecececece • 5c 88888 $ c n u Y B a � Y Y k O am = M = < v � 9¢ 0 cecececece V �rf n PW m to tR.� N 7 R R 0 V b� BQ 6Q BOpQ.� 6pQ 9 ^ .m.. bN a A ,$ O N O O O O 0 6 00 F o¢ gF U Z. b tR BZ M r < H V N $ g o m Q A ,3 4e 6Q tlt BQ � N � m yh V b N y O r y L4 �6 9 i= r C O yy U ai ry V ^ N m Q 3 U > O m Z !R se ee w oe y Nw v�1 vbia s 'J .°3 n n �tn0 .. .p rr'f Oab n g cececece � mn o00 moo m �Pi ,�"., o dYriP a e o a� `� ao n < °� b 0 N P d p� N O .di < b r y •O ^. ^ h ry N 9 d N P m C1 b r O b d b 'J 1.1 vl h Po W v b r e ... r o � u 0 0 ° u p 9 e Y B a O V m P N N e1 M V V U r O'O •� NI �' O V .� N y � �0.. R CC t� h P OO O a � N u a 4 O O d b O ry d b a p •� o r b N � Y P 1� p� O. � (A 9 yy N N rnvt §'O P r ry 1'1 Mf M1 N N d t'i. iJ f M o39 n Oi tl o - u C F o o e N �A � E .�`. oz U ¢ O'0 e.. z O m ; ¢ X ; h " v � ¢�Xoaz u / 00 bla \ . 2 f ; - ■ § t � 0 2 � 2 } . w r ` cq - ` cq \ = _ Q , � | } § \ , 0tl�- 22 : . , z 00 { - 2 ; / . \ § | § ƒ / K ! | f ! ; ; o / 41 ~ , \e 0 3 � k \ 2 ! \ { \ � \ Desert Willow Breakdown of Rounds per point of sale system Desert Willow - Combined Analysis- NOVEMBER 2004 Resident 1,323 $ 59,535 $ 45.00 22.80% Non-Resident 4,263 $ 382,307 $ 89.68 73.50% Other 33 $ 330 $ 10.00 0.60% Complimentary 179 $ 15,645 $ 87.40 3.10% Desert Willow Totals 5,798 457,817 78.96 100.00% Dw2005;Pos AVG RD Page 9 Desert Willow Breakdown of Rounds per point of sale system FIRECLIFF COURSE- NOVEMBER 2004 Description No. Of Revenue Avg. Per Pet to Rounds Per POS Round Total Resident Rounds Resident Fee 864 $ 38,880 $ 45.00 20.22% Total Resident 864 38,880 45.00 20.22% Non Resident IROC Member/ Guest 139 $ 13,672 $ 98.36 3.25% Sunrise 95 $ 12,350 $ 130.00 2.22% Prime 464 $ 60,320 $ 130.00 10.86% Midday 180 $ 17,100 $ 95.00 4.21% Sunset 175 $ 7,875 $ 45.00 4.09% Wholesale 734 $ 55,071 $ 75.03 17.17% Outing 973 $ 92,531 . $ 95.10 22.77% Twilight 230 $ 16,200. $ 70.43 5.38% Fee Special Event Variable 253 $ 18,246 $ 72.12 5.92% Total Non Resident Rounds 3,243 293,365 90.461 75.88% Other Rounds Junior Walking 30 $ 300 $ 10.00 0.70% Total Other 30 300 10.00 0.70% Complimentary VIP 90 $ 10,245 $ - 2.11% PGA Member 9 $ 455 $ - 0.21% USGA Kids on Course $ - $ - 0.00% Champions Club 15 $ 1,215 $ - 0.35% PDHS/COD $ - $ - 0.00% Employee / Employee Guest 23 $ 1,130 $ - 0.54% Total Complimentary 137 13,045 3.21% Total RoundS (FireCliff) 4,274 $ 345,590 $ 80.86 100.00% DW2005;POS AVG RD Page 10 Desert Willow Breakdown of Rounds per point of sale system MOUNTAINVIEW COURSE- NOVEMBER 2004 Description No. Of Revenue Avg. Per Pct to Rounds Per POS Round Total Resident Rounds Resident Fee 459 $ 20,655 $ 45.00 30.12% Total Resident 459 20,655 45.00 30.12% Non Resident IROC Member/ Guest 33 $ 3;264 $ 98.91 2.17% Sunrise 35 $ 4,550 $ 130.00 2.30% Prime 118 $ 15,340 $ 130.00 7.749/6 Midday 57 $ 5,415 $ 95.00 3.74% Sunset 77 $ 3,465 $ 45.00 5.059/6 VIP Card - $ - #DIV/O! 0.00% Wholesale 251 $ 18,270 $ 72.79 16.47% Outing _ 325 $ 28,428 $ 87.47 21.33% Twilight 68 $ 4,685 . . $ 68.90 4.46% Fee Special Event Variable 56 $ 5,525 $ 98.66 3.67% Total Non Resident Rounds 1,020 88,942 87.20 66.937 Other Rounds Junior Walking 3 $ 30 $ 10.00 0.20% Total Other 3 30 10.00 0.20% Complimentary VIP 10 $ 1,215 $ 121.50 0.66% PGA Member 8 $ 560 $ 70.00 0.52% Champions Club 2 $ 225 $ 112.50 0.13% Employee / Employee Guest 6 $ 440 $ 73.33 0.39% PDHS/COD 16 $ 160 $ 10.00 1.05% Total Complimentary 42 2,600 61.90 2.76% Total Rounds (Mountainviewl 1,524 $ 1 22,227 $ 73.64 100% DW2005;POs AVO RD Page 11 City of Palm Desert Desert Willow Cash Reserve Analysis for the month of November 2004 Cash Reserve Analysis One Month Required Reserve $ 500,000.00 Cash on Hand $ 739,972.77 Variance- Favorable Unfavorable $ 239,972.77 Page 12 N'SIVL ANI ` ' L z f l va Y. Y d Cv I/ l FS( Al WAR FHF)FF) JUNI .ri ,i6d LOW Palm Desert,California /C $ite , r • • i • • • • • COMPREHENSIVE ANNUAL FINANCIAL REPORT • of the • • CITY OF PALM DESERT, CALIFORNIA • • For the Fiscal Year Ended JUNE 30, 2004 • Prepared by the Finance Department City Treasurer/Director of Finance • Paul S. Gibson • Assistant Finance Director • Jose Luis Espinoza, CPA • Finance Staff • (in alphahetical order by positions and names) Accounting Technician Business License Technician Information Systems James Bounds Rob Bishop Technician • Accounting Technician Deputy City Treasurer Troy Kulas • Horacio Celaya Thomas Jeffrey Information Systems • Accounting Technician G.I.S. Technician Technician Veronica Tapia Robert Riches Clay Von Helf • Accounting Technician II Information Systems Sr. Office Assistant • Alana Townsend Manager Benjamin Druyon • Accounting Technician II Doug Van Gelder Senior Financial Analyst Barbara Wright Anthony Hernandez • Administrative Secretary • Diana Leal • • • • • • • • • • • • • Introductory Section • • • • • • • • • • • • • • • • • 1 1 i � � O /-�T�� � .� '�•� � • CITY OF PALM DESERT • COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2004 • TABLE OF CONTENTS • Page • Number INTRODUCTORY SECTION • Table of Contents i Letter of Transmittal v GFOA Certificate of Achievement for Excellence in Financial Reporting xii • CSMFO Certificate of Award for Outstanding Financial Reporting xiii List of Principal Officials xiv Organization Chart xv • FINANCIAL SECTION • AUDITORS' REPORT • Independent Auditors' Report 1 MANAGEMENT'S DISCUSSION AND ANALYSIS 3 • BASIC FINANCIAL STATEMENTS • Exhibit A - Statement of Net Assets 15 • Exhibit B - Statement of Activities 16 Exhibit C - Balance Sheet- Governmental Funds 20 • Exhibit D - Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 23 Exhibit E - Statement of Revenues, Expenditures and Changes in Fund Balances -Governmental Funds 24 Exhibit F - Reconciliation of the Statement of Revenues, Expenditures and • Changes in Fund Balances of Governmental Funds to the • Statement of Activities 26 . Exhibit G - Statement of Net Assets-Proprietary Funds 27 Exhibit H - Statement of Revenues, Expenses and Changes in Fund • Net Assets- Proprietary Funds 28 Exhibit 1 - Statement of Cash Flows- Proprietary Funds 29 Exhibit J - Statement of Fiduciary Net Assets- Fiduciary Funds -Agency 30 . NOTES TO BASIC FINANCIAL STATEMENTS 31 . -1- dl m 41 Continued n0, W REQUIRED SUPPLEMENTARY INFORMATION Schedule 1 - Budgetary Comparison Schedule -General Fund 71WmA Schedule 2 - Budgetary Comparison Schedule - Prop A Fire Tax- V► Special Revenue Fund 72 SUPPLEMENTARY SCHEDULES General Fund: Schedule 3 - Budgetary.Comparison Schedule by Department- General Fund 74 Other Governmental Funds- Combining Statements: n� Schedule 4 - Combining Balance Sheet-Other Governmental Funds 77Wn Schedule 5 - Combining Statement of Revenues, Expenditures and Changesylnr in Fund Balances -Other Governmental Funds 78 Other Governmental Funds- Nonmaior Special Revenue: Schedule 6 - Combining Balance Sheet- Nonmajor Special Revenue Funds 82 Schedule 7 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances- Nonmajor Special Revenue Funds 88 Schedule 8 - Budgetary Comparison Schedules-Special Revenue Funds: A. Traffic Safety 93 B. Gas Tax 94 C. Housing Mitigation Fees 95 D. Community Development Block Grant 96 E. El Paseo Assessment District 97 F. City-Wide Business License 98 G. Landscape and Lighting Districts No. 1-15 99 Other Governmental Funds- Nonmaior Capital Service: O Schedule 9- Combining Balance Sheet- Nonmajor Capital Projects Funds 102 Schedule 10- Combining Statement of Revenues, Expenditures and Changes in Fund Balances- Nonmajor Capital Projects Funds 106 Agency Funds: Schedule 11 -Combining Balance Sheet-All Agency Funds 112 Schedule 12 -Combining Statement of Changes in Assets and Liabilities-All Agency Funds 114 -ii- • STATISTICAL SECTION Continued • Revenue and Expenses Statistics • Governmental-wide Expenses by Function 118 • Government-wide Revenues 119 • Revenue and Expenditures Statistics • Historical Revenue and Expenditures Combined General, Special, Debt Service and Capital Project 121 Graphs - Historical Revenue and Expenditures Combined General, Special, Debt Service and Capital Project 123 . Historical General Revenue and Expenditures 124 • Historical General Fund Actual Statement of Revenues 126 • Graph - Historical General Fund Actual Statement of Revenues 127 • Historical General Fund Actual Statement of Expenditures 128 • Graph - Historical General Fund Actual Statement of Expenditures 129 • Historical General Revenue and Expenditures Per Capita 130 • Top 40 Sales Tax Generators Graph- Historical Sales Tax Trends 131 • FY 2003-2004 and FY 2002-2003 Breakdown of Basic 1% Property Tax Rate (Not in Redevelopment Project Area) 132 Graph - FY 2003-2004 Breakdown of Basic 1% Property Tax Rate(Not in • Redevelopment Project Area) 133 • Historical Net Assessed Taxable Values City-wide 134 • Change in Taxable Value City-wide- FY 2003-2004 and FY 2002-2003 135 • Assessed Value by Economic Category FY 2003-2004 136 • Graph -Assessed Value by Economic Category FY 2003-2004 137 • Property Tax Levy and Collections 138 • Special Assessment Levy and Collections 139 • FY 2003-2004 Top Ten Property Tax Payers 140 Historical Net Assessed Taxable Values City-wide Graph -Assessed Valuation Growth 141 Demographic Statistics 142 . Building Permits, and Taxable Transactions 143 Miscellaneous Statistics 144 • Bonded Debt Statistics • Computation of Legal Debt Margin 146 • Direct and Overlapping Bonded Debt 147 • Revenue Bond Coverage 148 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures 149 Ratio of Net General Obligation Debt to Assessed Value and Net General • Obligation Debt Per Capita 150 -iii- 41 41 dl Continued s1� Special Assessment Information 151 W Revenue Statistics Redevelopment Aoencv Project Area Statistics 155 Tax Allocation Bond Issue Information 156 m FY 2003-2004 Breakdown of Basic 1% Property Tax Levy Rates 157 Historical Tax Increment Summary Redevelopment Project Area#1 -Original 158 mW Historical Tax Increment Summary Redevelopment Project Area#1 -Amended 159 VmI Historical Tax Increment Summary Redevelopment Project Area#2 160 �W1� Historical Tax Increment Summary Redevelopment Project Area#3 161 �Wh Historical Tax Increment Summary Redevelopment Project Area#4 162 m Historical Net Assessed Taxable Values Redevelopment Project Area#1 -Original 163 IW1. Change in Taxable Values Redevelopment Project Area#1 - Original 164 II► Historical Net Assessed Taxable Values Redevelopment Project Area#1 -Amended 165 Change in Taxable Value Redevelopment Project Area#1 -Amended 166 Historical Net Assessed Taxable Values Redevelopment Project Area#2 167 Change in Taxable Value Redevelopment Project Area#2 168 Historical Net Assessed Taxable Values Redevelopment Project Area#3 169 Change in Taxable Values Redevelopment Project Area#3 170 Historical Net Assessed Taxable Values Redevelopment Project Area #4 171 Change in Taxable Values Redevelopment Project Area#4 172 O ry • caIY of Pfl � M 0 � SER1 • '�e 73-510 FRED WARING DRIVE PALM DESERT, CALIFORNIA 92260-2578 TEL: 76o 346-o6ii • FAx: 760 30-6372 • info@palm-deser[.org • • November 19, 2004 • Citizens of the City of Palm Desert, • Honorable Mayor and Members of the City Council • The Comprehensive Annual Financial Report (CAFR) of the City of Palm Desert for the fiscal . year ended June 30, 2004, is submitted herewith. This report was prepared by the City's Finance • Department. Responsibility for the accuracy of the data,the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and • belief, the enclosed data is accurate in all material respects, reported in a manner designed to • present fairly the financial position and results of operations of the various funds and all • disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. • For the fiscal year ended June 30, 2004, the City complied with the new financial reporting • model developed by the Governmental Accounting Standards Board (GASB) Statement 34. In • addition to the customary fund statements included in the CAFR, Statement 34 requires that the City prepare government-wide financial statements, which include, a Statement of Net Assets and a Statement of Activities. These statements are prepared using the accrual basis of • accounting, which is consistent with private business accounting, in contrast to the modified • basis of accounting that is used in accounting for fund financial statements. In the financial • section of this report, the reader is provided with reconciliation statements that will take the reader from the Fund Financial Statement to the Statements of Net Assets and Activities. • • GASB Statement 34 also requires that management provide a narrative introduction, overview, . and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the • MD&A and should be read in conjunction with it. The City of Palm Desert MD&A can be found immediately following the report of the independent auditors. • • • v • • �^,�nnnooennrrm rua • dl dl Citizens of the City of Palm Desert, Honorable Mayor and Members of the City Council November 19, 2004 CAFR Structure The format and content of this report comply with the principles and standards of accounting and financial reporting adopted by the Governmental Accounting Standards Board. It is presented in three sections: Introductory Section, provides the reader with the organizational structure of the City, its services and operating environment. This section includes a title page, table of contents, a letter of transmittal, an organizational chart, a list of the City of Palm Desert's elected and appointed officials, and the certificates of award from the California Society of Municipal Finance Officers and the Government Finance Officers Association of the United States and Canada. Financial Section, presents the City's independent auditor's report on the Basic Financial Statements, the Management's Discussion and Analysis (MD&A), the Basic Financial Statements, the notes to the financial statements, the Required Supplementary Information (RSI), and the non-major supplementary schedules. �) Statistical Section, provides the reader with additional historical financial data and other information concerning the City. GENERAL INFORMATION ABOUT THE CITY OF PALM DESERT The City of Palm Desert is located in the geographical center of the Palm Springs Desert Resorts area, also known as the Coachella Valley area, in the County of Riverside. It was incorporated on November 26, 1973, as a General Law City; however, on November 4, 1997, the voters overwhelmingly approved Measure LL adopting a city charter. Under the provisions of the charter, the City has full authority over its own municipal affairs which can include but are not limited to bidding and contracting procedures, regulation of parks, libraries and other facilities, certain franchise fees and other fees, imposition of taxes, zoning for municipal purposes, salaries of officials and employees, municipal utilities and municipal election procedures. The City is subject only to such limitations and restrictions under state laws on matters of statewide importance, examples of which are environmental regulations, general plan requirements, open meeting laws and redevelopment. The City of Palm Desert operates under a Council-Manager form of Government. The City Council consists of five members elected by the residents of the City. Council terms are for four years. In October of 1998, the City Council approved to shift elections every two years in November of even-numbered years, which was approved by the County of Riverside at its Board of Supervisors meeting on November 24, 1998. Previously, elections were held every two years in November of odd-numbered years in conjunction with the Unified School District elections. vi Citizens of the City of Palm Desert, Honorable Mayor and Members of the City Council November 19, 2004 The City Council selects the Mayor from its own members for a one-year term. The City Council appoints the City Manager and the City Clerk. • The City operates as a"contract city" utilizing, primarily, agreements with other governmental • entities, private firms and individuals to provide services. Contracted services include: police and fire protection through the County of Riverside, animal control, health services, legal services and landscape maintenance. • The City provides traditional municipal, public enterprise and redevelopment services as shown • below: Municipal Services Public Enterprise Services • Public improvements, infrastructure and maintenance Golf Course • Public art and community promotion Office Complex Planning, zoning, building and engineering Internal Service Housing and community development Code enforcement and inspections Blended & Discretely Component • Economic development and business support Units • Legislative, city clerk and public information PD Redevelopment Agency General administration and fiscal services PD Financing Authority PD Housing Authority PD Recreational Facilities Corp. ECONOMIC OUTLOOK Local Economy • The City encompasses an area of approximately 26 square miles. As of January 1, 2004, • according to data provided by the State Department of Finance,the City has a population of 44,812. In addition to permanent residents, the City has approximately 15,000 seasonal residents who live three to six months in the city. • The City of Palm Desert has cultivated a sound foundation of general fund revenue including • sales tax, transient occupancy tax, licenses and permits, property tax and investment earnings. The City's main sources of revenue are derived from tourism and sales tax. Tourism, retail, culture and education are part of the City's many facets. Palm Desert is the ideal getaway • destination for families and friends. It is home to numerous attractions which include: the Bob Hope Cultural Center/McCallum Theater, a 1,166 seat theater which hosts some of the biggest names and well-known productions in show business; the Living Desert Wildlife & Botanical Park, a 1,200-acre facility containing a . vii CIIY Of PRIM OHM . C� uxrzoaunure gun dl dl al QI Citizens of the City of Palm Desert, Honorable Mayor and Members of the City Council November 19, 2004 wide array of plants and animals from desert regions around the world; Art in Public Places, a Q� museum without walls, features more than 100 works of art on permanent display throughout the Q) City; the Westfield Shopping Town Palm Desert, Desert Crossing; and the Gardens, are a) collection of fine stores, adding to the upscale shopper paradise known as El Pasco; the Desert ®) Willow Golf Resort, a unique and premier 36-hole golf course; the College of the Desert, a community college; first class hotel accommodations and fine dining restaurants. �) a► Currently, the City's labor force is as strong as the economy. The State of California Employment Development Department Labor Market Information Division reported that the City of Palm Desert had an unemployment rate of 3.4% compared to Riverside County, which had a rate of 5.8%. Our balanced foundation of tourism, culture and education has strengthened the ®) City's labor force. Outlook for the Future In June 2004, the City Council approved a total of$41.491 million in funding for various capital �) improvement projects for the fiscal year of 2004-2005. Projects include traffic signals, sidewalk ®) repairs and implementation, street widening, construction of landscaping medians where none existed, improving drainage areas, continued design and constructions of two parks, and a completion of the development called Entrada El Paseo. With all these projects slated for the coming fiscal year, it is evident that the City of Palm Desert a) is committed to promoting tourism, business, culture and education in an effort to maintain the al high quality of life that the private and business community enjoys. Annual and Independent Audit a) It is the policy of the City of Palm Desert to have an annual audit performed by an independent certified public accountant. The independent audit of the City's financial statements for fiscal year ended June 30, 2004, was conducted by Lance, Soll &Lunghard, LLP as appointed by the City Council. The auditor's unqualified opinion on the basic financial statements is included in a) the Financial Section of this report. As part of the City's annual audit engagement, the auditors review the City's internal control structure, as well as compliance with applicable laws and regulations. The results of the City's al annual audit for fiscal year ended June 30, 2004, provided no instances of material weaknesses in connection with the internal control structure or significant violations of applicable laws and regulations. a• As recipients of federal, state and county financial resources, the City of Palm Desert is required to undergo an annual single audit. When applicable, information related to this single audit, viii a) a� a� a� Citizens of the City of Palm Desert, Honorable Mayor and Members of the City Council November 19, 2004 ® including the schedule of federal financial assistance, findings and recommendations and auditor's reports on the internal control structure and compliance with applicable laws and ® regulations are included in a separately issued report. For the fiscal year ended June 30, 2004, the ® City was not required to have a single audit performed. Internal Accounting Controls ® Management of the City is responsible for establishing, maintaining and evaluating the City's ® accounting system with great consideration to the adequacy of an internal control structure. The internal accounting controls are designed: 1) to ensure that the assets of the government are protected against loss, theft or misuse, 2) to ensure the reliability of adequate accounting data for ® the preparation of financial statements in conformity with generally accepted accounting • principles and, 3) to provide reasonable, but not absolute, assurance that these objectives are met. ® The concept of reasonable assurance recognizes that the costs of control should not exceed the benefits likely to be derived from it and that the evaluation of costs and benefits require estimates and judgment be made by management. ® The City's internal control evaluations occur within the above framework, which ensure adequate ® safeguard of the City's assets and reasonable assurance of proper recording of financial ® transactions. ® Budgetary Controls ® In addition, the City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved ® by the City Council. Activities of the General, Special Revenue, Debt Service and Capital ® Project Funds are included in the annual appropriated budget. Budgetary amounts for Debt ® Service, Capital Projects, and Certain Special Revenue Funds are adopted annually, however, ® budgets are considered to be long-term in nature. ® The City also maintains an encumbrance accounting system of purchase orders and contracts at ® the fund level as a means of accomplishing budgetary control. Open encumbrances are reported as a reservation of fund balance at the end of the fiscal year. Purchase orders are reviewed to ensure that funds are available and that requests are properly authorized prior to being released to vendors. ® The adopted budget for fiscal year 2003-2004 was prepared in accordance with accounting ® principles generally accepted in the United States of America. As reflected in the statements and ® schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. ® ix CI11 of PRIM 9HIF �"j ninaoov,urun,w 0 a► a► Citizens of the City of Palm Desert, Honorable Mayor and Members of the City Council �► November 19, 2004 �► Cash Management �) Cash resources of the individual funds are combined to form a pool of cash and investments. �) Cash which may be temporarily idle during the year, is invested in various instruments consistent with the City's and Redevelopment Agency's (the "Agency") adopted investment policy, with the majority of the maturities under one year. The investment policy authorizes investments in United States treasury bills, bonds and notes, obligations issued by the United States Government lei Agencies, bankers acceptances, commercial paper, medium term notes, certificates of deposit, a) demand accounts, California Local Agency Investment Fund, and in the California Asset Management Program. The City and Agency's portfolio at June 30, 2004 is $234,690,159. o► The City and Agency continue to maintain an investment policy, which is submitted annually to the City Council. Monthly Treasurer's Reports reporting investment activities and portfolio balances are also submitted to the Investment/Finance Committee and forwarded to the City Council. The primary goal of the City's and Agency's investment policy is to invest public funds ► in a manner which will provide the highest investment return with the maximum security, while �1 meeting the daily cash flow demands of the City and Agency, and conforming to all State and a► local statutes governing the investment of public funds. Accordingly, deposits are either insured a► by federal depository insurance or collateralized. Criteria for selecting investments and the order of priority are risk, liquidity and yield. At all times, there was compliance with the City and QI Agency's investment policy. �1 �1 Risk Management ®) The City joined the California Joint Powers Insurance Authority (the "Authority") on September a) 1, 1995 to arrange and administer programs of insurance for the pooling of self-insured losses a) and to purchase excess insurance coverage. Additionally, the City has all the risk property insurance with Robert Driver, an insurance company sub-contracted by the Authority to provide ®) replacement cost coverage with varying deductibles as scheduled. The City's Workers Compensation program is covered both under the Public Entity Risk Management Authority for a) old claims and the CJPIA for new claims. a) The Authority is a pool of cities and organized under a Joint Powers Agreement pursuant to the a' California Government Code. Each member city has a representative on the Board of Directors with officers of the Authority being elected annually by the Board Members. Annual deposits are ®� paid by member cities and adjusted retrospectively to cover costs. Each member city self-insures for the first $20,000 of each loss. Participating cities then share in claims from $20,000 to a) $500,000 per loss occurrence. In addition, various risk control techniques, including annual safety audits and employee accident prevention training, have been implemented to minimize loss. All claims are investigated, valued, reserved, defended and/or settled in accordance with Q� generally accepted insurance industry practices. There are no known existing claims, which a� x a' a� Q� • • • • • Citizens of the City of Palm Desert, Honorable Mayor and Members of the City Council November 19, 2004 iwould exceed the City's applicable coverage. • Certificates of Awards for Outstanding Financial Resorting The Government Finance Officers Association of the United States and Canada (GFOA) and the California Society of Municipal Finance Officers (CSMFO) have awarded a Certificate of • Achievement for Excellence in Financial Reporting to the City of Palm Desert for its comprehensive annual financial report for the fiscal year ended June 30, 2003. This was the • seventh consecutive year that the government has achieved this prestigious award. In order to be • awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both • general accepted accounting principles and applicable legal requirements. • • A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement • Program's requirements and we are submitting it to both the GFOA and CSMFO to determine its • eligibility for another certificate. • • Acknowledgments • The preparation of this report could not have been accomplished without the efficient and 'dedicated services of the entire staff of the finance department whose names are listed • individually in the title page. Due credit is given to the Mayor and the City Council Members for • their interest and support in planning and conducting the operations of our City in a responsible and progressive manner. Recognition is also given to all employees of the City of Palm Desert who continue to serve our community with commitment and dedication throughout the year, and to the citizens of Palm Desert our greatest appreciation for your continued support, input and guidance in helping us serve you better, thus preserving our City's quality of life and reputation • for innovation and leadership! • Respectfully submitted, • • Carlos L. ga Paul S. Gibson • City Manager Director of Finance/City Treasurer JLE:jle • • • xi C11Y Rf PRIRI RESERI • • �urrtnar unmurw o� Certificate of 0 o► Achievement o► for Excellence 4► o► in Financial o; Reporting o` Presented to �) City of Palm Desert, California a► o► For its Comprehensive Annual o► Financial Report 0 for the Fiscal Year Ended o► June 30, 2003 0► A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers 0 Association of the United States and Canada to 40 government units and public employee retirement 10 systems whose comprehensive annual financial reports(CAFRs)achieve the highest @ standards in government accounting n, and financial reporting. m0 Vr W UWIF0 STA16 N . f 4YU o President m mxwwmx " V�'�o�SEAL Doti v, aavuo ®� Executive Director Q� xii m dI • • • • • • • • California Society of • ! c lUnnicipal 3inance Officers Certificate of Award • Outstanding Financial Reporting 2002-2003 I • ! Presented to the • I City ®f Palm Desert +3 • This certificate is issued in recognition ofineedng professional standards and criteria in reporting I which reflect a high lead of quality in the annual financial statements • and in the underlying accounting system from which the reports were prepared j • March 1, 2004 • Chair,ProFmslonel&Technical Standards Camminee E • Dedicated to Excellence in Municipal Financial Management / • • • • • • • • • • • • • xiii • o� o� o� CITY OF PALM DESERT o� List of Principal Officials o► as of June 30, 2004 City Council - Manager Form of Government o� CITY COUNCIL ROBERT A. SPIEGEL o� Mayor O► �I BUFORD A. CRITES �I Mayor Pro-Tempore JEAN M. BENSON JIM FERGUSON RICHARD S. KELLY Council Member Council Member Council Member ► o► �I CITY ADMINISTRATION �1 CARLOS L. ORTEGA City Manager City Attorney - Best, Best & Krieger David J. Erwin QI Assistant City Manager for Community Services/City Clerk Sheila S. Gilligan �► Assistant City Manager for Development Services Homer Croy Assistant City Manager for Redevelopment AgencyiHousing Justin McCarthy o) Director of Finance/City Treasurer Paul S. Gibson a) REDEVELOPMENT AGENCY o) ®1 Executive Director CARLOS L. ORTEGA o� a� Xiv a� 0 • gi ; 57 i t i • �� $E 3 : $ �E =die 1< n� •U .o pu uF a a p mo3�ii° w 0 E 4 [[°C_l[�{e 8Pqi '�utj'Ei;�U$e tlo o $ b' 4014 EP ' F a.E °F • u �n°g °g ala.esc�•7 • ig • 2 uisurej °4 e� u 'hill T' g Uqy�, F°•g` SE@u i'g Ffxl iy Sfp P mf C Ep �FF� •K ;2fri £_� EO�e €s 6P enr tr IF •ty dd a! • � iu D 6��N6��LL �i�3�a ■ :°���PEf-0 `��m� p,$ �3 u�ouP�da�B ° O�0 —I IAA #.+4 G �— p, 55� oa E a oe •vv mmn eo y, • i'6p 0� 1 I : II11111'a5 IIIf1111 o E $ mL Y !E es � �' �p9 s y{�aS de • o' 111111111111 IIIIIIIIII i A • e • mu 'mF� � y�y i� �e.� � � $j �p� _ �i�� •{€ g Asa ��jEi • a • Ir ° 8! S g +a F E • °p ' tp �t 0 t. 4S :tli • $e• • 11111111 a llll lee e � I111111 ° .� o_ I111110 I11111111 � a II"I le EE F E E • f c a o aw • i � yy!!&QQssi ppgqeFe y i$$pp a LL g5F�'e' {{?66�j3 jb5FF • .m ;� • muit33gei30oF 'O CiaU� = ' • J f11111111111111 ! IIIIIIIIII . E� • ° m • °� LEc ar ma �' papd F €� s` • e�S5 Ej � �p`^��E! � .—i y �B�Si i' � � e E U L s $ S r • ° ZpCC s SE p.p p•p2..- E_! P Os mU �V .°jg�gF� pg9 p s 'iiY°MOMH-3 r ;e ui . �, Op - 5 eyy pmrS.QE pp8m 0 go0 'o a:� � " T _i CVg $ S r ' Sd PF FE� VIm� � eq . uZ : C CEi� = UL a' 6JO6J6OlCJJ 4, 111 ° �E� � � 9b°9 •LU06UE U I IIIa. m IIIE � CE a iII1IIIIIIIIIamcc IIII <> . 00 Z 1 I 1 = 0LLa sv dl S � C O � Y � IF ate rb 0 St a � UFL ai � 11- 1 -111 ( 1 I111 � z o = d E ea a � will Alp J � Y u' 3 A s' m � 12 IS 9 SE c � XV 1 , • • • • • • • • • Financial Section • • • • • • • • • • • • • • • • 1 1 I i m QI d O a O ��T��. � .:. � • • • • • • • • ® MLnce Brandon W.Burrows ® Donald L Parker & Michael K.Chu ghard David E.Rate p IO,eM1nlwur LpYu.•Donald G. ater LLY Richard K Klikuchi Certified Public Accountants Retired Robert C.Lance ® I' ire Richard C. Soil Fred J.Lunghard Jr. ® rexenae ® INDEPENDENT AUDITORS' REPORT ® To the Honorable Mayor and Members of the City Council ® City of Palm Desert, California ® We have audited the accompanying financial statements of the governmental activities, the business-type ® activities, the discretely presented component unit, each major fund and the aggregate remaining fund information of the City of Palm Desert, California, as of and for the year ended June 30, 2004, which collectively comprise the City's basic financial statements as listed in the table of contents. These ® financial statements are the responsibility of the City of Palm Desert's management. Our responsibility is to express opinions on these financial statements based on our audit. ® We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Governmental Auditing ® Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are ® free of material misstatement. An audit includes examining, on a test basis, evidence supporting the ® amounts and disclosures in the financial statements. An audit also includes assessing the accounting ® principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. ® In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, and the aggregate ® discreetly presented component units, each major fund and the aggregate remaining fund information of the City of Palm Desert as of June 30, 2004, and the respective changes in financial position and cash ® flows, where applicable, thereof for the year then ended in conformity with accounting principles generally ® accepted in the United States of America. ® In accordance with Governmental Auditing Standards, we have also issued our report dated ® September 10, 2004 on our consideration of the City of Palm Desert's internal control over financial reporting and our tests of its compliance with certain laws, regulations, contracts and grants. ® The accompanying management's discussion and analysis on pages 3 through 14 and budgetary comparison information on pages 71 through 72 are not a required part of the basic financial statements, ® but are supplementary information required by the Governmental Accounting Standards Board. We have ® applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did ® not audit the information and express no opinion on it. 75 fears weaver ® 1929 NO/ 2004 of ECcellence 203 N.Brea Blvd.• Suite 203 • Brea,CA 92821-4056• (714)672-0022 • Fax(714)672-0331 www.lslcpas.com Larxe SO"� 6 Lun a a rd LLP CERTIFIED PUBLIC ACCOUNTANTS To the Honorable Mayor and Members of the City Council City of Palm Desert, California Our audit was conducted for the purpose of forming opinions on the financial statements that collectively 11P, comprise the City of Palm Desert's basic financial statements. The accompanying introductory section, the combining and individual fund statements, schedules and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying combining and individual nonmajor fund financial statements have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The accompanying lot introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. ®I �1 ®I September 10, 2004 �1 �1 �l 401 �1 'OI a► o► a► a► 4) a) ®) dl a) a� a� ®1 m a� a� a� ® MANA GEMENT'S DISCUSSION AND ANAL MIS ® Our discussion and analysis of the City of Palm Desert financial performance for the fiscal year ended ® June 30, 2004 provides a comparison of current year to prior year ending results based on the ® government-wide statements, an analysis on the City's overall financial position and results of ® operations to assist users in evaluating the City's financial position, a discussion of significant changes ® that occurred in funds and significant budget variances. In addition, it describes the activities during the year for capital assets and long-term debt. We end our discussion and analysis with a description of ® currently known facts, decisions, and conditions that are expected to have a significant effect on the ® financial position or results of operations. Please read it in conjunction with the transmittal letter and the City's financial statements. FINANCIAL HIGHLIGHTS ® C The City's governmental activities net assets increased $7.26 million, and the net assets of the ® business-type activities increased by$0.13 million. 0 During the year, the City had revenues that were $7.26 million more than the $99.03 million ® expenses recorded by the City in its governmental activities. Compared to the prior year, ® revenues were $9.19 million greater than its expenses. ® o In the City's business-type activities, expenses were $0.13 million less than the $7.36 million ® generated in green fees, merchandise sales, rental income, capital contributions and other revenues. Compared to the prior year, the business-type activities losses were $0.02 million. ® o The City's governmental activities program revenues and general revenues decreased $2.63 ® million, or 2.4 percent from the prior year, while program expenses decreased $0.70 million. ® o Business-type activities revenues increased by $0.22 million from $7.14 million to $7.36 million. This was due to increased rounds played at Desert Willow Golf Course. Expenses increased by$0.07 million from the prior year. ® 0 The revenues available for expenditure were $2.59 million more than budgeted for in the General Fund. The City kept expenditures within spending limits by$6.29 million. ® USING THIS ANNUAL REPORT ® This annual report consists of a series of financial statements. The Statement of Net Assets and ® Statement of Activities (on pages 15, 16 and 17) provide information about the activities of the City as a whole and present a long-term view of the City's finances. Fund financial statements start on page ® 20. For governmental activities, these fund statements tell how these services were financed in the ® short term as well as what remains for future spending. Fund financial statements also report the ® City's operation in more detail than the government-wide statements by providing information about the City's most significant funds and other funds. The remaining fiduciary fund statement provides ® financial information about activities for which the City acts solely as a trustee or agent for the benefit ® of those outside of the government. -3- 0 6' 411 �I REPORTING THE CITY AS A WHOLE O� The Statement of Net Assets and the Statement of Activities: �1 Our analysis of the City as a whole begins on page 15. One of the most important questions asked �1 about the City's finances is, "Is the City as a whole better off or worse off as a result of the year's �I activities?" The Statement of Net Assets and the Statement of Activities report information about the ®i City as a whole and about its activities in a way that answers this question. