HomeMy WebLinkAboutAudited Financial Reports for FY Ending 06/30/2004City of Palm Desert
STAFF REPORT
Council Meeting of January 13, 2005
TO:
FROM:
SUBJECT:
DATE:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
PAUL S. GIBSON, DIRECTOR OF FINANCE/CITY TREASURER
City of Palm Desert Audited Financial Reports for the Fiscal Year
Ending June 30, 2004
January 13, 2005
RECOMMENDATION:
By Minute Motion, receive and file the audited Comprehensive Annual Financial Report
(CAFR) for the City of Palm Desert for the fiscal year ending June 30, 2004.
BACKGROUND:
Lance Soll & Lunghard performed and completed the annual independent audit forthe fiscal
year ending June 30, 2004, for the City of Palm Desert in September 2004, in accordance
with generally accepted auditing standards. In the auditor's opinion, the basic financial
statements present fairly, in all material respects, the financial position of the City of Palm
Desert as of June 30, 2004, and the results of its operations and the cash flows of its
proprietary funds for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
In conducting their audit, the auditors test the City's internal controls. Attached is the City's
management letter along with the City's correction plan.
The audited financial statements for the City of Palm Desert will be submitted for review to
the Investment Committee at their meeting in January 2005.
The CAFR will be submitted for the Certificate of Achievement for Excellence in Financial
Reporting from the Government Finance Officers Association, as well as the Certificate for
Outstanding Financial Reporting from the California Society of Municipal Finance Officers.
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. We
believe that our current comprehensive annual financial report continues to meet the
Certificate of Achievement Program's requirements.
Staff recommends that the City Council receive and file the audited financial statements for
the City of Palm Desert for the Fiscal Year Ended June 30, 2004.
Respectfully submitted,
PAUL S. GIBSON,
Reviewed and concur,
CARGOS L.O'i' GA,
DIRECTOR OF FINANCE/TREASURER CITY MANAGER
H: Wcctg041Audit041staHreport2004audit.wpd
CITY OF PALM DESERT, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
JUNE 30, 2004
INTRODUCTORY SECTION TAB
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 vi
GFOA Certificate of Achievement for Excellence in Financial Reporting xiii
CSMFO Certificate of Award for Outstanding Financial Reporting xiv
List of Principal Officials xv
Organization Chart xvi
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT 1
MANAGEMENT'S DISCUSSION AND ANALYSIS 3
BASIC FINANCIAL STATEMENTS
Government -Wide Financial Statements:
Exhibit A - Statement of Net Assets 15
Exhibit B - Statement of Activities 16
Fund Financial Statements:
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 I - Statement of Cash Flows - Proprietary Funds 29
Exhibit J - Statement of Fiduciary Net Assets - Fiduciary Funds - Agency 30
Notes to Basic Financial Statements 31
i
CITY OF PALM DESERT
COMPREHENSIVE ANNUAL FINANCIAL REPORT
JUNE 30, 2004
TABLE OF CONTENTS
Page
Number
REQUIRED SUPPLEMENTARY INFORMATION
Schedule 1 - Budgetary Comparison Statement - General Fund 71
Schedule 2 - Budgetary Comparison Statement - Prop A Fire Tax -
Special Revenue Fund
SUPPLEMENTARY SCHEDULES
General Fund:
Schedule 3 - Budgetary Comparison Schedule by Department - General Fund
Other Governmental Funds - Combining Statements:
Schedule 4 - Combining Balance Sheet - Other Governmental Funds
Schedule 5 - Combining Statement of Revenues, Expenditures and Changes
in Fund Balances - Other Governmental Funds
Other Governmental Funds - Nonmajor Special Revenue:
Schedule 6 - Combining Balance Sheet - Nonmajor Special Revenue Funds
Schedule 7 - Combining Statement of Revenues, Expenditures and Changes
in Fund Balances - Nonmajor Special Revenue Funds
72
74
77
78
82
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
ii
CITY OF PALM DESERT
COMPREHENSIVE ANNUAL FINANCIAL REPORT
JUNE 30, 2004
TABLE OF CONTENTS
Page
Number
SUPPLEMENTARY SCHEDULES (Continued)
Other Governmental Funds - Nonmajor Capital Projects:
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 Net Assets and
Liabilities - All Agency Funds 114
STATISTICAL SECTION
Revenue and Expenses Statistics
Governmental Expenses by Function
Government -Wide Revenues
118
119
Revenue and Expenditures Statistics