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. lei �I These two statements report the City's net assets and changes in them. Net assets are the difference between assets and liabilities, which is one way to measure the City's financial health, or financial position. Over time, increases or decreases in the City's net assets are an indication of whether its 401 financial health is improving or deteriorating. You will need to consider other non-financial factors, however, such as changes in the economy due to external factors that will cause a decrease in consumer spending. 1 �1 In the statement of Net Assets and the Statement of Activities, we separate the City Activities as lei follows: 401 Governmental activities — Most of the City's basic services are reported in this category, including 411 the general administration (city manager, city clerk, finance, etc.), police and fire protection, public a 0l works, parks, recreation and culture departments. Property taxes, sales tax, transient occupancy tax, Ol user fees, interest income, franchise fees, state and federal grants, contributions from other agencies, lml and other revenues finance these activities. �1 Business-type activities — The City charges a fee to customers to cover all or most of the cost of a1 certain services it provides. The City's municipal golf course, Desert Willow, and the City's Office al Complex, Parkview, activities are reported in this category. Component unit activities —The City includes one separate legal entity in its report—the Palm Desert al Recreation Facilities Corporation. Although legally separate, this "component unit" is important a) because the City is financially accountable for it. a� REPORTING THE CITY'S MOST SIGNIFICANT FUNDS Fund Financial Statements: a) The fund financial statements provide detailed information about the most significant funds and other Q) funds — not the City as a whole. Some funds are required to be established by State law and by bond a) covenants. However, management established many other funds to help it control and manage money a) for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, ®) and other resources. The City's two types of funds are governmental and proprietary. a) Q) 4 a) Q� Q) • Governmental funds — Most of the City's basic services are reported in governmental funds, which • focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government • operations and the basic services it provides. Governmental fund information helps determine whether ' there are more or fewer financial resources that can be spent in the near future to finance the City's programs. The differences of results in the Governmental Fund financial statements to those in the Government-Wide financial statements are explained in a reconciliation following each Governmental • Fund financial statement. Proprietary funds —When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the • City's enterprise funds are the same as the business-type activities we report in the government-wide • statements but provide more detail and additional information such as a statement of cash flows. THE CITY AS TRUSTEE : Reporting the City's Fiduciary Responsibilities: a The City is the trustee, or fiduciary, for certain funds held on behalf of developers and its employees retiree service stipend fund. The City's fiduciary activities are reported in separate Statements of • Fiduciary Net Assets. We exclude these activities from the City's other financial statements because • the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. • THE CITY AS A WHOLE : The City's combined net assets decreased $2.21 million from $388.55 million to $386.34 million. A separate review of the net change in the governmental and business-type activities depicts two different stories. Our analysis below focuses on the net assets (Table 1) and changes in net assets (Table 2) of • the City's governmental and business-type activities. -5- TAE E 1 I,ETA.SSEIS ONMILD 0 AscfA ue30,2004 and 2003 ®' Cuemratal ammType Activi&s Aclnities Taal 2004 2003 2004 2003 2DO4 2903 Clmatardres ctedasqts $ Z7252 $ 299.43 $ 247 $ 216 $774.99 $301.59 C'aptal asq2ts 350.79 339.82 64.69 65.42 415.48 40524 TOTALASS6'IS (23.31 63925 67.16 67.58 690.47 706.83 ®I Lang-tamliahhbes lei QmMkg 263.51 283.49 6..83 1.15 26434 284.64 01 Qhaliabihes 39.15 3277 0.64 0.87 39.79 33.64 61 TOTAL11ABIM 30266 316.26 IA7 202 304.13 31828 0) t01 Nt as�is �I Imcsirdnrca0tal assets,net cf 01 nlaedddt 141.30 143.45 63.86 6427 205.16 207.72 �I Restricted 10D27 99.31 - 10027 9931 0 Lhestnctcd 79.08 80.23 1.83 129 80.91 81.52 I TOTAL leiT�EI' ASSETS $ 32W $32299 $ E69 $ 65.56 $3%34 $38855 ®) 0) 01 Compared to the prior year, net assets of the City's governmental activities decreased by 0.70 percent, 0) or $2.34 million. The City's Net Assets is made-up of three components: Investment in Capital Assets, Net of Related Debt, Restricted Net Assets and Unrestricted Net Assets. For governmental activities, 0) unrestricted net assets, which represents, the part of net assets that can be used to finance day-to-day a) operations, accounted for 24 percent of the overall total net assets. It decreased $1.15 million from $80.23 million to $79.08 million. This is an indication that the City's Governmental Activities ) financial position had a fall from the prior year. The City as a whole now has $1.15 million less al unrestricted funds that can be used to finance its operations. a� The change in unrestricted net asset was due to the reclassification of several capital funds from ®� unrestricted in prior year to restricted in the current year. If the reclassification did not take place, the unrestricted net asset would have increased by $9.08 million. To properly record the capital funds, it a) was necessary to make the reclassification. In face of the reclassification, the City's unrestricted net a) assets increased, which indicates the City's ability to manage its operations so its expenses do not a) exceed its revenues. a� a� a� a� 6 QI a� • The net assets of the business-type activities increased by$0.13 million from $65.56 million to $65.69 • million, compare to the prior year loss of$0.02 million. Both Parkview and Desert Willow Golf Resort recognized a net change in their gross revenues with little change in the overall expenditures, hence, the net assets of the business like activities recognized an increase. The major change in the City's governmental activities total assets was the decrease in current and • restricted assets. The decrease was a result of removing the special assessment debt service funds assets from governmental activities to an agency fund. As shown on Table 2, the $9.60 million for Restatement of Net Assets is part of the decrease. Total liabilities decreased by $13.60 million, the majority of the decrease is due to the removing of the special assessment debt. In other liabilities, an increase of $6.59 million in amounts due for pass- through agreements was part of the total increase of$6.38 million. This was caused by the increase in the Redevelopment Agency's tax increment. TABLE 2 • CHANGES 1N NET ASSETS (IN MILLIONS) As of June 30,2004 and 2003 • Governmental Business-Type • 3004 Activities 2003 2001 Activities 2003 2004 Total 2003 • REVENUES: Program Revenues: • Charges for services S 10.84 S 10,67 S 7.09 S 6.67 S 17.93 S 17.34 • Operating grants and consnbutions 4.63 6.25 4.63 6,25 • Capital growls and contbulions 7.I3 4.33 0.27 0.41 7.40 4.74 • Geneal Revenues: Property Wecs 4.32 3.]] - - 4.32 3.]] • Tax inetemenl 56.00 50.25 - - 56.00 50,25 • Sales tax 15.14 13,46 _ - 15.14 13.46 Transient occupancy Ux ].66 6.81 7-66 6.81 • Otbernxes 1.14 7.00 - - 4.44 ]00 Other revenues (6.85) 3.01 - 0.05 (6.85) 3.06 • Investment earnings 2.98 3.37 0.01 2.98 3.38 • TOTAL REVENUES 106.29 10892 7.36 2.14 113.65 110.06 EXPENSES: • General Bovemment 28.40 21.% - - 2840 21.06 Public safety 15.42 15.60 - - 15.42 15,60 • Public works 13.05 23.01 - - 13,05 23.01 • Parks,recreation and culture 3.98 3.49 - - 3,98 348 Payments to other agencies 24.05 22.14 24.05 22,14 . Interest on long-term debt 14.13 14.44 - - 14.13 14,44 G01rCounc-Deserl Willow - - 6.66 6,65 6.66 6.65 • ORee Complex-Parkview - - 0.57 0.51 0.57 0.51 • TOTAL EXPENSES 99.03 99.73 7.23 7.16 106.26 106.89 INCREASE(DECREASE) • IN NET ASSETS 7.26 9.19 0.13 (0.02) ].39 9.17 . BEGINNING NET ASSETS 322.99 211.1B 65.56 6558 388.55 2]6.]6 RESTATEMENT OF NET ASSETS (9.60) 102.62 (9.60) 102.62 • ENDING NET ASSETS S 320.65 S 322.99 S 65.69 S 65.56 S 386.34 S 388,55 • • • -7- • Governmental Activities ®i Total revenue decreased from $108.92 million to $106.29 million, a 2.4 percent decrease. The decrease is the result of the special item of refunding special assessment debt. To obtain a favorable interest rate and remove bond funding that was not necessary, the developer approached the City to refund the bonds and use that remaining capital improvement funds to offset the refunding. $8.71 million was used to offset the debt being refunded. Removing the special item, an increase of $6.08 million would have been recognized. Contributors to the increase were tax increment, transient occupancy tax, and sales tax. Factors that either increased or decreased revenues are as follows: • The increase in property value provided additional tax increment, and • Decrease in investment earnings due to lower market returns. Total expenses decreased from $99.73 million to $99.03 million. The major factors were a decrease in the cost of public works and an increase in cost for general government. The decrease was due to the (Al recognition of public works projects as capital assets instead of maintenance or improvements, and the increase was the result of the City effort to fully fund its retiree health fund. Payments to other a agencies increased due to the increase in tax increment. The Redevelopment Agency has several agreements with other entities whereby the Agency is required to pay those entities a portion of the tax lei increment. The following schedule represents the net cost of providing services: 101 Governmental Activities 61 Net (Expense)Revenue O) (In Millions) 41 2004 2003 General Government ($20.04) ($13.68) Public Safety (12.58) (12.65) Public Works (4.99) (14.36) �l Parks, recreation and culture (0.64) (1.22) Payment to other agencies (24.05) (22.14) O) Interest on long-term debt (14.12) (14.44) Total ($74.42) ($78.49) Business-type Activities a) Business-type activities revenues increased $0.22 .million, a 3.1 percent increase. Increase in golf a� rounds played was the major factor in the increase for the business-type activities revenues, along with a� CPI adjustments in the tenants rent at Parkview Office Complex. ®1 Operating expenses for the business-type activities increased from 7.16 million to 7.23 million, an increase of less than 1 percent. The increase was normal for the business entities and their respective ®) industries. Q) Q) a) a) m ® THE CITY'S FUNDS ® On page 20, the governmental funds balance sheet is shown. The combined fund balance of$225.23 million increased from $220.57 million, or 2.1 percent. This total includes the General Fund balance of ® $55.46 million. It increased by $6.64 million from the prior year. The City's General Fund balance has ® reserved $27.84 million for advances, encumbrances, loans, debt service, etc. More detailed ® information about the combined fund balance reserves is presented in Note 12 to the financial statements. ® Other major funds balance changes are noted below: ® G For the Prop A Fire Tax fund, fund balance increased due to lower fire cost. G For the Redevelopment Agency Financing Authority Debt Service fund, fund balance increased ® due to the new bonds that was issued. ® O The Redevelopment Agency Debt Service funds, fund balance increased as a result of an ® increase in tax increment. The development in project areas increased the tax increment the Agency received. ® O The Redevelopment Agency Capital Projects funds, fund balance increase was due to issuances ® of new bonds. ® More detailed information on the fund financial statements balances is presented in the Notes to the ® financial statements. ® General Fund Budgetary Highlights ® During the year, with the recommendation from the City's staff, the City Council revised the City ® budget several times. Adjustments were made on a monthly basis as the City's staff requested ® additional appropriations to cover the cost of projects that either had change orders for additional work, ® or the estimated cost at the beginning of the project was underestimated. At mid-year, adjustments ® were made as department heads requested increases or decreases to their budgets to maintain their current level of services. At year-end, budgets were adjusted for unanticipated expenditures. All ® amendments that either increase or decrease appropriations are approved by the City Council. ® For the City's general fund, actual ending revenues of$39.17 million were $2.59 million more than the ® final budgeted revenues of $36.58 million. The majority of the variance was in sales tax revenues, which was budgeted to be $13.58 million; however, the actual was $15.14 million. The other ® significant variance was in property tax income. The City budgeted $2.85 million, and the actual was ® $3.37 million. ® -9- The General Fund actual ending expenditures of $32.53 million were $6.29 million less than the final lei budget of$38.82 million. There were significant changes in the original budget compared to the final 401 budget during the year. The original expenditure budget was $36.32 million compared to the final budget of$38.82 million, a $2.50 million increase. The major change was the increase of$1.47 million 1 for street resurfacing. This was due to the re-appropriations of prior year encumbrances to the fiscal 401 year ending June 30, 2004. ®i CAPITAL ASSET AND DEBT ADMINISTRATION 0 1 Capital Assets lei At the end of 2004, the City had $415.48 million invested in a broad range of capital assets, including 401401 land, streets, bridges, drainage systems, traffic lights, parks, buildings, art work, vehicles and equipment. (See Table 3). This amount represents a net increase (including additions and deductions) 411 of$10.24 million, or 2.5 percent over last year. 10) TABLE 3 �i CAPITAL ASSETS AT YEAR-END (NET OF DEPRECIATION,IN MILLIONS) of 41) For the years ended June 30,2004 and 2003 a) a► Governmental Business Type �) Activities Activities Total 2004 2003 2004 2003 2004 2003 Land $ 71.49 $ 70.51 $ 52.35 $ 52.17 $ 123.84 $ 122.68 �) Construction in progress 18.94 11.48 - - 18.94 11.48 ®) Buildings and improvements 67.03 66.36 10.71 11.07 77.74 77.43 a) Equipment 1.83 2.19 1.63 2.18 3.46 4.37 InPrastmcture 191.50 189.28 - - 191.50 189.28 TOTALS $ 350.79 $ 339.82 $ 64.69 $ 65.42 $ 415.48 $ 405.24 ®' VI a► m a► a► a► a► a► a► -10- a► ai a� 1► 0 ® This year's major additions included(in millions): ® Purchase of apartment complex for low income families, $ 2.85 ® Infrastructure construction, and 4.47 Start-up of several new capital projects recognized as Construction-in-progress. 1066 ® The City's fiscal year 2005 capital budget calls for it to spend and additional $41.491 million plus the ® continuing capital projects spending of $58.686 million from prior year. The majority being the ® construction of and widening of street at $25.173 million, $10.725 million in housing projects, $2.32 million in drainage, $1.258 million in parks, and $2.013 million in other capital projects. The City's ® Redevelopment Agency will issue a bond to fund some of the capital projects proposed, other projects ® will be funded with existing bond proceeds or funds that have been designated by an outside party for ® specific use. More detailed information about the City's capital assets is presented in Note Id and Note ® 5 to the financial statements. Debt ® At year-end, the City's governmental activities had $263.51 million in bonds, notes, contracts, and ® compensated absences verses $283.49 million last year, an decrease of $19.98 million, or 7.0 percent as shown in Table 4. The major difference is the reporting of the Special Assessments debt with ® governmental commitments which were removed from long term liabilities because they are not ® considered obligations of the City of Palm Desert. 0 ® -11- TABLE 4 OUTSTANDING DEBT, AT YEAR-END (IN MILLIONS) For the years ended June 30, 2004 and 2003 Govemmental Business Type Activities Activities Total 2004 2003 2004 2003 2004 2003 lei Compensated absences $ . 1.71 $ 1.48 $ $ $ 1.71 $ 1.48 Special assessments debt with 4 governmental comnutment - 40.53 - - - 40.53 0 Notes payable 0.98 1.95 0.98 1.95 10) Contract and leases payable 4.82 5.07 0.83 1.15 5.65 6.22 Revenue bonds and notes ) (backed by specific tax O) and fee revenues) 256.00 234.46 - - 256.00 234.46 �) TOTALS $ 263.51 $ 283.49 $ 0.83 $ 1.15 $ 264.34 $ 284.64 �) Three bonds were issued during the fiscal year ended June 30, 2004. The City was able to meet its a) current year debt obligation in a timely mariner. Debts issued in the prior year have been used to finance various capital projects. An example of this would be the purchase of land, and construction of a) the City's golf course. In an effort to increase its cash flow for additional capital projects, the City's al Redevelopment Agency was able to refund an existing bond and lower their annual principal and �) interest payments. a► The City's business-type activities debt decreased $0.32 million from $1.15 million to $0.83 million. ®) Debt in the business-type activities is for capital leasing of equipment. The City's golf course used leasing as an alternative to purchasing maintenance equipment to maintain a cash flow to operate the a) day-to-day activities. The reduction in the City's business type activities debt was directly related to the ageing of the current capital lease agreements. In a couple of years the City's golf course will have to replace the current equipment; such as the golf carts; mowers, and other golf course maintenance a) equipment; if the city decides to lease the debt should increase to approximately $1.15 million. More detailed information about the City's long-term liabilities is presented in Note 6 to the financial a) statements. a► Q� QP Q� a� 4 2- Q� • ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS In preparing the budget for 2005, management looked at the following economic factors: • • Energy and fuel cost: Currently, our nation is in an energy crisis, the City does not know the • extent of impact that the energy crisis will have on sales or tourism, which are the two largest • revenue sources for the City. The City's 2005 budget reflects the increase in energy and fuel. • Sales tax bill: legislation was passed that reallocated sales tax revenue. The city now receives an increase in the property taxes allocated to them in return for sales tax. The City on biannual • basis rather than a monthly basis is now receiving sales tax revenue. This has a direct effect on • the City cash flow and interest eaming. • In prior years, the City had unallocated reserves in its capital projects and special revenue funds. In the five-year capital improvement program, all restricted capital funds have been allocated to various projects. Any additional projects would require a transfer from the general • fund, which would mean that the City's unobligated general fund reserve would start to • decrease. • Compared to prior year's budget, the City's general fund expenditures are projected to increase by • $2.46 million. Staff salaries and benefits increased due to the annual CPI increase of 2.0 percent, and an average increase of 4 percent in health care premiums. In addition, the City's contracts with the Riverside County Sheriff's Department for police services and the contract with the Fire Department • for fire protection have increased. All other levels of support remained virtually unchanged. The City continues to grow with new hotels, commercial and residential development, construction of a four-year university, street improvements, park construction, and various other projects. The 2005 budget is a reflection of the City's commitment to the residents of Palm Desert. The City's conservative approach has provided for a consistent high level of services. The City has made a • commitment to allocate resources for public safety, cultural/social programs, and infrastructure improvements. A copy of the City's 2004-2005 financial plan can be obtained by contacting the City's finance department. -13- 0 o� o� 0 CONTACTING THE CITY'S FINANCIAL MANAGEMENT Oi This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors ®1 with a general overview of the City's finances and to show the City's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the o City's Finance Department, at the City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert, ®1 .California 92260-2578, or(760) 346-0611. a 0 of 0 o� of of of of a► o► a► �o► a► a► a► a► a► 0 0 0 0 0 0 dl -14- dl 4! dl • • • • • • Govemmental-wide Financial Statements • • • • • • • • • • • • • r • • • • 1 1 1 1 1 ��".*, � �► .. � 1 i aCITY OF PALM DESERT Exhibit A STATEMENT OF NET ASSETS • JUNE 30, 2004 • Component Unit Primary Government Palm Desert • Governmental Business-Type Recreational • Activities Activities Total Facilities Corp. Assets: Cash and investments $ 182,315,638 $ 2,739,618 $ 185,055,256 $ 405,670 • Receivables: Accounts 2,015,011 84,183 2,099,194 12,195 • Notes 3,108,930 - 3,108,930 - Interest 731,331 731,331 Loans 12,875,960 12,875,960 Internal balances 651,555 (651,555) - - • Prepaid costs 939,016 45,283 984,299 3,639 Inventories 36,058 201,096 237,154 26,006 Unamortized debt issuance costs 5,251,888 - 5,251,888 - Deposits 681,025 - 681,025 - . Due from other governments 3,834,902 - 3,834,902 - Property held for resale 865,335 - 865,335 - • Due from component unit 672,000 47,206 719,206 - Restricted assets: Cash with fiscal agent 58,537,707 - 58,537,707 - • Capital assets not being depreciated 199,923,806 52,349,436 252,273,242 - Capital assets, net of depreciation 150,864,778 12,341,347 163,206,125 • Total Assets 623,304,940 67,156,614 690,461,554 447,510 • Liabilities: • Accounts payable 8,196,948 98,297 8,295,245 60,070 Accrued liabilities 364,893 397,807 762,700 38,383 • Interest payable 3,155,324 - 3,155,324 - Uneamed revenues 126,729 116,520 243,249 31,711 ' Deposits payable 415,068 23,003 438,071 - Due to primary government - - - 719,206 Amounts due under pass-through agreement 26,889,509 - 26,889,509 - • Noncurrent liabilities: Due within one year 11,156,115 325,657 11,481,772 • Due in more than one year 252,352,967 507,702 252,860,669 - Total Liabilities 302,657,553 1,468,986 304,126,539 849,370 • Net Assets: • Invested in capital assets, net of related debt 141,303,283 63,857,424 205,160,707 - Restricted for: • Special projects 46,550,415 - 46,550,415 - • Capital projects 45,749,963 _ 45,749,963 - Debt service 7,968,219 7,968,219 • Unrestricted 79,075,507 1,830,204 80,905,711 (401,860) • Total Net Assets $ 320,647,387 $ 65,687,628 $ 386,335,015 $ (401,860) • See Notes to Financial Statements . 15 a► a► a• CITY OF PALM DESERT ®► STATEMENT OF ACTIVITIES 0 YEAR ENDED JUNE 30, 2004 41► ®► Program Revenues Q► Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants ®► Functions/Programs Primary Government: Governmental Activities: General government $ 28,402,902 $ 6,540,065 $ 271,675 $ 1,555,015 Q► Public safety 15,420,151 2,737,585 107,244 - il► Parks,recreation and culture 3,977,447 1,048,667 2,288025 11�11 Public works 13,046,864 511,317 4,253,378 3,291:118 Payments to other agencies 24,051,292 - m Interest on long-term debt 14,124,371 Total Governmental Activities 99,023,027 10,837,634 4,632,297 7,134,158 ®► Business-Type Activities: �) Desert Willow Golf Course 6,657,220 6,237,087 267,951 OfficeComplex-Parkview 570,135 851,763 - - a) Total Business-Type Activities 7,227,355 7,088,850 267,951 a) Total Primary Government $ 106,250,382 $ 17,926,484 $ 4,632,297 $ 7,402,109 a) Component Units: a' Palm Desert Recreational Facilities Corp. $ 1,660,844 $ 1,730,533 $ $ General Revenues: Taxes: Property taxes, levied for general purpose ®) Tax increment Transient occupancy taxes a� Sales taxes m Franchise taxes �Ir Motor vehicle in lieu �A Use of money and property V� Miscellaneous a) Special Item: ®) Refunding of special assessment debt Total General Revenues and Special Items ®► Change in Net Assets a► Net Assets at Beginning of Year a) Restatement of Net Assets amm) Net Assets at End of Year Vr a� a� See Notes to Financial Statements 16 Exhibit B Net(Expenses)Revenues and Changes in Net Assets Primary Government Component Unit Palm Desert Governmental Business-Type Recreational ® Activities Activities Total Facilities Corp. $ (20,036,147) $ $ (20,036,147) $ - (12,575,322) (12,575,322) - ® (640,755) (640,755) - (4,991,051) (4,991,051) - (24,051,292) (24,051,292) - (14,124,371) (14,124,371) - ® (76,418,938) (76,418,938) ® (152,182) (152,182) ® 281,628 281,628 ® 129,446 129,446 (76,418,938) 129,446 (76,289,492) 69,689 ® 4,320,126 - 4,320,126 55,994,780 - 55,994,780 - 7,650,831 - 7,660,831 - ® 15,138,424 - 15,138,424 - ® 2,417,856 - 2,417.856 - 2,019,129 - 2,019,129 - 2,985,463 - 2,985,463 - 1,852,229 1,852,229 - ® (8,706,206) (8,706,206) $3,682,632 - 83,682,632 - ® 7,263,694 129,446 7,393,140 69,689 322,991,979 65,558,182 388.550,161 (471,549) ® (9,608,286) - (9,608,286) ® $ 320,647,387 $ 65,687,628 $ 386,335,015 ® 17 a a' a; a� a� a' a' a' a� a' THIS PAGE INTENTIONALLY LEFT BLANK a� lei 401 401 401 a� a� al a► a� a► al a► a► a► a► a 0 a a a a D ,8 a 41 • • • • • • • • • Fund Financial Statements • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • �► �� �► �1 a �� �F ��T-� � .. • • • • • • • • • • • • • • • • • • • • • • • • FUND FINANCIAL STATEMENTS • • • • • • • • • • • • • • • • • • • • • • • • • • • 19 a► a► CITY OF PALM DESERT Q) BALANCE SHEET �) GOVERNMENTALFUNDS ®) JUNE 30, 2004 ®) Special Revenue Capital Projects ®) Fund Fund Prop A Redevelopment a) Fire Agency /�, General Tax Capital Projects yr Assets: Pooled cash and investments $ 31,118,311 $ 2,936,800 $ 6,968,464 Receivables: �) Accounts 1,127,528 - - Notes 3,000,000 - - �) Interest 378,994 - 254,965 a) Loans 2,100,000 - 2,773,326 Prepaid costs 919,074 - 17,113 a) Deposits 680,000 - - Due from other governments 3,002,654 51,396 �► Due from other funds 651,555 a) Advances to other funds 19,378,140 Inventories 36,058 a) Property held for resale - Due from component unit 672,000 ®) Restricted assets: a) Cash and investments with fiscal agents - - 40,796,473 Total Assets $ 63,064,314 $ 2,988,196 $ 50,810,341 all Liabilities and Fund Balances: Liabilities: Accounts payable $ 4,525,239 $ 339,881 $ 392,664 a) Accrued liabilities 258,680 - 11,722 ®) Unearned revenues 14,976 - Advances from other funds - a) Deferred revenues 2,807,000 Amounts due under pass-through agreements a) Deposits payable - - - Total Liabilities 7,605,895 339,881 404,386 �) Fund Balances: Reserved: Reserved for encumbrances 2,071,529 - 4,713,952 a) Reserved for inventory 36,058 - - Reserved for continuing appropriation - - 20,024,351 m Reserved for prepaid costs and deposits 1,599,074 - 17,113 VI Reserved for property held for resale - - - nn,, Reserved for debt service 1,709,018 - - W Reserved for receivables (notes and loans) 5,100,000 - 2,773,326 a' Reserved for advances to other funds 17,323,140 Unreserved: a� Unreserved, reported in: mm General fund 27,619,600 - L, Special revenue funds 2,648,315 Capital projects funds - 22,877,213 Debt service funds - - - amm� Total Fund Balances 55,458,419 2,648,315 50,405,955 V► Total Liabilities and Fund Balances $ 63,064,314 $ 2,988,196 $ 50,810,341 Q See Notes to Financial Statements a� 20 ®, Exhibit C • Debt Service Funds • RDA Redevelopment Other Total Financing Agency Governmental Governmental • Authority Debt Service Funds Funds $ $ 65,826,751 $ 72,346,484 $ 179,196,810 689,120 198,363 2,015,011 • 108,930 3,108,930 • 19,020 _ 78,352 731,331 8,002,634 12,875,960 • _ - 2,829 939,016 1,025 681,025 • 780,652 3,834,902 • _ _ 651,555 13,513,524 32,891,664 - 36,058 865,335 865,335 • - 672,000 • 6,647,085 - 11,094,149 58,537,707 $ 6,666,105 $ 66,515,871 $ 106,992,477 $ 297,037,304 • $ 6,591 $ - $ 2,932,573 $ 8,196,948 • _ 94,491 364,893 111,753 126,729 32,785,480 106,184 32,891,664 - 116,811 2,923,811 • _ 26,889,509 - 26,889,509 415,068 415,068 6,591 59,674,989 3,776,880 71,808,622 • - 4,938,173 11,723,654 36,058 28,161,819 48,186,170 • - 3,854 1,620,041 - 865,335 865,335 • 600,424 - - 2,309,442 - - 7,991,269 15,864,595 - 13,513,524 30,836,664 • - 27,619,600 • _ _ 29,966,043 32,614,358 17,775,580 40,652,793 • 6,059,090 6,840,882 - 12,899,972 6,659,514 6,840,882 103,215,597 225,228,682 $ 6,666,105 $ 66,515,871 $ 106,992,477 $ 297,037,304 21 0 o► o► o► o► o► o► a o► a o► THIS PAGE INTENTIONALLY LEFT BLANK o► a of of �1 a o► o� a of o• a of of of a of o► a a o• a a of ®I 22 o� CITY OF PALM DESERT Exhibit D • RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30, 2004 • Amounts reported for governmental activities in the statement of net assets are different because: Fund balances of governmental funds $ 225,228,682 • When capital assets (land, buildings, equipment)that are to be used in governmental activities are purchased or constructed, the cost of those assets are reported as expenditures in governmental funds. However, the statement of net assets includes those capital assets among the assets of the City as a whole: Beginning balance, net depreciation $ 338,905,685 Prior period adjustment (584,006) • Current year additions 18,927,787 Current year deletions (861,902) Current year depreciation (6,388,015) • Transfer to internal service fund (139,824) • Ending balance, net depreciation 349,859,725 Long-term debt and compensated absences from the General Long-Term Debt Account Group that have not been included in the governmental fund activity: • Long-term debt (261,800,064) Compensated absences (1,709,018) Interest on long-term debt is not accrued in governmental funds but, rather, • is recognized as an expenditure when due. (3,155,324) Cost of issuing bonds are recognized as an expenditure in the period paid, • however, in the statement of net assets it is amortized over the life of the bond. 5,251,888 • Because the focus of governmental funds is on short-term financing, some assets • will not be available to pay for current-period expenditures. Those assets (for example, receivables)are offset by deferred revenues in the governmental funds and, thus, are not included in fund balance: Palm Desert Recreational Facilities Corporation -relates to the amount of rent owed by component unit to City's General Fund. 672,000 • Community Development Block Grant-relates to loans given to low to moderate income families. 116,811 Deferred amounts in-lieu of property taxes not received from developer 80,000 • Redevelopment Agency land purchase from City. 2,055,000 2,923,811 Internal service funds are used by management to charge the costs of certain activities, such as equipment, management and self-insurance, to individual funds. • The assets and liabilities of the internal service funds must be added to the . statement of net assets. 4,047,687 • Net assets of governmental activities $ 320,647,387 • See Notes to Financial Statements 23 a► a► CITY OF PALM DESERT �► STATEMENT OF REVENUES, ®) EXPENDITURES AND CHANGES IN FUND BALANCES a) GOVERNMENTALFUNDS YEAR ENDED JUNE 30,2004 �) a► Special Revenue Capital Projects �) Fund Fund �) Prop A Redevelopment Fire Agency �1 General Tax Capital Projects a) Revenues: Taxes $ 30,887,340 $ 1,432,859 $ o► Special assessments collected - - n, Licenses and permits 1,053,905 V� Intergovernmental revenues 3,633,489 Rental income - �) Charges for services 1,048,667 Use of money and property 1,135,952 26,679 577,543 �► Fines and forfeitures 147,378 - - ®I Miscellaneous 178,016 180,092 Contributions from property owners - - - �) Total Revenues 38,084,747 1,459,538 757,635 �) Expenditures: Current: General government 10,497,307 11,936 3,702,066 Payments to other agencies - - - OI Public safety 13,052,963 2,171,008 O) Parks, recreation and culture 2,638,386 - Public works 5,255,530 - - ®► Capital outlay 230,557 - 2,829,717 �) Debt service: Principal retirement - - 850,000 O) Interest and fiscal charges - - - Total Expenditures 31,674,743 2,182,944 7,381,783 �) Excess (Deficiency)of Revenues Over �) (Under) Expenditures 6,410,004 (723,406) (6,624,148) �) Other Financing Sources (Uses): Transfers in 1,092,475 726,605 26,329,528 Transfers out (859,328) - (1,018,239) �1 Bonds issued Sale of property _ _ _ n) Total Other Financing Sources (Uses) 233,147 726,605 25,311,289 Special Item: 11� Refunding of special assessment debt - - - Net Change in Fund Balances 6,643,151 3,199 18,687,141 �V Fund Balances, Beginning of Year 48,815,268 2,645,116 31,718,814 �) Fund Balances, End of Year $ 55,458,419 $ 2,648,315 $ 50,405,955 a) See Notes to Financial Statements ®I 24 a� • Exhibit E • • • Debt Service Funds RDA Redevelopment Other Total • Financing Agency Governmental Governmental Authority Debt Service Funds Funds • $ $ 55,994,780 $ 5,633,206 $ 93,948,185 • - 214,950 214,950 262,764 1,316,669 - - 2,434,066 6,067,555 • - - 4,494,098 4,494,098 3,800 1,052,467 985,031 282,580 1,233,721 4,241,506 - - 159,252 306.630 479,842 1.245,648 2,083,598 - 2,095,969 2,095,969 • 985,031 56,757,202 17,777,474 115,821,627 239 13,719 12,897,265 27,122,532 • - 24,051,292 - 24,051,292 - 66,725 15,290,696 • - 2,638,386 4,897,566 10,153,096 t - - 15,867,513 18,927,787 • 27,150,000 122,707 250,000 28,372,707 15,739,454 903,595 - 16,643,049 • 42,889,693 25,091,313 33,979,069 143,199,545 (41,904,662) 31,665,889 (16,201,595) (27,377,918) 17,466,578 - 22,621,078 68,236,264 ® (24,153,420) (25,257,948) (16,947,329) (68,236,264) 48,690,000 - 48,690,000 - 1,728,522 1,728,522 • 42,003,158 (25,257,948) 7,402,271 50,418,522 ® - (8,706,206) (8,706,206) i 98,496 6,407,941 (17,505,530) 14,334,398 • 6,561,018 432,941 120,721,127 210,894,284 • 3 6,659,514 $ 6,840,882 $ 103,215,597 S 225,228,682 • 25 CITY OF PALM DESERT Exhibit F a) RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2004 Amounts reported for governmental activities in the statement of activities differs from the amounts reported in the statement of activities because: Net change in fund balances-total governmental funds $ 14,334,398 a Governmental funds report capital outlays as expenditures, however, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. 11,677,870 Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. 28,372,707 Proceeds of bonds are reported as revenue in governmental funds, however, the receipts of debt increase liabilities in the statement of net assets and does result in revenues in the statement of activities. (48,690,000) Cost of issuing bonds are recognized as an expenditure in the period paid, however, O in the statement of net assets it is amortized over the life of the bond. 1,645,674 Some expenses reported in the statement of activities do not require the use of O current financial resources and,therefore,are not reported as expenditures in governmental funds: Net change in compensated absences for the current period. (230,341) Net change in accrued interest for the current period. (30,591) Collection of deferred revenues are reported as revenues in governmental funds and, thus, has the effect of increasing fund balances. For the City as a whole, however, the collection of these receipts reduces the net assets in the statement of net assets and does not result in revenues in the statement of activities: Deferred loans 5,736 Revenues will not be collected within 60 days of the City's fiscal year end and, therefore, are not considered available in the governmental funds: Rental income due from Palm Desert Recreational Facilities Corporation. 96,000 Deferred amounts in-lieu of property taxes not received from developer 80,000 Reimbursement revenue related to repairs completed by the City on behalf of the public library. (172,217) Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. `) The net revenues (expenses)of the internal service funds is reported with governmental activities. 174,458 Change in net assets of governmental activities $ 7,263,694 See Notes to Financial Statements 26 ® CITY OF PALM DESERT Exhibit G STATEMENT OF NET ASSETS PROPRIETARY FUNDS ® JUNE 30,2004 Business-Type Activities ® Enter rise Funds ® Major on-Major Governmental Fund Fund Total Activities- ® Desert Willow Office Complex Enterprise Internal Golf Course Parkview, Funds Service Fund ® Assets: ® Current: Cash and investments $ 530.814 $ 2,208,804 $ 2,739,618 $ 3,118,828 ® Receivables: Accounts 44,612 39,571 84,183 ® Prepaid costs 45,283 - 45,283 ® Inventories 201,096 _ 201,096 Due from PDRFC 47,206 47,206 Total Current Assets 869,011 2,248,375 3,117,386 3,118,828 Noncurrent: ® Capital assets- net of accumulated depreciation 61,237,521 3,453,262 64,690,783 928,859 ® Total Noncurrent Assets 61,237,521 3,453,262 64,690,783 928,859 ® Total Assets $ 62,106,532 $ 5,701,637 $ 67,808,169 $ 4,047,687 Liabilities and Net Assets: ® Liabilities: ® Current: ® Accounts payable $ 78,336 $ 19,961 $ 98,297 $ Accrued liabilities 397,807 397,807 Deposits payable - 23,003 23,003 ® Unearned revenues 115,140 1,380 116,520 ® Due to other funds 651,555 - 651,555 ® Capital leases-current portion 325,657 - 325,657 ® Total Current Liabilities 1,568,495 44,344 1,612,839 ® Noncurrent: ® Capital leases payable 507,702 - 507,702 ® Total Noncurrent Liabilities 507,702 507,702 ® Total Liabilities 2,076,197 44,344 2,120,541 - ® Net Assets: Invested in capital assets, net of related debt 60,404,162 3,453,262 63,857,424 928,859 Unrestricted (373,827) 2,204,031 1,830,204 3,118,828 Total Net Assets 60,030,335 5,657,293 65,687,628 4,047,687 Total Liabilities and Net Assets $ 62,106,532 $ 5,701,637 $ 67,808,169 $ 4,047,687 ® See Notes to Financial Statements ® 27 al CITY OF PALM DESERT Exhibit H STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2004 Business-Type Activities Enterprise Funds Major Non-Major Governmental Fund Fund Total Activities - Desert Willow Office Complex Enterprise Internal Golf Course Parkview Funds Service Funds Operating Revenues: Fees and rentals $ 5,446,645 $ 851,763 $ 6,298,408 $ 213,137 Merchandise sales 790,442 - 790,442 - Total Operating Revenues 6,237,087 851,763 7,088,850 213,137 is Operating Expenses: Maintenance and operations 4,215,430 197,426 4,412,856 - Cost of merchandise 426,426 - 426,426 O General and administrative 1,129,746 178,144 1,307,890 - Depreciation and amortization 824,553 194,565 1,019,118 213,137 Total Operating Expenses 6,596,155 570,135 7,166,290 213,137 O 0 Operating Income (Loss) (359,068) 281,628 (77,440) - 4D Nonoperating Revenues (Expenses): 411 Interest revenue - 34,634 Interest expense (61,065) (61,065) 4) Total Nonoperating 46 Revenues (Expenses) (61,065) (61,065) 34,634 4) Income(Loss) Before Contributions (420,133) 281,628 (138,505) 34,634 Capital Contributions 267,951 - 267,951 139,824 Changes in Net Assets (152,182) 281,628 129,446 174,458 Net Assets: Beginning of Fiscal Year 60,182,517 5,375,665 65,558,182 3,873,229 End of Fiscal Year $ 60,030,335 $ 5,657,293 $ 65,687,628 $ 4,047,687 See Notes to Financial Statements 28 ® CITY OF PALM DESERT Exhibit I ® STATEMENT OF CASH FLOWS ® PROPRIETARY FUNDS ® YEAR ENDED JUNE 30,2004 Business-Type Activities Enterprise Funds Major Non-Major Governmental ® Fund Fund Total Activities- ® Desert Willow Office Complex Enterprise Internal Golf Course Parkview Funds Service Funds Cash Flows From Operating Activities: ® Receipts from customers $ 6,418,874 $ 824,644 $ 7,243,518 $ - ® Payments to suppliers (5,845,638) (391,887) (6,237,525) - Internal activity-payments to other funds (105,952) (105,952) ® Receipts from interfund services - - - 213,137 ® Net Cash Provided(Used)by Operating Activities 573,236 326,805 900,041 213,137 ® Cash Flows From Capital and Related ® Financing Activities: Purchases of capital assets (7,655) (18.019) (25,674) (83,908) ® Principal paid on leases (313,223) - (313.223) - Interest paid on leases (61,065) - (61,065) - ® Net Cash Provided(Used)by Capital and ® Related Financing Activities (381,943) (18,019) (399,962) (83,908) ® Cash Flows From Investing Activities: Interest and dividends 34,634 ® Net Cash Provided(Used)by Investing Activities - - 34,634 Net Increase(Decrease)in Cash and Cash Equivalents 191,293 308,786 500,079 163,863 ® Cash and Cash Equivalents-Beginning of Year 339,521 1,900,018 2,239,539 2,954,965 ® Cash and Cash Equivalents-End of Year $ 530,814 $ 2,208,804 $ 2,739,618 $ 3,118,828 ® Reconciliation of Operating Income(Loss)to Net Cash Provided(Used)by Operating Activities: ® Operating income(loss) $ (359,068) $ 281,628 (77,440) $ - ® Adjustments to reconcile operating income(loss) ® to net cash provided(used)by operating activities: Depreciation and amortization expense 824,553 194,565 1,019,118 213,137 Changes in assets and liabilities: ® Receivables,net 157,848 (26,099) 131,749 - Prepaids and deposits (10,421) - (10,421) - Inventory 70,975 - 70,975 - Accounts,accrued liabilities and deposits ® payables (134,591) (120,604) (255,195) Unearned revenue 23,940 (2,685) 21,255 - Net Cash Provided(Used)by Operating Activities $ 573,236 $ 326,805 $ 900,041 $ 213,137 Noncash items included$267,951 and$139,824(net value)of capital assets contributed by the City of Palm Desert to Desert Willow Golf Course and the internal service fund,respectively. See Notes to Financial Statements 29 QI QI CITY OF PALM DESERT Exhibit J m� STATEMENT OF FIDUCIARY NET ASSETS V► FIDUCIARY FUNDS -AGENCY JUNE 30, 2004 a) Assets: Q) Cash and investments $ 16,754,733 Receivables (net of allowance for uncollectibles): Accounts 27,645,360 Interest 18,327 Total Assets $ 44,418,420 �1 Liabilities: Accounts payable $ 10,141 Deposits 44,408,279 Total Liabilities $ 44,418,420 46 4 See Notes to Financial Statements 30 . tdotes N � �1�--� �r �``\ a �r +� � . a s �r i • • i • a� ®► m a► a► a► �► a� a► a► ®► a► �► �� �� ®� +� �T,-.� �� �� .� ���. . � �� �. CITY OF PALM DESERT • NOTES TO BASIC FINANCIAL STATEMENTS • JUNE 30, 2004 Note 1: Summary of Significant Accounting Policies . a. Description of the Reporting Entity The City of Palm Desert was originally incorporated on November 26, 1973 as a General • Law City. In December 1997, the voters in the City passed Measure LL, which adopted a City Charter. The City operates under a Council-Manager form of government and provides the following services: public safety (police and fire), highways and streets, • sanitation, public improvements, community development (planning, building and zoning) and general administrative services. The City has defined its reporting entity in accordance with accounting principles generally accepted in the United States of America which provide guidance for ' determining which governmental activities, organizations and functions should be included in the reporting entity. The Basic Financial Statements present information on the activities of the reporting entity, including all of the fund types and account groups of . the City (the primary government) and its component units, entities for which the • government is considered financially accountable. • Accounting principles generally accepted in the United States of America require that the component units be separated into blended or discretely presented units for reporting purposes. The following criteria were used in determination of blended component units: • appointment of the governing board and fiscal dependence. Although legally separate entities, blended component units are, in substance, part of the City's operations. • Therefore, they are reported as part of the primary government. Discretely presented • component units are reported in a separate column in the basic financial statements to emphasize that they are legally separate from the City. Blended Component Units • Following are descriptions of legally separate component units for which the City is financially accountable that are blended with the Primary Government. The governing bodies of these component units are substantially the same as the City. The Palm Desert Redevelopment Agency (Agency) was established October 24, 1974, pursuant to California Health and Safety Code Section 33000 entitled • "Community Redevelopment Law." The purpose of the Agency is to prepare and execute plans for the improvement, rehabilitation and redevelopment of blighted areas within the limits of the City. The Agency's transactions are reported in the • governmental fund financial statements as debt service, capital projects and other governmental funds. • The Palm Desert Housing Authority (Housing Authority) was established by the City Council in January 1998 and is partly responsible for the administration of providing • affordable housing in the City. The Housing Authority transactions are reported in the • governmental fund financial statements under other governmental funds. . The City Council of Palm Desert is the governing body for the Agency and Housing . Authority. 31 City of Palm Desert Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) The Palm Desert Financing Authority (Financing Authority) was formed on January 26, 1989. The purpose of the Financing Authority is to issue debt and loan the proceeds to the City and Agency. The Financing Authority's capital related transactions are reported in the governmental fund financial statements in the capital projects funds and the collection of assessments and payments of debt service is recorded in the fiduciary funds. 0 The financial statements of the Agency can be obtained at the administrative offices of the City. Separate financial statements are not issued for the Housing Authority and Financing Authority. Discretely Presented Component Unit The Palm Desert Recreational Facilities Corporation (Corporation) was incorporated on February 25, 1997. The purpose of the Corporation is to lease, operate and manage a restaurant and bar in the Desert Willow Golf Course in Palm Desert, California. The Board of Directors of the Corporation appoints an executive director to administer operations. The Corporation is in a separate column to emphasize that it is legally separate from the City and is financially accountable to the City. The two-member board governing the Corporation is appointed by the City Council and the City has authority to control O the Corporation's budget. 40 Complete financial statements of the Component Unit can be obtained from the City's administrative offices. 40' b. Basis of Presentation O Government-Wide Financial Statements 401 The government-wide financial statements (i.e., the statement of net assets and the 4D statement of activities) report information on all of the nonfiduciary activities of the O primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, 4D which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and 40 charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. G The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Expenses reported for functional activities include allocated indirect expenses. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the later are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 32 City of Palm Desert Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies(Continued) • Fund Financial Statements The accounting system of the City is organized and operated on the basis of . separate funds, each of which is considered to be a separate accounting entity. Each • fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues and expenditures/expenses. • Funds are organized into three major categories: governmental, proprietary and fiduciary. An emphasis is placed on major funds within the governmental and • proprietary categories. A fund is considered major if it is the primary operation fund of . the City or meets the following criteria: • a. Total assets, liabilities, revenues or expenditures/expenses of that individual governmental or enterprise fund are at least 10% of the corresponding total for all funds of that category or type; and • b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5% of the corresponding total • for all governmental and enterprise funds combined. c. The government has determined that a fund is important to the financial • statement user. • The funds of the financial reporting entity are described below: Governmental Fund Types • General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in • another fund. Special Revenue Funds - Special Revenue Funds are used to account for the • proceeds of specific revenue resources (other than major capital projects) that are legally restricted to expenditures for specified purposes. • Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term obligation principal, interest • and related costs. Capital Proiects Funds - Capital Projects Funds are used to account for financial • resources to be used for the acquisition or construction of major capital facilities. Proprietary Fund Types • Enterprise Funds - The Enterprise Funds account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of • the City Council is that the costs (expenses including depreciation) of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges. The Primary Government's Enterprise • funds consist of the Parkview Office Complex and the Desert Willow Golf Course, which are operated by a management company. The Component Unit's Enterprise fund consists of the Palm Desert Recreational Facilities Corporation. 33 City of Palm Desert Notes to Financial Statements(Continued) Note 1: Summary of Significant Accounting Policies (Continued) Internal Service Funds - The Internal Service Fund accounts for financial transactions related to replacement of City-owned vehicles and equipment. These services are provided, to other departments or agencies of the City, on a cost reimbursement basis. al Fiduciary Fund Type 0 Agency Funds - These funds are used to account for assets held by the City in a vI custodial capacity as a trustee or as an agent. These assets include deposits placed with the City by developers, individuals and groups to obtain future services, as well 4DI as deposits from assessment district's property owners. These deposits are reduced by payments and/or refunds to individuals or entities at some future time. The City's Retiree Service Stipend Fund is used to account for assets held to pay for the retiree service stipend. Agency funds are custodial in nature and do not involve measurement of results of operations. The major funds are as follows: Governmental Funds The General Fund is the general operating fund of the City. It is used to account for O all financial resources except those required to be accounted for in another fund. O The Prop A Fire Tax Special Revenue Fund is used to account for all revenues O derived from tax collected within the City for upgrading fire protection and prevention. Its use is restricted for obtaining, furnishing, operating and maintaining fire protection and prevention services (currently under contract with Riverside County Fire O Department) equipment or apparatus. O The Redevelopment Agencv Capital Projects Fund is used to account for the fiscal O activities of the Palm Desert Redevelopment Agency. O The Redevelopment Agency Financing Authority Debt Service Fund is used to account for the resources and payment of the debt issued by the Palm Desert Financing Authority and loaned to the Redevelopment Agency. 4) The Redevelopment Agency Debt Service Fund is used to account for resources and 0 payments of debt issued by the Redevelopment Agency. 4D Proprietary Fund 40 The Desert Willow Golf Course Fund is used to account for the fees collected and G expenses incurred in connection with operating the municipal golf course in the City 40 of Palm Desert. Is c. Measurement Focus and Basis of Accounting 41 Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" transactions are recorded regardless of the measurement focus applied. is 34 • City of Palm Desert Notes to Financial Statements(Continued) Note 1: Summary of Significant Accounting Policies (Continued) • Measurement Focus On the government-wide Statement of Net Assets and the Statement of Activities, • both governmental and business-like activities are presented using the economic resources measurement focus. The accounting objectives of the economic • measurement focus are the determination of operating income, changes in net assets • (or cost recovery), financial position and cash flows. All assets and liabilities (whether current or noncurrent)associated with their activities are reported. In the fund financial statements, the "current financial resources" measurement focus or the "economic resources"measurement focus is used as appropriate: • a. All governmental funds utilize a "current financial resources" measurement focus. Only current financial assets and liabilities are generally included on their • balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the • end of the period. b. The proprietary fund utilizes an "economic resources" measurement focus. • Proprietary fund equity is classified as net assets. • c. Agency funds are not involved in the measurement of results of operations; • therefore, measurement focus is not applicable to them. • Basis of Accounting In the government-wide Statement of Net Assets and Statement of Activities, both • governmental and business-like activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset • used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. In the fund financial statements, governmental funds are presented on the modified • accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when "measurable and available". Measurable means knowing or being able to reasonably estimate the amount. Available means • collectible within the current period or soon enough thereafter to pay current liabilities. Revenues which are susceptible to accrual include property taxes and special assessments that are levied for and due for the fiscal year and collected • within 60 days after year-end. Licenses, permits, fines, forfeits, charges for services and miscellaneous revenues are recorded as governmental fund type revenues when received in cash because they are not generally measurable until actually received. • Revenue from taxpayer assessed taxes, such as sales taxes, are recognized in the accounting period in which they became both measurable and available to finance r♦ expenditures of the fiscal period. Grant funds and reimbursements of expenses under • contractual agreements are reported in governmental fund types and are recorded as a receivable when earned rather than when susceptible to accrual. Generally, this • occurs when authorized expenditures are made under the grant program or • contractual agreement. Expenditures are recognized when the fund liability is incurred, if measurable, except for unmatured interest on long-term debt, which is • recognized when due. 35 al City of Palm Desert 40 Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Interfund activity in the amount of $1,862,541 has been eliminated from the general government function for the government-wide financial statements except for charges between the government's Desert Willow Golf Course and Parkview Office Complex funds and various other functions of the government. Elimination of these charges �) would distort the direct costs and program revenues for the various functions considered. 40 0 The accrual basis of accounting is followed by the proprietary fund and fiduciary funds. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund's principal ongoing operations. The principal revenue of the Desert Willow Golf Course and Parkview Office Complex �I Enterprise Funds are charges to customers for use of the golf course and rental fees. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. O Private-sector standards of accounting and financial reporting issued prior to December 1989 generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments O also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. O When both restricted and unrestricted resources are available for use, it is the is government's policy to use restricted resources first, and then unrestricted resources 40as they are needed. d. Capital Assets and Depreciation Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, traffic signals, drainage systems and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets are defined by the City as assets with an initial cost of more than $500 and an estimated life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital 0 assets are recorded at estimated fair market value at the date of donation. 0 In accordance with GASB Statement No. 34, the City has reported general infrastructure 41 assets acquired in prior and current years. 40 The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Is 41 41 41 36 41 • City of Palm Desert Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) • Property, plant and equipment of the primary government as well as the component units, are depreciated using the straight-line method over the following estimated useful lives: • Assets Years Buildings 40 • Improvements other than buildings 20 . Machinery and equipment 5 -8 Infrastructure 20 - 75 e. Budget and Budgetary Accounting • The City uses the following procedures in establishing the budgetary data reported in the financial statements: 1. Before the beginning of the fiscal year, the City Manager submits to the City Council a proposed budget for the year commencing the following July 1. 2. Public hearings are conducted to obtain taxpayer comments. • 3. The budget is subsequently adopted through passage of a resolution. 4. Expenditures for the General Fund cannot exceed amounts budgeted at the • departmental level, which is the legal level of control. For other funds, expenditures cannot exceed the total amount budgeted for each • fund, which is the legal level of control. The City Manager is authorized to transfer appropriations (without council approval) within an object of a General Fund • Department and within total fund appropriations for other funds. The City Council • approves all other changes. Annual appropriation amounts lapse at year-end. • 5. Encumbrances and continuing appropriations are rebudgeted as of July 1 by Council action. • 6. Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds except for certain special revenue funds and capital projects funds, which adopt project- length budgets and debt service funds which are not budgeted as effectively budgetary control is achieved through debt indenture provisions. The following special revenue funds had legally adopted budgets during the current fiscal year: Traffic Safety Gas Tax Housing Mitigation Fees Community Development Block Grant • El Paseo Assessment District City-Wide Business License Landscape and Lighting Districts No. 1 - 15 37 City of Palm Desert Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) �mm f. Appropriations Limit V► Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or returned to the taxpayers through revised tax rates, revised fee schedules or other refund arrangements. For the fiscal year ended June 30, a) 2004, proceeds of taxes did not exceed appropriations. g. Investments Investments are stated at fair value (quoted market price or the best available estimate thereof). h. Cash and Investments For purposes of the statement of cash flows, the City has defined cash and investments to include cash on hand, demand deposits, and investments held in the California Local Agency Investment Fund (LAIF)and California Asset Management Program (CAMP). i. Employee Compensated Absences It is the government's policy to permit employees to accumulate earned but unused vacation and sick leave (compensated absences). Vacation pay and sick leave, which is expected to be liquidated with expendable available resources, is reported as an expenditure and liability of the governmental fund that will pay it. Compensated absences in the amount of $1,709,018, which are not expected to be liquidated with expendable available financial resources, are reported in long-term debt. a j. Property Held for Resale The Agency purchased land within the Agency's project area. The land held for resale is Q recorded in the Redevelopment Agency Special Revenue Fund as property held for resale at the lower of acquisition cost or net realizable value. At June 30, 2004, the cost of the property held for resale for various housing properties in Palm Desert totaled O $865,335. k. Inventories, Prepaid Costs and Deposits Inventory in the amount of $201,096 and $26,006 for the Desert Willow Golf Course Enterprise Fund (Primary Government) and Palm Desert Recreational Facilities Corporation (Component Unit), respectively, are stated at lower of cost or market with cost determined using the weighted average cost method. Inventory in the amount of $36,058 in the general fund is stated at cost. Inventory is recorded as an expenditure when consumed rather than purchased. Certain payments to vendors reflect costs applicable to future accounting periods are recorded as prepaid costs in the government-wide and fund financial statements. The City has deposited $680,000 in escrow to purchase hillside land. The Agency has deposited $1,025 in escrow to purchase various properties. 38 • City of Palm Desert Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) I. Property Tax Calendar Property taxes are assessed and collected each fiscal year according to the following • property tax calendar: Lien date January 1 • Levy date July 1 to June 30 Due date November 1 - 1st Installment, March 1 -2nd installment Delinquent date December 10 - 1st Installment, April 10 -2nd installment • Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes go • into a pool, and are then allocated to the cities based on complex formulas prescribed by state statutes. The City accrues only those taxes, which are received within 60 days after • the year-end. The City is a participant in the Teeter Plan under the California Revenue and Taxation Code. The County of Riverside has responsibility for the collection of delinquent taxes and the City receives 100% of the levy. m. Restricted Assets • Certain proceeds of debt issues, as well as certain resources set aside for their • repayment, are classified as restricted assets on the balance sheet because they are maintained in separate trustee bank accounts and their use is limited to applicable bond • covenants. In addition, funds have been restricted for future capital improvements by City resolution. • Note 2: Cash and Investments As of June 30, 2004, cash and investments were reported in the accompanying financial • statements as follows: Governmental activities $ 240,853,345 • Business-type activities 2,739,618 Component unit 405,670 Fiduciary funds 16,754,733 Total Cash and Investments $ 260,753,366 • The City of Palm Desert maintains a cash and investment pool that is available for use for all • funds. Each fund type's position in the pool is reported on the combined balance sheet as cash and investments. The City has adopted an investment policy, which authorizes it to • invest in various investments. Deposits At June 30, 2004, the carrying amount of the City's deposits was $10,495,277, and the bank balance was $11,133,757. The $638,480 difference represents outstanding checks • and other reconciling items. 39 al City of Palm Desert Notes to Financial Statements(Continued) Note 2: Cash and Investments (Continued) Credit Risk n� The City's investment policy requires certain types of investments to meet a minimum W rating by Standard and Poor's (S&P) or by Moody's. The City's investment in medium- term notes are limited to those rated "A" or higher by S&P or by Moody's, investments in commercial paper are limited to those rated "A-1" or higher by S&P or "P-1" or higher by Moody's and investments in money market mutual funds are limited to those rated "AAA" OI by S&P or "Aaa" by Moody's. As of June 30, 2004, the City's investment in medium-term notes, money market mutual funds and commercial paper consisted of investments with various issuers. As of June 30, 2004, the Moody's ratings for medium-term notes ranged O) from Al to Aa3, the commercial paper ratings were "P-1", and money market mutual funds were "Aaa". All securities were investment grade and were legal under state and City law. Investments in U.S. government securities are not considered to have credit risk and, therefore, their credit quality is not disclosed. As of June 30, 2004, the City's investments in external investment pools are unrated. Custodial Credit Risk �I The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. ISO As of June 30, 2004, none of the City's deposits or investments were exposed to O custodial credit risk. is Concentration of Credit Risk The City's investment policy imposes restrictions on the percentage the City can invest in o certain types of investments and also the percentage the City can invest with any one v issuer. With respect to concentration risk, as of June 30, 2004, the City has not invested more than 25% of its total investments in commercial paper, 30% of its total investments in medium-term notes and 20% of its total investments, excluding bond proceeds, in money market mutual funds. Further, the City has not invested more than 10% of its portfolio with any one issuer in commercial paper and no more than 15% of the portfolio with any one issuer in medium-term notes. Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement. Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy states that the City shall not invest in securities with maturities exceeding five years and the weighted-average maturity of the City portfolio shall not exceed 540 days. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. 40 ® City of Palm Desert Notes to Financial Statements (Continued) ® Note 2: Cash and Investments (Continued) As of June 30, 2004,the City had the following investments and original maturities: Investment Maturities (in Years) ® Less Fair ® Than 1 1 - 5 Value ® Money market mutual funds -held by $ 30,687,261 $ - $ 30,687,261 ® fiscal agent California Local Agency Investment Fund 86,110,129 86,110,129 ® California Asset Management Program 40,850,990 - 40,850,990 ® Federal Agencies 20,996,204 - 20,996,204 U.S. Treasury 30,664,469 - 30,664,469 ® Commercial Paper 21,044,387 - 21,044,387 ® Medium-Term Corporate Notes 14,056,285 5,848,364 19,904,649 $ 244,409,725 $ 5,848,364 $ 250,258,089 ® Note 3: Receivables ® Primary Government's Governmental Funds Notes and Loans Receivable ® The City has a note for $108,930 to Saint Margaret Episcopal Church, for the Church's share of costs of undergrounding the Highway 74 utility lines in front of the ® church and school development. The Church agreed to repay the note over 10 years, ® making annual payments of$16,854 at an interest rate of 5% per annum. ® The City has a note for$3,000,000 to Friends of the Desert Mountains, for the sale of land. Friends of the Desert Mountains agreed to repay the note within 36 months ® from the date of issue, June 25, 2004, with interest accrued at 4.5% per annum. ® The City purchased property for $2,100,000, for which Sunline Transit Agency ® entered into a lease option agreement with the City to make monthly lease payments ® for the exclusive use of, and the right to purchase, this property. The monthly payments include a 6% per annum interest rate applied to the outstanding principal ® balance. The time period for this lease is for a period of up to five years, unless ® terminated sooner by purchase of the property or as otherwise provided in the lease agreement. ® On April 21, 2003, the Agency entered into a loan agreement with The Regents of the University of California, on behalf of its Riverside Campus, to loan various amounts over a period of time, not to exceed an aggregate amount of $2,000,000. Proceeds of the loan are to be used for capital improvements at the University's ® Riverside Campus. The outstanding principal balance and interest on the note is due ® in five annual payments beginning on a future date yet to be determined. As of June ® 30, 2004, the amount outstanding on the loan is $841,443. ® The Agency entered into a cooperative agreement with the County of Riverside (County) and Desert Community College District (District) to construct and operate a ® regional library. On behalf of the County and District, the Agency advanced payments ® on this project, which are to be repaid from certain County Library and District pass- through funds (see Note 7). The advances earn interest at 6.44% until paid. At June ® 30, 2004, amounts due from the County and District were $8,116 and $1,923,767, ® respectively. 41 City of Palm Desert Notes to Financial Statements (Continued) Note 3: Receivables (Continued) �nn The Agency has loaned $147,181 in below market loans, secured by deeds of trust, to eligible low-income households. Monthly payments of interest and principal are W due over a period of 30 years, unless the homes are sold, in which case the entire loan balance is due and payable. nn� The City has $116,811 and the Agency has $79,205 in home improvement loans. W Payments of interest and principal are due monthly on these loans. 4) A loan receivable for the construction of a multi-family affordable housing 41) development dated June 14, 2001 with a balance of$7,659,437 is due from the Palm 0 Desert Development Company. The loan is secured by a Deed of Trust, with assignment to property, rent and fixtures on the housing development located in Palm Desert. Interest is earned and due annually at a rate of 1% per annum from the date on which the final certificate of occupancy is issued. Principal on the loan is based on the applicable agency's percentage of positive net cash flow derived from the operations of the Development. The Agency has issued loans for several other projects, all of which are secured by a deed of trust. A valuation allowance equal to the loan balance has been recognized where there is a significant possibility that these loans either become uncollectible or forgiven by the Agency at a future date if all the terms of the loans have been met. Detailed information for these loans is as follows: Loan �1 Balance Interest Maturity V Project Name Outstanding Rate Date Secured By Special Provisions of Loan Self-Help $ 429,000 7.25% 30 years Deed of Trust Loan balance and interest �I Housing Program or 2024 due upon maturity, unpaid balance of loan or interest will bear an interest rate of 401 12%. O Home Improvement 222,176 N/A N/A Deed of Trust Loan is payable upon �1, Loans change or transfer of title, 4) refinancing or upon the death of the borrower. Portola Palms 362,837 5.00 30 years Deed of Trust Loan balance and interest Mobilehome Park from date due upon maturity. If of loan debtor of loan is not in O default with the note, deed O of trust, loan agreement or restrictive covenant, then the Agency will forgive 2% per annum of the interest. Desert Rose 2,106,750 3.00 30 years Deed of Trust Loan will be forgiven at 4D from date maturity unless the debtor is of loan is in violation of the unit regulatory agreement or 40 the deed of trust. 40 is 42 • City of Palm Desert Notes to Financial Statements (Continued) Note 3: Receivables (Continued) • Loan Balance Interest Maturity Project Name Outstanding Rate Date Secured By Special Provisions of Loan • Acquisition, 52,000 3.00% 30 years Deed of Trust Loan balance and interest • Rehabilitation, from date Assignment of will be forgiven at maturity • Resale of loan Rent if debtor does not breach the terms and conditions of • either the unit regula-tory agreement or note. • Note 4: Interfund Receivable, Payable and Transfers The composition of interfund balances as of June 30, 2004 is as follows: Due To/From Other Funds • Due to • Other Funds Desert W illow • Funds Golf Course Total Due From Other Funds: General $ 651,555 $ 651,555 • The General Fund receivable amount is loaned to the Desert Willow Golf Course to provide temporary funds for operations. Advances To/From Other Funds • Advances to Other Funds • Other General Governmental • Funds Fund Funds Total • Advances from Other Funds: RDA Debt Service $ 19,366,480 $ 13,419,000 $ 32,785,480 • Other Governmental Funds 11,660 94,524 106,184 Total $ 19,378,140 $ 13,513,524 $ 32,891,664 • The advances from the General Fund and Other Governmental Funds were made to the • Redevelopment Agency and Other Governmental Funds for capital improvements and cash shortages. 43 City of Palm Desert Notes to Financial Statements (Continued) Note 4: Intertund Receivable, Payable and Transfers (Continued) 0 Due To/From Primary Government and Component Unit 0 Due to �) Primary Government Funds PDRFC Total Due From Component Unit: General Fund $ 672,000 $ 672,000 0 Desert Willow Golf Course 47,206 47,206 �1 Total $ 719,206 $ 719,206 The receivable by the General Fund is for rent owed by the PDRFC and the receivable by the Desert Willow Golf Course represents funds loaned to PDRFC for operations. Intertund Transfers Transfers In Prop A RDA RDA Other Fire Financing Capital Governmental General Tax Authority Projects Funds Total Transfers Out: n' General $ - $ 726,605 $ - $ - $ 132,723 $ 8591,328 v RDA Financing Authority - - - 24,153,420 - 24,153,420 RDA Debt Service - - 13,159,425 899,567 11,198,956 25,257,948 RDA Capital Projects 85,319 - 5,350 251,185 676,385 1,018,239 1 Other Governmental Funds 1,007,156 - 4,301,803 1,025,356 10,613,014 16,947,329 $ 1,092,475 $ 726,605 $ 17,466,578 $ 26,329,528 $ 22,621,078 $ 68,236,264 Transfers are used to: 1. move receipts restricted to debt service from the funds collecting the receipts to the debt service funds as debt service payments become due, 2. transfer 20% of tax increment received by RDA Debt Service Funds to the Low and lei Moderate Income Housing Special Revenue Fund, O 3. transfer allocation of administrative expenses, 4. transfer revenues to provide for capital projects, and O 5. transfer revenues to provide for additional resources to pay for expenditures. 