Graphs - Historical Revenue and Expenditures Combined General,
Special, Debt Service and Capital Project 120
Historical Revenue and Expenditures Combined General, Special,
Debt Service and Capital Project 121
Historical General Revenue and Expenditures 123
Historical General Fund Actual Statement of Revenues 124
Graph - Historical General Fund Actual Statement of Revenues 125
Historical General Fund Actual Statement of Expenditures 126
Graph - Historical General Fund Actual Statement of Expenditures 127
Historical General Revenue and Expenditures Per Capita 128
Top 40 Sales Tax Generators Graph - Historical Sales Tax Trends 129
FY 2003-2004 and FY 2002-2003 Breakdown of Basic 1 % Property Tax Rate
(Not in Redevelopment Project Area) 130
Graph - FY 2003-2004 Breakdown of Basic 1 % Property Tax Rate (Not in
Redevelopment Project Area) 131
iii
CITY OF PALM DESERT
COMPREHENSIVE ANNUAL FINANCIAL REPORT
JUNE 30, 2004
TABLE OF CONTENTS
Page
Number
Revenue and Expenditures Statistics (Continued)
Historical Net Assessed Taxable Values City -Wide 132
Change in Taxable Value City -Wide - FY 2003-2004 and FY 2002-2003 133
Assessed Value by Economic Category FY 2003-2004 134
Graph - Assessed Value by Economic Category FY 2003-2004 135
Property Tax Levy and Collections 136
Special Assessment Levy and Collections 137
FY 2003-2004 Top Ten Property Tax Payers 138
Historical Net Assessed Taxable Values City -Wide Graph - Assessed
Valuation Growth 139
Demographic Statistics 140
Building Permits and Taxable Transactions 141
Miscellaneous Statistics 142
Bonded Debt Statistics
Computation of Legal Debt Margin 143
Direct and Overlapping Bonded Debt 144
Revenue Bond Coverage 145
Ratio of Annual Debt Service Expenditures for General Bonded Debt
to Total General Governmental Expenditures 146
Ratio of Net General Obligation Debt to Assessed Value and Net General
Obligation Debt Per Capita 147
Special Assessment Information 148
Revenue Statistics Redevelopment Agency
Project Area Statistics 149
Tax Allocation Bond Issue Information 150
FY 2003-2004 Breakdown of Basic 1 % Property Tax Levy Rates 151
Historical Tax Increment Summary Redevelopment Project Area #1 - Original 152
Historical Tax Increment Summary Redevelopment Project Area #1 - Amended 153
Historical Tax Increment Summary Redevelopment Project Area #2 154
Historical Tax Increment Summary Redevelopment Project Area #3 155
iv
CITY OF PALM DESERT
COMPREHENSIVE ANNUAL FINANCIAL REPORT
JUNE 30, 2004
TABLE OF CONTENTS
Page
Number
Revenue Statistics Redevelopment Agency (Continued)
Historical Tax Increment Summary Redevelopment Project Area #4 156
Historical Net Assessed Taxable Values Redevelopment Project Area #1 - Original 157
Change in Taxable Value Redevelopment Project Area #1 - Original 158
Historical Net Assessed Taxable Values Redevelopment Project Area #1 - Amended 159
Change in Taxable Value Redevelopment Project Area #1 - Amended 160
Historical Net Assessed Taxable Values Redevelopment Project Area #2 161
Change in Taxable Value Redevelopment Project Area #2 162
Historical Net Assessed Taxable Values Redevelopment Project Area #3 163
Change in Taxable Value Redevelopment Project Area #3 164
Change in Taxable Value Redevelopment Project Area #4 165
FINANCIAL SECTION TAB
Lance
Soli &
Lunghard
LLP
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
Brandon W. Burrows
Donald L. Parker
Michael K. Chu
David E. Hale
A Professional Corporation
Donald G. Slater
Richard K. Kikuchi
Retired
Robert C. Lance
1914-1994
Richard C. Soil
Fred J. Lunghard, Jr.
1928-1999
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 Years
MI''II
�j
1929 2004
of Excellence
203 N. Brea Blvd. • Suite 203 • Brea, CA 92821-4056 • (714) 672-0022 • Fax (714) 672-0331 • www.islcpas.com
Lance
Soli s
Lunghard
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
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
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.
.a.4401, Jee, 5E-4440e, eeo
September 10, 2004
GOVERNMENT -WIDE FINANCIAL STATEMENTS TAB
MANAGEMENT'S DISCUSSION AND ANALYSIS
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
• 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.
• 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.
• 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.
• 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.
• 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.