44 City of Palm Desert ® Notes to Financial Statements (Continued) ® Note 5: Capital Assets A summary of changes in Capital Assets at June 30, 2004 is as follows: ® Primary Government ® Adjusted ® Balance at Balance at Balance at July 1,2003 Adjustments(') July 1,2003 Transfers Additions Deletions June 30,2004 ® Governmental Activities: Capital assets,not being depreciated: ® Land $ 70.505,752 $ (562,279) $ 69,943,473 $ 2,036,224 $ 211,009 $ (704,200) $ 71,486,506 Right-of-Way 109,502,212 109,502,212 109.502,212 Constmdon-in-progress 11,483.769 11,483,769 (3,052,006) 10,658,702 1155,377) 18,935,088 ® Total Capital Assets Not Being Depreciated 191.491,733 (562,279) 190,929454 (1,015,782) 10,869,711 (859,577) 199,923,806 ® Capital assets,being depreciated: ® Buildings 70,142,002 - 70,142,002 - 3,348,015 _ 73.490,017 Improvements other than buildings 25,343,119 - 25,343,119 408,527 42,889 25.794,535 ® Machinery and equipment 5,630,831 - 5,630,831 (160,880) 196,071 (144,952) 5.521,070 Infrastructure 119,692,066 (21,727) 119,670,339 607,255 4,471,101 124,748.695 ® Equipment-Internal service Fund 2,289,536 2,289,536 160,880 83,908 (87,156) 2.447.168 ® Total Capital Assets Being Depredated 223.097,554 (21,727) 2237075,827 1,015.782 8,141,984 (232,108) 232,001,485 ® Less accumulated depreciation for. ® Buildings (23,335,8541 - (23,335,854) - (1,821,464) - (25,157,318) Improvements other ® than buildings (5,801.445) _ (5,801,445) - (1,284,084) - (7,085,529) Machinery and equipment (4,349,712) (4,349,712) 21,056 (442.639) 142,627 (4,628,668) ® Infrastructure (39,907,055) - (39,907,055) - (2,839,828) - (42,746,883) Equipment-Internal service Fund (1,371,272) (1,371,272) (21,056) (213,137) 87,156 (1,518,309) Total Accumulated Depreciation (74.765,338) _ (74,765,338) - (6,601,152) 229,783 (81,136,707) ® Net Capital Assets ® Being Depredated 148.332,216 (21,727) 148,310,489 1,015,782 1,540,832 (2,325) 150,864,778 „ca Net Capital Assets �1 Governmental Activities $ 339,823.949 $ (584,008) $ 339.239.943 $ $ 12,410.543 $ (861,902) $ 350,788,584 ® Business-Type Activities: Governmental Activities: ® Capital assets,not being depreciated Land $ 52,173,499 $ $ 52,173,499 $ $ 175,937 $ - $ 52,349.436 ® Total Capital Assets Not ® Being Depredated 52,173,499 52.173,499 175,937 52,349,436 Capital assets,being depreciated: ® Buildings 12,688,403 - 12,688.403 - 18.019 - 12,706,422 Machinery and equipment 4,019,093 4,019,093 103.189 (71,331) 4,050.951 ® Total Capital Assets Being 16,707,496 16.707,496 121,208 (71,331) 16,757,373 Depredated Less accumulated depredation for. ® Buildings (1,623,236) - (1,623,236) (32,007) (407,236) 67,811 (1,994,668) Machinery and equipment (1,841,483) _ (1,841,483) 32,007 (611,882) (2,421,358) ® Total Accumulated ® Depredation (3,464,719) - _ (3,464,719) - (1,019,118) 67,811 (4,416,026) Net Capital Assets Being Depreciated 13,242,777 13,242,777 (897,910) (3,520) 12,341,347 ® Net Capital Assets. Business-Type Activities $ 65,416,276 $ - $ 65,416,276 $ - $ (721,973) $ (3,520) $ 04,690.783 ® 'Adjustments are a result of prior years capitalization and reporting. 45 a► a► City of Palm Desert ®) Notes to Financial Statements (Continued) a 1 Note 5: Capital Assets(Continued) a) 1. Land sold in 2001, but not removed from Capital Asset listing, and a) 2. Adjustment to infrastructure to remove overstatement caused by incorrect expenditure �) classification. al Depreciation expense was charged to functions/programs of the primary government as �) follows: Q) Governmental Activities: General government $ 2,093,875 �) Public safety 176,806 �) Public works 2,921,436 Parks, recreation and culture 1,195,898 ®) Depreciation expense for internal service funds is charged �) to various functions based on usage of capital assets 213,137 1 Total Depreciation Expense - �) Governmental Activities $ 6,601,152 I Business-Type Activities: ®1 Golf course- Desert Willow $ 824,553 �) Office complex - Parkview 194,565 Total Depreciation Expense - �) Business-Type Activities $ 1,019,118 1 Note 6: Long-Term Liabilities �) The following is a summary of long-term liability transactions of the City for the year ended �) June 30, 2004: �) Primary Government �) �) Balance at Balance at Due Within July 1,2003 Adjustments(') Additions Reduction June 30,2004 One Year �11 Governmental Activities: Compensated absences payable $ 1,478,677 $ - $ 925,028 $ 694,687 $ 1,709,018 $ 700,000 Tax allocation bonds 234,460,000 - 48,690,000 27,150,000 256,000,000 5,515,000 �) Special assessment bonds payable 40,528,000 (40,528,000) - - - - Notes payable 1,954,363 - - 972,707 981,656 122,707 Contract payable 5,068,408 - 250,000 4,818,408 4,818,408 �) Total $ 283,489,448 $ (40,528,000) $ 49,615,028 $ 29,067,394 $ 263.509,082 $ 11,156,115 Debt service payments for governmental activities are made from debt service funds: �M Business-Type Activities: Capital leases $ 1,146,582 $ - $ - $ 313,223 $ 833,359 $ 325,657 `Adjustments are the result of the special assessment bonds being removed from long- term liabilities because these bonds are not considered debt or obligations of the City. lei 46 41 !u City of Palm Desert Notes to Financial Statements(Continued) a Note 6: Long-Term Liabilities(Continued) �y Governmental Activities a. Compensated Absences Payable There is no fixed payment schedule to pay the governmental fund types' outstanding liability for compensated absences earned at June 30, 2004, of $1,709,018. Compensated absences are generally liquidated by the General Fund. b. Tax Allocation Bonds Tax Allocation bonds are special obligations of the Agency and the Financing Authority, dQk (a component unit of the Agency) and are secured by an irrevocable pledge of tax revenues and other funds as provided under the Bond Resolution. The bonds, and any interest thereon, are not a debt of the City, the State of California or any of its political subdivisions and neither the City, the State of California nor any of its political subdivisions is liable on the bonds, nor in any event shall the bonds, and interest thereon ® be payable out of any funds or properties other than those provided under the Bond ® Resolution. 1995 Series Tax Allocation Revenue Bonds (Project Area No. 1) In June 1995, the Palm Desert Financing Authority issued $24,025,000 of Tax Allocation Bonds (Project Area No. 1) Series 1995. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to ® finance certain redevelopment activities of the Agency in Project Area No. 1. Interest rates on the bonds vary from 4.40% to 5.95% per annum payable semi-annually on �a April 1 and October 1 with principal maturing annually. In June 2004, $22,195,000 of �J these bonds were advance refunded. See Note 10 for additional information. ® The future debt service requirements on the 1995 Series Tax Allocation Revenue Bonds (Project Area No. 1)are as follows: ® Year Ending June 30, Principal Interest Total 2005 $ 255,000 $ 13,260 $ 268,260 ® 1995 Series Tax Allocation Revenue Bonds (Project Area No. 2) In June 1995, the Palm Desert Financing Authority issued $4,090,000 of Tax a I Allocation Bonds, (Project Area No. 2) Series 1995. The Palm Desert Financing � Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to l,J finance certain redevelopment activities of the Agency in Project Area No. 2. Interest ® rates on the bonds vary from 4.40% to 5.95% per annum payable semi-annually on February 1 and August 1 with principal maturing annually on August 1. �r JaN 47 a► City of Palm Desert ®► Notes to Financial Statements (Continued) a 1 Note 6: Long-Term Liabilities (Continued) a) The future debt service requirements on the 1995 Series Tax Allocation Revenue �) Bonds (Project Area No. 2)are as follows: Year Ending �) June 30, Principal Interest Total ®► 2005 $ 35,000 $ 231,607 $ 266,607 �) 2006 35,000 229,796 264,796 10) 2007 115,000 225,482 340,482 2008 120,000 218,528 338,528 2009 125,000 211,279 336,279 �) 2010-2014 760,000 930,537 1,690,537 �) 2015-2019 1,010,000 670,522 1,680,522 2020-2024 1,305,000 328,270 1,633,270 ls1 2025-2026 435,000 20,425 455,425 16) $ 3,940,000 $ 3,066,446 $ 7,006,446 �) 1995 Series A-Tax Allocation Revenue Refunding Bonds In August 1995, the Palm Desert Financing Authority issued $6,305,000 in Tax Allocation Revenue Refunding Bonds 1995 Series A. The proceeds from the bonds �) were loaned to the Palm Desert Redevelopment Agency to provide funds to refund in advance $6,430,000 of the 1988 Tax Allocation Bonds. Interest rates on the bonds �l vary from 3.80% to 5.55% with interest payable semi-annually on March 1 and September 1 with principal maturing annually on September 1. �1 The future debt service requirements on the 1995 Series A Tax Allocation Revenue Refunding Bonds are as follows: �► Year Ending �) June 30, Principal Interest Total O► 2005 $ 525,000 $ 141,195 $ 666,195 a► 2006 555,000 113,378 668,378 2007 585,000 83,445 668,445 2008 600,000 51,592 651,592 n, 2009 635,000 17,621 652,621 �V $ 2,900,000 $ 407,231 $ 3,307,231 �) 1997 Series Tax Allocation Refunding Revenue Bonds a) On July 24, 1997, the Palm Desert Financing Authority issued $71,955,000 in Tax �) Allocation Refunding Revenue Bonds (Project Area No. 1 as Amended) 1997 Series. a) The proceeds from the bonds were loaned to the Palm Desert Redevelopment a) Agency to provide funds to refund in advance a portion of the 1992 Series A Tax Allocation Revenue Bonds. The advance refunding resulted in an economic gain of ®) $1,148,752 (difference between the present value of the annual debt service �1 payments between the old debt and new debt) and a decrease in aggregate debt !u service payments of$3,297,787. ®) Interest rates on the bonds vary from 4.100% to 5.625% with interest payable semi- ®) annually on April 1 and October 1 with principal maturing annually on April 1. a) 48 a) a� • City of Palm Desert Notes to Financial Statements(Continued) Note 6: Long-Term Liabilities (Continued) The future debt service requirements on the 1997 Series Tax Allocation Refunding • Revenue Bonds are as follows: Year Ending • June 30, Principal Interest Total • 2005 $ 2,260,000 $ 3,310,988 $ 5,570,988 S 2006 2,025,000 3,205,898 5,230,898 2007 2,065,000 3,110,724 5,175,724 2008 2,290,000 3,011,604 5,301,604 • 2009 2,255,000 2,899,394 5,154,394 2010-2014 13,585,000 12,598,260 26,183,260 2015-2019 17,700,000 8,551,770 26,251,770 • 2020-2023 19,620,000 2,958,750 22,578,750 $ 61,800,000 $ 39,647,388 $101,447,388 1998 Series Tax Allocation (Housing Set-Aside) Revenue Bonds • In January 1998, the Palm Desert Financing Authority issued $48,760,000 in Tax Allocation (Housing Set-Aside) Revenue Bonds. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to finance the acquisition of S seven apartment complexes consisting of 725 rental units from the Housing Authority of the County of Riverside. Interest rates on the bonds vary from 4.0% to 5.1% per annum payable semi-annually on April 1 and October 1 with principal maturing • annually on October 1. The future debt service requirements on the 1998 Series Tax Allocation (Housing • Set-Aside) Revenue Bonds are as follows: June 30, Principal Interest Total 2005 $ 565,000 $ 2,301,954 $ 2,866,954 2006 590,000 2,277,410 .. 2,867,410 • 2007 615,000 2,251,804 2,866,804 2008 655.000 2,224,817 2,879,817 2009 685,000 2,196,342 2,881,342 • 2010-2014 7,700,000 9,985,180 17,685,180 2015-2019 9,890,000 7,797,180 17,687,180 2020-2024 12,730,000 4,953,889 17,683,889 • 2025-2028 12,805,000 1,347,804 14,152,804 $ 46,235,000 $ 35,336,380 $ 81,571,380 • 1998 Series Tax Allocation Revenue Bonds (Project Area No. 4) On March 1, 1998, the Palm Desert Financing Authority issued $11,020,000 of Tax • Allocation Revenue Bonds (Project Area No. 4) Series 1998. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No, 4. Interest rates on the • bonds vary from 4,0% to 5.2% per annum payable semi-annually on April 1 and October 1 with principal maturing annually on October 1. 49 a► �a► City of Palm Desert Notes to Financial Statements (Continued) a) Note 6: long-Term Liabilities (Continued) a) The future debt service requirements on the 1998 Series Tax Allocation Revenue �) Bonds (Project Area No.4) are as follows: Q) Year Ending a) June 30, Principal Interest Total amm) 2005 $ 225,000 $ 531,465 $ 756,465 2006 230,000 520,415 750,415 a` 2007 250,000 508,759 758,759 a) 2008 260,000 496,378 756,378 2009 265,000 483,628 748,628 ®► 2010-2014 1,560,000 2,209,836 3,769,836 a) 2015-2019 1,975,000 1,778,373 3,753,373 2020-2024 2,545,000 1,198,990 3,743,990 a) 2025-2029 3,285,000 444,470 3,729,470 ®) $ 10,595,000 $ 8,172,314 $ 18,767,314 �) a► 2001 Series Tax Allocation Revenue Bonds (Project Area No. 4) a1, In November 2001, the Palm Desert Financing Authority issued $15,695,000 of Tax al Allocation Revenue Bonds (Project Area No. 4) Series 2001. The proceeds from the a) bonds were loaned to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No. 4. Interest rates on the bonds vary from 3.5% to 4.9% per annum payable semi-annually on April 1 and a) October 1 with principal maturing annually on October 1. The future debt service requirements on the 2001 Series Tax Allocation Revenue a) Bonds (Project Area No. 4) are as follows: Year Ending �) June 30, Principal Interest Total a) 2005 $ 160,000 $ 696,600 $ 856,600 2006 170,000 690,825 860,825 2007 270,000 682,994 952,994 2008 285,000 673,013 958,013 �) 2009 310,000 662,313 972,313 ®) 2010-2014 1,660,000 3,133,884 4,793,884 2015-2019 2,050,000 2,743,198 4,793,198 a) 2020-2024 2,565,000 2,214,740 4,779,740 a) 2025-2029 3,200,000 1,533,120 4,733,120 2030-2032 4,725,000 347,160 5,072,160 $15,395,000 $13,377,847 $ 28,772,847 Q� a� 50 Q� City of Palm Desert Notes to Financial Statements(Continued) ® Note 6: Long-Term Liabilities (Continued) ® 2002 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as ® Amended) ® In March 2002, the Palm Desert Financing Authority issued $22,070,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended) 2002 Series ® A. The proceeds from the bonds were loaned to the Palm Desert Redevelopment ® Agency. A portion of the proceeds of the loan was used to prepay the prior loan, which affected the current refunding of a like portion of the prior bonds. The remainder was used to finance certain redevelopment activities of the Agency in Project Area No. 4. The bonds consist of term bonds of $10,905,000 term bonds at ® 5.00% due April 1, 2025 and $11,165,000 term bonds at 5.10% due April 1, 2030. ® Interest is payable semi-annually on April 1 and October 1. Mandatory sinking fund ® redemptions begin April 1, 2024. ® The future debt service requirements on the 2002 Series A Tax Allocation Refunding ® Revenue Bonds (Project Area No. 1, as amended) are as follows: Year Ending ® June 30, Principal Interest Total 2005 $ - $ 1,114,665 $ 1,114,665 2006 - 1,114,665 1,114,665 ® 2007 - 1,114,665 1,114,665 ® 2008 - 1,114,665 1,114,665 2009 - 1,114,665 1,114,665 ® 2010-2014 - 5,573,325 5,573,325 ® 2015-2019 - 5,573,325 5,573,325 2020-2024 4,780,000 5,573,325 10,353,325 ® 2025-2029 14,830,000 2,515,060 17,345,060 ® 2030 2,460,000 125,460 2,585,460 ® $ 22,070,000 $ 24,933,820 $ 47,003,820 2002 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 2) ® In July 2002, the Palm Desert Financing Authority issued $17,310,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 2). The Palm Desert ® Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to prepay outstanding indebtedness and to finance certain redevelopment activities within or of benefit to the project area. Interest rates on the bonds vary from ® 3.0% to 5.0% per annum payable semi-annually on February 1 and August 1. ® Principal payments will be made annually beginning August 1, 2003. ® 51 City of Palm Desert a► Notes to Financial Statements (Continued) a► Note 6: Long-Term Liabilities (Continued) ®) The future debt service requirements on the 2002 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 2)are as follows: a) Year Ending �) June 30, Principal Interest Total a) 2005 $ 665,000 $ 710,513 $ 1,375,513 a) 2006 690,000 690,188 1,380,188 �) 2007 630,000 671,333 1,301,333 2008 650,000 653,078 1,303,078 ®) 2009 675,000 631,853 1,306,853 a► 2010-2014 3,805,000 2,720,120 6,525,120 2015-2019 4,780,000 1,759,949 6,539,949 ®► 2020-2023 4,770,000 491,150 5,261,150 a) $ 16,665,000 $ 8,328,184 $ 24,993,184 2002 Series Tax Allocation (Housing Set-Aside) Revenue Bonds In August 2002, the Palm Desert Financing Authority issued $12,100,000 of Tax �) Allocation (Housing Set-Aside) Revenue Bonds, Series 2002. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment a) Agency to finance certain low and moderate housing activities of the Agency and to a► finance costs of issuance of the bonds. Interest rates on the $6,555,000 serial bonds vary from 2.0% to 4.9% per annum payable semi-annually on March 1 and October 1. Annual principal payments begin October 1, 2003. The $5,545,000 term bonds a► bear an interest rate of 5.0% per annum and mature October 1, 2031. a► The future debt service requirements on the 2002 Series Tax Allocation (Housing �► Set-Aside) Revenue Bonds are as follows: Year Ending �) June 30, Principal Interest Total a► 2005 $ 240,000 $ 526,182 $ 766,182 a) 2006 245,000 521,025 766,025 2007 250,000 515,143 765,143 a) 2008 255,000 508,448 763,448 a) 2009 265,000 500,572 765,572 2010-2014 1,480,000 2,347,149 3,827,149 �) 2015-2019 1,805,000 2,014,788 3,819,788 ®) 2020-2024 2,280,000 1,550,079 3,830,079 2025-2029 2,915,000 911,625 3,826,625 a) 2030-2032 2,130,000 163,250 2,293,250 a) $ 11,865,000 $ 9,558,261 $ 21,423,261 a) Q) ®mm� Vi Qm� VI 52 ®) ai City of Palm Desert Notes to Financial Statements(Continued) ® Note 6: Long-Term Liabilities(Continued) ® 2003 Series Tax Allocation Revenue Bonds(Project Area No.2) ® In March 2003, the Palm Desert Financing Authority issued $15,745,000 of Tax ® Allocation Revenue Bonds (Project Area No. 2) Series 2003. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment ® Agency to finance certain redevelopment activities of the Agency in Project Area No. ® 2. Interest rates on the bonds vary from 4.5% to 5.0% per annum payable semi- annually on February 1 and August 1 with principal maturing as follows: ® $ 875,000 Serial Bonds August 1, 2023 ® 910,000 Serial Bonds August 1, 2024 ® 2,485,000 Term Bonds August 1, 2026 ® 11,475,000 Tenn Bonds August 1, 2033 The future debt service requirements on the 2003 Series Tax Allocation Revenue ® Bonds (Project Area No. 2) are as follows: ® Year Ending ® June 30, Principal Interest Total ® 2005 $ - $ 769,006 $ 769,006 2006 - 769,006 769,006 2007 - 769,006 769,006 ® 2008 - 769,006 769,006 2009 - 769,006 769,006 ® 2010-2014 - 3,845,030 3,845,030 ® 2015-2019 - 3,845,030 3,845,030 2029-2024 875,000 3,825,343 4,700,343 ® 2025-2029 6,275,000 2,981,347 9,256,347 ® 2030-2034 8,595,000 1,117,625 9,712,625 ® $ 15,745,000 $ 19,459,405 $ 35,204,405 ® 2003 Series Tax Allocation Revenue Bonds (Project Area No. 1) ® In July 2003, the Financing Authority issued $19,000,000 Tax Allocation Revenue Bonds (Project Area No. 1, as amended) Series 2003. The proceeds of the bonds were disbursed to make a loan to the Redevelopment Agency. The Agency will use ® the proceeds of the loan to finance certain redevelopment activities of the Agency and to finance costs of issuance of the bonds. The bonds bear interest at 5.0%. They ® consist of$7,050,000 serial bonds with principal payments due in 2026 and 2027 and ® $11,950,000 term bonds due in 2030. Interest will be payable on April 1 and October 1 of each year, beginning April 1, 2004. Principal payments will be on April 1 of the ® years stated above. ® The future debt service requirements on the 2003 Series Tax Allocation Revenue ® Bonds (Project Area No. 1)are as follows: 53 41 City of Palm Desert G Notes to Financial Statements (Continued) Note 6: Long-Term Liabilities(Continued) Year Ending �) June 30, Principal Interest Total 2005 $ - $ 950,000 $ 950,000 �) 2006 - 950,000 950,000 2007 - 950,000 950,000 2008 - 950,000 950,000 2009 - 950,000 950,000 2010-2014 - 4,750,000 4,750,000 2015-2019 - 4,750,000 4,750,000 2029-2024 - 4,750,000 4,750,000 2025-2029 14,820,000 3,683,500 18,503,500 2030 4,180,000 209,000 4,389,000 $ 19,000,000 $ 22,892,500 $ 41,892,500 2003 Series Tax Allocation Revenue Bonds (Project Area No. 3) In July 2003, the Financing Authority issued Tax Allocation Revenue Bonds (Project Area No. 3), Series 2003 in the amount of$4,745,000. The proceeds of the bonds were disbursed to make a loan to the Redevelopment Agency. The Agency will use the proceeds of the loan to finance redevelopment activities within or of benefit to the project area and to finance costs of issuance of the bonds. The bonds bear interest at ID rates ranging from 3.000% to 5.125%. Principal maturities for the serial bonds of O$2,475,000 began April 1, 2004 and continue through October 1, 2031. The term bonds in the amount of$2,270,000 are due in 2033. The future debt service requirements on the 2003 Series Tax Allocation Revenue Bonds (Project Area No. 3) are as follows: Year Ending June 30, Principal Interest Total 2005 $ 90,000 $ 206,998 $ 296,998 2006 90,000 204,298 294,298 2007 95,000 201,598 296,598 2008 95,000 198,748 293,748 2009 100,000 195,898 295,898 2010-2014 550,000 929,338 1,479,338 2015-2019 660,000 814,847 1,474,847 2029-2024 820,000 656,858 1,476,858 2025-2029 1,050,000 433,063 1,483,063 2030-2033 1,040,000 136,581 1,176,581 $ 4,590,000 $ 3,978,227 $ 8,568,227 54 City of Palm Desert Notes to Financial Statements (Continued) ® Note 6: Long-Term Liabilities (Continued) ® 2004 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as ® amended) In June 2004, the Palm Desert Financing Authority issued $24,945,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended) 2004 Series ® A. The proceeds from the bonds were loaned to the Palm Desert Redevelopment ® Agency to refinance a portion of the Agency's obligations from 1995 and to finance certain redevelopment activities within or of benefit to the project area. Interest rates ® on the bonds vary from 3.0% to 5.0% per annum payable semi-annually on April 1 a and October 1. Principal payments will be made annually beginning April 1, 2005. ® The future debt service requirements on the 2004 Series Tax Allocation Revenue Bonds ® (Project Area No. 1, as amended)are as follows: ® Year Ending June 30, Principal Interest Total ® 2005 $ 495,000 $ 875,560 $ 1,370,560 2006 855,000 1,123,063 1,978,063 2007 940,000 1,097,413 2,037,413 ® 2008 850,000 1,059,813 1,909,813 2009 1,030,000 1,025,813 2,055,813 2010-2014 5,490,000 4,383,538 9,873,538 ® 2015-2019 6,730,000 3,072,513 9,802,513 ® 2029-2024 7,295,000 1,400,100 8,695,100 2025 1,260,000 63,000 1,323,000 ® $ 24,945,000 $ 14,100,813 $ 39,045,813 ® Below is a summary of the changes in Tax Allocation Bonds: ® Balance at Balance at ® July 1,2003 Additions Reduction June 30,2004 ® 1995 Series Tax Allocation Revenue Bonds(Project Area ® No. 1 -Original Issue$24,025,000) $ 22,695,000 $ $ 22,440,000 $ 255,000 1995 Series Tax Allocation ® Revenue Bands(Project Area ® No.2-Original Issue$4,090,000) 3,975,000 - 35,000 3,940,000 1995 Series A Tax Allocation Revenue Refunding Bonds (Original Issue$6,305,000) 3,395,000 495,000 2,900,000 ®' 1997 Series Tax Allocation Refunding Revenue Bonds ® (Original Issue$71,955,000) 64,025,000 - 2,225,000 61.800,000 ® 1998 Series Tax Allocation ® (Housing Set-Aside Revenue Bonds-Original Issue$48,760,000) 46,785,000 550,000 46,235,000 1998 Series Tax Allocation Revenue Bonds(Project Area ® No.4-Original Issue$11,020,000) 10,815,000 220,000 10,595,000 ® 55 a) City of Palm Desert Notes to Financial Statements (Continued) Note 6: Long-Term Liabilities (Continued) �r Balance at Balance at July 1,2003 Additions Reduction June 30,2004 2001 Series Tax Allocation Revenue Bonds (Project Area No.4) 15,545,000 - 150,000 15,395,000 2002 Series A Tax Allocation w, Refunding Revenue Bonds Project Area No. 1,as Amended) 22,070,000 - - 22,070,000 2002 Series A Tax Allocation Refunding Revenue Bonds Project Area No.2) 17,310,000 - 645,000 16,665,000 2002 Series Tax Allocation (Housing Set-Aside)Revenue Bonds 12,100,000 - 235,000 11,865,000 2003 Series Tax Allocation Revenue Bonds(Project Area No.2) 15,745,000 - - 15,745,000 2003 Series Tax Allocation Revenue Bonds (Project Area No. 1) - 19,000,000 - 19,000,000 O 2003 Series Tax Allocation Revenue Bonds (Project Area No.3) 4,745,000 155,000 4,590,000 2004 Series A Tax Allocation O Refunding Revenue Bonds Project Area No. 1,as Amended) - 24,945,000 - 24,945,000 $ 234,460,000 $ 48,690,000 $ 27,150,000 $ 256,000,000 O c. Notes Payable County of Riverside The Agency entered into a cooperation agreement with the County of Riverside on December 15, 1987 regarding the adoption of the Agency's Project Area No. 2. The agreement states that the Agency was to retain 50% of the County's share of tax increment. This was based on the County's share of tax increment being what would be allocated to the County in the absence of a redevelopment project area being adopted. This agreement called for the Agency to retain 50% of the County's share until the gross increment reached $3,500,000. The agreement further states that when gross increment reaches $10,000,000, that the Agency would repay the 50% of the retained County's share of increment in equal payments over a 10-year period. The gross increment reached the $3,500,000 limit in fiscal year 1991-1992. The Agency reached the $10,000,000 limit in fiscal year 2002-2003. The total amount owed to the County at June 30, 2004 was $981,656. Annual payments on the note are $122,707. Future debt service payments are as follows: Year Ending June 30, Principal Interest Total 2005 $ 122,707 $ - $ 122,707 2006 122,707 - 122,707 2007 122,707 - 122,707 2008 122,707 - 122,707 2009 122,707 - 122,707 2010-2012 368,121 - 368,121 $ 981,656 $ - $ 981,656 56 t City of Palm Desert Notes to Financial Statements (Continued) Note 6: Long-Term Liabilities(Continued) • d. Contract Payable The Coachella Valley Association of Governments (CVAG) funded in advance the City's • share of costs to construct an interchange at Highway 10 at Monterey, Cook and Washington. At June 30, 2004, the estimated costs to be reimbursed to CVAG amounted to $4,818,408. The City is obligated to pay $250,000 annually at June 30 of each year • with the unpaid balance due and payable on or before June 30, 2005. • Business-Type Activities Obligations under capital leases are as follows: • Associates Commercial Corporation (leases executed by the City of Palm Desert) The present value of the minimum lease payment on radio • equipment was capitalized at $11,562 using an incremental borrowing interest rate of 14.0% at the inception of the lease. The lease is payable in 36 monthly installments of $395, which • began December 4, 2001. $ 1,904 Textron Corporation (leases executed by the City of Palm Desert) • The present value of the minimum lease payment on the new golf carts was capitalized at $331,101 using an increment borrowing interest rate of 5.50% at the inception of the lease. • The lease is payable in 48 monthly installments of $5,336, • which began December 15, 2002. The remaining principal will be paid in one lump sum at the end of the lease payments. 263,751 • The present value of the minimum lease payment on specialized golf carts was capitalized at $39,304 using an increment borrowing interest rate of 4.302% at the inception of the lease. The lease is payable in 36 monthly installments of $985, which began April 15, 2003. The remaining principal will be paid in one lump sum as the last monthly installment. 27,202 • General Electric Capital Corporation (leases executed by the City of Palm Desert) The present value of the minimum lease payment on the • grounds equipment was capitalized at $1,036,863 using an increment borrowing interest rate of 4.4288% at the inception of the lease. Lease payments of $46,814 are paid during the last six months of each fiscal year for four years, begining January • 1, 2003. 532,693 • The present value of the minimum lease payment on a compactor was capitalized at $9,504 using an increment borrowing interest rate of 16.71% at the inception of the lease. The lease is payable in 60 monthly installments of $235, which • began March 15, 2003. 7,809 Present value of net minimum lease payments 833,359 • Less: current portion (325,657) $ 507,702 . 57 a► City of Palm Desert Notes to Financial Statements (Continued) Note 6: Long-Term Liabilities (Continued) The following is a schedule, by year, of future minimum lease payments and present value of the net minimum lease payments for capital leases as of June 30, 2004: �) Minimum Less: Amounts Present Value of Year Ending Lease Representing Net Minimum June 30, Payments Interest Lease Payments 2005 $ 361,532 $ 35,875 $ 325,657 2006 364,504 20,351 344,153 2007 167,360 5,785 161,575 2008 2,142 168 1,974 Total $ 895,538 $ 62,179 $ 833,359 The assets acquired through capital lease are as follows: Assets: Machinery and equipment $ 1,428,332 Less: accumulated depreciation (351,737) Total $ 1,076,595 0 Note 7: Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Q Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. Pursuant to changes in August 1996, of IRC Section 457, in January 1997, the City established a trust in which all assets held by Nationwide Retirement Solutions, Inc. (NRS) and ICMA Retirement Corporation (ICMA) were placed. The City does not have fiduciary responsibility for the plan assets held by NRS and ICMA. The assets, all property and rights purchased with such amounts and all income attributable to such amounts, are held in trust for the exclusive benefit of the participants and the beneficiaries. The assets are no longer the property of the City, and as such, are no longer subject to the claims of the City's general creditors. As a result, the assets in the amount of$6,496,599 held by NRS and ICMA of the 457 Plan are no longer reflected in the City's financial statements. Note 8: Deposits Payable Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are, except where otherwise provided by specific agreement, allocated to the Agency. All taxes on the "frozen" assessed valuation of the property are allocated to the City and other taxing agencies. The Agency has entered into various pass- through agreements with other tax agencies to allocate their tax increment resulting from the ✓� increase in assessed values after the adoption of the Redevelopment Plan. At June 30, 2004, the Agency was holding $26,889,509 in trust on behalf of other taxing agencies related to specific pass-through agreements. 58 City of Palm Desert Notes to Financial Statements (Continued) ® Note 9: Bond Reserve Requirements At June 30, 2004, the fund balance reserve requirements and actual reserve balances are presented as follows: ® Requirement Actual • Assessment District 98-1 $ 225,726 $ 245,580 1995 Financing Authority Revenue Bonds 471,500 547,548 ® 1995 Refunding Tax Allocation Bonds 290,000 810,979 1997 Financing Authority Revenue Bonds 2,017,484 2,038,444 ® 2001 Tax Allocation Revenue Bonds 310,424 319,229 • 2003 Financing Authority Revenue Bonds 334,114 338,359 • Note 10: Defeased Obligations The City defeased certain obligations by placing the proceeds of new obligations in an irrevocable trust to provide for all future debt service payments on the old obligations. Accordingly, the trust account assets and the liability for the defeased obligations are not included in the accompanying financial statements. At June 30, 2004, the outstanding amounts of the defeased obligations were as follows: • 1995 Series Tax Allocation Bonds (Project Area 1) $ 22,195,000 1996 Series B Tax Allocation Bonds 6,840,000 • Note 11: Pension Plan ® a. Plan Description The City of Palm Desert contributes to the California Public Employees Retirement System (PERS), an agent multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of ® California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of PERS' annual financial report may be obtained from their executive office:400 P Street, Sacramento, CA 95814. b. Funding Policy a Participants are required to contribute 7% of their annual covered salary. The City makes the contributions required of City employees on their behalf and for their account. The ® City is required to contribute at an actuarially determined rate; the rate for fiscal year 2003-2004 was 9.134% for non-safety employees of annual covered payroll. The contribution requirements of plan members and the City are established and may be ® amended by PERS. S 59 a► City of Palm Desert Notes to Financial Statements (Continued) Note 11: Pension Plan (Continued) c. Annual Pension Cost For 2004, the City's annual pension cost of $1,581,184 for PERS was equal to the City's required and actual contributions. The required contribution was determined as part of the June 30, 2001 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included: a) 8.25% investment rate of return (net of administrative expenses), b) projected annual salary increases of 3.75% to 14.20% �) depending on age, service and type of employment, and c) 3.75% per year cost-of-living adjustments. Both a) and b) included an inflation component of 3.50%. The actuarial value of PERS assets was determined using techniques that smooth the effects of short- term volatility in the market value of investments over a three-year period (smoothed market value). PERS' unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis that depends on the plan's entry into PERS. The remaining amortization period at June 30, 2004 was 12 years. d. Three-Year Trend Information for PERS Fiscal Annual Pension Percentage Net Pension Year Cost(APC) APC Contributed Obligation 6/30/2002 $ 595,396 100% $ 6/30/2003 1,242,350 100% O 6/30/2004 1,581,184 100% e. Schedule of Funding Progress for PERS O Actuarial Accrued UAAL as O Liability Actuarial Unfunded a%of Actuarial (AAL) Entry Value of AAL Excess Covered Covered Valuation Age Assets Assets Funded Payroll Payroll Date (A) (B) (A-B) Ratio B/A (C) [(A-B)IC] 6/30/2001 $ 27,455,440 $ 29,185,013 $ (1,729,573) 106.3% $ 7,038,563 (24.6%) 6/30/2002 29,947,399 28,201,105 1,746,294 94.2% 8,193,500 21.3% 6/30/2003 34,795,625 29,701,792 5,093,833 85.4% 8,919,100 57.1% Note 12: Fund Equity a. Reserves of Fund Balance In the fund financial statements, reserves segregate portions of fund balances that are either not available or have been earmarked for specific purposes. The various reserves established as of June 30, 2004 were as follows: 60 ; • City of Palm Desert Notes to Financial Statements(Continued) Note 12: Fund Equity (Continued) S RDA Financing RDA Financing Capital Other General Authority Debt Projects Governmental • Fund Fund Fund Funds Totals • Loans and notes receivable $ 5,100,000 $ $ 2,773,326 $ 7,991,269 $ 15,864,595 • Property held for resale - - 865,335 865,335 Advances(') 17,323,140 13,513,524 30,836,664 • Prepaid costs and deposits 1,599,074 17,113 3,854 1,620,041 Encumbrances 2,071,529 4,713,952 4,938,173 11,723,654 Continuing appropriations - 20,024,351 28,161,819 48,186,170 Debt service 1,709,018 600,424 - - 2,309,442 Inventory 36,058 36,058 • Total $ 27,638,819 $ 600,424 $ 27,628,742 $ 55,473,974 $ 111,441,959 I In the general fund, fund balance for advances to other funds in the amount of$2,055,000 is not reserved, as the revenue related to the sale of land has been deferred (see Note 14). Reserved for Loans and Notes Receivables - These reserves are set up to reflect the noncurrent portion of receivables so that they will not be considered as current funds • available. • Reserved for Property Held for Resale - This reserve is for property held for resale and has been set aside to indicate that these funds are not available to finance current expenditures. Reserved for Advances - These reserves are set up to reflect the advances to the Redevelopment Agency so that they will not be considered as current funds available. Reserved for Prepaid Costs and Deposits - These reserves represent contractual obligations for cash payments made before June 30, 2004, but not recognized as an • expenditure until after July 1, 2005 and noncurrent portions of deposits. . Reserved for Encumbrances - These reserves represent the portion of purchase orders awarded for which the goods or services had not yet been received at June 30, 2004. Although all appropriations lapse at year-end, even if encumbered, the City intends either • to honor the contracts in progress or to cancel them. Reserve for encumbrances are • rebudgeted on July 1, by Council action. ' Reserved for Continuing Appropriations - These reserves are for appropriations for capital projects, which are unexpended as of June 30, 2004 and are carried forward as continuing appropriations to be expended in 2004-2005. Reserved for Debt Service - These reserves for Debt Service represent reserves accumulated by the City and the Redevelopment Agency that are legally restricted to the • payment of long-term debt principal and interest amounts that mature in future years and for compensated absences. Reserved for Inventory - This reserve is to restrict fund balance, so that it will not be considered as current funds available. 61 • �1 �1 City of Palm Desert O) Notes to Financial Statements (Continued) 1 Note 12: Fund Equity (Continued) �) b. Net Asset Restatements �h Net assets have been restated as follows: Capital asset adjustments (see Note 5) $ (584,006) Long-term liabilities adjustment (see Note 6) 40,528,000 Adjustment to Assessment District (49,412,456) �) Capital asset transfers to Internal Service Fund (139,824) ®11) Total Net Asset Restatements $ (9,608,286) �1r Note 13: Risk Management The City maintains self-insurance programs for workers'compensation, general public liability �1 and auto liability. Claims are processed by an outside insurance service which administers OI the programs. �1 For general liability and workers' compensation programs, the City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is comprised of 78 40) Southern California member cities and is organized under a Joint Powers Agreement 101 pursuant to the California Government Code. The purpose of the Authority is to arrange and administer programs of insurance for the pooling of self-insured losses and to purchase 411 excess insurance coverage. Each member city has a representative on the Board of 0 Directors with officers of the Authority being elected annually by the Board Members. 1 General Liability 40) Annual deposits are paid by member cities and are adjusted retrospectively to cover 0 costs. Each member city, including Palm Desert, self-insures for the first $20,000 of each 40) loss. Participating cities then share in claims from $20,000 to $500,000 per loss occurrence. Specific coverage includes comprehensive and general automotive liability, 41 personal injury, contractual liability, errors and omissions and certain other coverage. Separate deposits are collected from the member cities to cover claims between $500,000 and $10,000,000. Excess insurance coverage for claims between $10,000,000 OI and $50,000,000 has been purchased by the Authority. These deposits are also subject to retrospective adjustment. 4PI Workers' Compensation 18 411 Period deposits are paid by member cities and are adjusted retrospectively to cover 101 costs. Each member city has a specific retention level. The City of Palm Desert has a retention level to $50,000 and pays 100% of all losses incurred under $50,000. The City ttel does not share or pay for losses of other cities under $50,000. Losses between $50,000 Ig and $100,000 are prorated among all participating cities on the basis of each city's total losses under its retention level. Losses between $100,000 and $500,000 are prorated 41' among all participating cities on a payroll basis. Losses in excess of $500,000 are covered by excess insurance purchased by the participating cities, as a part of the pool, to a limit of$10 million.This cost is also prorated on a payroll basis. Estimates for all workers' compensation and general liabilities, up to the self-insured levels have been recorded in the General Fund. At June 30, 2004, total estimated a workers' compensation and general liability claims payable, including a provision for incurred but not reported claims were$636,212 and $407,169, respectively. a 62 a a City of Palm Desert Notes to Financial Statements (Continued) Note 13: Risk Management(Continued) • Changes in claims liabilities during the past two years are as follows: June 30, 2003 June 30, 2004 • Claims payable.- Beginning of Year $ 1,041,382 $ 1,441,680 Incurred claims (including IBNR) • and changes in estimate 1,135,161 270,918 • Claims payments (734,863) (669,217) • Claims payable- End of Year $ 1,441,680 $ 1,043,381 • Settled claims from General Liability and Workers' Compensation risks have not exceeded commercial insurance coverage for the past three years. Note 14: Deferred Revenues and Unearned Revenues • Governmental Activities • Major Funds General Fund • On March 13, 1997, the Redevelopment Agency (Agency) purchased land from the City for the purpose of developing a second golf course financed by a note in • the amount of $2,055,000. The note has no specific due date and carries an interest rate that equates the rate of return the City receives on its investment with the Local Agency Investment Fund (1.44% at June 30, 2004). Recognition of • the revenue from the sale has been deferred until it becomes available. On March 13, 1997 and amended on June 4, 1997, the City entered into an • agreement with the Palm Desert Recreational Facilities Corporation (Corporation) for the use of property at the City's Golf Resort (Desert Willow). The agreement states the lease payments to the City in the amount of$8,000 per month. Payment is due when the Corporation's revenues exceed its expenses. At June 30, 2004, the Corporation owed the City for 84 months of rent totaling • $672,000, which will be recognized as revenue by the City when the rent is paid • by the Corporation. • Per the terms of a Disposition and Development Agreement (DDA) between the City and the Palm Desert Development Company (Developer), the Developer is required to pay to the City a "Payment in Lieu of Property Tax" (PILOT), The • initial amount of the PILOT was $80,000 and became due during the fiscal year ending June 30, 2004. The PILOT is due annually and increases by 2% each year. Any unpaid portion accrues interest at a rate of 3% per year. As of June 30, • 2004, the Developer did not generate sufficient positive cash flow from the operations of the Development to pay the City. Recognition of$80,000 has been • deferred until it becomes available. Other amounts reported as unearned revenues include $14,976 in miscellaneous . rents. 63 of of City of Palm Desert ®) Notes to Financial Statements (Continued) 1 Note 14: Deferred Revenues and Unearned Revenues (Continued) Other Governmental Funds o) Special Revenue Funds �) Loans receivable in the amount of $116,811 for home improvement loans are �) recorded as deferred in the Community Development Block Grant Fund. of $447 of grant funds are deemed unearned until expenditures are incurred in the Recycling Fund. $25,683 of grant funds is deemed unearned until expenditures are incurred in the Public Safety Police Grants Fund. Prepaid rents in the amount of $33,738 from the eight apartment complexes operated by the Palm Desert Housing Authority will be recognized as revenue 4011 when earned. of $51,885 of uncollected interest due from the Palm Desert Development of Company in the Low Income Housing fund of the Agency has been deferred. of Business-Type Activities The balance of $116,520 presents the unused portions of prepaid golf fees, value of unredeemed gift certificates and unearned rent. Component Unit o The balance of$31,711 represents the unused portions of prepaid banquets. I Note 15: Other Post-Employment Benefits of Plan Description 401 The City offers the Public Agency Retirement Systems (PERS) Health Care Program to of its retirees. The City contributes $16 per month to PERS on behalf of each retiree eligible of for PERS. In addition, the City will make an additional contribution towards certain retirees' premiums under a program called the Retiree Service Stipend. �I A retiree will be eligible for the Retiree Service Stipend if: of 1. retirement occurs from the City and from PERS simultaneously; 2. the retiree has attained age 50 and has completed 10 years or more of continuous service with the City; and of 3. the retiree meets any other requirements as specified in the Retiree Service Stipend. The City provides continued coverage for eligible retirees for the further lifetime of o retirees and their spouses and/or eligible dependents, provided the above eligibility O criteria are met. Spousal and dependent coverage is provided during the retiree's lifetime only. O 0 a a +a 64 O • City of Palm Desert Notes to Financial Statements(Continued) Note 15: Other Post-Employment Benefits (Continued) • The percentage of the premium paid by the City on behalf of an eligible retiree is • according to the following schedule, based on years of continuous service with the City: • Years of Service City Percent Less than 10 0% • 10 50% 11 55% 12 60% . 13 65% • 14 70% 15 or more 75% • Accounting and Funding The Retiree Service Stipend is not actuarially funded. The assets for the retiree service • stipend are accounted for in an agency fund. There were 18 participants in the plan. The premiums paid amounted to $83,644. An actuarial valuation completed for the plan as of • July 1, 2002 indicated the amount of the actuarial liability to current and future liabilities to • be $9,761,065. • Note 16: Special Assessment Debt Below is a summary of the changes in the Special Assessment Bonds Payable: • Balance at Balance at July 1, 2003 Additions Reduction June 30,2004 Assessment District 98-1 $ 13,575,000 $ - $ 13,575,000 $ 1995 Revenue Bonds 1,590,000 405,000 1,185,000 • 1997 Revenue Bonds 20,940,000 - 870,000 20,070,000 2003 Assessment Revenue Bonds 4,423,000 - 10,000 4,413,000 • AD 98-1 Limited Obligation Refunding Bonds - 2,955,000 - 2,955,000 • $ 40,528,000 $ 2,955,000 $ 14,860,000 $ 28,623,000 • The City has Special Assessment Bonds Payable issued under the 1911 and 1915 Special Improvement Acts and the 1982 Mello-Roos Community Facilities Act (1982 Bonds).The City has no liability to 1911 Act bondholders until assessments have been collected from the property owner. Such liability is then recorded in the Agency Funds. Therefore, the 1911 Bonds are not recorded as liabilities in the accompanying financial statements. • The City also has no liability to the 1915 Act bondholders or the bondholders of bonds issued under the 1982 Mello-Roos Community Facilities Act until assessments are collected on the tax rolls. However, the City may take certain actions to assume secondary liability for all or . part of 1915 Act Bonds and the 1982 bonds until such time as foreclosure proceedings are consummated. • Special assessment bonds payable, as described below, are not recorded as long-term liabilities, as these obligations do not constitute a debt or obligation of the City. 65 0 10) City of Palm Desert O) Notes to Financial Statements (Continued) I Note 16: Special Assessment Debt (Continued) O) Assessment District 98-1 �) The bonds were issued in an original amount of $34,760,000 in December 1998 to finance the acquisition and construction of certain infrastructure improvements with �) Assessment District No. 98-1 (Canyons at Bighorns) (the District). The bonds are secured by unpaid assessments on parcels within the District. Under the 1915 Act, annual assessments on the unpaid assessments sufficient to meet the scheduled debt �) service requirements are to be included on the regular county tax bills for the assessed parcels for which there are unpaid assessments. Interest rates vary from 4.60% to 6.05% with interest payable semi-annually on March 2 and September 2 with principal maturing annually on September 2. The remaining bonds were advance refunded during the current fiscal year through the issuance of the Assessment District 98-1 Limited �I Obligation Refunding Improvement Bonds. �) As part of the refunding, the City transferred $8,706,206 from the Capital Projects Fund �I for Assessment District No. 98-1 (Bighorn) into bond escrow. This amount has been �I reported as a special item in both the government-wide and fund financial statements. 1 1995 Revenue Bonds In September 1995, the Palm Desert Financing Authority issued $7,540,000 1995 �1 Revenue Bonds. The proceeds from the revenue bonds were loaned to the Assessment Districts to provide funds to refund in advance $900,000 Assessment District No. 83-1 Bonds, $5,575,000 in Assessment District 84-1 Refunding Bonds and $3,200,000 in lei Assessment District No. 87-1 Bonds. These bonds were issued under the 1915 Act to provide funds for capital improvements in the respective assessment districts. Interest 401 rates on the Bonds is paid at a rate of 6.0% with interest payable semi-annually on March lei 2 and September 2 with principal maturing annually on September 1. I Debt Service requirements to maturity are as follows: 10) Year Ending ®l, June 30, Principal Interest Total 0 2005 $ 425,000 $ 58,350 $ 483,350 �) 2006 445,000 32,250 477,250 2007 95,000 16,050 111,050 �) 2008 105,000 10,050 115,050 2009 115,000 3,450 118,450 �) $ 1,185,000 $ 120,150 $ 1,305,150 �) As of June 30, 2004, the principal amount to be repaid by each assessment district to �) pay-off the loans from the Financing Authority are as follows: �) Assessment District 84-1 Refunding $ 570,000 a) Assessment District 87-1 625,000 a) Total $ 1,195,000 �) a) 66 �I a� e City of Palm Desert ® Notes to Financial Statements (Continued) Note 16: Special Assessment Debt (Continued) ® 1997 Revenue Bonds ® In December 1997, the Palm Desert Financing Authority issued $30,915,000 in 1997 Revenue Bonds. The proceeds were loaned to the Assessment Districts to refund in advance $2,298,980 Assessment District No. 92-1 Bonds, $11,870,000 Community ® Facilities District No. 91-1 (1992 Bonds), $6,945,000 Assessment District No. 94-1 Bonds and $12,835,000 Community Facilities District No. 91-1 (1995 Bonds). These bonds were issued under the 1915 Act or the 1982 Mello-Roos Community Facilities Act to provide funds for capital improvements in the respective assessment districts. ® Debt service requirements to maturity are as follows: ® Year Ending ® June 30, Principal Interest Total ® 2005 $ 870,000 $ 1,123,756 $ 1,993,756 ® 2006 915,000 1,078,674 1,993,674 ® 2007 960,000 1,030,381 1,990,381 ® 2008 1,005,000 978,789 1,983,789 2009 1,060,000 923,536 1,983,536 ® 2010-2014 6,240,000 3,635,026 9,875,026 ® 2015-2019 7,270,000 1,552,140 8,822,140 ® 2020-2021 1,750,000 102,000 1,852,000 ® $ 20,070,000 $ 10,424,302 $ 30,494,302 ® As of June 30, 2004, the principal amount to be repaid by each assessment district to ® pay-off the loans from the Financing Authority are as follows: ® Assessment District 91-1 $ 19,428,000 ® Assessment District 92-1 27,000 Assessment District 94-1 42,000 ® Total $ 19,497,000 ® 2003 Assessment Revenue Bonds ® In June 2003, the Palm Desert Financing Authority issued $4,423,000 in 2003 Assessment Revenue Bonds. The proceeds were used to purchase three series of ® limited obligation improvement bonds issued by the City in connection with the financing ® and refinancing of certain improvements of benefit to property within the City's Assessment District No. 94-2 (Sunterrace), Assessment District No. 94-3 (Merano) and ® Silver Spur Ranch Utility Undergrounding Assessment District No. 01-01. These bonds ® were issued under the 1915 Improvement Bond Act to provide funds for public improvements in the respective assessment districts. ® As of June 30, 2004, the principal amount to be repaid by each assessment district to pay-off the loans from the Financing Authority are as follows: ® Assessment District 94-2 $ 920,000 Assessment District 94-3 1,153,000 ® Assessment District 01-1 2,340,000 ® Total $ 4,413,000 ® 67 081 �l City of Palm Desert ®1 Notes to Financial Statements(Continued) 1 Note 16: Special Assessment Debt(Continued) ®� Debt service requirements to maturity are as follows: Year Ending �) June 30, Principal Interest Total �) 2005 $ 143,000 $ 198,950 $ 341,950 �) 2006 180,000 195,045 375,045 �) 2007 185,000 189,564 374,564 101 2008 185,000 183,205 368,205 2009 195,000 176,195 371,195 2010-2014 1,120,000 750,564 1,870,564 a) 2015-2019 935,000 501,999 1,436,999 �1 2020-2024 745,000 281,289 1,026,289 V 2025-2029 725,000 101,722 826,722 �l $ 4,413,000 $ 2,578,533 $ 6,991,533 �1 �1 Assessment District 98-1 Limited Obligation Refunding Improvement Bonds ®1 The bonds were issued in an original amount of $2,955,000 in February 2004 to redeem lei and defease the outstanding limited obligation improvement bonds of Assessment District lei No. 98-1 which were issued in 1998. The bonds are secured by unpaid assessments on parcels within the District. Under the 1915 Act, annual assessments on the unpaid assessments sufficient to meet the scheduled debt service requirements are to be �l included on the regular county tax bills for the assessed parcels for which there are unpaid assessments. Interest rates vary from 1.5% to 5.1% with interest payable semi- lei annually on March 2 and September 2 with principal maturing annually on September 2. 411 Debt service requirements to maturity are as follows: �1 Year Ending ®) June 30, Principal Interest Total �) 2005 $ 635,000 $ 102,189 $ 737,189 2006 135,000 92,484 227,484 �) 2007 135,000 89,514 224,514 �) 2008 140,000 85,799 225,799 O) 2009 140,000 81,634 221,634 2010-2014 790,000 324,441 1,114,441 OI 2015-2019 980,000 126,327 1,106,327 �) $ 2,955,000 $ 902,388 $ 3,857,388 ®) a► a► a� o► a 68 Q� lei City of Palm Desert ® Notes to Financial Statements (Continued) ® Note 17: Conduit Debt Obligations ® a. Series 1996-$7,010,000 Lease Revenue Bonds ® In August 1996, the Palm Desert Financing Authority (the Authority) issued $7,010,000 in ® Lease Revenue Bonds. The proceeds of the Bonds were used to finance the construction of a County Administrative Center and related facilities upon a site located in the City of ® Blythe, County of Riverside, fund a reserve account, fund approximately eight months of ® capitalized interest and pay costs of issuance of the bonds. The Authority will lease the site from the County of Riverside (the County) pursuant to a site lease dated August 1, ® 1996, by and between the Authority and the County and will lease back to the Authority ® the site and the facilities (together"the Project") pursuant to a Lease Agreement dated as of August 1, 1996, by and between the Authority and County (Lease). Under the Lease, ® the County will pay the Trustee Base Rental Payments to the trustee in an amount equal to the scheduled debt service payments on the Bonds. The Authority will assign its right ® to receive the Base Rental payments to the trustee for the benefit of the owners of the ® Bonds. The debt service on the bonds are to be paid solely from lease payments made ® by the County. The Authority has no obligation to make the debt service payments in the event that the County is not able to make the required base rental payments. During the ® current fiscal year, these bands were refunded through the issuance of the 2003 Series A ® Lease Revenue Bonds. b. 2003 Series A-$22,310,000 Lease Revenue Bonds In December 2003, the Palm Desert Financing Authority (Authority) issued $22,310,000 in Lease Revenue Bonds. The proceeds of the Bonds were used to: i) finance the construction of a County animal shelter and related facilities located in the unincorporated ® area of Thousand Palms, California; ii) finance construction of certain County medical clinic facilities located in Mecca, California; iii) refund the Palm Desert Financing Authority ® Lease Revenue Bonds Series 1996; iv) acquire a debt service reserve insurance policy; ® v)fund capitalized interest on the bonds; and vi) pay costs of issuance of the bonds. The ® Authority will lease sites relating to each project from the County of Riverside (County) pursuant to a Site Lease dated as of December 1, 2003 and will lease back to the County ® the Sites and the Facilities pursuant to a Facilities Lease dated December 1, 2003. Under the Lease, the County will pay to the Trustee Base Rental Payments in the amount equal ® to the scheduled debt service of the Bonds. The Authority will assign its right to receive ® the Base Rental Payments to the Trustee for the benefit of the owners of the bonds. The debt service on the bonds is to be paid solely from lease payments made by the County. ® The Authority has no obligation to make the debt service payments in the event that the ® County is not able to make the required base rental payments. As of June 30, 2004, the outstanding amount was $22,260,000. ® Note 18: Other Disclosures ® The Palm Desert Recreational Facilities Corporation has a net asset deficit of $401,860, ® which will be eliminated by increasing revenues through banquet reservations. ® 69 a► a► a► a► a► m a► a► a► a► a► THIS PAGE INTENTIONALLY LEFT BLANK ®) a► a► o� a• a► al al a� a• a� a� a� a� a� a� a� a� 70 a� a� • • • • • • Required Supplementary Schedules • • • • • • • • • • • i • • • • • • • • • • • • • • • • • • a a a o► a o► o• a a o► a a o► a o► o► a a 41 a a a o► a a a o► o► o► a o► o► n► o► o� a► ®P o► m os ® CITY OF PALM DESERT Schedule 1 ® BUDGETARY COMPARISON SCHEDULE ® GENERALFUND YEAR ENDED JUNE 30,2004 Variance with Final Budget ® Budget Amounts Actual Positive ® Original Final Amounts (Negative) ® Budgetary Fund Balance, July 1 $ 48,815,268 $ 48,815,268 $ 48,815,268 $ - Resources(Inflows): ® Taxes 27,638,000 27,638,000 30,887.340 3,249,340 ® Licenses and permits 862,400 862,400 1,053,905 191,505 Intergovernmental revenues 4,066,393 4,066,393 3,633,489 (432,904) ® Charges for services 588,000 588,000 1,048,667 460,667 ® Fines and forfeitures 165,000 165,000 147,378 (17,622) ® Use of money and property 2,100,000 2,100,000 1,135.952 (964,048) Miscellaneous revenues 165,500 165,500 178,016 12,516 ® Transfers from other funds 1,000,000 1,000,000 1,092,475 92,475 ® Amounts Available for Appropriation 85,400,561 85,400,561 87,992,490 2,591,929 ® Charges to Appropriation (Outflow): ® General government 11,705,490 12,405,980 10,497,307 1.908,673 Public safety 13,757,657 13,923,159 13,052,963 870,196 ® Public works 6,342,061 7,633,351 5,255,530 2,377,821 ® Parks, recreation and culture 3,445,924 3,450,705 2,638,386 812,319 �a Capital outlay - 340,238 230,557 109,681 �r Transfers to other funds 1,072,605 1,072,605 859.328 213,277 ® Total Charges to Appropriations 36,323,737 38,826,038 32,534,071 6,291,967 ® Budgetary Fund Balance, June 30 $ 49,076,824 $ 46,574,523 $ 55,458,419 $ 8,883,896 y� Y"J 71 01 Q► 01 CITY OF PALM DESERT Schedule 2 BUDGETARY COMPARISON SCHEDULE 01 PROP A FIRE TAX-SPECIAL REVENUE FUND 01 YEAR ENDED JUNE 30, 2004 Variance with Final Budget Budget Amounts Actual Positive n, Original Final Amounts (Negative) mW Budgetary Fund Balance, July 1 $ 2,645,116 $ 2,645,116 $ 2,645,116 $ - V► Resources (Inflows): Taxes 1,420,000 1,420,000 1,432,859 12,859 mm Use of money and property 34,000 34,000 26,679 (7,321) V� Transfers from other funds 728,605 728,605 726,605 (2,000) Amounts Available for Appropriation 4,827,721 4,827,721 4,831,259 3,538 Charges to Appropriation (Outflow): General government 13,500 13,500 11,936 1564 Public safety 3,220,105 3,220,105 2,171,008 1,049:097 0) Total Charges to Appropriations 3,233,605 3,233,605 2,182,944 1,050,661 IND Budgetary Fund Balance, June 30 $ 1,594,116 $ 1,594,116 $ 2,648,315 $ 1,054,199 01 41 O 0 0 0 0 0 0 72 0 i qb Supplementary Schedules qb • ,• • • • • • • i • i i i i i i r If i r r i r i r 73 i 0 CITY OF PALM DESERT Schedule 3 BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERALFUND YEAR ENDED JUNE 30,2004 B Variance with O Final Budget Budget Amounts Actual Positive m Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 48,815,268 $ 48,815,268 $ 48,815,268 $ Resources(Inflows): Taxes: Property taxes 2,850,000 2,850,000 3,369,711 519,71l Property transfer tax 450,000 450,000 870,415 420,415 B' Timeshare mitigation fee 250,000 250,000 392,988 142,988 Sales tax 13,575,000 13,575,000 15,138,424 1,563,424 _ Business license tax 950,000 950,000 955,501 5,501 0� Job valuation fees 40,000 40,000 32,745 (7,255) - Transient occupancy tax 7,350,000 7,350,000 7,660,831 310,831 Franchises 2,150,000 2,150,000 2.417,856 267,856 d Penalties and interest on taxes 23,000 23,000 48,869 25,869 Total Taxes 27,638,000 27,638,000 30,887,340 3,249,340 O O Licenses and Permits: Building permits 750,000 750,000 860.547 110,547 Grading permits 55,000 55,000 110,279 55,279 O Valet parking permits 400 400 425 25 _ Encroachment permits 12,000 12,000 9,917 (2,083) 0 Miscellaneous permits - - 4,893 4,893 - Business regulatory permits 45,000 45,000 67,844 22,844 0- Total Licenses and Permits 862,400 862,400 1,053,905 191,505 0 Intergovernmental Revenues: County grants - - 849 849 b, State grants - - 37,518 37,518 - Motor vehicle in-lieu fees 2,670,000 2,670,000 2,019,129 (650,871) a. Off highway in-lieu fees 500 500 1,454 954 Monthly parking bail 20,000 20,000 26,677 6,677 e' Reimbursement RDA costs 726,000 726,000 958,946 232,946 e� Other reimbursements 649,893 649,893 588,916 (60,977) 0 Total Intergovernmental Revenues 4,066,393 4,066,393 3,633,489 (432,904) Charges for Services: Subdivision fees 150,000 150,000 298,979 148,979 Zoning fees 15,000 15,000 28,461 13,461 Plan check fees 400,000 400,000 459,046 59,046 Sale of maps and publications 4,000 4,000 7,656 3,656 Microfilm fees 17,000 17,000 34,500 17,500 Other fees 2,000 2,000 220,025 218,025 a Total Charges for Services 588,000 588,000 1,048,667 460,667 Fines and Forfeitures: Vehicle code fines 100,000 100,000 83,111 (16,889) \ Municipal court fines 65,000 65,000 64,267 (733) Total Fines and Forfeitures 165,000 165.000 147,378 (17,622) ti 74 i ® CITY OF PALM DESERT Schedule 3 ® BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERALFUND YEAR ENDED JUNE 30,2004 Variance with Final Budget Budget Amounts Actual Positive ® Original Final Amounts (Negative) Use of Money and Property: Interestincome 1'000,000 1,000,000 400,077 (599,923) ® Interest on advances 1,000.000 1,000,000 597,669 (402,331) Interest on notes receivable 100,000 100,000 138,206 38,206 ® Total Use of Money and Property 2,100,000 2,100,000 1,135,952 (964,048) ® Other Revenues: ® Code compliance 5,000 5,000 7,539 2,539 ® Strong motion instrument fee 15,000 15,000 12,503 (2,497) Special investigation fee 500 500 236 (264) ® Certificate of compliance fee 2,000 2,000 2,300 300 Nuisance abatement tax 10,000 10,000 8,985 (1,015) ® Abandoned vehicle abatement 30,000 30,000 22,000 (8,000) ® Rental income 53,000 53,000 53,363 363 Other revenue 50,000 50,000 71,090 21,090 Total Other Revenues 165,500 16s,500 1T8,016 12,516 ® Transfers from other funds 1,000.000 1,000,000 1,092,475 92,475 ® Amounts Available for Appropriation 85,400,561 85,400,561 87,992,490 2,591,929 Charges to Appropriation(Outflow): ® General Government-Departmental: ® City council 268.400 266,230 237,284 28,946 City clerk 361.800 370,419 347,526 22,893 ® Legislative advocacy 53,000 53,000 38,810 14,190 City attorney 144,000 144,000 144,000 - ® Legal special services 345,000 345.000 304,269 40,731 City manager 633,350 629.407 618,823 10,584 ® Community services 1,364,700 1,353,770 1,307,785 45,985 ® Finance 1,189.487 1.196,887 1,191,004 5,883 ® Auditing 50,000 69,000 64,259 4,741 Human resources 835,455 832,995 603,963 229,032 General services 380,700 446,676 381,531 65,145 ® Data processing 771,327 708,779 663,134 45,645 ® Unemployment insurance 15,000 15,200 15,144 56 Insurance 520,500 520,500 81,696 438.804 ® Community promotions 1.814.500 1,967,667 1,420,717 546,950 Code enforcement 620,500 623,672 575,414 48,258 ® Community development 849,798 1,005,629 960,623 45,006 ® Art committee 9,000 9,000 2,893 6,107 Marketing 877,023 1,155,199 845,527 309,672 ® Total General Government-Departmental 11,103,540 11,713,030 9,804,402 1,908,628 ® General Government-Nontlepartmental: Contributions to other agencies 601,950 692,950 692,905 45 ® 75 CITY OF PALM DESERT Schedule 3 BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERALFUND YEAR ENDED JUNE 30,2004 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Public Safety: Police services 10,730,757 10,761,718 10,456,157 305,561 Animal regulation 150,000 150,000 85,720 64,280 Nuisance abatement 10,000 10,000 6,113 3,887 Demolition 5.000 5,000 - 5,000 Traffic safety 617,500 679,589 375,512 304,077 Development services 568,650 559,256 509,301 49,955 Building and safety 1,675,750 1,757,596 1,620,160 137,436 Total Public Safety 13.757,657 13,923,159 13,052,963 870,196 Public Works: Administration 2,368,677 2,453,347 2,270,854 182,493 Street maintenance 1,604,684 1,573,853 1,411,018 162,835 Street resurfacing 1,200,000 2,365,697 897,153 1,468,544 Curb and gutter 90,000 90,000 16 89,984 Cross cutter 80,000 87,869 65 87,804 Tie in paving 35,000 36,279 9,878 26,401 Stripping 75,000 143,724 - 143,724 Corporate yard 68,300 63,722 25,956 37,766 Equipment 262,000 262,000 183,632 78,368 Building maintenance 443,800 442,260 369,502 72,758 Portola community center 74,600 74,600 67,673 6,927 Storm water permit 40,000 40,000 19,783 20,217 Total Public Works 6,342,061 7,633,351 5,255,530 2,377,821 Parks,Recreation and Culture: Park maintenance 1,146,700 1,399,068 794,724 604,344 Civic center park 1,400,500 1,144,011 1,020,620 123,391 Landscape service 532,091 533,679 519,492 14,187 Visitors center 366,633 373,947 303,550 70,397 �1 Total Parks,Recreation and Culture 3,445,924 3,450,705 2,638.386 812,319 Capital Outlay: Departmental capital outlay - 155,238 155,238 - a Land purchase - 185,000 75,319 109,681 Total Capital Outlay - 340,238 230,557 109,681 Transfers to other funds 1,072,605 1,072,605 859,328 213,277 Total Charges to Appropriations 36,323,737 38,826,038 32,534,071 6,291,967 Budgetary Fund Balance,June 30 $ 49,076,824 $ 46,574,523 $ 55,458,419 $ 8,883,896 m a m m mm 76 w a� • • • • • • • Other Governmental Funds • • • • • • • • • • i • • • • • • • • • • • • • • • • • • QI m al al �► d �T--� o 0 �� ���. . � • • ® CITY OF PALM DESERT Schedule 4 COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS JUNE 30, 2004 ® Total ® Other ® Special Capital Governmental Revenue Projects Funds ® Assets: ® Pooled cash and investments $ 48,171,022 $ 24,175,462 $ 72,346,484 Receivables: Accounts 197,995 368 198,363 ® Notes - 108,930 108,930 Interest 76,865 1,487 78,352 Loans 8,002,634 8,002,634 ® Prepaid costs 1,621 1,208 2,829 ® Deposits 1,025 - 1,025 Due from other governments 780,852 780,852 ® Advances to other funds 748,524 12,765,000 13,513,524 Property held for resale 865,335 - 865,335 ® Restricted assets: ® Cash and investments with fiscal agents 4,933,334 6,160,815 11,094,149 Total Assets $ 63,779,207 $ 43,213,270 $ 106,992,477 Liabilities and Fund Balances: Liabilities: Accounts payable $ 1,076,278 $ 1,856,295 $ 2,932,573 Accrued liabilities 93,501 990 94,491 Unearned revenues 111,753 - 111,753 Advances from other funds 106,184 106,184 Deferred revenues 116,811 - 116,811 ® Deposits payable 309,804 105,264 415,068 ® Total Liabilities 1,814,331 1,962,549 3,776,880 Fund Balances: ® Reserved: ® Reserved for encumbrances 2,632,090 2,306,083 4,938,173 Reserved for continuing appropriation 19,867,899 8,293,920 28,161,819 ® Reserved for prepaid costs and deposits 2,646 1,208 3,854 ® Reserved for property held for resale 865,335 - 865,335 Reserved for loans receivables 7,882,339 108,930 7,991,269 ® Reserved for advances to other funds 748,524 12,765,000 13,513,524 Unreserved: Designated for capital outlay - 17,775.580 17,775,580 Designated for special revenue purposes 29,966,043 - 29,966,043 Total Fund Balances 61,964,876 41,250,721 103,215,597 ® Total Liabilities and Fund Balances $ 63,779,207 $ 43,213,270 $ 106,992,477 ® 77 CITY OF PALM DESERT Schedule 5 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2004 Total Other Special Capital Governmental ®' Revenue Projects Funds Revenues: Taxes $ 5,633,206 $ $ 5,633,206 Special assessments collected 214,950 214,950 ®i Licenses and permits - 262,764 262,764 Intergovernmental revenues 2,249,389 184,677 2,434,066 Rental income 4,494,098 - 4,494,098 Charges for services 3,800 - 3,800 lei Use of money and property 560,174 673,547 1,233,721 Fines and forfeitures 159,252 - 159,252 4bi Miscellaneous 1,243,997 1,651 1,245,648 401 Contributions from property owners - 2,095,969 2,095,969 Total Revenues 14,558,866 3,218,608 17,777,474 Expenditures: 40l Current: 401 General government 7,788,253 5,109,012 12,897,265 10) Public safety 66,725 - 66,725 Public works 458,398 4,439,168 4,897,566 �1 Capital outlay 11,550,950 4,316,563 15,867,513 �) Debt service: Principal retirement - 250,000 250,000 �) Total Expenditures 19,864,326 14,114,743 33,979,069 ®, Excess (Deficiency)of Revenues a) Over(Under) Expenditures (5,305,460) (10,896,135) (16,201,595) a► Other Financing Sources (Uses): Transfers in 11,495,448 11,125,630 22,621,078 ®' Transfers out (5,764,084) (11,183,245) (16,947,329) Sale of property 924,522 804,000 1,728,522 a) Total Other Financing Sources a) (Uses) 6,655,886 746,385 7,402,271 10) Special Item: amm' Refunding of special assessment debt - (8,706,206) (8,706,206) V/ Q� Net Change in Fund Balances 1,350,426 (18,855,956) (17,505,530) m Fund Balances, Beginning of Year 60,614,450 60,106,677 120,721,127 VI Fund Balances, End of Year $ 61,964,876 $ 41,250,721 $ 103,215,597 n! 78 Q■� • • • • • • • • Other Governmental Funds- • Special Revenue • • • • • • • • • i • • • • • • • • • • • • • • • • • • • iD �� iU o� o� �� a 0 �--�--� '� �., .. . � • ® OTHER GOVERNMENTAL FUNDS- SPECIAL REVENUE ® Special Revenue Funds are used to account for proceeds of specific revenue sources other than expendable trust that are legally restricted to expenditures for specific purposes. ® Traffic Safety Fund -Traffic and court fines are collected in these funds. A transfer from this Fund ® to the General Fund is made at the end of the fiscal year by council action to be applied toward ® the eligible expenditures permitted by law. ® as Tax Fund - Portions of the tax rate per gallon levied by the State of California on all gasoline ® purchases are allocated to cities throughout the State. These funds are restricted to expenditure ® for transit and street-related purposes. ® Measure A Fund - In 1988, Riverside County voters approved a half-cent sales tax, known as Measure A, to fund a variety of highway improvements, local street and road maintenance, ® commuter assistance and specialized transit projects. This fund is used to collect this tax and ® pursuant to the provision of Measure A (Ordinance No. 88-1 of the County of Riverside) it is restricted for local street and road expenditures only. ® Housing Mitigation Fee Fund -This fund is used to account for fees collected from construction of commercial and office buildings for low and moderate income mitigation purposes. At the end of ® the fiscal year, a transfer is made by council action to transfer funds collected during the fiscal ® year to the Redevelopment Fund to be used strictly for projects and programs that benefit the low and moderate income households. ® Community Development Block Grant Fund - This fund is used to account for the receipts and ® expenditures of CDBG funds received from the U.S. Department of Housing and Urban ® Development. ® New Construction Tax Fund - This fund is used to account for tax collected upon application to ® the City for a building permit from every person/entity for the construction of any new building or addition or trailer space in the city according to a fee schedule. Its use is restricted for the ® acquisition and development of public facilities such as parks, playgrounds and public structures. ® planned Drainage Fund - This fund is used to account for off-site drainage fees based on and ® established fee schedule collected prior to approval of the final map in the case of land being ® subdivided or prior to the issuance of a building permit in the case of construction or improvement of subdivided land. ® Park and Recreation Facilities Fund - This fund is used to account for fees collected for residential and subdivision developments collected either at the time grading permits are paid or ® prior to the approval of the final map. Its use is restricted for expenditures related to park ® development, maintenance and equipment. ® 79 OTHER GOVERNMENTAL FUNDS - SPECIAL REVENUE ®' (CONTINUED) i Traffic Signals Fund - This fund is used to account for fees collect for residential, commercial and industrial developments collected either at the time grading permits are paid or prior to the approval of the final map. Its use is restricted for expenditures related to the acquisition and maintenance of traffic signals. Recycling Fund - This fund is used to account for resources resulting form lower land fill tipping fees of $8.50 per ton which took effect in July, 1996. Due to limited landfill resources, it will be used for the implementation of appropriate long-range plans to be determined by the City Council for municipal solid waste disposal. �I Public Safety Police Grants Fund - This fund is used to account for grants received from the U.S. �1 Department of Justice under the Local Law Enforcement Block Grants Program for the purpose of purchasing equipment related to public safety. Library Foundation Fund - This fund is used to account for resources set aside for the specific �i purpose of purchasing library books and materials for the Multi-Agency Library Foundation, a non-profit entity. �I El Paseo Assessment District Fund - This fund is used to collect assessments on all business �I establishments located within the boundaries set for the El Paseo parking and business �I improvement area based on a fee schedule established for the various types of businesses. Collections are made in the same manner and at the same time as the City business license fees. �) Proceeds from all charges are used for the promotion of business activities in the area. �I Air Quality Management Fund - This fund accounts for receipts from South Coast Air Quality ®1 Management District, one-third of which is disbursed to the Coachella Valley Association of Governments. The remaining two-thirds are spent for programs that promote the goal of attaining Federal and State air quality standards. O) City-Wide Business License Fund - This fund accounts for receipts received from College of the �) Desert Alumni Association Fair collected form all street fair vendors at $2.00 per day for each space. Fifty percent of the proceeds are spent for city-wide business promotion and the other fifty n1 percent is transferred to the General Fund for partial business licensing cost recovery. ��Vh Various Landscape and Lighting District Funds - These funds are used to account for VI expenditures and receipts of property taxes and service fees levied to the property owners in the a) various landscaping and lighting districts which were formed to provide landscaping and street a) lighting maintenance. Individual landscaping and lighting funds are set up for Districts No. 1 through 15. AIPP Maintenance Fund - This fund is used to account for monies set aside to maintain the a) artwork in the City of Palm Desert. ®� Q� Q� amm� VI 80 ®f ao ® OTHER GOVERNMENTAL FUNDS -SPECIAL REVENUE (CONTINUED) ® Child Care Program Fund - This fund is used to collect funds from developers for the purpose of ® providing child care programs. Golf Course Maintenance Fund - This fund is used to offset the cost of capital improvements, • equipment purchases, perimeter maintenance, pay off assessments and other nonrecurring costs that will arise as a result of the new Desert Willow Golf Course Resort. Funding source for the Golf Course Maintenance Fund are collections from the IROC time share project. • Redevelopment Agency Low Income Housing Fund - This fund is used to account for monies set • aside in accordance with Community Redevelopment Law for the provision of affordable housing for low and moderate income persons and families. Redevelopment Agency Housing Authority Fund - This fund is used to account for revenues and ® expenditures related to rental units owned by the Housing Authority. • ® 81 dl CITY OF PALM DESERT COMBINING BALANCE SHEET �mm NONMAJOR SPECIAL REVENUE FUNDS W JUNE 30,2004 �I► Vm� Housing Mitigation Traffic Safety Gas Tax Measure A Fee Assets: Pooled cash and investments $ - $ - $ 4,063,811 $ Receivables: Accounts - - - Interest - - - Loans - - - Prepaid costs - - - OI Deposits - - Due from other governments 31,306 81,166 587,788 Advances to other funds - - - Property held for resale Restricted assets: Cash and investments with fiscal agents - Total Assets $ 31,306 $ 81,166 $ 4,651,599 $ Liabilities and Fund Balances: Liabilities: Accounts payable $ $ $ 724,403 $ OI Accrued liabilities - Unearned revenues Advances from other funds Deferred revenues Deposits payable Total Liabilities 724,403 Fund Balances: O Reserved: Reserved for encumbrances 860,125 Reserved for continuing appropriation 2,802,428 O Reserved for prepaid costs and deposits O Reserved for property held for resale Reserved for loans receivables Reserved for advances to other funds - Unreserved: Designated for special revenue purposes 31,306 81,166 264,643 Total Fund Balances 31,306 81,166 3,927,196 Total Liabilities and Fund Balances $ 31,306 $ 81,166 $ 4,651,599 $ 82 Schedule 6 Community New Park and Development Construction Planned Recreation Traffic • Block Grant Tax Drainage Facilities Signals Recycling $ - $ 4,287,926 $ 5,011,737 $ 2,267,668 $ 850,851 $ 4,244,155 16,495 - _ _ _ 137,353 • 116,811 - - - - - . 