• 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-
REPORTING THE CITY AS A WHOLE
The Statement of Net Assets and the Statement of Activities:
Our analysis of the City as a whole begins on page 15. One of the most important questions asked
about the City's finances is, "Is the City 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
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.
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
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.
In the statement of Net Assets and the Statement of Activities, we separate the City Activities as
follows:
Governmental activities — Most of the City's basic services are reported in this category, including
the general administration (city manager, city clerk, finance, etc.), police and fire protection, public
works, parks, recreation and culture departments. Property taxes, sales tax, transient occupancy tax,
user fees, interest income, franchise fees, state and federal grants, contributions from other agencies,
and other revenues finance these activities.
Business -type activities — The City charges a fee to customers to cover all or most of the cost of
certain services it provides. The City's municipal golf course, Desert Willow, and the City's Office
Complex, Parkview, activities are reported in this category.
Component unit activities — The City includes one separate legal entity in its report — the Palm Desert
Recreation Facilities Corporation. Although legally separate, this "component unit" is important
because the City is financially accountable for it.
REPORTING THE CITY'S MOST SIGNIFICANT FUNDS
Fund Financial Statements:
The fund financial statements provide detailed information about the most significant funds and other
funds — not the City 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 City's two types of funds are governmental and proprietary.
-4-
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:
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-
TAHE3
GLITP D
r-ileyasilg22o mB
Cikamarti BBrasT}pe
101. 2i1B 2J MB 101 22CB
Lad $ 71.4) $ 1151 $ $ 5217 $1238. $122(8
C i cgus 1891 1148 - - 1891 1148
B.i ,axiis 67(B 6636 1071 1107 77.74 77.43
Elilmart 183 219 163 218 346 437
Haute 1915) 1 1913) 1
TES $ 1079 $ 39.82 $ $ E6 $ 41548 $41124
Compared to the prior year, net assets of the City's governmental activities decreased by 0.70 percent,
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,
unrestricted net assets, which represents, the part of net assets that can be used to finance day-to-day
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
unrestricted funds that can be used to finance its operations.
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
was necessary to make the reclassification. In face of the reclassification, the City's unrestricted net
assets increased, which indicates the City's ability to manage its operations so its expenses do not
exceed its revenues.
-6-
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.
REVENUES:
Program Revenues:
Charges for services
Operating grants and
contributions
Capital grants and
contributions
General Revenues:
Property taxes
Tax increment
Sales tax
Transient occupancy tax
Other taxes
Other revenues
Investment earnings
TOTAL REVENUES
EXPENSES:
General government
Public safety
Public works
Parks, recreation and culture
Payments to other agencies
Interest on long-term debt
Golf Course -Desert Willow
Office Complex-Parkview
TOTAL EXPENSES
INCREASE (DECREASE)
IN NET ASSETS
TABLE 2
CHANGES IN NET ASSETS
(IN MILLIONS)
As of June 30, 2004 and 2003
Governmental
Activities
Business -Type
Activities
Total
2004 2003 2004 2003 2004 2003
10.84 $ 10.67 $ 7.09 $ 6.67 $ 17.93 $ 17.34
4.63 6.25 - - 4.63 6.25
7.13 4.33 0.27 0.41 7.40 4.74
4.32
56.00
15 14
7.66
4.44
(6.85)
2.98
106.29
28.40
15.42
13.05
3.98
24.05
14.13
99.03
3.77
50.25
13.46
6.8 1
7.00
3.01
3.37
108.92 7.36
21.06
15.60
23.01
3.48
22.14
14.44
6.66
0.57
99.73 7.23
7.26 9.19
0.05
0.01
7.14
6.65
0.51
7.16
4.32
56.00
15.14
7.66
4.44
(6.85)
2.98
113.65
28.40
15.42
13.05
3.98
24.05
14.13
6.66
0.57
106.26
3.77
50.25
13.46
6.81
7.00
3.06
3.38
116.06
21.06
15.60
23.01
3.48
22.14
1444
6.65
0.51
106.89
0.13 (0.02) 7.39 9.17
BEGINNING NET ASSETS 322.99 211.18 65.56 65. 58 388.55 276.76
RESTATEMENT OF NET ASSETS (9.60) 102.62 - - (9.60) 102.62
ENDING NET ASSETS $ 320.65 $ 322.99 $ 65.69 $ 65.56 $ 386.34 $ 388.55
- 7 -
Governmental Activities
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
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
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
increment. The following schedule represents the net cost of providing services:
Governmental Activities
Net (Expense) Revenue
(In Millions)
2004 2003
General Government ($20.04) ($13.68)
Public Safety (12.58) (12.65)
Public Works (4.99) (14.36)
Parks, recreation and culture (0.64) (1.22)
Payment to other agencies (24.05) (22.14)
Interest on long-term debt (14.12) (14.44)
Total ($74.42) ($78.49)
Business -type Activities
Business -type activities revenues increased $0.22 million, a 3.1 percent increase. Increase in golf
rounds played was the major factor in the increase for the business -type activities revenues, along with
CPI adjustments in the tenants rent at Parkview Office Complex.