41,289 - 32,847 • - 654,000 _ _ • $ 174,595 $ 4,941,926 $ 5,011,737 $ 2,267,668 $ 850,851 $ 4,414,355 $ 29,213 $ 508 $ 42,290 $ 4,169 $ 38,535 $ 36,497 • - 447 11,660 - 116,811 157,684 508 42,290 4,169 38,535 36,944 116,136 142,082 281,650 38,693 40,500 94,492 • - 3,815,523 3,658,699 1,770,740 268,647 654,000 - - • (99,225) 329,813 1,029,098 454,066 503,169 4,282,919 16,911 4,941,418 4,969,447 2,263,499 812,316 4,377,411 $ 174,595 $ 4,941,926 $ 5,011,737 $ 2,267,668 $ 850,851 $ 4,414,355 83 CITY OF PALM DESERT �) COMBINING BALANCE SHEET a) NONMAJOR SPECIAL REVENUE FUNDS JUNE 30, 2004 Public El Paseo Air �) Safety Police Library Assessment Quality Grants _ Foundation District Management ®) Assets: Pooled cash and investments $ 33,782 $ 5,257 $ 34,256 $ 129,942 Receivables: Accounts - - - 13,830 �) Interest - Loans Prepaid costs al Deposits a)Due from other governments - - - - Advances to other funds - - - - �) Property held for resale - - - - Restricted assets: Cash and investments with al fiscal agents - - - - 1 Total Assets $ 33,782 $ 5,257 $ 34,256 $ 143,772 al Liabilities and Fund Balances: Liabilities: Accounts payable $ 9,743 $ - $ 16,644 $ 4,610 al Accrued liabilities - - - Unearned revenues 25,683 ®1 Advances from other funds - �) Deferred revenues �) Deposits payable Total Liabilities 35,426 16,644 4,610 �) Fund Balances: ®) Reserved: al Reserved for encumbrances 1,370 - - Reserved for continuing appropriation - - - - al Reserved for prepaid costs and deposits - - - - a) Reserved for property held for resale - - - - Reserved for loans receivables - - - - Reserved for advances to other funds - - - - �) Unreserved: Designated for special revenue purposes (3,014) 5,257 17,612 139,162 �) Total Fund Balances (1,644) 5,257 17,612 139,162 Total Liabilities and Fund Balances $ 33,782 $ 5,257 $ 34,256 $ 143,772 Vail al al a� 84 a a� Schedule 6 • City Wide Landscape Business and Lighting AIPP Child Care Golf Course • License Districts No. 1-15 Maintenance Program Maintenance $ 61,800 $ 331,810 $ 264,139 $ 160,543 $ 2,806,757 1,630 • 6,456 • $ 63,430 $ 338,266 $ 264,139 $ 160,543 $ 2,806,757 $ _ $ 20,770 $ $ - $ 33,628 • 20,770 33,628 2,262 39,100 21,193 • 63,430 315,234 225,039 160,543 2,751,936 63,430 317,496 264,139 160,543 2,773,129 $ 63,430 $ 338,266 $ 264,139 $ 160,543 $ 2,806,757 85 m CITY OF PALM DESERT Schedule 6 COMBINING BALANCE SHEET m�m NONMAJOR SPECIAL REVENUE FUNDS V► JUNE 30, 2004 Redevelopment Agency Total Low Non-Major Income Housing Special Revenue Housing Authority Funds Assets: Pooled cash and investments $ 15,449,396 $ 8,167,192 $ 48,171,022 Receivables: Accounts 26,512 2,175 197,995 Interest 54,512 22,353 76,865 Loans 7,885,823 - 8,002,634 O) Prepaid costs 1,621 - 1,621 Deposits 1,025 - 1,025 Due from other governments - - 780,852 Advances to other funds 94,524 - 748,524 Property held for resale 865,335 - 865,335 Restricted assets: Cash and investments with fiscal agents 4,622,627 310,707 4,933,334 Total Assets $ 29,001,375 $ 8,502,427 $ 63,779,207 Liabilities and Fund Balances: Liabilities: �r Accounts payable $ 66,338 $ 48,930 $ 1,076,278 Accrued liabilities 13,951 79,550 93,501 Unearned revenues 51,885 33,738 111,753 Advances from other funds - 94,524 106,184 O Deferred revenues - 116,811 Deposits payable - 309,804 309,804 Total Liabilities 132,174 566,546 1,814,331 Fund Balances: Reserved: Reserved for encumbrances 663,507 330,980 2,632,090 Reserved for continuing appropriation 6,160,989 1,390,873 19,867,899 Reserved for prepaid costs and deposits 2,646 - 2,646 Reserved for property held for resale 865,335 - 865,335 Reserved for loans receivables 7,882,339 - 7,882,339 Reserved for advances to other funds 94,524 - 748,524 Unreserved: Designated for special revenue purposes 13,199,861 6,214,028 29,966,043 Total Fund Balances 28,869,201 7,935,881 61,964,876 Total Liabilities and Fund Balances $ 29,001,375 $ 8,502,427 $ 63,779,207 86 ` THIS PAGE INTENTIONALLY LEFT BLANK 87 0 CITY OF PALM DESERT nn� COMBINING STATEMENT OF REVENUES, W EXPENDITURES AND CHANGES IN FUND BALANCES 0 NON MAJOR SPECIAL REVENUE FUNDS m YEAR ENDED JUNE 30, 2004 0 Housing 0 Mitigation Traffic Safety Gas Tax Measure A Fee Revenues: Taxes $ - $ $ 2,260,912 $ 232,209 40 Special assessments collected - - - Intergovernmental revenues - 834,570 1,091,870 �1 Rental income - - - Charges for services - - 300 - Use of money and property 1,114 5,375 60,651 1,561 40 Fines and forfeitures 159,252 - - - Miscellaneous - Total Revenues 160,366 839,945 3,413,733 233,770 Expenditures: Current: General government - - - - Public safety - O Public works 29,798 - Capital outlay - 6,668,206 O Total Expenditures - 29,798 6,668,206 Excess (Deficiency) of Revenues Over(Under) Expenditures 160,366 810,147 (3,254,473) 233.770 O Other Financing Sources (Uses): Transfers in Transfers out (163,633) (843,523) (233,770) Sale of property Total Other Financing Sources (Uses) (163,633) (843,523) (233,770) Net Change in Fund Balances (3,267) (33,376) (3,254,473) 4D Fund Balances, Beginning of Year 34,573 114,542 7,181,669 Fund Balances, End of Year $ 31,306 $ 81,166 $ 3,927,196 $ 88 Schedule 7 Community New Park and • Development Construction Planned Recreation Traffic • Block Grant Tax Drainage Facilities Signals Recycling • $ $ 477,695 $ 212,188 $ 78,906 $ 52,317 $ 121,424 _ _ _ 46,447 • - - - 3,500 - - • 3,554 61,388 62,317 26,951 13,392 47,165 93,580 400 - 100,163 548,544 218,558 539,483 274,505 109,357 165,872 642,156 253,149 - - - - 83,116 • 18,534 - - - 387,471 821,292 77,035 547,255 - 253,149 406,005 821,292 77,035 547,255 83,116 • (34,591) 133,478 (546,787) 32,322 (381,383) 559,040 • (34,591) 133,478 (546,787) 32,322 (381,383) 559,040 51,502 4,807,940 5,516,234 2,231,177 1,193,699 3,81B,371 $ 16,911 $ 4,941,418 $ 4,969,447 $ 2,263,499 $ 812,316 $ 4,377,411 s . 89 m N ®1 CITY OF PALM DESERT nn� COMBINING STATEMENT OF REVENUES W EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2004 n, W Public El Paseo Air Safety Police Library Assessment Quality Grants Foundation District Management Revenues: Taxes $ $ $ - $ Special assessments collected 214,950 Intergovernmental revenues 103,665 - 51,413 n1 Rental income - �V Charges for services - - Use of money and property 765 1,304 Fines and forfeitures - - Miscellaneous 2,814 - Total Revenues 107,244 214,950 52,717 Expenditures: Current: General government - 224,939 17,137 Public safety 66,725 - Public works - Capital outlay 42,163 - - Total Expenditures 108,888 224,939 17,137 Excess (Deficiency)of Revenues O Over(Under) Expenditures (1,644) (9,989) 35,580 Other Financing Sources (Uses): Transfers in - Transfers out Sale of property Total Other Financing Sources (Uses) - Net Change in Fund Balances (1,644) - (9,989) 35,580 Fund Balances, Beginning of Year 5,257 27,601 103,582 Fund Balances, End of Year $ (1,644) $ 5,257 $ 17,612 $ 139,162 90 S • ® Schedule 7 City Wide Landscape Business and Lighting AIPP Child Care Golf Course • License Districts No. 1-15 Maintenance Program Maintenance • $ 48,630 $ 395,441 $ $ $ 1,874,908 503 1,797 3,735 1,933 21,049 49,133 397,238 3,735 1,933 1,895,957 55,800 - 58,859 - 478,167 410,066 55,800 410,066 58,859 478,167 (6,667) (12,828) (55,124) 1,933 1,417,790 62,722 - - • 62,722 (6,667) 49,894 (55,124) 1,933 1,417,790 70,097 267,602 319,263 158,610 1,355,339 • $ 63,430 $ 317,496 S 264,139 $ 160,543 $ 2,773,129 • s s ® 91 al Q► CITY OF PALM DESERT Schedule 7 mm� COMBINING STATEMENT OF REVENUES, V► EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2004 mm V, Redevelopment Agency Total Low Non-Major m Income Housing Special Revenue Housing Authority Funds Revenues: Taxes $ $ $ 5,633,206 Special assessments collected 214,950 Intergovernmental revenues 2,249,389 Rental income 5,509 4,488,589 4,494,098 Charges for services - - 3,800 �) Use of money and property 178,569 67,051 560,174 Fines and forfeitures - - 159,252 Miscellaneous 286,653 211,843 1,243,997 Total Revenues 470,731 4,767,483 14,558,866 Expenditures: Current: General government 1,973,407 4,643,679 7,788,253 Public safety - - 66,725 Public works - 458,398 Capital outlay 3,007,528 - 11,550,950 Total Expenditures 4,980,935 4,643,679 19,864,326 Excess (Deficiency) of Revenues Over(Under) Expenditures (4,510,204) 123,804 (5,305,460) Other Financing Sources (Uses): Transfers in 11,432,726 - 11,495,448 Transfers out (4,523,158) - (5,764,084) Sale of property 924,522 - 924,522 Total Other Financing Sources (Uses) 7,834,090 - 6,655,886 Net Change in Fund Balances 3,323,886 123,804 1,350,426 Fund Balances, Beginning of Year 25,545,315 7,812,077 60,614,450 Fund Balances, End of Year $ 28,869,201 $ 7,935,881 $ 61,964,876 92 ® CITY OF PALM DESERT Schedule 8A • BUDGETARY COMPARISON SCHEDULE • TRAFFIC SAFETY YEAR ENDED JUNE 30, 2004 • Variance with Final Budget Budget Amounts Actual Positive • Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 34,573 $ 34,573 $ 34,573 $ - Resources(Inflows): Use of money and property 2,000 2,000 1,114 (886) Fines and forfeitures 120,000 120,000 159,252 39,252 • Amounts Available for Appropriation 156,573 156,573 194,939 38,366 • Charges to Appropriation (Outflow): Transfers to other funds 137,000 163.633 163,633 • Total Charges to Appropriations 137,000 163,633 163,633 • Budgetary Fund Balance,June 30 $ 19,573 $ (7,060) $ 31,306 $ 38,366 • S • 93 m dl CITY OF PALM DESERT Schedule 8B nn� BUDGETARY COMPARISON SCHEDULE W GAS TAX YEAR ENDED JUNE 30, 2004 m Variance with Final Budget �A Budget Amounts Actual Positive Original Final Amounts (Negative) IW Budgetary Fund Balance, July 1 $ 114,542 $ 114,542 $ 114,542 $ yr Resources (Inflows): Intergovernmental 848,000 848,000 834,570 (13,430) Use of money and property 15,000 15,000 5,375 (9,625) Amounts Available for Appropriation 977,542 977,542 954,487 (23,055) V� Charges to Appropriation (Outflow): Public works - 29,798 29,798 - Transfers to other funds 863,000 873,322 843,523 29,799 Total Charges to Appropriations 863,000 903,120 873,321 29,799 Budgetary Fund Balance, June 30 $ 114,542 $ 74,422 $ 81,166 $ 6,744 O' 0 0 94 CITY OF PALM DESERT Schedule 8C BUDGETARY COMPARISON SCHEDULE • HOUSING MITIGATION FEES YEAR ENDED JUNE 30, 2004 Variance with Final Budget Budget Amounts Actual Positive • Original Final Amounts (Negative) • Budgetary Fund Balance, July 1 $ - $ - $ - $ - Resources (Inflows): Taxes 30,000 30,000 232,209 202,209 + Use of money and property 4,000 4,000 1,561 (2,439) • Amounts Available for Appropriation 34,000 34,000 233,770 199,770 • Charges to Appropriation (Outflow): • Transfers to other funds 34,000 233,770 233,770 - • Total Charges to Appropriations 34,000 233,770 233,770 • Budgetary Fund Balance,June 30 $ $ (199,770) $ - $ 199,770 95 0 QI CITY OF PALM DESERT Schedule 8D m� BUDGETARY COMPARISON SCHEDULE 0 COMMUNITY DEVELOPMENT BLOCK GRANT YEAR ENDED JUNE 30, 2004 m Variance with 0 Final Budget 0 Budget Amounts Actual Positive Original Final Amounts (Negative) 0 Budgetary Fund Balance, July 1 $ 51,502 $ 51,502 $ 51,502 $ Resources (Inflows): Intergovernmental 400,000 400,000 121,424 (2781576) Use of money and property - - 3,554 3,554 Other - - 93,580 93,580 0 Amounts Available for Appropriation 451,502 451,502 270,060 (181,442) Charges to Appropriation (Outflow): General government- nondepartmental 400,000 415,840 253,149 162,691 Total Charges to Appropriations 400,000 415,840 253,149 162,691 Budgetary Fund Balance,June 30 $ 51,502 $ 35,662 $ 16,911 $ (18,751) 0 0 0 0 0 0 0 0 0 96 ® CITY OF PALM DESERT Schedule 8E ® BUDGETARY COMPARISON SCHEDULE EL PASEO ASSESSMENT DISTRICT ® YEAR ENDED JUNE 30, 2004 ® Variance with Final Budget ® Budget Amounts Actual Positive ® Original Final Amounts (Negative) ® Budgetary Fund Balance, July 1 $ 27,601 $ 27,601 $ 27,601 $ - ® Resources(Inflows): ® Special assessments collected 180,000 180,000 214,950 34,950 ® Amounts Available for Appropriation 207,601 207,601 242,551 34,950 ® Charges to Appropriation (Outflow): ® General government- nondepartmental 180,000 225,000 224,939 61 ® Total Charges to Appropriations 180,000 225,000 224,939 61 ® Budgetary Fund Balance, June 30 $ 27,601 $ (17,399) $ 17,612 $ 35,011 ® 97 41 dl QI CITY OF PALM DESERT Schedule 8F mm� BUDGETARY COMPARISON SCHEDULE V� CITY-WIDE BUSINESS LICENSE YEAR ENDED JUNE 30, 2004 Variance with Final Budget in Budget Amounts Actual Positive W Original Final Amounts (Negative) �m Budgetary Fund Balance, July 1 $ 70,097 $ 70,097 $ 70,097 $ Resources (Inflows): Taxes 50,000 50,000 48,630 (1,370) Use of money and property 1,000 1,000 503 (497) Amounts Available for Appropriation 121,097 121,097 119,230 (1,867) Charges to Appropriation (Outflow): General government- nondepartmental 51,000 56,000 55,800 200 Total Charges to Appropriations 51,000 56,000 55,800 200 Budgetary Fund Balance,June 30 $ 70,097 $ 65,097 $ 63,430 $ (1,667) V Q 98 • • CITY OF PALM DESERT Schedule 8G BUDGETARY COMPARISON SCHEDULE • LANDSCAPE AND LIGHTING DISTRICTS NO. 1-15 • YEAR ENDED JUNE 30,2004 • Variance with Final Budget Budget Amounts Actual Positive • Original Final Amounts (Negative) • Budgetary Fund Balance, July 1 $ 267,602 $ 267,602 $ 267,602 $ - Resources (Inflows): Taxes 374,997 374,997 395,441 20,444 • Use of money and property 5,000 5,000 1,797 (3,203) • Transfers from other funds 48,000 48,000 62,722 14,722 Amounts Available for Appropriation 695,599 695,599 727,562 31,963 Charges to Appropriation (Outflow): Public works 418,620 428,266 410,066 18,200 Total Charges to Appropriations 418,620 428,266 410,066 18,200 • Budgetary Fund Balance,June 30 $ 276,979 $ 267,333 $ 317,496 $ 50,163 • • • • • • • 99 dl dl QI fll a a dl a U► a dl dl a al ID �1 THIS PAGE INTENTIONALLY LEFT BLANK �1 a a a a 0 a a a a a a a a a a a a 41 a a a� a 100 41 41 40 40 Other Governmental Funds- Capital Projects • 40 e • • • AV Aw AV Ik- • v a. v m CITY OF PALM DESERT d 4 COMBINING BALANCE SHEET u NONMAJOR CAPITAL PROJECTS FUNDS u JUNE 30, 2004 0 a 0 0 Arts In Capital • Public Projects Drainage Places Reserve Facilites a Assets: o Pooled cash and investments $ 1,810,190 $ 11,973,872 $ 3,075,317 0 Receivables: o Accounts 368 - - • Notes 108,930 Interest - - o Prepaid costs 1,208 - • Advances to other funds - 8,000,000 0 Restricted assets: 0 Cash and investments with • fiscal agents - - o. Total Assets $ 1,811,766 $ 20,082,802 $ 3,075,317 e' P Liabilities and Fund Balances: a Liabilities: e, Accounts payable $ 16,935 $ 273,359 $ 50,259 Accrued liabilities 990 - - a' Deposits payable 105,264 - Total Liabilities 123,189 273,359 50,259 Fund Balances: Reserved: Reserved for encumbrances 84,375 1,956,054 94,852 ` Reserved for continuing appropriation 483,322 4,506,532 1,008,704 �. Reserved for prepaid costs and deposits 1,208 - - �- Reserved for notes receivables - 108,930 Reserved for advances to other funds - 8,000,000 - Unreserved: Designated for capital outlay 1,119,672 5,237,927 1,921,502 ` Total Fund Balances 1,688,577 19,809,443 3,025,058 Total Liabilities and Fund Balances $ 1,811,766 $ 20,082,802 $ 3,075,317 i 102 • Schedule 9 • Parks and CFD Assessment Recreation Indian District No. 94-2 • Facilities Signalization Buildings Library Ridge Sunterrace $ 2,159,831 $ 307,188 $ 3,150,724 $ 271,076 $ 451 $ - • 662 25 4,765,000 - - - - - - 4,768,550 44,243 $ 6,924,831 $ 307,188 $ 3,150,724 $ 271,076 $ 4,769,663 $ 44,268 $ 18,678 $ 900 $ - $ 10,103 $ _ $ 18,678 900 10,103 • 24,164 12,640 24,450 2,099,710 195,652 - 4,765,000 - - - - - • 17,279 97.996 3,150,724 236,523 4,769,663 44,268 • 6,906,153 306,288 3,150,724 260,973 4,769,663 44,268 • $ 6,924,831 $ 307,188 $ 3,150,724 $ 271,076 $ 4,769,663 $ 44,268 . 103 CITY OF PALM DESERT COMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECTS FUNDS JUNE 30, 2004 Assessment Assessment District No. 94-3 District No. 98-1 Bighorn Merano Bighorn Series B Assets: Pooled cash and investments $ - $ - $ Receivables: Accounts Notes - - Interest 179 479 ®' Prepaid costs - - Advances to other funds - - Restricted assets: Cash and investments with fiscal agents 315,428 835,421 i Total Assets $ 315,607 $ 835,900 $ lei Liabilities and Fund Balances: 9 Liabilities: 401 Accounts payable $ - $ - $ Accrued liabilities 40 Deposits payable AD Total Liabilities OI al Fund Balances: �n Reserved: v' Reserved for encumbrances - - - �) Reserved for continuing appropriation - - - Reserved for prepaid costs and deposits - - - Reserved for notes receivables - - - �) Reserved for advances to other funds - - - ®) Unreserved: Designated for capital outlay 315,607 835,900 �) Total Fund Balances 315,607 835,900 �) Total Liabilities and Fund Balances $ 315,607 $ 835,900 $ a� a� a� a� d� m m a� 104 n®) W ® Schedule 9 ® Total ® Non-Major ® Town Center Silver Capital Projects ® Parking Lot Spur Ranch Funds ® $ 1,424,893 $ 1,920 $ 24,175,462 ® - - 368 ® - 108,930 ® 142 1,487 - 1,208 ® - 12,765,000 - 197,173 6,160,815 ® $ 1,424,893 $ 199,235 $ 43,213,270 ® $ 1,424,893 $ 61,168 $ 1,856,295 ® - - 990 ® - - 105,264 ® 1,424,893 61,168 1,962,549 109,548 2,306,083 ® - 8,293,920 ® - 1,208 108,930 ® - 12,765.000 ® - 28,519 17,775,580 ® 138,067 41,250,721 ® $ 1,424,893 $ 199,235 $ 43,213,270 ® 105 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES �I NONMAJOR CAPITAL PROJECTS FUNDS �I YEAR ENDED JUNE 30, 2004 Arts In Capital Public Projects Drainage lei Places Reserve FacilitiesRevenues: 1 Licenses and permits $ 262,764 $ $ - lei Intergovernmental revenues - 158,630 26,047 Use of money and property 21,514 383,993 39,665 Miscellaneous 200 951 - lei Contributions from property owners - - - Total Revenues 284,478 543,574 65,712 Expenditures: Current: General government 188,185 4,650,000 - lei Public works - 378,575 2,335 �I Capital outlay 88,464 3,645,296 455,470 Debt service: �I Principal retirement - 250,000 - �1 Total Expenditures 276,649 8,923,871 457,805 ®I Excess (Deficiency)of Revenues �I Over(Under) Expenditures 7,829 (8,380,297) (392,093) Other Financing Sources (Uses): Transfers in - 11,055,630 - Transfers out (804,000) - �) Sale of property 804,000 - �1 Total Other Financing Sources �) (Uses) 11,055,630 - �) Special Item: O) Refunding of special assessment debt a) Net Change in Fund Balances 7,829 2,675,333 (392,093) ®I Fund Balances, Beginning of Year 1,680,748 17,134,110 3,417,151 a� Fund Balances, End of Year $ 1,688,577 $ 19,809,443 $ 3,025,058 41 41 al dl 41 106 is 41 • • Schedule 10 • • • • • Parks and CFD Assessment Recreation Indian District No. 94-2 Facilities Signalization Buildings Library Ridge Sunterrace $ $ $ $ $ $ 99,188 3,702 37,927 34,236 191 • - - - 500 _ • • 99,188 3,702 37,927 500 34,236 191 • - - _ 268,698 - - 19,710 2,100 145 • 127,333 - - • 147,043 2,100 268,698 - 145 • • (47,855) 1,602 37,927 (268,198) 34,236 46 • • - - 70,000 - - 70,000 • (47,855) 1,602 37,927 (198,198) 34,236 46 6,954,008 304,686 3,112,797 459,171 4,735,427 44,222 $ 6,906,153 $ 306,288 $ 3,150,724 $ 260,973 $ 4,769,663 $ 44,268 • • • • 107 • CITY OF PALM DESERT ®i COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES lei NONMAJOR CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2004 �I lei Assessment Assessment District No. 94-3 District No. 98-1 Bighorn lei Merano Bighorn Series B �1 Revenues: �V Licenses and permits $ - $ - $ Intergovernmental revenues - - Use of money and property 1,369 45,853 Miscellaneous - - - Contributions from property owners - 867,518 1,228,451 Total Revenues 1,369 913,371 1,228,451 401 Expenditures: 411 Current: lei General government - - - Public works 1,043 436,377 1,228,451 ®) Capital outlay - - - Debt service: JP) Principal retirement - - - Total Expenditures 1,043 436,377 1,228,451 ®) Excess (Deficiency) of Revenues Over(Under) Expenditures 326 476,994 - Other Financing Sources (Uses): Q Transfers in Transfers out - �) Sale of property - Total Other Financing Sources a) (Uses) - Special Item: a) Refunding of special assessment debt - (8,706,206) �) Net Change in Fund Balances 326 (8,229,212) ®) Fund Balances, Beginning of Year 315,281 9,065,112 Q Fund Balances, End of Year $ 315,607 $ 835,900 $ Q) dl n®� 108 e Schedule 10 Total • Non-Major Town Center Silver Capital Projects Parking Lot Spur Ranch Funds • $ $ $ 262,764 184,677 5,909 673,547 - 1,651 2,095,969 • 5,909 3,218,608 • 2,129 - 5,109,012 - 2,370,432 4,439,168 • - 4,316,563 ® - - 250,000 2,129 2,370,432 14,114,743 (2,129) (2,364,523) (10,896,135) • - 11,125,630 (10,379,245) - (11,183,245) • 804,000 ® (10,379,245) - 746,385 - (8,706,206) (10,381,374) (2,364,523) (18,855,956) 10,381,374 2,502,590 60,106,677 $ $ 138,067 $ 41,250,721 . 109 a �I a a a o► a a a► a a► THIS PAGE INTENTIONALLY LEFT BLANK �1 a a a a �I a a a a a a a a a� a� a� ai ai ai ai ai ai 110 aI • • • • • • • • Agency Funds • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • a� a► �► a► o► o► ®► o► a► a► a► o► a► �► �► �--�--� a �► '� ���. . �, �► a► �► �► a► a► �► a► a► a► a �► a► m a► . AGENCYFUNDS • Agency Funds are used to account for assets held by the city as an agent for individuals, private organizations, other governments and/or funds. Agency Fund - This fund is used to account for deposits placed with the City by developers, • individuals and groups to obtain future services. Deposits are reduced by disbursements and/or • refunds to the depositors when the cost of services are determined. • Treasurers 1991 Bond Act - This fund is used to account for the assets held on behalf of the assessment district's property owners until they are remitted to the bondholders. • Retiree Service Stipend Fund - This fund is used to account for assets held to pay for the retiree service stipend. • Special Assessment Funds - These funds are used to account for the collection of special assessments and the future payment of debt service related to bonds issued. 111 a► CITY OF PALM DESERT Schedule 11 a COMBINING BALANCE SHEET �) ALL AGENCY FUNDS �) JUNE 30, 2004 Treasurers Retiree Special aP 1991 Bond Service Assessment m Agency Act Stipend Fund Funds Totals !l, Assets: QP Cash and investments $ 1,677,716 $ 274,514 $ 7,605,609 $ 7,196,894 $ 16,754,733 m Receivables (net of alowance for uncollectibles): aP Accounts - - 27,645,360 27,645,360 QP Interest - 16,319 2,008 18,327 Total Assets $1,677,716 $ 274,514 $. 7;621,928 - $34,844,262 .$ 44,418,420 m �r Liabilities: Accounts payable $ - $ - $ 228 $ 9,913 $ 10141 �n Deposits 1,677,716 274,514 7,621,700 34,834,349 44,408:279 �1► Total Liabilities $1,677,716 $ 274,514 $ 7,621,928 $34,844,262 $ 44,418,420 a' �P m� V► aP QI aP ®P �P +01 aP 41 41 dl 41 di 41 41 41 112 THIS PAGE INTENTIONALLY LEFT BLANK 113 Q► CITY OF PALM DESERT Schedule 12 COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS Q) YEAR ENDED JUNE 30, 2004 Na) V� Balance Balance July 1, 2003 Additions Deletions June 30, 2004 40 Agency ®P Assets: Cash and investments $ 1,778,081 $ 1,289,169 $ 1,389,534 $ 1,677,716 W Total Assets $ 1,778,081 $ 1,289,169 $ 1,389,534 $ 1,677,716 a� Liabilities: Deposits $ 1,778,081 $ 1,289,169 $ 1,389,534 $ 1,677,716 ®) Total Liabilities $ 1,778,081 $ 1,289,169 $ 1,389,534 $ 1,677,716 of iahP Treasurers 1991 Bond Act V' Assets: a0 Cash and investments $ 10,126 $ 264,388 $ $ 274,514 Total Assets $ 10,126 $ 264,388 $ $ 274,514 Liabilities: Deposits $ 10,126 $ 264,388 $ $ 274,514 �1v Total Liabilities $ 10,126 $ 264,388 $ $ 274,514 Qt Retiree Service Stipend Fund Assets: ®P Cash and investments $ 5,798,655 $ 5,006,475 $ 3,199,521 $ 7,605,609 ne Receivables (net of allowance !!� for uncollectibles): ®� Interest 16,319 16,319 16,319 16,319 ®� Total Assets $ 5,814,974 $ 5,022,794 $ 3,215,840 $ 7,621,928 aP Liabilities: Accounts payable $ 3,215,840 $ 228 $ 3,215,840 $ 228 QB Deposits 2,599,134 5,022,566 - 7,621,700 nQB Total Liabilities $ 5,814,974 $ 5,022,794 $ 3,215,840 $ 7,621,928 VB dB 4B 4B 41 41 41 114 41 41 • CITY OF PALM DESERT Schedule 12 COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES • ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2004 Balance Balance July 1, 2003 Additions Deletions June 30,2004 • ' Special Assessment Funds Assets: Cash and investments $26,213,982 $ 8,657,101 $27,674,189 $ 7,196,894 • Receivables (net of allowance for uncollectibles): Accounts 40,435,676 3,228,155 16,018,471 27,645,360 • Interest 12,815 2,008 12,815 2,008 Total Assets $ 66,662,473 $11,8137,264 $ 43,705,475 $ 34,844,262 • Liabilities: Accounts payable $ 4,997 $ 9,913 $ 4,997 $ 9,913 Deposits 66,657,476 5,714,165 37,537,292 34,834,349 Total Liabilities $ 66,662,473 $ 5,724,078 $ 37,542,289 $ 34,844,262 Totals -All Agency Funds Assets: • Cash and investments $ 33,800,844 $ 15,217,133 $ 32,263,244 $ 16,754,733 Receivables (net of allowance for uncollectibles): • Accounts 40,435,676 3,228,155 16,018,471 27,645,360 • Interest 29,134 18,327 29,134 18,327 • Total Assets $ 74,265,654 $18,463,615 $ 48,310,849 $ 44,418,420 • Liabilities: t♦ Accounts payable $ 3,220,837 $ 10,141 $ 3,220,837 $ 10,141 • Deposits payable 71,044,817 12,290,288 36,926,826 44,408,279 Total Liabilities $ 74,265,654 $12,300,429 $ 42,147,663 $ 44,418,420 115 +0► /1► il► a► a► a► a► a► a► THIS PAGE INTENTIONALLY LEFT BLANK a► a► al ®P QP a► ®1 a9 QI dl 41 • 41 41 41 41 41 41 41 41 116 41 41 • • • • • • • Statistical Section • S • • • • • • • • • • a • • • • • • • • • • • • • • • • • • • • Ip QI �h ���-� o 0 0 ��.. � . � • • d ExPenses statistics gevenue and a , Californi city of Palm 1 • • • • • • • • • • • • • • • • • • • • 0 117 0 dl City of Palm Desert Government-wide Expenses by Function Last Five Years (1) -_-.iFu_nctioi 0_1 .Z7- ?R -�f2003/2QO_4� 20 04--. -""000/209_1�&, 1999/20 1.4 MM G6hd—r5Fj9q_y&Mm6fit $28,402,902 $21,055,957 $20,830,544 $ 18,625,329 $ 15,987,467 Public safety_za 21, 15,420,151 15,601,833 14,547,981 12,744,434 12,291,265 PuIJIICWorks��-� ' 5.2 13,046,864 23,009,640 19,686,164 15,595,997 21,649,952 Parks,�recreation 5'6i� t ®R 3,977,447 3,480,264 3,775,417 3,542,671 7,503,822 a .-a gencies2kill 24,051,292 22,140,837 17,734,171 14,317,974 10,397,422 Interestlon long;term WdebtT:,` 14,124,371 14,443,467 15,271,200 16,224,248 16,380,712 Golf Course Desert W* 6,657,220 6,653,242 6,629,866 6,901,576 6,797,094 R 570,135 511,272 534,865 1,481,938 440,223 To $106,250,382 $106,896,512 $99,010,208 89,434,167 $91,447,957 (1)City has only five years of expenses using the new financial model. Source: City of Palm Desert Audited Financial Statements City of Palm Desert Government-wide Revenues • Last Five Years (1) • Program.and General Revenues 200312004 2002/2003 2001/2002 2000'2001 '999/200D Program Revenues • Charges for services $17,926,484 $17,334,608 $ 17,038,841 $ 17,115'089 $ 17,406,283 Operating grants and contributions 4,632,297 6,249,955 5,568,966 4,607,448 41180,474 Capital grants and contributions 7,402,109 4,740,000 4,442,917 5,844,132 16,300,977 • General Revenues Taxes 87,551,146 79,129,316 73,257,210 66,975,636 59,416,203 Special Assessment Collected - 2,168,069 - - - • Gain(loss)on sale of assets 937,006 204,000 764,000 159,018 Other revenues -6,853,977 3,997,338 4,971,773 7,113,762 2,154,731 Use of money&property 2,985,463 3,378,266 6,388,234 11,539,085 8,727,125 • Total' $113,643,522 $116,060,546 $ 111,871,941 $ 113,959,152 $ 108,344,811 S (1)City has only five years of revenues using the new financial model. • Source: City of Palm Desert Audited Financial Statements • -119- m m al Revenue and Expenditures Statistics 0 City of Palm Desert, California 0 0 0 0 a a a 0 0 40 0 0 u -120- 4 0 0 City Of Palm Desert Historical Revenue and Expenditures Combined General, Special,Debt Service and Capital Project Last Ten Fiscal Years ' F 20031200A 2002l2003 r `200112002 = 20,00/20oT 1 99 91200 0. /l Revenue Type; �J Taxes - '' $ 93,948,185 $ 83,762,760 $ 78,631,363 $ 72.173.943 $ 65,850,439 Use of.Money and Property 8,735,604 9,068,422 11,537,388 17,995,716 14,949,739 0 Intergoveritmenial Revenues:- - - 6,067,555 11,488,993 10,581,051 6,463,484 5,058,242 O Sales of property - - 979,5331 765,279 767,500 831,948 O Special Assessments Colledite_d 214,950 707,434 193,909 188,591 160,687 Licenses and P6Rr111S , 1,316,669 1,286,262 1,417,012 1,511,652 1,606,114 6 ChargesforServices 1,052,457 873,605 975,541 845,097 914,594 O Recovery of Investment Loss.': - 0 0 0 0 0 Fines and Forfeitures 306,630 367,903 305,197 238,872 359,655 O Oth�nues: 4,179,567 2,440,929 1,391,276 11,035,100 12,GN,282 Totat Revenue 4 5) 115,821,627 110,975,841 105,799,316 111,219,955 115,512,272 / Expenditures Curient' � O -Gei1e(at GovY de artmentaC< 27,122,532 20,034,295 10,570,028 10,343,127 9,505,179 51 Glin;ra1 GOvt[,110R-de artmental . ., 24,051,292 - 8,624,068 6,943,486 4,904,499 Public;Safe _ 15,290,696 15,410,711 14,368,399 12,598,263 12,288,224 Rublie Works _ il : 10,153,096 20,631.322 17,657,120 13,167,046 5,496,375 (J , Park;-Recreation and Culture. 2,638,386 2,656,809 2,580,841 2,434,884 1,970,888 O Capital Outlay; . , 18,927,787 36,687,223 1 17,159,885 14,330,725 49,355,219 O Debt Service(1) . _ 45,015,756 38,389,539 37,215,381 16,961,290 16,410,034 Othef Combined' andRures 2 21,600,505 14,9o2,584 14,317,974 10,397,422 0 Total Ez enditures 4 5 - 143,199,545 155,410,404 123,078,312 91,096,795 125,356,502 Excess,of Revenues Over(Under), ( 7,377,918) $ (A4,A3A,563) $ (17,278,996) $ 20,123,1 4A 60 $ (9,8 ,230) 0 . . $ 2 O ExpediEures'(3) c 0 (1)Debt Service is any combination of bond discount,frond issue costs, interest and fiscal charges,principal retirement and repayment of advances. (2)Other Combined Expenditures is any combination of bad debt expense,loss on investment,cost of inventory 0 sold,decline in value of inventory held for resale,Educational Revenue Augmentation Fund',payment to other 0 agencies,cost of land and arbitrage rebate. (3)Excess Expenditures are due to the Capital improvements being spent after collecting the fees or using bond proceeds. *Educational Revenue Augmentation Fund-In connection with its approval of a budget for the 1993-94 fiscal 0 year,the State Legislature enacted Senate Bill 1135 which,among other things,realloacted approximately$65 0 million from redevlopment agencies to a State Education Revenue Augmentation Fund(ERAF)for the benefit of school districts by shifting approximately 5.675%of each agency's tax increment,net of amounts due to 0 their taxing agencies,to the ERAF for the benefit of school districts for the current and next fiscal years. The amount required to be paid by a redevelopment agency under such legislation is apportioned among all of its 0 redevelopment project areas on a collective basis,and is not allocated separately to individual project areas. (4)Fiduciary Funds are not included in totals. (5)Interfund Transfers In/Out, proceeds from bonds and proceeds from notes are not included in totals �J (6)Per GFOA Special Assesments levies and collections for ten year schedules are no longer required. Source: City of Palm Desert Audited Financial Statements J 121 a► City Of Palm Desert ®► Historical Revenue and Expenditures a) Combined General, Special,Debt Service and Capital Project Last Ten Fiscal Years a� M s c=»�rc +M, .sc -v. N 'x i:. ®► mow- x F�Y1998/1999' 41997/.t998�, - .-�1996M99T 1995%�1996 ,� '1994/�1995 Revenue Type a Taxes ;'+ , r $ 57,251,012 $ 51,058.766 $ 47,163,127 $ 45,253,057 $ 43,903.619 USe10f Money andyProperty�`_-- ' 12,357,206 $ 11,461,409 9,904,514 9,724,426 5,229,765 ®► IntergOvemmental Reve ueS_'m 3,733,553 $ 5,104,695 6,895,551 13,926,934 8,626,030 Salesxofproperty',,, � � 589,407 $ 16,612,425 6,433,296 1,031,764 0 a► SpecialiAssessmentssCollected y 165,971 $ 218,925 542,100 438,549 432,872 UcenSes and Permit5l 2,054,410 $ 1,672,191 1,243,229 1,022,087 ROTCohtnhtaCeearsaglr ReR2Ysei d f2oje FrnhOSuurfeeeem sjlf 4euc)are(s5S�)' .`_.. :h' '.,_:-�: Ez 1'006,06 1,126,350 $ 939,963 556,480 539,398 534,354 �aaV ReryovsttenLo 999,718 $ 336,213 438,711 0 47,176 8280,384 $ 163,523 105,600 83,498 7 , 72 4,165,68 2,681,462 940,323 691,339 01596,905,91 80,787,274 76,866,958 ►') ®► Expenditures M .� m Curze its VI GeneraltGovtde artmental 9,895,799 8,499,876 8,812,854 8,479,993 8,621,141 GeheTal'GOvt non de rtmental 3,538,256 2,865,252 2,828,675 7.191,765 4,777,722 11.475,231 10,957,552 9,213,399 7,660,837 8,498,700 fgublF Works' R " "� ,) 5,233,575 3,959,509 6,032,388 4,909,366 2,513,937 �Ratk,RecreatwnyandCulturQ�� 2,361,873 1,974,216 1,213,019 1,190,679 1,334,452 �) CaptaOUtlay 34,651,149 81,122,212 30,224,801 28,444,639 27,655,049 Debf SemCe(t) 25,804,222 21,396,296 31,012,505 12,401,236 1,903,000 Othert,Gombmed,Ezpenddures((2) �; 2,921,309 7,100,023 12,630,970 16,392,832 7,283,974 III TotalEx endrtures 4'`5 '- �E 107,320,170 142,519,961 106,406,350 90,470,320 76,339,012 Excess'of Revenues"Over(Und111 er)A -ap, (3)u '' $ (10,414,255) $ (44,256,990) $ (25,619,076) $ (13,603,362) $ (11,317,667) a) (1)Debt Service is any combination of bond discount,bond issue casts, interest and fiscal charges, principal a) retirement and repayment of advances. Q) (2)Other Combined Expenditures is any combination of bad debt expense, loss on investment,cost of inventory V� sold,decline in value of inventory held for resale, Educational Revenue Augmentation Fund%payment to other V agencies,cost of land and arbitrage rebate. ®) (3)Excess Expenditures are due to the Capital improvements being spent after collecting the fees or using bond proceeds. �) 'Educational Revenue Augmentation Fund-In connection with its approval of a budget for the 1993-94 fiscal a) year,the State Legislature enacted Sentate Bill 1135 which,among other things, realloacted approximately$65 million from redevlopment agencies to a State Education Revenue Augmentation Fund(ERAF)for the benefit of school districts by shifting approximately 5.675%of each agency's tax increment, net of amounts due to a) their taxing agencies,to the ERAF for the benefit of school districts for the current and next fiscal years. The amount required to be paid by a redevelopment agency under such legislation is apportioned among all of its redevelopment project areas on a collective basis,and is not allocated separately to individual project areas. ®I (4)Fiduciary Funds are not included in totals. (5) Interfund Transfers In/Out, proceeds from bonds and proceeds from notes are not included in totals a� Source: City of Palm Desert Audited Financial Statements ®I a 122 a a . City of Palm Desert Graphs- Historical Revenue and Expenditures Combined General,Special, Debt Service and Capital Project • Last Ten Fiscal Years • • Combined Revenues • • $140,000,000 ❑Series6 • 5120,000,000 ■Series4 • V00,000,000 • $80,000,000 -' 0Senes5 • $60,000,000 •" ❑Series3 • $40,000,000 • N 0 Series2 $201000,000 • 40 ■Seriesl • • Combined Expenditures • $180,000,000 ®Other Combined • SI60,0001000 Expenditures(2) • $140,000,000 ®Special • $120,000,000 Assessments $100,000,000 • $80,000,000 ❑Debt Service(3) . $60,000,000 840,000,000 - • 520,000000 ■Capital Outlay • $0 a 8 S 8 R 5 ■Curtent(4) • (1)"Other Combined Revenues"is any combination of sales of inventory,licenses and permits,charges for • services,recovery of investment loss,fines and forfeitures,and other revenues. • (2)"Other Combined Expenditures"is any combination of bad debt expense,loss on investment,cost of inventory sold,decline in value of inventory held for resale,Educational Revenue Augmentation Fund', • payment to other agencies,cost of land and arbitrage rebate. (3)"Debt Service"is any combination of bond discount,bond issue costs,interest and fiscal charges,principal retirement and repayment of advances. • (4)"Current"is any combination of general government(departmental and non-departmental),public safety, public works,and parks,recreation and culture. • • 40 Source: City of Palm Desert Audited Financial Statements • • • • • • • -123- City Of Palm Desert Vr Historical General Revenue and Expenditures Last Ten Fiscal Years � 7 i .,<e t *wt e`er' i:r'�•t" `'2003/2004 2002/2003'"".M01%2002°. *Z000/2001 -1999/2000•''.' a W Taxesb?;', 30,887.340 $ 27,588,464 $ 26.676,756 $ 27,225.965 $ 26,783,123 use o6Money and'Froperty s - 1.135,952 1,573,165 2,379,764 3.147,544 2,688,963 Intergovemmental:Revenues 3,633,489 4,840,161 3,778,651 4,410,048 2,980,751 Licenses`and Permits 1,053,905 960,080 1,133,922 1,170.926 1,239,693 Charges for Services:- - - 1,048,667 868,2SS 975.841 845.097 914.594 Recovery of Itiyestmen[Loss „ 0 0 0 0 0 Fines ar d Forfeitures,'- F 147,378 164,575 170,534 139,269 140,896 Other Revenues r 178,016 244,959 172,397 158.079 585,605 Total Revenue(1) 38,084,747 36,239,659 35,287,865 37,096,928 35,333,625 Expendttures nT .�., -. Current= r - Geneia]Govt departmentalp 10,497,307 10,431,622 10,204,026 8,606,552 7,950,575 'General Govt non depaRmental j. 0 553,253 843,00E 710,405 733,870 13,052,963 12,405,418 12,119,147 10,92U00 10,499,038 Public`�Works � r.n ��„ 5,255,530 6,580,693 4,612,488 5,561,427 5,189,349 Capital Outlay =£ ,,` "_% 230,557 2,307,796 581,652 669,238 �t Pai k Recrea Lqn and Culture ' 2,638,386 2,656,809 2.580,841 2,434,884 1,970,888 Total'Ex eridi[ures l ' ' 31,674,743 34,935,591 30,941,156 28,902,706 26,343,720 Excess'ofzRevenues:Oven(Under) 6,410,004 $ 1,304,068 $ 4,346,709 $ 8,194,22E $ 8,989,905 Expeditures (1) Interfund Transfers In/Out are not included in totals. 4) �1 40 Source: City of Palm Desert Audited Financial Statements �I �I -124- . City Of Palm Desert • Historical General Revenue and Expenditures • Last Ten Fiscal Years s Yz FY 1998/1999997/199$ 1996/19,97 1995/1996 7994/]995 �. ReHen 1, ' + • 23,452,941 $ 21,232,260 $ 19,829,410 $ 17,569,056 $ 16,358:806 USe�ofMoney-anZ'( roPerty•' 2,169,894 2,168,056 2,172,618 1,583,596 1,661,499 Interaovemulenta7Revenues.=, 2,586,521 2,299,888 2,193,319 3,177,260 1,665,010 • L�cens sand Arf"11- 1,570,3971,570,397 1 1,399,380 833,441 809,693 775,795 CharmesgforSemces� v .w jj t 1,126,350 939,963 556,480 539,398 534,354 ke"vco�very nvesrinent'[.oss _x 160,158 0 0 0 75,087 Fnes,`�''apd�rotffez ure-'"s ., :' , s'€'; 133,822 121,073 68,349 55,470 53,470 Ot MMM MY M " 376,605 395,188 366,232 112,064 84,202 . Total Rev nev uet`31 ,. 31,576 688 28,555 808 26,019,849 23,846,539 21,208,223 Crurrena 7 ou • e eral Chg�3'Yzwd`e`par'trnental _ 7,364,325 6,738,391 6,873,931 6,679,393 7,124,525 • GenecaMGovtsn n'='de artmental, ,,. - 719,866 457,343 340,061 409,020 138,931 • ,. P tµ`6Safet'y 'e '`' 'tea 9,694,478 9,105,901 7,493,114 6,861,919 6,788,829 4,919,357 3,657,256 5,644,239 4,527,291 2,158,088 Gap}ta{�dutlay'" .^ 0 0 • `P r` ReeTeation`atidFCulture_`- 2,361,873 1,974,216 1,213,019 1 1,190,6791 1,334,452 • TotalEx endttu" 'gs 7.. `-' 25,059,899 21,933,107 21,564,364 19,668,302 17,544,825 Excess 0111ik In Dver(Qnder) • 'up?4' = S. x '* 'k -s a $ 6,516,789 $ 6,622,701 $ 4,455,485 $ 4,178,237 $ 3,663,398 • Exped�tures 40 (1)InterfLnd Transfers In/Out are not included in totals. • • • Source: City of Palm Desert Audited Financial Statements 0 . -125- 0 City of Palm Desert is Historical General Fund Actual Statement of Revenues a� (Including Transfers In) Last Ten Fiscal Years ag FY 2003l1004 s 2002/20033 '� 200]/200 2000/2001999l2000 .even...: u R Y!► RevenuekType Sales3Tax _MW a { $ 15,138,424 $ 13,463,197 $ 13,027,395 $ 13,619,607 $ 13,203,564 Trapsient,�,Ocenpancy Tax",��"�.��. 7,660,831 6,816,682 7,043,454 7,385,707 7,280,625 �) 3,369,711 3.078,047 2,765,556 2,466,758 2,393,368 1,135,952 1,573,165 2,379,764 3,147,544 2,688,963 �) TSansfer ln% 1,092,475 2,45Q 600 870,624 934,039 957,817 Frauch[ses� 2,417,856 2,199,663 2,131,920 1,991,697 1,837,806 Spate Subventions sf `'.'M' 7y 2,020,583 2,634,949 2,555,811 2,262,535 1,991,034 Butl�ng CG:rading_Pe*jtQ W- 970,826 876,372 1,064,097 1,101,743 1,182,392 gelmbursment * ° '' 1,547,862 1,367,303 1,036,133 2,125,784 958,858 eu'-. sr mess lccnse Tax$us40 } y & cK yam` 955,501 961,675 898,113 826,591 749,831 Ttm se h e'Mth�ahonFeel 392,988 262,403 158,302 265,350 553,800 P.lanec Feesr 459,046 472,356 612,845 623,936 538,590 �) &opertyTransfer�Tax„� .�� 870,415 689,147 497,967 578,238 698,934 Othe=Revenges,(2) ,„„ 1,144,752 1,845,700 1,116,608 711,438 1,255,860 nTM.a .a TotaUGeneral Ri venuer - $ 39,177,222 $ 38,690,259 $ 36,158,489 $ 38,030,967 $ 36,291,442 s.'*v+s x ::nsxrs.:e.^m r x �19981199 1997/1998 1996l. 99 1995/F 199- t"0 941,1995 ;, I RevenueaType - `�' ®I S�aeszTax $ 10,877,715 $ 9,594,560 $ 8,942,146 $ 8,133,542 $ 7,222,169 �) Transten40ccupancy�Tax ...:; 6,725,876 6,135,811 5,459,239 4,919,263 4,653,958 I 2,417,572 2,306,753 2,597,674 1,757,609 1,923,273 2,169,894 2,168,056 2,172,618 1,583,595 1,632,004 Ti nsferi�ln ',r` ., �agF`1*�m 1,026,956 1,048,970 1,714,582 678,676 855,671 �I r " 5 1,612,054 1,54Q656 1,395,523 1,360,554 1,287,902.1;,rapchxsesa4 I Sfa Suu' vve'nlions 11 a-A. �x�� 1,679,519 1,494,346 1,365,641 1,393,615 1,016,910 lei r Butldmg&�GTadmEyermrts ��.. 1,5t7,286 1,339,825 783,862 768,247 728,875 Re mburs[nents�;,Y,..w, Via: 830,198 730,772 768,421 1,717,264 600,213 BusmeSs,l,.�censwe,T, axe ;� 744,444 684,601 641,877 598,704 588,129 Tim sh elt�itigaton F,ee,: `` ,, s 476,050 458,900 429,750 501,150 450,150 Plan Ckie kFees ��: ,," 966,757 660,307 414,510 359,525 320,955 Pro er�T.ax-�.-�,��� ,� 516,513 436,631 289,783 252,189 191,808 OtheB-,evenUes„(2r,,} � ;, 1,142,810 1,004,590 758,805 501,282 591,877 -•. ' tee: -4„R..�, Totali_General`jRe@enuer, - A. $ 32,603,644 $ 29,604,778 1 $ 27,734,431 $ 24,525,215 $ 22,063,894 (1)State Subventions is any combination of trailer coach fees,motor vehicle and off-highway in-lieus,and subventions from state. (2)Other Revenues is any combination of miscellaneous penalties and interest,permits,grants,parking bails, fees, sales of maps and publications,vehicle and court fines and other revenues. Source: City of Palm Desert Audited Financial Statements -126 ® City of Palm Desert • Historical General Fund Actual Statement of Revenue (Including Transfers In) . Last Ten Fiscal Years • $45,000,000 $40,000,000 $35,000,000 • $30,000,000 • $25,000,000 ❑Combined Other � (1> • $20,000,000 • $15,000,000 ❑Interest $10,000,000 ❑Property Tax • $5,000,000 n I• s0 ❑Transient • yp ,., n o p„, aqp ,p Occupancy Tax 8 $ « H m m a m m m IS Sales Tax . LL LL LL LL LL LL LL LL LL LL • (1)Combined Other is any combination of transfers,franchises,state subventions*,building and grading permits,reimbursements,business license taxes,timeshare mitigation fees,plan check fees,property transfer taxes. It also may include any combination of miscellaneous bails, fees, Imes, grants, • incomes,penalties,permits, sales and taxes. • *State Subventions is any combination of trailer coach fees,motor vehicle and off-highway in-lieus, and • subventions from state. • • ® Source: City of Palm Desert Audited Financial Statements • • • -127- dl City of Palm Desert Historical General Fund Actual Statement of Expenditures Q) (Including Transfers Out) Q) Last Ten Fiscal Years m� F Y � 2003/22004'a 2002/2003 2001/2002` 2000/2001 999/2000 ; V, Ezpe dtture� - $ 11,432,803 $ 10,869,991 $ 10,732,159 $ 9,489,468 $ 8,841,693 C"IyAdmmt tratron,(2)..%w 5,999,228 6,573,351 6,461,706 4,972,981 4,617,682 Ppbhc Work�s�Admmrstiahon'�� ° 2,270,854 1,937,184 1,745,513 1,764,947 1,673,434 C n"i ,P onrombbons:-xe�4 ,: 1,420.717 1,654,768 2,262,129 2,052,281 1,676,995 StieetMamtetiance r �- 1,411,018 1,323,955 1,378,064 1,455,268 1,451,917 BuildmgiSafety 1,620,160 1,535,427 1,386,988 1,201,802 1,134,696 a) Stieet7 surf ctng �; �6 897,153 2,078,218 608,616 1,422,637 1,028,354 �) Pul he Works 676,505 1,007,637 880,295 918,575 1,035,644 Other�EeMures.( 1+ „ 6,805,633 14,228,641 7,052,549 8,398,278 11,503,552 �l TotalE peniLres � $ 32,534,071 $ 41,209,172 $ 32,508,019 s 31,676,237 $ 32,963,967 s rFYX199811999�' a x� 1997%19 8 �19961997 , *9 1946E 1994/]995 * �1 u' d 2�': o-a , t-�_. tr:iur41.+.z"k �? ?f. ..' 14 E�xpendtture ^ �) - r Public Safety(L) £t $ 7,932,755 $ 7,600,456 $ 6,023,208 $ 5,847,414 $ 5,691,616 CityAdmrmstraClon(2) 4,375,851 3,966,163 4,383,993 3,816,262 3,327,681 Public Works'Admlmstratiorr tj& 1,607,836 1,649,970 2,413,334 2,237,745 1,330,248 �) r. CommumtyPronronons � ,;A 1,677,282 1,683,191 1,484,691 1,662,037 1,304,394 StteetMamte ancegr� ' 1,515,287 1,097,782 1,327,167 1,357,312 1,177,970 Biuldmg'Sa£etypi s � ' 1,424,124 1,257,458 1,255,092 899,604 868,344 OI va ' �} L ti 86I,490 19Q003 1,177,944 406,440 257,430 �)StteetR fa sur 'acing Pu�blicW,o k t 3EBY% 934,744 719,501 725,794 525,359 821,304 Other,Expendttures(3) 6,161,641 9,664,696 4,214,557 2,965,877 2,818,092 T,otalYExpendttures $ 26,491,010 $ 27,829,220 $ 23,005,780 $ 19,718,050 $ 17,597,079 (1)Public Safety is any combination of animal regulation,development services,nuisance abatement,police �) services,demolition,and traffic safety expenditures. I (2)City Administration is any combination of administrative services, auditing,City attorney,clerk,council and �) manager,data processing,elections, finance,general services,human resources,insurance, legal special services, legislative advocacy and unemployment insurance expenditures. �) (3)Other Expenditures is any combination of aquisitions,centers,committees, contributions, community ®) development, Hautline, newsletter,health and welfare,interfund transfers,parks,recreation and culture, and code enforcement. O) Source: City of Palm Desert Audited Financial Statements �) �I -128- �� • City of Palm Desert • Graph-Historical General Fund Actual Statement of Expenditures (Including Transfers Out) Last Ten Fiscal Years • $45,000,000 • $40,000,000 • $35,000,000 • $30,000,000 ❑Combined Other(]) . $25,000,000 • $20,000,000 • ❑Community lost $15,000,000 HM Promotions $10,000,000 ❑Public Works • $S,000,000 Administration • $0 - O City Administration o a o e o a aa$, a (2) 0 o e e o C C C C QC e $ H e 5; � $, a a $ ❑Public Safety(3) • ? t t • • (1)"Other Expenditures"is any combination of street maintenance,building safety,street resurfacing and public works. It may also be aquisitions,centers,committees,contributions,community development, . Hautline,health and welfare,interfund transfers,park maintenance,refunds,and code enforcement. • (2)"City Adrn nistation"is any combination of administrative services,auditing,City attorney,clerk,council and • manager,data processing,finance,general services,human resources,insurance,legal special services, legislative advocacy and unemployment insurance expenditures. (3)"Public Safety"is any combination of animal regulation,risk management,nuisance abatement,police services,and traffic safety expenditures. • Source: City of Palm Desert Audited Financial Statements • • • • • • • • • • • • • • • -129- dl City of Palm Desert Historical General Revenue and Expenditures Per Capita m�m Last Ten Fiscal YearsRV V� C'�' ,t- ,a ; .^3` }R ",'�t�,'� :'-•'�^ '3:` -s - �' �{ ti-kfit FY 2003(2004 F E:OY6�2/2003 }2001/2002 Fa�2000/2061 P{ t 1999/2000 Total General Re enueO�s _ $ 38,084,747 $ 36,239,659 $ 35,287,865 $ 37,096,928 $ 35,333,625 Population{1} x 44,812 43,917 42,863 42,334 37,634 IS General Revenue°Per,Captta t s 850 $ 825 $ 823 $ 876 $ 939 A' s� t,� �F�, 1998/�1999 ]997/199&? rr 1996/1997 1995/1996r �-1994/1995-, �) ..- Total C�cneral Revenue(2) $ 31,576,688 $ 28 555,908 s 26,019,849 $ 23,846,539 $ 21,208,223 ) 36,287 35,162 33,471 32,771 27,351 �Geueral Revenue PerrCapita y $ 870 $ 812 $ 777 $ 728 $ 775 c 2003/2004�K: 2002/20030 2001/2002 2000 2001 k � 1999/2000,;, �) Total Qeneral Expendrtures(2)( $ 31,674,743 $ 34,935,591 $ 30,941,156 s 28,902,706 $ 26,343,720 �► P,opulahon(1) t ` 44,812 43,917 42,863 42,334 37,634 �) General Expendrtures Per $ 707 $ 795 $ 722 $ 683 $ 700 I C A,P da t f FY"y 1998/1999 4' 1997/998 ai99611997 7995%19?6:, 1994/1995 i �) ¢:a,..... Total Genera Expendrtur�(2)� $ 25,059,899 $ 21,933,107 $ 21,564,364 $ 19,668,302 $ 17,544,825 �) S: �kKrvVfl Populatron�(:1) � �q 36,287 35,162 33,471 32,771 27,351 �) hcv +i tM3fi. ! rvl General Eapend�tm es Pere �l 691 $ 624 $ 644 $ 600 s 641 a► (1)Population figures are as of January start of fiscal year. ®) (2) Interfund Transfers In/Out are not included in total. al a► al Sources: City of Palm Desert Audited Financial Statements a) Population figures from State Department of Finance -130- a) • City of Palm Desert • Top 40 Sales Tax Generators . Graph -Historical Sales Tax Trends June 30,2004 Top 40 Sales 8 Use Tax Generators(1) Primary Economic Top 40 Sales&Use Tax Generators Primary Economic - • Category Category COSTCO WHOLESALE DEPARTMENT STORES ARCO AMIPM SERVICE STATIONS • DESERT SPRINGS RESORT&SPA RESTAURANTS BARNES&NOBLE BOOKSTORE MISCELLANEOUS RETAIL • BEST BUY STORES FURNITUREIAPPLIANCE T-.MAXX APPAREL STORES • MACY'S DEPARTMENT STORE DEPARTMENT STORES HATHAWAY&SONS BLDG CONTRACTOR • ROBINSONS-MAY DEPARTMENT STORE DEPARTMENT STORES RALPH$GROCERY FOOD MARKETS • TARGET STORES DEPARTMENT STORES CENTRAL WHOLESALE APPL.SUP. FURNITURE/APPLIANCE • CIRCUIT CITY STORES FURNITUREIAPPLIANCE SIMPLOT PARTNERS FOOD PROCESSING EOP • SAKS FIFTH AVENUE DEPARTMENT STORES TRADER JOE'S FOOD MARKETS • J C PENNEY COMPANY DEPARTMENT STORES POOL&ELECTRICAL PRODUCTS BLDG.MATLS-WHSLE • MOBIL SERVICE STATION SERVICE STATIONS ROSS STORES APPAREL STORES • BED BATH&BEYOND MISCELLANEOUS RETAIL HUB CONSTRUCTION BLDG.MIATLS-WHSLE • LEGACY HOME FURNISHINGS FURNITURE)APPLIANCE DESERT ELECTRIC SUPPLY BLDG.MATLS-W HSLE • MERVYN'S DEPARTMENT STORE DEPARTMENT STORES USA GASOLINE SERVICE STATIONS . TOMMY BAHAMA PALM DESERT RESTAURANTS PETSMiART MISCELLANEOUS RETAIL . ALBERTSON'S FOOD CENTERS FOOD MARKETS OFFICE DEPOT OFFICE EQUIPMENT • DESERT PIPE&SUPPLY BLDG.MIATLS-WHSLE CONSOLIDATED ELECTRICAL DSTRS. BLDG.MATLS-WHSLE • MIARSHALL'S STORES APPAREL STORES RITE AID DRUG STORES MISCELLANEOUS . HIGH TECH IRRIGATION BLDG.MATLS-W HSLE MICHAEL'S ARTS&CRAFTS MISCELLANEOUS RETAIL • TOYS R US MISCELLANEOUS RETAIL GIANT R.V. VEHICLE SALES • PETE CARLSONS GOLF&TENNIS RECREATION PRODUCTS MOLLER'S GARDEN CENTER FLORIST/NURSERY • (1 1 UstedOrder • Sales and Use Tax Trends FY 94/95• FY 03/04 Millions %=%Change from Prior Year 1gg.0 tti% 15.5 15.0 a.z%— 14. t].6%-3.1%--0.5%— 1343.0 ---- • 13pp.0 - w 12.0 n.e%— y; 11.0 —6.8%— — • 0 —02% z^T. - A 7.5 :g ` g. • (1 A A m Af W T o O G o O • � o 0 0 0 0 N N N N N • Amounts r' '' m A A o 0 0 0 N N N N In Millions . 7.222 8.133 8.942 9.595 10.878 13.204 13.620 13.027 13.463 15,138 . Source:Municipal Resource Consultants,Geohased Revenue Information Program(Grip database)&City of Palm Desert -131- ®1 City of Palm Desert a' FY 2003/2004 and 2002/2003 Breakdown of Basic 1% Property Tax Rate ®) Not In Redevelopment Project Area Q) - �=� :� �,�dl.;ar Taxmg Agencya � FY 2003/2004 Rate 6 FY 2002/2003�Rate' R ' at � € r Coun.. 6heraWV. , ti' r G.s 21.10727500% 21.10727500% IL y_. �yv'xi. ®,County Free LlFrarr. z y 2.728242% 2.728242% County Structure Ftre,Protecnon 5.873086% 5.873096% �) City of Palm Desert{1)zs 7.070052% 7.070052% a Desert Sandsx feed SchooltD stn k 36.221597% 36.221587% �Ir s4W � ys $ t � ' :'� 7.526714 7.52671A �)Oesett Communtt Colle e_,N 0/0 0/° Riversie Coun�tvy�.Reg P M,Op�en SpyacPe�r-- i� � 0.426231% 0.426231 u=. RiWrsstde C6iifity,Qffwe ofEduc ahonk ;* 4.094919% 4.094919% Des H Sal 3, t # o ° �) 1.996808/° 1.996808/0 oachella Valley'I ubl cemetary � r 0.339927% 0.339927% Coachella ValleyRecreatwn&Parks s 2.071624% 2.071624% Coachella Valley Mosgwio:&Ue�c or C nTWI"I t' 1.369698% 1.369698% �1 Coachella Vall iyCounty Water 2.736607% 2.736607% ®) Ma r , Env+' 11 et,'Cou e x wase-1•' 3a'. Coachella Valle"y County Water Imp Disfict 80 2.972906% 2.972906% C chella Valley County Water+Storm WaterUmt, 3.464324% 3.464324% �) General Purpo+e Baste 1% "`` t r-x 100.000000% 100.000000% (1)City of Palm Desert is a No-Low Property Tax City and the 7%represents what the state allocates to No-Low Property Tax Cities. l ®1 0 a� Source:County of Riverside,Property Tax Allocation Percentages,TRA 018-041. a� -132- ® City of Palm Desert ® FY 2003/2004 Breakdown of Basic I% Property Tax Rate ® Not In Redevelopment Project Area ® jO County General ® ❑County Free Library ® ❑County Structure Fire ® (% 7% Protection 3% ® 10 City of Palm Desert(1) d ❑Desert Sands Unified d School District 21% ❑Desert Community College kH • ❑Riverside County Reg. • `ski Park&Open Space Cl Riverside County • Office of Education 3% I, 0 Desert Hospital 3% 3% ® IOX ❑Coachella Valley Public ® ° ° Cemetary 0%2% 4% 0% 8/0 ® 0Coachella Valley ® Recreation& Park ® ❑Coachella Valley e Mosquito&Vector Control ® ❑Coachella Valley ® County Water ® ❑Coachella Valley ® County Water Imp. District 80 ® ❑Coachella Valley ® County Water Storm (])City of Palm Desert is a No-Low Property Tax City and the 7%represents what the state allocates to No-Low ® Property Tax Cities. ® Source:County of Riverside, Property Tax Allocation Percentages,TRA 018-014 ® -133- m City Of Palm Desert 0 Historical Net Assessed Taxable Values Citywide �1► Last Ten Fiscal Years V� S ' t r2002/2003 20001 99(2000F 200320 .sc Secifred:(1)•` ' - - u ` Land ^= 2,725,623,146 2,391861,647 5 2,200,864,184 $ 1,954,303,360 $ 1,741,543,322 .d- mvements. _ F, rt. 6,205,269,290 5,476,571,513 4,902,119,469 4,362,630,597 3,869,968,459 "''.Personal Property- "* 20,048.067 23,401,831 23,005,947 21,975,379 27,178,963 �:,'! `Penal c ^,�,.e--- a{': ,ems._•"• 163,807 178,761 146,465 321,504 76,686 -Less Other Ezc' t ti `i 90,810,742) 67,439,766 (69,912,768) (58,818,186) (54,607,788) r ...:Le'ss$Iome,Ownei,Value "`.,'.t (68,537,556) 64,218,812 (62,213,997) (61,183,329) (59,688,587) S= L'essB;lnv Ualue -I^L:ST" ;i 0 0 0 0 0 Total Net Assessed Taxable Secure Vat r ": 8,791,756,012 7,762,355,174 6,994,009,300 6,219,229,345 5,524,471,055 163,788 342,952 406,306 277,839 293,666 �ry ., ^1 novemeittsr �+ at '" 108,722,567 98,447,663 102.802.843 98,997,655 81,516,884 W Person5hPropert ' `- ,_ — 171,683,868 145,295.116 136,519,230 137.417,880 1I9,224,153 $ 6,066.692 $ 3,905,203 3,767.747 5,021,021 1,717,699 --Less Oilier Exem to y -.' $ 6,924,980) $ 9,149,201 (10,316,560) (IQ802,14p (6.773,153) Totale[Assessed Taxable Unsecured Value T"5 281,711,935 238,841,733 233,177,566 230,912,254 195,979,249 x Total Ne[Assessed Taxable Value y} x ' ;} $ 9,073,467,947 $ 8,OOI,196,907 $ 7,227,186,866 $ 6,450,141,599 S 5,72Q450JOJ FV�t tl998/1999 1997/1998A;. ) 1996/1997 `-'�1995/199G fi 1994/1995 tires . <- .- Landt rF:ice a ,� ; . ., s = S 1,655,103.019 $ 1,628,468,665 S 1,601,710,837 S 1,572,840,288 $ 1,378,950,557 3,600,322,755 3,462,314,634 3,337,986,039 3,302,861,825 2,825,099,215 *;1'-xPersottelProo '�+n;� ,pia o-l. 24.354,115 21,253,740 18,655,554 27,134,660 18,167,708 •`,,..PeMlt'rr'?�: r. ` 'e. .; ` 253,988 102,904 238,539 474.815 176,752 (70,815,494) (69,720,709) (66,750,829) (65,720,948) (61,003,502) Less•llome Owner,Vulue <-.F (59,743,660) (59,008,600) (57,997,400) (56,149,600) (42,865,200) 'Less`D Inv Value _ 0 0 0 Total Net Assessed Taxable Secured Value 5,149,474,722 4,983,810,634 4,833,842,740 4,781,441,040 4,118,525,530 Unsecured r 0 Lands -i >z 428,124 915,393 732,588 851,747 568,329 ;`h,Im riivements rkk...�PM1 n "t + 74,972,495 66,958,298 63,637,085 61,927,335 56,727,274 �, Personalfro erty -">✓I 110,194,540 88,974,622 79,548,931 68,477,096 70,356,739 Denali __ a - 2,214,948 2.012,870 1,033,860 2,973,031 1,831,948 Less Olfier Ecem t -" (1,975,533)1 (5,946,570) (4,422,000) (5,269,989)1 (5,657,754) Tot I NetIAssessed Taxable Unsecured Value - 185,834,474 152,914,603 140,530,464 128,960,210 123,826,536 , Total Net Assessed.Taxatile Value I $ 5,335J09,196 $ 5,136,725,237 $ 4,974,373,204 S 4,910,401,250 S 4,242,352,066 (1)Secured values includes any state assessed data. Source: County of Riverside,County Auditor Controller,Assessed Valuations OB G -134- 16 City Of Palm Desert Change in Taxable Value Citywide Fiscal Year 2003/2004 and 2002/2003 FYJ 2,725,623,146 $ 2,393,961,647 13.9% VEhis $ 6,205,269,290 $ 5,476,571,513 13.3% • Z,%�R pnjM 20,048,067 $ 23,401,831 -14.3% 163,807 $ 178,761 -8.4% $ (90,810,742) $ (67,439,766) 34.7% 1143�om $ (68,537,556) $ (64,218,812) 6.7% • & 41�u iRI'Value I e es. 4"I,"axhlel 8,791,756,012 7,762,355,174 13.3% 1,Esecured: $ 163,788 $ 342,952 -52.2% dl $ 108,722,567 $ 98,447,663 10.4% Total • - 4 se &wIS Ik' 173,683,868 $ 145,295,116 19.5% $ 6,066,692 $ 3,905,203 55.3% _e $ (6,924,980) (9,149,201) -24.3% 4 1 Net s We -h Ue 281,711,935 238,841,733 17.9%d-FW-X�'B e� 'IV I • 9,073,467,947 8,001,196,907 13.4%1 WINsestO $ $11aablerMaluel;� Tptra!I, • (1)Secured values includes any state assessed data. Source:County of Riverside,County Auditor Controller,Assessed Valuations -135- m CITY OF PALM DESERT ASSESSED VALUE BY ECONOMIC CATEGORY FY 2003/2004 mm �I �` ' '-CATEGORY-s '` ,PARCELS: ASSESSO VALUE T NET 24,102 5,999,948,242 66.8% 5,994,201,785 68.9% CommercUIndusf a� ., 793 1,299,194,012 14.4% 1,295,269,354 14.9% Recreafional�' �a 211 122,682,564 1.4% 122,682,564 1.4% v' a h§ tit 44 104,880,702 ].2 71,217,188 0.8% [nshtutional /° Yacaut�Landr `'' 1,333 368,049,569 4.1% 367,395,700 4.2% m Exempt�a 2,276 197,980,425 2.2°/n - 0.0°/n Possessory�lnterest-(1 � 148,1481 532,180,730 5.9% 512,102,177 5.9% 0 Mlscellaneous'�a: }' �� �' 20 61,210,424 0.7% 57,209,890J3. 13,0131 293,372,939 3.3% 284,053,722 IQ 28,779 8,979,499,607 ]00% 8,704,132,380 (1)Possessory Interest and Unsecured Parcels not included in Total Parcels(Net Taxable Vaule equals Estimated Actual Value) 10 O a Source:HdL Caren&Cone a Ris aide County Assessor 2003/2004 Combined Tax Rolls 136 r CITY OF PALM DESERT ASSESSED VALUE BY ECONOMIC CATEGORY • FV 2003/2004 • i Assessement Value Recreational • Residential Commercialllndustrial 1.4% 66.8% 14.4% Institutional 1.2% • Vacant Land i 4.1% • Exemp Possessory In t i 2.2k • terest 5.9% u i Unsec red Miscellaneous 3.3% 0.7% Net Taxable Value • Residentfal • 68.9% Commercial/industrial 149% Recreational • 1.4% Institutional 0.8% • Vacant Land 4.2% Exempt 0.0/° . Possessory interest Oil 5.9% Unsecured • • Miscellaneous • 1 �--0.6 3.3% . Source:HdL Coren&Cone Riverside County Assessor 2003/2004 Combined Tye Rolls r r r r r r r 137- a► City Of Palm Desert a) Property Tax Levy and Collections Last Ten Fiscal Years Y [='r ,3 nr +a , �• ry z 3,m FY 20033//2004 + 2002(2003 k 20oU2002 2000/2001 �1999/2000 iN, ri , t. 44 GrossvTax Levy; s ya ?T g r 3,08QA22 3,273,730 $ 2,603,643 $ 2,426,812 $ 2,391,389 yt Current Tax C chons(1)(2)�3)(4) 3,007,652 2,723,336 2,475,308 2,387,760 2,064,974 �► Eercent of Current Levy Collected r a=s 97.6% 83.2% 95.1% 98.4% 86.3% Total Tax Gollechons(inclnd ng r .=Vv�vx ,r s `* 3,369,711 3,078,046 2,725,950 2,466,758 2,393,368 delmcjitenctes)(lj(2)(3)(4) n2� t1 FY 998/99 1997 98 ir9 97 �99519, 994 95 �) Gross Tax Levy- ,o $ 2,327,872 $ 2,230,201 $ 2,137,170 1,949,891 $ 1,356,332 �) Current,Tax Collectrons(1)(2)(3J(4) k 1,993,999 2,011,099 1,984,516 1,603,693 1,309,155 Percent of Current Levy Collected `I 85.7% 90.2% 92.9% 82.2% 965% Total Tax Collections(mclvtiding - 2417,572 2,306,753 2,597,674 1,757,606 1,923,273 dehugnencies)(L)(2)(3)(4) _ �) (1)City of Palm Desert is on the"Teeter Plan' with the County of Riverside. The first payment was received 11) in fiscal year 1993/94. a) (2)City of Palm Desert is a"No-Low Property Tax City". Proposition 13 rolled the tax rates back to 1973 a) which is when the City of Palm Desert Incorporated and the Property Tare rates were zero. Based on current state law the County allocates 7%of the 1%assessed values within the City less the Redevelopment Agency tax increment. Fiscal Year 1992/93 was the first year to receive the No/Low taxes. (3)Fiscal Year 1993/94, 1994/95 and 1996/97 final total collected includes adjustments for No-Low property n, tax collections from prior years modified by the County of Riverside. The County adjusted the payment to the City of Palm Desert(FY 1995/96)for the annexation of Palm Desert Country Club. (4)Fiscal Year 1995/96 collections were lowered by the County adjustments($291,000)of the tax levy. Source: Riverside County Auditor Controller Office and City of Palm Desert m Vr QI ®e -138- a) 41 City of Palm Desert Special Assessment Levy and Collections Last Ten Fiscal Years y JOY 2003/20,0 4 2002%2003 200112002 2000/2001 -�1999l2000 • Special Assessment Levy (1) 4,529,904 2,508,377 $ 2,698,371 $3,275,256 $ 4,545,108 Special Assessment Collections(1) 4,319,095 2,420,757 2,579,451 3,210,229 4,474,360 Percent of Levy Collected(1) 95.32% 96.51% 95.59% 98.01% 98.44% Total Special Assessment Received • following close of Fiscal Year 4,318,085 2,420,757 2,579,451 3,211,226 4,526,233 • (including delinquencies) (1) FX aggk99$ _ 1991/98F ,1996l97 1995/96? 1994X95 : • Special Assessment Levy(I) $ 1,838,523 $ 2,163,334 $ 2,218,158 $2,618,291 $ 1,718 668 Special Assessment Collections (1) 1,673,368 2,010,853 1,929,254 2,478,883 1,399,108 • Percent of Levy Collected(1) 91.02% 92.95% 86.98% 94.68% 81.41% Total Special Assessment Received following close of Fiscal Year 1,831,068 2,144,632 2,192,911 2,616,076 1,718,668 (including delinquencies) (1) . Source:MB1A MuniFinancial Services -139- City Of Palm Desert FY 2003/04 Top Ten Property Tax Payers �mmP w, N,et Local /o Net Secured!. Cumulatnre Owner r'> Secured/Urisewredrz Unsecured Value Net Sec'ured/ ..�'3 . -. - Business Descrl twn �� ns s '4-Primary AgencyA-' :Assessed:Value(1) (1) Unsecured Value xy. -Yr `"v?=��..' y ®� D s�ert Spnngs H Ire $ 258,873,818 2.88% 2 88% Commercial Owner of Desert Springs Resort 891 room a� S RDA#2 Hotel 8 Golf Course ``" r Commercial Owners of 800,000 sq.ft. Retail Shopping m WWEA;Palm Desert 92,503,979 1.03% 3.91% RDA#1 Mall located at 72840 Highway 111. L/ ` Commercial Desert Crossing I YI 57,874,517 0.64% 3.53°/ Owners of Major Commercial Bldgs �� �.'�f RDA#1 -•; to �r ' r , Commericial Owners of Garden's at El Paseo up-scale Gardens SpedIFLLC 52.834,590 0,59/0 4.50% RDA 82 Annex retail shopping Center. mm scant �I �- Land/Possessory P Ma`rdoti Ownershi 'Resorts 41,589,478 0.46% 6.01% Marriott Vacation Timeshare Developer +.� =�� P� Interst/Commerical a 2,4z " ° Residential Apartment Leasing San Tropez Apartment a' Pal cesert 39,846,414 0.44% 5,22/o 's Tax District#1 located at 73373 Country ClubOr tapns ' e" `( Residential,Vac 1 $rg!Horn Development 37,482,037 0,42% 6.43% Residential Land Developer �n. RDA 82 Annex 41' ��^ = Commericial Owner of Marriott Courtyard and Residence n, CNL;.H,rosp ta6tyePn L 29,130,159 0.32% 5.55°/ RDA#2 Inn �V Residential < a� National Golf. eradng LP 26,625,700 0.30% 6.72% pD Annex Golf Course Operations ®' PRrXIV 24,939,624 0.28°!° 4.78% ResidentialRDA#1 Residential Prop Management 5 ToNet Assessed Value $ 661,700,316 7.37% 0 (1)2003/2004 Net Local Secured Assessed Valuation: $8,979,499,607 a) �mm Vr a) al Source:HdL Coren 8 Cone ®I Riverside County Assessor 2003/2004 Combined Tax Rolls a� a� -140- al ai • City of Palm Desert • Historical Net Assessed Taxable Values Citywide Graph -Assessed Valuation Growth Last Ten Fiscal Years Net Assessed Valuation - Historical Comparison Value in Millions (All Property) FY 94/95 to FY 03/04 $10,000 $8,000 $6,000 — $4,000 — — — — $2,000 — -- — $- 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01102 02/03 03/04 • • Percent Increase in Assessed Valuation w (All property) FY 94/95 to FY 03/04 • 30.00% 25.5 % 25.00% 24.05% 20.00% - - ---- ---------- --------------------- --- --------------- - ------ ------- ------- ------------------ -------- ------- -- 12.76% 15.00% ------------- -15.75%.------------'--.....-------.-.---------------'--------'-------------------13. o----------------'----'--- • 7.22% 10.00% - - -..3.26% -- 3:87°/a------ ------- ------------------------- ------- - ------------ ----- - --- • 5.00% -- - ------------------- --------------...--------- . - 0.00% o • 94195 95/96 96/97 97198 98/99 99100 00)01 01/02 02103 03104 Historical Major Additions • Annexations FY Retail Centers FY Cook Street Area 88/89 Town Center Mall 83/84 Country Club#28 93/94 Desert Springs Marriott 86/87 • Price Club#30 93/34 One Eleven Town Ctr 88/89 • Palm Desert CC#29 94/95 Mervyn's Center 92/93 • Desert Crossing 95/96 LuckyslAlbertson Deep Canyon 96/97 • Remodel 111 Town Ctr(Best Buy) 97/98 • Gardens at El Paseo 98199 -141- a City of Palm Desert DEMOGRAPHIC STATISTICS �) Last Ten Fiscal Years Fiscal City of Percentage Riverside Percentage Year Palm Desert Increase County Increase �► End Population (Decrease) Population (Decrease) �) 2004 44,812 2.0% 1,776,743 5.00% 2003 43,917 2.5% 1,692,187 2.91% 2002 42,863 1.2% 1,644,341 3.06% O) 2001 42,334 12.5% 1,595,576 5.73% 2000 37,634 3.7% 1,509,114 2.43% 1999 36,287 3.2% 1,473,307 2.23% 411 1998 35,162 5.1% 1441,237 5.48% �) 1997 33,471 2.1% 1,366,353 0.18% 1996 32,771 19.8% 1,363,880 (0.9%) 16) 1995 27,351 3.2% 1,376,198 2.49% 16) 1994 26,510 7.6% 1,342,793 1.09% V' a► a► a► Sources: State Department of Finance (January of each year). am► V► a� m m m 4P 0 ai 4r -142- 41 City of Palm Desert BUILDING PERMITS AND TAXABLE TRANSACTIONS Last Ten Calendar Years Building Sales Tax Calendar Permit Percent Building Taxable Percent Sales Tax • Year Valuation Change Permits Transactions Change Permits 1994 101,368,670 45% 4162 637,909,000 14% 2250 • 1995 98,299,745 (3%) 4377 682,490,000 7% 2363 • 1996 106,325,577 8% 4039 746,463,000 9% 2357 1997 166,035,678 56% 5166 829,820,000 11% 2354 1998 254,758,860 53% 6886 923,979,000 11% 2363 1999 197,654,627 (22%) 6015 1,098,211,000 19% 2549 • 2000 209,416,185 6% 5672 1,217,986,000 11% 2684 • 2001 172,424,192 (18%) 5249 1,224,2B4,000 1% 2833 2002 168,038,763 (3%) 5393 1,330,826,000 9% 2979 • 2003 116,469,857 (31%) 4809 1,513,842,000 14% 3193 • • • Source: City of Palm Desert State Board of Equalization Office and Branches of FDIC-insured Institutions ® (1) First year information is being provided. Per GFOA 7/9/04 Bank Deposit statement no longer required • • -143- City of Palm Desert Miscellaneous Statistics June 30, 2004 City/ Municipal Government 0 Form of Gorvernment: Council- City Manager/Charter City �) Date of Incorporation: November 26, 1973 Number of Employees 152 Full Time Employees Size of City 25.5 Square Miles ) Geographic Location: Located 117 miles east of Los Angeles and 515 miles ®) south of San Francisco. Streets 157 paved street miles �) Number of Business Licenses 9,209 active business licenses CONTRACT SERVICES: Police Department Contract with Riverside County Sheriff-65 positions plus 18 support staff ®I Fire Department Contract with Riverside County/State Fire 35 positions Animal Control Riverside County Animal Services Water& Sewer: Coachella Valley Water District Trash Collection Waste Management vl Electric Southern Calif. Edison Gas Southern California Gas Telephone Verizon Airport Palm Springs International Airport Public Education �l Elementary School (grades K- 5) 3 Middle School (grades 6 -8) 1 High School (grades 9 - 12) 1 Community College 1 O CSUSB - Palm Desert Campus 1 OI Insurance Coverage �) General Liability Coverage Calif. Joint Powers Insurance Authority 50 Million/Event �I (Excludes Earthquake& Flood) Excess Coverage: American Guarantee & Liab. Insurance a Special Events Calif. Joint Powers Insurance Authority 1 Million ®l Workers Compensation Calif. Joint Powers Insurance 5 Million 401 Property Insurance Robert Driver Based on Prop. Value 401 Health Insurance III Medical California PERS; choice of PPO, HMO lei Dental Delta Dental 4 Vision Vision Service Plan ®I Disability Insurance UNUM - Life Insurance Company of America ®, Life Canada Life a Retirement California PERS - Public Employers Retirement System Source: City of Palm Desert a -144- • • • • • • • • • Bonded Debt Statistics City of Palm Desert, California • • • • • • • • • • • • • • • • • • • • • • • • • -145- City of Palm Desert �) Computation of Legal Debt Margin June 30, 2004 �) ®I N- �irc '. k:ax✓4. Tot AssedvaluahontOF .. }u> 8,709,578,378 BondedzDelit Lrm�t(15% of assessed+value)(1) #`. $ 1,306,436,757 oun f Debt'Sub ect to Limit � �I Total BondefiDelit 27,810,000 N rue MSpec�al Assessment]hstnct Bonds � � (27,810,000) m Total Amo ntDebt Subject=to�Lim�t® � 4L - � - .. ,. MO avh,�'ri-'�; � 'pus, of LegalDebf argin `x' $ 1,306,436,757 (1) Section 43605 of the California Government Code. ®i 10 19 lei 161 �1 �I is) Source: California Municipal Statistics, Inc. San Francisco �I �I al a� -146- al • City of Palm Desert DIRECT AND OVERLAPPING BONDED DEBT JUNE 30,2004 • 2003/04 Assessed Valuation: $ 8,709,578,378 • Redevelopment Incremental Valuation: 5,394,881,525 • Adjusted Assessed Valuation: $ 3,314,696,853 • DIRECT AND OVERLAPPING TAX ASSESSEMENT DEBT: %Applicable Debt 6/30/04 • Desert Sands Unified School District General Obligation Bonds 35.830% S 52,311,800 • Desert Sands Unified School District Lease Tax Obligations 35.830% 8,984,373 Palm Springs Unified School District 0.873% 1,038,783 • Coachella Valley County Water District,ID No.53 41.844% 135,993 • Coachella Valley County Water District,ID No.54 69.395% 3,806,316 Coachella Valley County Water District,ID No.55 17.996% 1,373,095 Coachella Valley County Water District,ID No.58 49.589% 2,251,341 City of Palm Desert 100.000% 0 • City of Palm Desert 1915 Act Bonds 100.000% 8,322,000 • City of Palm Desert Community Facilities District No.91-1 100.000% 19,488,000 Riverside County Assessment District No. 150 30.696% 16,883 + TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $ 97,728,584 • OVERLAPPING GENERAL FUND OBLIGATION DEBT: Riverside County General Fund Obligations 3.684% $ 23,694,647 • Riverside County Board of Education Certificate of Participation 3.684% 484,814 • Desert Sands Unified School District Certificates of Participation 35.830% 5,557,233 Coachella Valley Recreation and Park District Certificates of Participation 31.330% 849,043 • Palm Desert Water Services District Certificates of Participation(3) 100.000% 415,000 • Coachella Valley County Water District,ID No.71 Certificate of Participation 26.196% 2,746,651 TOTAL GROSS OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 33,747,399 • Less: Riverside County Administrative Center Authority(2) $ (788,708) • Palm Desert Water Services District Certificates of Participation(3) (415,000) TOTAL NET OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 32,543,680 • • GROSS COMBINED TOTAL DEBT $ 131,475,972 (1) • NET COMBINED TOTAL DEBT $ 130,272,264 (1)Excludes tax revenue anticipation noted,revenue,mortage revenue and tax allocation bonds and non-bonded capital lease obligations • (2)100%self-supporting from tax increment revenues • (3)Palm Desert Water Services District C.O.P.was assumed by Coachella Valley Water District Ratios to 2003-04 Assessed Valualtions: • Direct Debt 0.00% • Total Direct and Overlapping Tax and Assessment Debt 1.12% . Ratios to Adiusted Valuations • Gross Combined Total Debt 3.97% Net Combnined Total Debt 3.93% • STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/04 $ 0 . Source:California Municpal Statistics,Inc.,San Francisco . -147- II► City of PalmDesert Revenue Bond Coverage ®1 Last Ten Fiscal Years ��t1 63FY ` 6200312004� 200212003� 2�001/20021 2000/2001 - 1999/2000 Y .-�v e1 :».- F`,i 7x -=P'.et., c .L ... 1 W..r�.w. (1) Revenue-rAvatla_bl"e for Debt a 1 Service; � -: & '= DEBMSERVICEt 21 �) M. a f s RE r UIRENI) Nd S 1 RIMS a� ROOM I Os ip MY1998/1999 �199.7/1998� '" 996/i997 9 5/1996 1994/1995 ®I Revenue�`Avatlattle fortDebt,;v, .. Servtce� ,a „�, DE&SERVICE l REQi11ItEIvIENI'S + Prmnal = KIND MM a INO u 0 (1)There are no Revenue Bonds for the City of Palm Desert for the fiscal years 1994/1995 to 2003/2004 lei lei Jul a 0 Source: City of Palm Desert O a -148- • City of Palm Desert • Ratio of Annual Debt Service Expenditures For General Bonded Debt to Total • General Governmental Expenditures Last Ten Fiscal Years ` FY 2003/2004 F2002/ZOU3 -2001/2002 �'� 2000/2001 y� 199912000 <; r DEBISERVICE: ' Principal _ Int re est �T, r�tal Y Tot 1 GeneraLGouenmental-: Expen ilures �g� 'r - Ranoeof T tal Debt Servile to • To 1 GenesahGouerimental: Ex n, 77 JA O - 998141 O 1993l1948 1996L 997 I05/1996 iM 1994k14>?5 D'� $ERU�CE np ' terest�� Tots] Gene a]`Governmental r EX13 es,. - Ratio 0 otalsDebtbSeMce for To Genera] Goveurment-- • Expenditures° • (1)There is no General Obligation Debt for the City of Palm Desert for the fiscal years 1994/1995 to 2003/2004 Source: City of Palm Desert. • -149- 0 City of Palm Desert Ratio of Net General Obligation Debt to Assessed Value and Net General Obligation Debt Per �I Capita Last Ten Fiscal Years :. ..'r "r— #m „s" M2 m- - ._ WWW 1 Y 2D03/200_4 2002Y2003 " 20 002 2000/2001 1999/2000 r etG urieral10bltgat7on�Debt � �` �� � (1) Assesse"d - PercentdofNet�General,,Obltgationde�t" to"�'x 1 Assessed�Value �� � � Popu`1 Miami NetGen`eTalOtilig`a(ion Debt-P,er,Ca tta 5a� 'try ®1 1995/1999 1997/199$ ]996/1997" " 1995/1996 1994/1995lei Newt Geit �Obltgation Debt,, .,G..�. � AssesseltUa7ue ��� �,,.; 'ecru#ofNetxGe eialiObhgatio'�"rt d�bt£toy_ ` _ lei NEW , Net Gene Obhgation4DebeP,@r Caprta x (1)There is no General Obligation Debt for the City of Palm Desert for the fiscal years 1994/1995 to 2003/2004 le) of - a col �I �I Source:Riverside County Auditor Controller Office and City of Palm Desert a� 4B a� -150- ®� a� • City of Palm Desert • Special Assesment Information June 30,2004 • 1995 A 1995 B. 1995 C 1997 Bovds 1997 Bonds 2003 Ol-01 District NsanODescription Marks-Roos Pool MarlwRcoa Marks-Roos -'921R„ ,944AR Revenue Bonds • (83-1) Pool("I R) Pool(87-1) Tieeravista Bigborn 94 2 Suaterrace . Flood Issu¢Dow 0926/95 09/26N5 09/26/95 12/11/97 12/1 L9] 0625/03 • Final Maturity Date 09/02/0) 09MMS 09/07/08 051OV12 o9/02119 091OW14 Highest lntereseRite 5J0% 5.70% 5.70% 6.325% 6.425% 4.80'Y Bond Issue Amount $ 695,000 S 4,880,000 1,775,000 1,678,000 5,332,000 930,000 Matured Principal S 610.000 S 3,000,000 1 905.000 132,000 234,000 65,000 • Called Principal $ 85,000 S 1,590,000 350,000 1,520,000 5,060,000 30,000 • Outstanding Bonds(4) $ o $ 290,000 520,000 26,000 38,000 835,000 Redemption lamnium 3.25% 3.25% 3,25% 3.00% 3.00% 3.00%, • Original Parcels 962 518 1,317 86 274 71 • Active Parcels 0 U3 1,243 6 9 70 Reserve Requirement(5) S o S 329,000 S 142,300 S 2,600 S 086 S 93,000 • Reserve Balance 03/04(1) 154 S 332980 S 1"'9" S 2,936 S 10,667 S 93,377 • principal:Due 03/04(2) 0 290,000 1 1Moon 4,000 1,000 75,000 Principal.Levied 03/04(3) 412,470 147,412 7.976 6,211 73,944 • Journal Due 03/04(2) 0 16,530 35,868 1,533 3,636 33,464 • Interest Levied 03/04(3) 0 23,511 37,133 4,741 8,826 34,284 - o2jo3.Delinq6ency Rate • Arbritage.Installment Computation 09N2/00 0 ovoo 09MV00 09/30/02 0920/02 09/02/04 Date: '.90%Rebate Due • Arbritage.yield Rate 5.8194% 5.8194% 5.8194% 5.6992% 5.6880% 7.9769% • Arbritage-Amount Owed - - - - - - COntmiungDisclosttle last Report 10/142003 10/142001 10/142003 10/142003 12/132003 6/302004 • I SUPA: �`'.