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.
-8-
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:
• For the Prop A Fire Tax fund, fund balance increased due to lower fire cost.
• For the Redevelopment Agency Financing Authority Debt Service fund, fund balance increased
due to the new bonds that was issued.
• 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.
• 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
budget of $38.82 million. There were significant changes in the original budget compared to the final
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
for street resurfacing. This was due to the re -appropriations of prior year encumbrances to the fiscal
year ending June 30, 2004.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of 2004, the City had $415.48 million invested in a broad range of capital assets, including
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)
of $10.24 million, or 2.5 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 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
Equipment 1.83 2.19 1.63 2.18 3.46 4.37
Infrastructure 191.50 189.28 191.50 189.28
TOTALS $ 350.79 $ 339.82 $ 64.69 $ 65.42 $ 415.48 $ 405.24
-10-
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. 10.66
$17.98
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 ld 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.
-11-
TABLE 4
OUTSTANDING DEBT, AT YEAR-END
(IN MILLIONS)
For the years ended June 30, 2004 and 2003
Governmental Business Type
Activities Activities
Total
2004 2003 2004 2003 2004 2003
Compensated absences $ 1.71 $ 1.48 $ $ - $ 1.71 $ 1.48
Special assessments debt with
governmental commitment 40.53 40.53
Notes payable 0.98 1.95 0.98 1.95
Contract and leases payable 4.82 5.07 0.83 1.15 5.65 6.22
Revenue bonds and notes
(backed by specific tax
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
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. In an effort to increase its cash flow for additional capital projects, the City's
Redevelopment Agency was able to refund an existing bond and lower their annual principal and
interest payments.
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
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
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
statements.
-12-
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 earning.
• 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-
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors
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
City's Finance Department, at the City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert,
California 92260-2578, or (760) 346-0611.
-14-
Assets:
Cash and investments
Receivables:
Accounts
Notes
Interest
Loans
Internal balances
Prepaid costs
Inventories
Unamortized debt issuance costs
Deposits
Due from other governments
Property held for resale
Due from component unit
Restricted assets:
Cash with fiscal agent
Capital assets not being depreciated
Capital assets, net of depreciation
Total Assets
CITY 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.
$ 182,315,638 $ 2,739,618 $ 185,055,256 $ 405,670
2,015,011 84,183 2,099,194
3,108,930 3,108,930
731,331 731,331
12,875,960 - 12,875,960
651,555 (651,555)
939,016 45,283 984,299
36,058 201,096 237,154
5,251,888 5,251,888
681,025 681,025
3,834,902 3,834,902
865,335 865,335
672,000 47,206 719,206
58,537,707 - 58,537,707
199,923,806 52,349,436 252,273,242
150,864,778 12,341,347 163,206,125
623,304,940 67,156,614
12,195
3,639
26,006
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 -
Unearned 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
Net Assets:
Invested in capital assets,
net of related debt 141,303,283
Restricted for:
Special projects 46,550,415
Capital projects 45,749,963
Debt service 7,968,219
Unrestricted 79,075,507
63,857,424
1,830,204
304,126,539 849,370
205,160,707
46,550,415
45,749,963
7,968,219
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
CITY OF PALM DESERT
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2004
Functions/Programs
Primary Government:
Governmental Activities:
General government
Public safety
Parks, recreation and culture
Public works
Payments to other agencies
Interest on long-term debt
Total Governmental Activities
Business -Type Activities:
Desert Willow Golf Course
Office Complex - Parkview
Total Business -Type Activities
Total Primary Government
Component Units:
Palm Desert Recreational Facilities Corp.