-'` -• 2001 01-01 evev 1997 Bonds 2004 R-Rood:2003 01-01 R a Bondt_ i�MeP Indiana 98-1 save Spn DssNamelDescrip[ion Re Bonds • � - 94-3 Marano lvdsan Ridge Canyons® Raneh -t: , 1992AR Bighor° UndeUliOty'�; mdndiv� • Bond Issue IJaie- 0625/03 IVI1/97 02/19N4 0625/03 • Final Maturity Data 09/O7120 10/0120 09/02/IS WOMB Highest Interest Rate 5.25% 6,425% 5.100% 5.375% . Bond7ssue Amount 1,153,000 23,509,000 2,955,000 2,340,000 • Mahucd Principal 43,000 4,831,000 635,000 35,000 Called.Principal';j - 6g00o - - • Outstanding Bands(4) t,Llo,00o 18,618,000 2,320,000 2305,0o0 • Red-Tti ii Pttmiuio 3.00% 3.00% 3.00% 3.00% Ongnu(Parcels�" _ 121 1,154 67 250 • Active Parcels': , 121 1.048 52 200 • Rese a Re4ufiesoent(5) S 69,180 $ 1,004,103 S R5,609 $ 171,931 Reservehalance 02/03(1) S 69,460 S 1,680.493 S 226.112 S 172,621 • principal.Due03/04(2) 50,0o0 849,000 135.000 55,000 . principal:Levied 03104(3) SUN 849,000 118,652 55,156 Interest Dud 03/04(2) 50.286 1,149,010 93,698 112,936 • Interest levied 03(04(3) 50,285 I,149,010 82.352 113257 • 6Z/03 Delinquency Rate Aitntage Installment Computation• p9/g2Ry 0920N2 12/16/03 ILI]/Ol Date: 90°/Rebate Due Arbrftiige Yield Rate 6.672'XM 5.6882% 5.8386% 5.1577% Atbrilage-Amount Owed - - - • COJIMU ng Disclosure Last Report 6202004 I L06/03 1211313 12/14/03 I ed:. • (1)Resvvc Balances arc as 9f9/30/04,shortfall will be recovered by additional levy,and invert earnings see Financial Statements Note 9. . (2)Amount sepmScata principal and unemss to be colleend on dte FY 03104 ma It for Debt Sca ice Paymrnl due in FY O3N4. . (3)Levied-cents reflect adi-nomats for construction funds,reserve funds,redemption funds and other adjuavocaus. . (4)Represents Outstanding Bonds after September 2,2004 principal payment (5)Reserve Requiremem as of9/N04 . Source:Muni Financial Annual Repon . -15t- of a ®► ®► a) This page intentionally left blank. O� o� a► o� o► o► �o► a► a► a► a� a� a� a� ®e -152- am) V1 • • • • • • • • Revenne Statistics • • Redevelopment Agency • City of Palm Desert, California • • • • • • • • • • • • • • • • • • • • • • • • • • • • • . -153- • a a '�'•'Rr Pass Decent a F DIN 1 AH-SHORE-DR w Redevelopment �I Agency ®I GERALO;FOR_' R Project Areas a♦1 OR o RANK�SINATRA pH FRANK-BINATRA OR-� I - �S Project Area No.2 y9R�s, OI 1987 kRo o�, I P ♦, Q COUNTRY GUU 8 OR W LOUNTRYJLL'UB9RT __J �) w F—HOVLEYtN W—o O b a O V Q V HOVL•EY•I I �04 f„ Project re l N\o.3 1991 HOVUE�H:NE O a Project Area No.4 z 1993 I(f MAGNESIA FALLS DR y rc ,w j Iwo n Iw PART VIEW OR ly 10 I¢_/ iO u CA�IFOFN\PPS 13 Project Area i4o- 1i i. rp� 4Lw ED-WARING DIi FREO•WA--RING+DR o' Orlgunali1w> it Ii V If IN ICI 1 6.STATE!HWYe11,i a � EL'P4G TWA-All MOUNN•DR ° 11 o►f¢I.FAIRWAY,OR. _v_ G FEVINE'$T-�O 1'0 -;a_nv neK-g_D 0 Project Area No. 1 -Original (1975) ®1 Project Area No. 1 -Added Territory(1982) a w 1 � Me`sa,wEw,oR�PORaocPP � Project Area N0. 2 (1987) r 0 Project Area No. 3 (1991) Project Area No"11 Ailded,Territory,' 0 Project Area No. 4(1993) L . City Limits ®� W 1 1 W E ` m S Vr \ m a os r z V' July, 2004 a) 0 no W • City of Palm Desert Project Area Statistics June 30, 2004 • RDA-1 --RDA 11982-', RDA 2 RDA 3 "A Annex ilfi' '_• , !�' 6..".' RDA 4 v n Area,was .-' 07/16/75 10116192 07115/87 07/17/91 07/19/93 Established , Most Ne'den-tAmen' nt, 02/27/03 02/27/03 02/27/03 02/26/04 02/26/04 7/16/2025 11/25/2031 7/15/2037 7/17/2041 7/19/2043 Pro3ecf )nraneo r 7/16/2015 11/25/2021 7/15/2027 7/17/2031 7/19/2033 . Last Date to mcw Repealed Repealed Repealed Repealed Repealed • e S 200,000,000 $ 200,000,000 $ 150,000,000 $ 100,000,000 $ 135,000,000 jgffi6§� S 758,000,000 $ 500,000,000 $ 800,000,000 $ 360,000,000 $ 600,000,000 R, C,P R, C,P R, C,P, 0 R,I,C,P R,1, C, P Acreage• Pr 580 5,240 2,927 764 2,260 • R=Residential, C=Commercial, P=Public Facilities, 1=Industrial, O= Other (1) Figures are unadjusted and should be annually adjusted by Consumers Price Index set by the Bureau of Labor Statistics • Source: Palm Desert Redevelopment Agency -155- City of Palm Desert �) Redevelopment Agency Tax Allocation Bond Issue Information ®) June 30,2004 PROJECT ARE41i2. » �` $24025�OOD~j� $7195500D. 51$22070 QOO�g:r.$19004 D00 """$249AS,OOD^m. $17370 D00 $4090000rq ,$15745000v ' DESCRIPTI7 �., Tax4AIIocahon ax N, bcahonr iaz Allocation_ -£ax Allocation TaxsAllocat�on7axIno,TTax'AIlogt��on::kTax AIIt on t Bonds -'Bonds *=�- Bb ds» Bontls-�--, �"-"�Reve iued�k" Revenue: s�Revenue a.. Years iaM" """-.a,5s, 30 25 28 27 21 20 30 3 Bond(IssueiDates: ' 06/01/95 07/24/97 03/13/02 08/05/03 06/24/04 07/17/02 06/01/95 03/26/5 Final Matunty-Date '-9'T i 04/01/25 04/01/23 04/01/30 04/01/30 04/01/25 08/01/22 08/01/25 08/01/3 est l . ' Highute-a&t Rate ` = 5.20% 5.625% 5.100% 5.000% 5.000% 5.000% 5.20% 5.00% Bond,IssuefAmount 1es7~.. $ 24,025,000 $ 71,955,000 $ 22,070,000 $ 19,000,000 $ 24,945,000 $ 17,310,000 $ 4,090,000 $ 15,745,000 Otitstandiii6ftrid'.Amount .,^; $ 255,000 $ 61,800,000 $ 22,070,000 $ 19,000,000 $ 24,945,000 $ 16,665,000 $ 3,940,000 $ 15,745,000 Call Premiu`m�---. . ' _ 0-2.00% 0-2.00% 0-2.00% 0.00% 0.00% 0-2.00% 0-2.00% 1-2.00% Bon4lnsS6F6rffi4q%ffU MBIA MBIA MBIA MBIA AMBAC MBIA MBIA MBIA Re9&ie)Re uirementl(2)P�,:- 1,955,525 5,126,790 2,804,344 950,000 2430,750 1,339,150 343,900 769,006 Reserve B51an( (2)"WWW3er (2) (2) (2) (2) (2) (2) (2) 2 Calle'06—dsv� :` ':.. $ 22,195,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 PdnclpaKWe-04/05.-_—yam 255.000 2,260,000 0 0 495,000 665,000 35,000 0 ' I6te'test,Due 04l05s5a,., °... A 13,260 3,310,989 1,114,665 950,000 875,560 710,513 231,606 769,006 Afbrit`agexYield1R5ta _..... ,* 6.0451% 5.4584% 5.2939% 4.8571% 4.7961% 4.7043% 6.0485% 4.9502% t Anta�9eAmounttOwed - - - - - - - - dibntage Fve Y�pa_r Due Date.' :� O6/14/00 04/01/02 04/13/07 08/05/08 O6/24/09 07/17/07 O6/14/00 03/2WE 6/08 t"x -�PRJCT AREA#321, `PROJECTaAl2EAr#4 i:. 13Ol1SING F.UNO' "��� ®I $47..45a011 $14;020000a $75695000 $48`760000 $6305000 $12100004 ®' DESCRIPTION ;e;% -s� ,Tax Alloratron Tax O.IIocaUon t Taz Allocation ,Tax AI c a on Allocation yTax Allocatlon7 xytg{+ .p'eo-".Sx even-- nua 4 a. ..Z--a,. k, Revenue Bonds Revenue -. �Reveriue Bonds..Revenue Bontls y NRevenue' 30 30 30 30 13 30 Bandrlssue Date' ;:1 - ' ()8/05/03 03/01/98 11/28/01 01/01/98 08/01/95 09/05/02 m Final MaCunryrDate` 's:' 04/01/33 10/04/28 10/01/31 10/01/27 09/01/08 10/01/31 VI Highest lnteres'GRate` ` ` .av: 5.13% 5.00% 4.80% 5.10% 5.55% 4,90% /I► 8o`nd115sue.Am`diint . ,,,, :. $ 4,745,000 $ 11.020,000 $ 15,695,000 $ 48,760,000 $ 6,305,000 $ 12,100,000 V� D'u`tstandir-ig?eondiA`m`ourit $ 4,590,000 $ 10,595,000 $ 15,395,000 $ 46,235,000 $ 2,900,000 $ 11.865,000 m CaUlPrenaumx'tT `'a'�" �'� 2.00% 0-2.00% 0-2.00% 0-2.00% 0-2.00% 1 -2.00% MBIA MBIA MBIA MBIA MBIA MBIA , Reserve R uiiemenl(2)"*:y..tx 297,953 768,020 965,780 3,625,950 630,500 779,250 R""e`servetBatancei(2)a - :,��."; (2) (2) (2) (2) 810,962 (2) Called eontls > t`'�. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 a1 P.nnci al Due`.03104. *au`�c"' 90,000 225,000 160,000 565,000 525,000 240,000 lnterest Due 03I04 i 206,998 531,465 696,600 2,301,954 141,195 526,181 ®� Artihta egYetd�Rate ,:",,':r:= 4.9358% 5.2271% 4.9464% 5.1343% 5.2231% 4.8290% Artinta AmountOwed�,-' a1 AdinWge Rve�Year Dine Date 08/05/08 10/01/02 11/28/06 10101J02 09/01/04 09/05/07 U� (1)Bond was partialy refunded$22,195,00010 be called on 4/1/O5 from escrow setup from$22,945,000 PA No#1,Bonds issued June 24,2004. al(2)A surety bond was issued by MBIA Insurance,future reserve balance's will be zero. a/ 101 a/ ar ar Source:City of Palm Desert and Redevelopment Agency mm� Vr ar ar m ar ar -156- O O O City of Palm Desert O FY 2003/2004 Breakdown of Basic 1% Property Tax Levy Rates ORedevelopment Project Areas Q ,..Rate .�i. Taxing Agency RDA 1 Original RDA 1 1982 Annex RDA 2 RDA 3 RDA 4 OCounty General 28.41362320% 28.32593100% 27.22391790% 24.74338670% 10.95439524% O County Ubrary - 2.75110026% 2.89139428% 2.88411070% 2.81535690% 1.49057610% County Fire 5.92229991% 6.22431382% 6.20862560% 6.06063160% 6.09486472% v City of Indian Wells Annex 0.00000000% 0.00000879% 0.00000000% 0.00000000% 0.00000000% OSupervisor Road District 4 0.00000000% 0.00007442% 0.00000000% 0.00000000% 0.00000000% O City of Palm:Desert 0.00000000% 2.27370242% 3.21801780% 5.28687590% 6.75371198% O Rancho Mirage Library 0.00000000% 0.01642460% 0.00000000% 0.00000000% 0.00000000% O Rancho Mirage Fire Asmt. 0.00000000% 0.03535724% 0.00000000% 0.00000000% 0.00000000% Desert Sands Unified School District 36.52513785% 36.81560806% 29.79588910% 37.37829540% 37.58939539% O Palm Springs Unified School District 0.00000000% 0.00000wo% 6.18448500% 0.00000000% 0.00000000% O Desert Cemmunity College 7.58978656% 8.05753066% 7.95672910% 7.76706560% T81093845% O County Superintendent of Schools 4.12923101% 4.38370867% 4.32886890% 4.22567960% 4.24955155% ORiverside County Reg.Park&Open 0.42971271% 0.42938439% 0.41180780% 0.37427390% 0.36059122% O Spam - O Rancho Mirage Community Service 0.00000000% 0.00000000% 0.00000000% 0.00000000% 0,00000000% O Coachella Valley Public Cemetary 0.34277019% 0.29642098% 0.27962310% 0.35077320% 0.23857022% O Palm Springs Public Cemetary 0.00000000% 0.03103937% 0.03667360% 0,00000000% 0.00000000% ODesert Hospital 2.01353641% 1.34376133% 1.72689520% 0.91535190% 0.00000000% OCoachella Valley Mosquito&Vector Control' 1.38117066% 1.46629119% 1.44795020% 1,41342770% 1.01440663% OCoachella Valley Recreation.&Park 2.08898018% 1.80650571% 1.70411790% 2.13777080% 1.52361565% OCoachella,Valley Water District 2.75953560% 2.92860831% 2.89295360% 2.82398850% 2.86560813% OCoachella.Valley Resource Cons. 2.15976452% 0.02091175% 0.03708840% 0.10336650% 0.03640605% OPDRDA Redeviopment 82 Annex 0.00000000% 0.95370686% 0.00000000% 0.02880820% 0.003088189", Coachella Valley Water District Storm 3,49335094% 1-69931614% 3.66224620% 3.57494760% 3.595141% till Water Unit O ERAF'RDV 0,00000000% 0.00000000% 0.00000000% 0.00000000% 15.41913855% O General.Purpose Basic 1%Rate 100.00000000% 100.00000000% 100.00000000% 100.00000000% 100.00000000% Source: Palm Desert Redevelopment Agency,Tax Increment Calculations&County of Riverside O O O O O O O O -157- a City of Palm Desert a Historical Tax Increment Summary Redevelopment Project Area#1 -Original �) Last Ten Fiscal Years �) FY 2003/2004 2002/2003 2001/2002 2000/2001 1999/2000 �) Secured/Unsecured $ 6,934,754 $ 6,503,515 $ 6,360,760 $ 6,199,196 $ 5,549,207 Supplemental-PY 29 Supplemental-CY 151,075 49,849 104,267 140,667 58,920 a) SBE(Utility) 297,098 288,489 285,323 292,520 332,579 a) Total Gross Increment 7,382,927 6,841,853 6,150,350 6,632,383 5,940,736 Low/Mod Housing Set Aside (1,455,810) (1,348,011) (1,328,643) (1,305,693) (1,168,457) Tax Increment Less Low/Mod 5,927,117 5,493,842 5,421,707 5,326,690 4,772,279 Total Pass-Throughs(1) (316,366) (696,443) (922,984) 0 0 ®) SB 2557 Charges (103,877) (101,797) (107,137) (103,919) (98,451) Net Tax Increment Agency(2) $ 51506,874 $ 4,695,602 $ 4,391,586 s 5,222,771 $ 4,673,828 a) a FY 1998/1999 1997/1998 1996/1997 1995/1996 1994/1995 n1 Secured/Unsecured $ 5,484,253 $ 5,341,708 $ 5,185,911 $ 5,098,516 $ 4,913,481 Supplemental-PY 0 205,722 138,806 (2,862) 34,460 a) Supplemental-CY 0 0 0 65 1,587 a' SBE(Utility) 322,956 331,955 324,173 329,675 356,256 a' Total Gross Increment 5,807,209 5,879,386 5,648,890 5,425,394 5,305,784 Low/Mod Housing Set Aside (1,161,442) (1,293,465) (1,242,756) (1,193,587) (1,167,272) Tax Increment Less Low/Mad 4,645,767 4,585,921 4,406,134 4,231,807 4,138,511 Total Pass-Throughs(1) 0 0 0 0 0 a SB 2557 Charges (104,485) (62,056) (105,440) (93,751) (93,085) a Net Tax Increment Agency(2) $ 4,541,282 $ 4,523,865 $ 4.300,694 $ 4,138,057 $ 4,045,426 a� a Percentage represents change from prior year. ®� 17.28% $6,000,000 0 11.75% W $5,000,000 6.92/0 1— $4,000,000 a' $3,000,000 $2,000,000 m $1,000,000 W $0 2003/2004 2002/2003 2001/2002 2000/2001 1999/2000 ®t (1)RDA Project Area 1 does not have Total Pass-Throughs with the exception of FY 1991/92. ®, (2)Net Tax Increment Agency does not include Debt Service payments. a Sources: City of Palm Desert,Tax Increment Calculations&County of Riverside 4/ a -158- 41 r • City of Palm Desert • Historical Tax Increment Summary Redevelopment Project Area# 1 - Amended Last Ten Fiscal Years • FY 2003/2004 2002/2003 2001/2002 2000/2001 1999/2000 • Secured/Unsecured $ 25,247,194 $ 22,967,677 $ 19,826,224 $ 15,969,365 $ 12,683376 • Supplemental-PY 0 0 0 0 399,222 Supplemental-CY 886,454 910,786 2,011,351 1,352,695 480,210 • SBE(Utility) 144,829 136,296 134,804 138,207 152,108 • Total Gross Increment 26,278,477 24,014,759 21,972,379 17,460,268 13,714,716 • Low/Mod Housing Set Aside (5,182,761) (4,733,721) (4,330,166) (3,440,490) (2,699,974) • Tax Increment Less Low/Mod 21,095,716 19,281,038 17,642,213 14,019,778 11,014,742 . Total Pass-Throughs (11,740,730) (10,523,374) (9583,446) (7,3397195) (4,598,001) • SB 2557 Charges (364,672) (346,155) (321,551) (257,820) (214,847) Net Tax Increment Agency(1) $ 8,990314 $ 81411,509 $ 7,737,217 $ 6,422,763 1 $ 6,201,894 FY 1998/1999 1997/1998 1996/1997 1995/1996 1994/1995 Secured/Unsecured $ 11,791,667 $ 11,283,027 $ 10,962,401 S 10,997,657 $ 11.022,093 • Supplemental-PY 91,071 37,518 (20,053) 68,683 23,470 • Supplemental-CY 0 0 0 10,590 6,114 SBE(Utility) 142,885 146,870 135,100 137,394 148,474 • Total Gross Increment 12,025,622 11,467,415 11,077,448 11,114,324 11,200,151 • Low/Mod Housing Set Aside (2,405,124) (1293,483) (2,215,490) (2,222,865) (2,240,030) • Tax Increment Less Low/Mod 9,620,498 9,173,932 8,861,958 8,891,459 8,960,121 • Total Pass-Mroughs (3,966,585) (3,732,310) (3,605,208) (3,617,219) (3,645,290) • SB 2557 Charges (214,426) (123,390) (219,533) (198,731) (190,428) • Net Tax Increment Agency(1) $ 5,439,487 $ 5,318,232 $ 5,037,218 $ 5,075,509 $ 5,124,403 • • • Percentage represents change from prior year. • $10,000,000 b.88% 8.71 . $8,000,000 _ 2o.a7% 3.56°l0 16.62% • $6,000,000 . $4,000,000 $2,000,000 1 $0 2003/2004 2002/2003 2001/2002 2000/2001 1999/2000 (1)Net Tax Increment Agency does not include Debt Service payments. • Sources:City of Palm Desert,Tax Increment Calculations Worksheets&County of Riverside • -159- City of Palm Desert �) Historical Tax Increment Summary ®► Redevelopment Project Area#2 �l Last Ten Fiscal Years m FY 2003/2004 2002/2003 2001/2002 2000/2001 1999/2000 11) Secured/Unsecured S 11,717,869 S 10,422,746 $ 8,575,348 S 7,816,649 S 7.120,210 1@ Supplemental- PY 151,051 IM Supplemental-CY 812,847 548,517 257,896 391,197 93,861 n) SBE(Utility) 25,689 22,768 22,519 23,088 25,187 1n@0 Total Gross Increment 12,556,405 10,994,031 8,855,763 8,230,934 7,390,309 W Low/Mod Housing Set Aside (2,477,550) (2,167,507) (1,743,454) (1,621,091) (1,454,141) ��ry Tax Increment Less Low/Mod 10,078,855 8,826,524 7,112,309 6,609,843 5,936,168 Total Pass-Throughs (4,683,769) (4,320,158) (3,296,575) (2,790,025) (2'423,175) a) SB 2557 Charges (168,655) (156,494) (138,491) (125,482) (119,606) �m Net Tax Increment Agency(1) $ 5,226,431 $ 4,349,872 $ 3,677,242 $ 3,694,336 1 $ 3,393,387 m FY 1998/1999 1997/1998 1996/1997 1995/1996 1994/1995 �) Secured/Unsecured S 6,330,882 $ 5,899,166 $ 5,377,930 $ 5,017,061 S 4,725,268 Supplemental-PY 312,878 187,627 65,221 74,933 117,909 Supplemental-CY 0 0 5,019 45,384 m SBE(Utility) 21,385 21,982 16,653 16,936 18,303 Total Gross Increment 6,665,145 6,108,774 5,459,805 5,113,949 4,906,863 a' Low/Mod Housing Set Aside (1,333,029) (1,221,755) (1,091,961) (1,022,790) (981,373) 0 Tax Increment Less Low/Mod 5,332,116 4,887,019 4,367,844 4,091,160 3,925,491 m Total Pass-Throughs (2,152,320) (1,913,246) (1,702,484) (1,586,470) (1,513,453) Q� SB 2557 Charges (114,107) (80,229) (70,875) (60,172) (61,961) Net Tax Increment Agency(1) $ 3,065,689 S 2,893,544 $ 2,594,485 $ 2,444,518 $ 2,350,077 41 Percentage represents change from prior year. ®m' $6,000,000 20.150 18.29% `mmom $5,000,000 -0.46% 8.87% 10.69% VI $4,000,000 , , .4 C e, IV $3,000,000 K � 'rt 4f +' a� $21000,000sa - $1,000,000 2003/2004 2002/2003 2001/2002 2000/2001 1999/2000 41 0 (1)Net Tax Increment Agency does not include Debt Service payments. 41 Sources: City of Palm Desert,Tax Increment Calculations Worksheets -160- • City of Palm Desert • Historical Tax Increment Summary • Redevelopment Project Area#3 Last Ten Fiscal Years(2) FY 2003/2004 2002/2003 2001/2002 2000/01 1999/2000 • Secured/Unsecured $ 2,040,874 $ 1,359,556 $ 1204,009 $ 1,028,201 $ 854,991 • Supplemental-PY 1,764 • Supplemental-CY 150,716 79,744 130,497 47,444 14,199 SBE(Utility) 1,001 731 723 742 908 • Total Gross Increment 2,192,591 1,440,031 1,335,229 1,076,387 871,862 • Low/Mod Housing Set Aside (432,653) (283,930) (263,165) (211,984) (171,507) • Tax Increment Less Low/Mod 1,759,938 1,156,101 1,072,064 864,403 700,355 • Total Pass-Throughs (899,766) (448,4991 (t83,986) (548,192) (519,921) • SB 2557 Charges(I) (29,324) (20,379) (19,405) (t6,469) (14,327) Net Tax Increment Agency(3) $ 830,848 $ 687,233 $ 868,673 $ 299,742 $ 166,107 • FY 1998/99 1997/98 1996/97 1995/96 1994/95 Secured/Unsecured $ 677,494 $ 610,197 $ 520,342 $ 539,001 $ 441,421 • Supplemental-PY 37,064 6,959 31,702 8,546 21,864 • Supplemental-CY 0 0 2,857 1,512 • SBE(Utility) 539 553 121 123 133 • Total Gross Increment 715,096 617,709 552,166 550,528 464,930 Low/Mod Housing Set Aside (143,019) (123,542) (110,433) (110,106) (92,986) • Tax Increment Less Low/Mod 572,077 494,167 441,732 440,422 371,944 • Total Pass-Throughs (660,139) (642,855) (77,212) (76,976) (64,997) SB 2557 Charges(1) (12,181) (7,329) (10,789) (7,856) (7,525) • Net Tax Increment Agency $ (I00,243) $ ( 66,017) $ 353,731 $ 355,591 $ 299,422 • Percentage represents change from prior year. • $1,000,000 $900,000 20.90 /0 189.81 • $800,000 2o.a9 $700,000 - • $600,000 - . $500,000 so.as°/ $400,000 - $300,000 265.711% . $200,000 $100,000 $0 2003/2004 2002/2003 2001/2002 2000/01 1999/2000 • (1)Data for SB 2557 Charges is available from FY 1993/94. • (2)Project Area#3 first Fiscal Year is 1992/93. • (3)Negative Tax Increment for FY 1997/98 and FY 1998/99 due to Regional Access Project pass through,prior year tax increment used to cover deficit. • Sources:City of Palm Desert,Tax Increment Calculations Worksheets • • -161- �I City of Palm Desert �l Historical Tax Increment Summary Redevelopment Project Area 4 4 _ 40 Last Ten Fiscal Years FY 2003/2004 2002/2003 2001/2002 2000/2001 1999/2000 III Secured/Unsecured $ 8,044,541 $ 7,275,223 $ 6,205,401 $ 4,612,165 $ 3,293,418 al Supplemental-PY 0 0 449,268 0 Supplemental-CY 318,307 411,994 854,021 829389 578,194 110 SBE(Utility) 3,641 1,952 1,930 1,979 2,117 Total Gross Increment 8,366,489 7,689,169 7,061,353 5,443,533 4.322,997 ®m) Low/Mod Housing Set Aside (1,650,181) (1,516,029) (1,392,274) (1,073,936) (853,567) vm' Tax Increment Less Low/Mod 6,716,308 6,173,140 5,669,078 4,369,597 3,469,430 Total Pass-Throughs (3,569,212) (3,863,556) (3,747,180) (3,640,563) (2,956,325) 4W SB 2557 Charges(1) (115,583) (109,024) (99,981) (73,853) (55,164) Net Tax Increment Agency $ 3,031,513 $ 2,200,560 $ 198219917 $ 6559182 $ 557,941 ®) FY 1998/1999 1997/1998 1996/1997 1995/1996 1994/1995 41 ) Secured/Unsecured $ 1,981,390 $ 1,427,671 $ 1,102,951 $ 1,085,326 $ 798,951 Supplemental-PY 455,457 80,639 49,662 139,262 128,353 VVVm Supplemental-CY 0 0 0 10,592 17383 mV' SBE(Utility) 1,044 1,073 0 0 0 L, Total Gross Increment 2,437,892 1,509,383 1;152,613 1,235,180 945,087 a' Low/Mod Housing Set Aside (487,578) (301,877) (230,523) (247,036) (189,017) Tax Increment Less Low/Mod 1,950,314 1,2079506 922,090 988,144 756,069 a' Total Pass-Throughs (1,312,022) (811,613) (619,829) (664,019) (508,067) �1► SB 2557 Charges(1) (35,617) (20,230) (21,723) (14,214) 0 Net Tax Increment Agency $ 602,675 $ 375,663 $ 280,538 $ 309,911 $ 248,002 Percentage represents change from prior year. 41P $3,500,000 3776i ®' $3,000,000 lop $2,500,000 20.78% m 7s. ®1I $2,000,000 08%- $1,500,000 10 $1,000,000 17.43% -742% $500,000 m $0 10 2003/2004 2002/2003 2001/2002 2000/2001 1999/2000 10 (1)Data for SB 2557 Charges is available from FY 1995/96. 4' (2)Project Area#4 first year is FY 1994/95 41 Source: Palm Desert Redevelopment Agency,Tax Increment Calculations&County of Riverside is 41 -162- 11 • w � This pa e i g ntentionally left blank. r 1 -162a- City of Palm Desert" Historical Net Assessed Taxable Values Redevelopment Project Area# l -Original Last Ten Fiscal Years '2003/2004 2002R003 u '2 0 002Z000 Old 1999/2000 ..c ',•s. ' $Landis— �...', '•-v.- " .x.;: $ 180,571,588 $ 175,028,644 $ 171,440,095 $ 167,254,618 $ 157,749,66 ments�. P a - `,�. "' - 430,563,506 403,984,613 389,716,686 381,168,647 342,048,525 ' -- P,`ersdnalpPro emg: .t =4_-_.k '. 5.�' 2,970,008 3,290,180 3,824,393 4,621,105 3,958,876 0 0 2,536 61,938 24,969 `# n „„,���:.;"�" . (100) 0 0 0 0 ` Les.'-LTome,Owner;Value (77,000) (75,600) (70,000) (49,000) (56,000 I,es"s`B)Iuv?Ialue '' eK+ � ' 4"�.nx_s. 0 0 0 0 0 � Tota1N¢NA essed Taxable$¢¢ureValue e." _ 614,028,002 582,227,837 564,913,710 553,057,308 503,726,030 l3nsecurede3` t " 174,128 201,461 229,626 191,925 211,902 Ed `0"„ Tmpiovements :.,r. a ~� v ; ,^� 52,581,364 48,916,729 52,533,594 47,281,799 44,481,799 Personal(Ptn erty�`�g�" Ey „iMw- - :"a`{+'NM 54,158,601 46,472,846 44,331,125 44,847,382 33,234,094 - 1._s- M 0 0 1,592,700 2,OS9,768 735,012 T;yLes's,OtiieiExe� ', ',. --' ._�' '' a};: ', - (57,842) (57,121) (58,570) (61,394) (38,283 TotaCNet AssessedrTaxatil¢tl7nseeured Valne 5�� 106,556,251 95,533,915 98,628,475 94,349,480 78,624,524 Total Ne6ASsessedcTaxabte Value ,F $ 720,884,253 $ 677,761,752 $ 663,542,185 $ 647,406,788 $ 582,350,554 -". , .' t7 5�,�.-�, ... .maxx ,r,;,.,••�06 T .. 7 �. � u199,81999 3 1997/I998 n ):995/199Tw 199511996 �1994l1995 .r s1 c�i ..2_?$r'vx3j.": _�> ,t.'-::LrY ..T' ♦_a.C:T,Y7 aS,e'curedii(i; ..'' ;;• ,�- t $ 358,233,158 $ 152,360,397 $ 162,089,396 $ 159,585,014 $ 154,143,316 335,487,546 331,532,883 310,347,856 306,158,845 285,966,096 1 c"�h,T'Personal'aPro erty. = � ri '��'i�*;� 4,284,839 3,805,452 3,563,026 3,832,650 4,235,728 Pc"r;aj 55,034 7,011 22,855 45,785 35,300 }s(Less O[fier Ex tom,-..„ 8., �., i 1'= 0 0 0 0 0 (35,000) (28,000) (28,000) (28,000) (28,00, , 0 0 0 0 0 Total'Net7AsSessed Taxabl 498,025,577 487,677,743 475,995,133 469,594,294 444,352,443 MW [Trisecured s..., '�' ,W .mac^5 225,314 50,747 47,559 251,002 34,718 43,198,389 37,357,588 37,898,413 36,344,372 36,553,181 �,'tP.erso�a]€P 33,519,839 35,834,338 31,172,730 29,870,330 26,584.252 748,851 766,233 585,341 902,426 894,808 (69,264) (58,072) (50,241) (69,094) (54,301 ' Total Net'Assessed Taxable basecured Value 77,623,129 73,950,834 69,653,802 67,299,036 64,002,658 ' T ,{Net ASS¢ssed�a��ablValu¢a-+e'�*^ � $ 575,648,706 $ 561,628,577 $ 545,648,935 $ 536,893,330 $ 508,355,10] v3x a1 (1)Secured values include State assessed data. m ®I Source:County of Riverside,County Auditor Controller,Assessed Valuations ®r a� 41 41 -163- is 0 0 0 City of Palm Desert 0 Change in Taxable Values 0 Redevelopment Project Area# 1 -Original 0 2003/2004 versus2002/2003 0 FY 2003120t14=` 2002/2003 =%Change ,' x Secured.(1) lJ Land ' $ 180,571,588 $ 175,028,644 3.2% 0 ` Improvements $ 430,563,506 S 403,994,613 6.6% 0 - Personal Property $ 2,970,009 $ 3,290,180 -93% 0 0 Penalty $ 0 $ 0 0.0% Less Other Exempt.' , $ (100) $ 0 -1000100.0% lJ `Less Home Owner Value $ (77,000) $ (75,600) 1.9% 0 TotalNetAssessedJAvableSecured Value $ 614,028,002 $ 582,227,837 5.5% iTTnsecured ...: ; 0 , •land, - - $ 174,128 $ 201,461 -13.6% 0 ; ''In,r6ver6eros $ 52,581,364 $ 48,916,729 7.5% 0 .PersonalPioperiy _ - ` _ $ 54,158,601 $ 46,472,846 16.5% •Penalty _ $ 0 $ 0 0.0% 0 L''ss Other"Exempt - -- $ (57,842) $ (57,121) 1.3% 0 Toth)Net' Assessed Taxable Unsecured Value $ 106,856,251 $ 95,533,915 11.9% 0 'F4tal'NetAssessed=Taxable Value $ 720,884,253 $ 677,761,752 6.40/. 0 0 (1)Secured values include State assessed data. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Source: County of Riverside,County Auditor Controller, Assessed Valuations 0 0 0 164- City of Palm Desert Historical Net Assessed Taxable Values Redevelopment Project Area p I -Amended Last Ten Fiscal Years pdg,,s `>. $, sa+.#"v 3'm -• *. '4 +'a—. .,._--u'� ^5 as. i m � zaonooa yzoozzzoo3 zoolrzooz z000noot 149?a000:T $ I,037,831,772 $ 964,043,115 $ 887,797,124 $ 746,195,135 $ 631,896,282 2,109,457,532 1,966,604,300 1,742,745,364 1,493,036,846 1,292,074,218 ®� 3,722,255 4,822,904 4,009,942 3,266,563 1,984,406 OI 0 0 31,999 159,145 37,717 `LEs:Other Examt MOW"W—. I a (50,011,055) (50,251,474) (55,711,920) (47,407,077) (46,013,692) „ TLess Home OxroervValu¢e3 s (30,819,292) (28,898,212) (28,025,997) (27,838,129) (27,464,787) "?B ,f.ecSiB"Inv Value'�x '�.v' F' rk 0 0 0 0 0 �) TOtaW¢f°A55¢SSedrTn3ab1¢SecUred Valu¢ 3,070,181,212 2,856,320,533 2,550,946,512 2,167,412,483 1,852,514,144 _ ley yUgnmsecuceil % d 4 `'' 9.581 135,778 143,855 52,422 46,483 ®) ,.1..7"yg 32,087,933 29,960,052 26,976,720 27,217,181 21,163,813 56,477,598 46,150,607 42,134,507 40,144,238 29,967,514 0 0 494,612 673,565 181,234 (8,791,155) (8,632,424) (9,613,037) (10,316,419) (6,335,363) Total NeAsgeggedjTeIa111e Un securedValue 79,783,947 67,614,013 60,136,657 57,770,987 44,423,681 Total Net.'AssegSed?a>ra�ble Velu¢ `� -�.� $ 3,149,965,159 $ 2,923,9347546 S 2,610,983,169 $ 2,225,183,470 $ 1,896,937,825 ; =' 749..u/i 9S197/t998e s y96rl19 ' >»_-95/ 96" x y5FY . ,1 - ...:. sm.«..*.a . H 5 607,328,618 5 598,056,040 $ 593,084,678 $ 589,033,586 $ 574,102,552 1,230,571,559 1,194,367,177 1,169,643,780 1,174,332,339 1,179,951,841 �{ PersoaaLPrope' ..i -ems'?�R 1,632,328 1,581,739 1,533,185 1,495,546 2,493,171 ia,5'PEnsl =G' " 'g" ')% ' `-�-{ 4'= 54,377 26,687 41,966 87,352 123,078 ;.Le537.00her 6xempl$' st, �' ` . (44,781,911) (43,778,024) (43,171,518) (42,783,930) (41,256,857) (28,135,860) (28,427,000) (28,142,400) (27,488,800) (27,018,600) LesslB rnvsVa7uC -`ma's., "; 0 0 0 0 10 a' Total Aet�t.Ass sed sTaiLable Secore d V,a 1,766,669,111 I,721A26,619 1,692,989,691 1,694,676,093 1,688,795,185 Unseeursil J 'erg ". a"'b`*t�:�-'S. r- --c°`v�a.�•"E-3�" 369,654 778,001 608,938 591,897 524,542 15,262,973 14,561,036 14,135,932 10,207,099 10,020,119 a Ribial ToSp& 26,532,412 23,804,436 20,336,143 16,513,405 14,503,619 ensl»" . 'rs OWZ ' + 592,583 419,541 49,945 837,205 443,199 LesscOther l3xem»[ �`" 'fir -u (1,377,178) (5,328,832) (3,957,847) (4,890,796) (5,099,649) Total Net'Ags¢gsed Tax85lle Ung¢CurCdrValae �""'�: 41,180,344 34,234,182 31,173,111 23,258,610 20,39I,830 SeNY'9£h3J MyY.' StSm 4u+ �_vn'�S To l,lleYA55es 5ed�TaxaHblel M,� �� $ 1,807,849,455 $ 1,756,060,801 $ 1,724,162,802 $ 1,717,934,903 $ 1,708,787,015 a` (1)Secured values include State assessed data. �m VP 40 W a ®1 Source: County of Riverside,County Auditor Controller,Assessed Valuations 41 dl 41 �1 -165- • City of Palm Desert Change in Taxable Value Redevelopment Project Area# 1 -Amended 2003/2004 versus 2002/2003 • } , t p , FY 2063/26f14 20D2/2D03 Change Secured O . �d=land $ 1,037,831,772 $ 964,043,115 7.7% • provements $ 2,109,457,532 $ 1,966,604,300 7.3% 7 r960,a`hP, operf s 3,722,255 $ 4,822,804 -22.8% $ 0 $ 0 0.0% . ,: ss`40the Ejcempt�,�,. r -f $ (50,011,055) $ (50,251,474) -0.5% -n 4%65 H m owner Value�..� $ (30,819,292) $ (28,898,212) 6.6% • grog,�, et A's ess�ed Taxable`S'e'an'. Value _ $ 3,070,181,212 $ 2,856,320,533 7.5% • Unseeu ed .,,.�_ d".t:.` v� ,. » $ 9,581 $ 135,778 -92.9% • ,4�`;� _1mprovet $ 32,087,933 $ 29,96Q052 7.1% . -er onaltPl'vperty � =2 �, r +'� ' $ 56,477,588 $ 46,150,607 22.4% • ,,..''? _Less„,OtherEz mpt' ' =' $ (8,791,155) $ (8,632,424) 1.8% ' otsl et A�Sseasgd Taxable Tluseeuied'yalue - N s 79,793,947 S 67,614,013 19.0% Total EA`ssesse "taxable Value.,. $ 3,149,965,159 $ 2,923,934,546 7.7% (1)Secured values include State assessed data. 40 • • • • • • • Source: County of Riverside,County Auditor Controller,Assessed Valuations • . -166- City of Palm Desert Historical Net Assessed Taxable Values Redevelopment Project Area M 2 Last Ten Fiscal Years .s�Fr� 2002123-` 200112110E 00012001%' --g igo12000 . mr*�k00' .�0 ' xi+%� 0 x :s�,h"'�k' �,-. .. $ 338,504,943 $ 298,852,366 $ 269,700,076 $ 254,353,602 $ 241,562,963 915,313,076 830,436,695 675,455,199 615,751,576 557,262,592 7,136,535 7,539,989 6,840,530 6.545,424 10,603,177 0 0 0 0 '' e'ss"TOther Exe f` ( , 1 (2,979,597) (2,823,135) (2,767,781) (1,213,512) (1,189,719) ...• C:es5�E3°- 'ome Ownec,¢Value ' (3,316,600) (2,853,200) (2,639,000) (2,623,600) (2,522,800) 0 0 0 0 0 lei Total'NBtAssessed Taxable SecuredsValue SA,,. 1,254,658,357 1,131,152,714 945,589,023 872,813,490 805,716,213 - ...r; Unsecured x„*v- nd , `lfff*MOO— 4,482,615 2,799,545 2,910,472 2,417,234 1,877,417 vf�P,ets4nalPro - V& ""` 11,486,746 7,626,600 8,438.055 5,921587 3,984,295 O) Pena -" +Lr,,,;"' 'rss?; ,.r"t 0 0 115,676 46,458 77,730 Total IYet:Assessed Triable nsecured�alue 15,969,361 10,426,145 11,464,203 8,385,279 5,939,44E Total Net-Assess dlTaza`1e Yaiue '"s El- �Po S 1,270,627,718 $ 1,,141,578,859 $ 957,P53126 $ 881,198,769 S 811,655,655 w Yv1'1 "TM5 rY `��'?1 I999 a K7997/1995� 1 96; 997"a- j995!991 6 6 1994%1995 �. M a rs -:"xny $ 221,877,005 S 210,387,922 $ 197,557,269 5 187,520,043 $ 190,140,907 502,284,327 469,021,627 433.210,966 401,961,850 359,407,935 lei AMMP e > - + , „... 6,563,588 7,699,828 4,367,066 8,746,222 495,573 a' 75,371 0 0 o 0 E'e'sstOtber exem"t= .o + -}. ` "-. a (1,168,077) (1,245,174) (1,222,721) (1,210,397) (100,000) Ees'siBorr,eowner`alne a `-' -<-:I:' (2,403,800) (2,219.000) (2,023,000) (1,883,000) (1,730,400) ML''e 0 0 0 0 0 Secure 'sValue 727,228,414 683,645,203 631,889,580 595,134,718 54Q214,015 Tota)!'eGMsessi&Taxable ' Unsecured 3 AM ,rT "' d r ?"�4v Ix„� c 0 0 0 0 0 1,860,565 2,049,025 1,890,431 1,753,774 4,121,570 �� 4,363,617 4,126,229 4,132,977 5,092,080 10,980,477 q 57,857 34,546 14,500 0 0 V■ l 4� si?`e_. Total Net-Fssessed Taeable U seemed slue - 6,282,039 6,209,600 6,037,908 6,845,854 15,102,047 ®1 rGA^;' • vim, c,:Lr.2 v CT , �. aI Total iVek Assesse'd,Taxab)e„Value* S 733,510,453 $ 689,855,003 $ 637,927,488 E 607,960,57E $ 563,316,06E (1)Secured values include State assessed data. ym' V� 0 Source:Palm Desert Redevelopment Agency,Tax Increment Calculations&County of Riverside al V. m� V� m� Vr 41 41 41 41 -167- 4 City of Palm Desert Change in Taxable Value • Redevelopment Project Area#2 2003/2004 versus 2002/2003 t: s' FY 2003/2004 " 0200Z/2UO3,- W` .Change f Secured (1) • L;6d `_- p $ 338,504,943 $ 298,852,366 13.3% • Improvements _ ':- $ 915,313,076 $ 830,436,695 10.2% • ,,,Personall',roperty - - - " $ 7,136,535 $ 7,539,988 -5.4% , tPenalty ,. 7, $ 0 $ 0 0.0% jog! sS'Other�iExempt�= ��._. $ (2,979,597) $ (2,823,135) 5.5% $ (3,316,600) $ (2,853,200) 16.2% • t�LiessB liivl a1ueA $ 0 $ 0 0.0% • Tat, ,Net Assesse8 TNX ile,Seclued l;�alue 1,254,658,357 1,131,152,714 10.9% • Unseecured v ra $ 0 $ 0 0.0% iproveruent$ , � '-' $ 4,482,615 $ 2,799,545 60.1% • _ ,Personal Pzoperty ,y� �_ $ 11,486,746 $ 7,626,600 50.6% '` "Penalty r A),- A' $ 0 $ 0 0.0% • Tofal Net Assessed Taxable llnsecurgd Value- 15,969,361 10,426,145 53.2% • Total Net Assessed Tacable`Yalue $ 1,270,627,718 $ 1,141,578,859 11.3% • (1)Secured values include State assessed data. • • • Source: County of Riverside, County Auditor Controller,Assessed Valuations • -168- City of Palm Desert Historical Net Assessed Taxable Values Redevelopment Project Area#3 Last Ten Fiscal Years 3. t- y}10 y» 12000yAy'.y �. =-' R'r- 20D3i3004 2002/20 03 /2615 b 9992000 - . : _ Ae Secured'(]) - „ �";.-�' t. . Lrar dTYW—0 a . , - $ 83 600.129 $ 76,423,641 S 70,984,182 S 67,042,691 $ 62,879,457 �Im roVementS .R a" -fe >_' 221,590,995 176,923,362 167,824,429 149,512,375 142,999,361 1,581,880 1,224,360 1,221,819 1,739,556 4,247,032 0 0 255 40,255 0 16 -, gOExp 429,452).0 ie � f .$'24Cess•k7ome�Ownen5alue=nslrs �'* (1,912,400) (1,750,000) (1,687,000) (1,762,600) (1,789,200) TotalNet+Assessv.dTaxable Seeured+,aValue $s 301,711,240 249,843,562 235,475d55 213,921,087 205,797,198 �! as"�si A;Land.,W 2,138 2,213 29,325 29,992 31,781 47mpTovemen[5=' �:x-a'>sw 13,245,112 6,281,641 11,021,570 11,069,151 8,832,767 �) 'S zPersanal Pro = �: .. 37,209.995 26,061,080 21,453,363 24,809,691 18,345,262 0 0 904.695 1,176,179 625,647 O' Less;Odrer Exem'T „'�.`., (470,220) (459,656) (646,953) (424,328) (399,507) �I -tt!3,,.-' "tra "=cam 'max Total Net assessed Taxable UasecLLredxValue - 49,987,025 33,885,278 32,762,000 36,659,685 27,435,950 ti'";`ns".' "rG; TIyNeess�ed Tazable�Value -�� S 351,698,265 $ 283,728,840 S 268,237,155 FS 250,580,772 S. 233.233,148 t F .� a->.7.1 -ei-.--: .• .sass. *,s• r tk"xr; ` �,., wry��« r .-FY ;,,1998/1499�e, -199711998 .v..„ 3- "1996/1997 1995/1 6 :.,� 1994/19Q5 *�i cam, pse-�. .m,w ,: - - - ' Secured'](]) V- .and4 fix W501 $ 62,465,266 S 62,899,697 $ 59,741,591 $ 59,492,810 S 58,012,336 143,323,854 143,172,549 138,853,030 132,659,136 131.664,525 4,474,127 3,388,041 3,899,940 3,703,111 3,591,467 2,295 2,295 1,036 327,179 4,374 , '`rlxss-0therExem to (19,068,851) (18,623,087) (16,995,333) (15,980,806) (15,303,069) ®) „ il.esadlome�Ownera,146 ,' (1,807,400) (1,743,000) (1,531,600) (1,370,600) (1,330,000) Total NeGAssesseUTaxable Seeured Value 189389,291 189,096,495 183,968,664 178,830,829 176,639,633 Unsecured'' '" �: 1 � ��,. .�:. 29,656 29,703 30,941 4,307 4,407 8,843,353 5,998,073 4,335,089 11,413,799 3,757,625 t,x'r`Personal Pro �1 `.zF: � � `4 18,062,689 - 13,493,827 11,759,146 11,054,432 11,166,024 711,922 554,243 186,362 988,033 302,996 (341,925) (372,400) (254,319) (238,603) (434,768) 27,305,795 19,703,446 16,057,220 23,221,958 14,796,284 Tofal NefAssessed„Tnxable Unsecured Valuc '' To[al NeGAssesseduTaxable>Value"-+'r� �" � S 216,695,086 S 208,799,941 $ 200,025,884 S 202,052,787 S 191,435,917 (1)Secured values include State assessed data. ®1 dl Source:Palm Desert Redevelopment Agency,Tax Increment Calculations&County of Riverside 41 41 41 41 41 41 41 41 -169- 0 0 Q City of Palm Desert d Change in Taxable Values ORedevelopment Project Area#3 0 2003/2004 versus 2002/2003 FY 2003/2004 200.212003 - %Change Secured;(1) O -=.Land $ 83,600,129 $ 76,423,641 9.4% a. Improvements $ 221,590,995 $ 176,923,362 25.2% 0 ',persona)Property- - $ 1,581,880 $ 1,224,360 29.2% penalty $ 0 $ 0 0.0% o 'Less.OtherExempt - $ (3,149,364) $ (2,977,801) 5.8% Q Less HomeO•wnerYalue- $ (1,912,400) $ (1,750,000) 9.3% Total Net Assessed Taxable Secured Value 301,711,240 249,843,562 20.8% Vn$ecured: $ 2,138 $ 2,213 -3.4% O 9lmprovements k _ - $ 13,245,112 $ 8,281,641 59.9% -,,personal-Pro e $ 37,209,995 $ 26,061,080 42.8% P rty O Penaltwl. $ 0 $ 0 0.0% 'Lessr Other Exempt '-` $ (470,220) $ (459,656) 2.3% �i. Total Wet-Assessed Taxable llnsecured Value 49,987,025 33,885,278 47.5% 0 Total Net-Assessed Taxable Value $ 351,698,265 $ 283,728,840 24.0% 0 Q (1)Secured values include State assessed data. 0 0 O O \J 0 0 O O O O �l OSource: County of Riverside, County Auditor Controller,Assessed Valuations O O 0 O -170- City of Palm Desert Historical Net Assessed Taxable Values Redevelopment Project Area#4 Last Ten Fiscal Years n r-- 0 . yf 20032004+ ' ^200Zf2003 .y�2007/202 2000./2001 $ 1999/2000k;,z 387,694,896 S 363,532,124 S 336,601.532 S 295,636.937 8 266,431,690 �I 6%'` amiOSeme.nt3 -.; 1V4: X Ts:=li• 1,000,472,990 943,610,707 861,691,896 742,772,488 639,902,294 903,523 1,176,104 1,269,934 1,085,169 1,130,254 lei 0 0 91,675 32,666 (2,236,588) (2,005,855) (1,924,780) (1,240,153) (1,125,349) aS,Cess;llome Ocvne$-Xdlue "'�-"'" (16,032,800) (75,162,000) (14,604,800) (14,263,200) (13,61osoo) 0 0 0 0 0 lei 1< tTAs secINs a*�„,,�.. ,* sue-- T¢tal'Ne6As5e55ed Taxable Secured ValUey'° n'�"'rv{''�,' 1371,002,021 1,291,151,080 1,183,125,457 1,024,023,927 692,726,079 Unsecured 3,172,618 1,610,760 1,878,576 2,018,343 1,874,135 3,438,910 6,790,656 8,053,034 8,071,994 8,292770 0 0 70,495 31,283 28,376 tea, T0[SI NeBAsSeIDsedcT 4,61 t,528 8,401,416 10,002,105 10,121.620 10,195,181. 7otal`NetTJlSseasedab e'aV la u y $ 1,375,613,549 $ 1,299.552,496 S 1,193,127,562 S 1,034,145,547 S 902,923,260 .,�. - '-3xr::�F.;�� cFY s3`1199S/I999�' .,Se997/1998 �..,.z� 996/1997 r zi 199;11 96 l9 3995 Securedi'(1)'T5 $ 241,556,658 $ 239,474,265 S 230,406,034 $ 226,816,633 $ 219.270,406 MfI rPtiemenis , fiC 'y`v1- .R- asai 543,450,593 487,317,734 464,373,174 463,671,956 440,950,749 3,312,159 1,030,391 1,304,271 3,679,819 2,638,745 V, 52,911 52,911 158,682 500 0 ..m1.C59 other Exe t .,a�.i0a �" ";_ (945,874) (1,106,989) (1,049,518) (967,6)6) (568,381) Less HomeosiiT ire ValUe"0"- a' q (13,367,200) (12,854,800) (12,691,000) (12,355,000) 11,090,800) U—!s lm wal 0 0 0 0 0 Tnial Net•Assessed Tazabl¢S¢Cu[edx3''elue ""�. 774,059,247 713,913,512 682,501,643 680,846,292 651,200,719 ♦�' landx "'«£� r-'3 = > _4 . ? 0 41,582 41,532 11,851 12,618 624,979 923,449 738,984 623,062 1.231,206 a' " Pnair$to .� m- , -,"4 1,673,026 2,152,303 1,510,108 1,175,492 _1,923,987 28,74) 73,710 4,000 20,806 0 -gyp"�.e4xuZ `' 39ac#g%^` ad'f"r:- TOt�aI N¢L'ASsesSed TaXabIC Un$¢cnretlNalne� 2,326,746 3,191,044 2,294,674 1,831,211 3,167,e11 +aa�x�emn aer�6errxUixunFu+e ..�.c w:0., £ n�i�uT� TntelrNej Assessed Taxab7e,.F alue. = ;�_$ S 776,385,993 S 717,104,556 S 684,796,317 S 682,61],503 S 654368,530 (1)Secured values include State assessed data. a 1 am� ur ®1 ai 41 ai di a� a� at a� a� s • • City of Palm Desert Change in Taxable Values Redevelopment Project Area#4 2003/2004 versus 2002/2003 x Fl 2UO3/2 004 = ° 2002/2003 % Change= . gee urid (!) .Land , $ 387,894,896 $ 363,532,124 6.7% • =Tmprovemenfs $ 1,000,472,990 $ 943,610,707 6.0% . Persgnal Pr`gperty .- $ 903,523 $ 1,176,104 -23.2% Penaltyr °- - $ 0 $ 0 0.0% • .LeSs`OtU.erEXempt ;:'':_ �'__ $ (2,236,588) $ (2,005,855) 11.5% ,''Less ome.Ovmer Ualue $ (16,032,900) $ (15,162,000) 5.7% • .Less'$ n' `Nalu $ 0 $ 0 0.0% . `TotalNe�Qissessed Taxable Secured Value- 1,371,002,021 1,291,151,080 6.2% Ot • Unsecured �r �-� ) - t`I g ov@SSt nos . $ 1,172,619 $ 1,610,760 -27.20/. • ��?P<ersonal}P.rQperty ;£;.K-. $ 3,438,910 $ 6,790,656 -49.4% • Penalty 5 $ 0 $ 0 0.0% • Iotasue. 4,611,528 8,401,416 45.1%U ns�eu%red Value • - x _ •:9'otal'iVet�Assess'ed°'�.Taiole,valu� $ 1,375,613,549 $ 1,299,552,496 5.994. (1)Secured values include State assessed data. • • • • • • • • • • • • • • Source: County of Riverside,County Auditor Controller, Assessed Valuations • • • -172- This page intentionally left blank. lei 0 a Q� �1 ®1 fl► ®1 QI �1 a► m a► m a► ar ar ar 81 �r m ai 173 ®� ai Q 41 0 ai