Expenses
$ 28,402,902
15,420,151
3,977,447
13,046,864
24,051,292
14,124,371
99,023,027
6,657,220
570,135
Program Revenues
Charges for
Services
$ 6,540,065
2,737,585
1,048,667
511,317
10,837,634
6,237,087
851,763
7,227,355 7,088,850
Operating Capital
Contributions Contributions
and Grants and Grants
$ 271,675 $ 1,555,015
107,244
4,253,378
4,632,297
2,288,025
3,291,118
7,134,158
267,951
267,951
$ 106,250,382 $ 17,926,484 $ 4,632,297 $ 7,402,109
$ 1,660,844 $ 1,730,533 $ $
General Revenues:
Taxes:
Property taxes, levied for general purpose
Tax increment
Transient occupancy taxes
Sales taxes
Franchise taxes
Motor vehicle in lieu
Use of money and property
Miscellaneous
Special Item:
Refunding of special assessment debt
Total General Revenues and Special Items
Change in Net Assets
Net Assets at Beginning of Year
Restatement of Net Assets
Net Assets at End of Year
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)
(76,418,938)
(152,182) (152,182)
281,628 281,628
129,446 129,446
129,446 (76,289,492)
4,320,126 4,320,126
55,994,780 55,994,780
7,660,831 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)
83,682,632 83,682,632
69,689
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 $ (401,860)
17
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18
FUND FINANCIAL STATEMENTS TAB
FUND FINANCIAL STATEMENTS
Assets:
Pooled cash and investments
Receivables:
Accounts
Notes
Interest
Loans
Prepaid costs
Deposits
Due from other governments
Due from other funds
Advances to other funds
Inventories
Property held for resale
Due from component unit
Restricted assets:
Cash and investments with fiscal agents
Total Assets
Liabilities and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Unearned revenues
Advances from other funds
Deferred revenues
Amounts due under pass -through agreements
Deposits payable
Total Liabilities
Fund Balances:
Reserved:
Reserved for encumbrances
Reserved for inventory
Reserved for continuing appropriation
Reserved for prepaid costs and deposits
Reserved for property held for resale
Reserved for debt service
Reserved for receivables (notes and loans)
Reserved for advances to other funds
Unreserved:
Unreserved, reported in:
General fund
Special revenue funds
Capital projects funds
Debt service funds
Total Fund Balances
Total Liabilities and Fund Balances
CITY OF PALM DESERT
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2004
General
$ 31,118,311
1,127, 528
3,000,000
378,994
2,100,000
919,074
680,000
3,002,654
651,555
19,378,140
36,058
672,000
$ 63,064,314
Special Revenue
Fund
Prop A
Fire
Tax
$ 2,936,800
51,396
2,988,196
$ 4,525,239 $
258,680
14,976
2,807,000
7,605,895
2,071,529
36,058
1,599,074
1,709,018
5,100,000
17,323,140
27,619,600
55,458,419
$ 63,064,314
339,881
339,881
2,648,315
2,648,315
Capital Projects
Fund
Redevelopment
Agency
Capital Projects
$ 6,968,464
254,965
2,773,326
17,113
40,796,473
$ 50,810,341
$ 392,664
11,722
404,386
4,713,952
20,024,351
17,113
2,773,326
22,877,213
50,405,955
$ 2,988,196 $ 50,810,341
See Notes to Financial Statements
20
$
Debt Service
Funds
RDA Redevelopment
Financing Agency
Authority Debt Service
19,020
6,647,085
$ 6,666,105
Other
Governmental
Funds
$ 65,826,751 $ 72,346,484
689,120
$ 6,591 $
6,591
600,424
6,059,090
6,659,514
198,363
108,930
78,352
8,002,634
2,829
1,025
780,852
13,513,524
865,335
11, 094,149
Exhibit C
Total
Governmental
Funds
$ 179,196,810
2,015,011
3,108,930
731,331
12,875,960
939,016
681,025
3,834,902
651,555
32,891,664
36,058
865,335
672,000
58,537,707
66,515,871 $ 106,992,477 $ 297,037,304
32,785,480
26,889,509
59,674,989
6,840,882
$ 2,932,573
94,491
111,753
106,184
116,811
415,068
3,776,880
$ 8,196,948
364,893
126,729
32,891,664
2,923,811
26,889,509
415,068
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
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
12,899,972
6,840,882 103,215,597
225,228,682
$ 6,666,105 $ 66,515,871 $ 106,992,477 $ 297,037,304
21
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22
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
Compensated absences
Interest on long-term debt is not accrued in governmental funds but, rather,
is recognized as an expenditure when due.
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.
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.
Community Development Block Grant - relates to loans given to low
to moderate income families.
Deferred amounts in -lieu of property taxes not received from developer
Redevelopment Agency land purchase from City.
672,000
116,811
80,000
2,055,000
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.
(261,800,064)
(1,709,018)
(3,155,324)
5,251,888
2,923,811
4,047,687
Net assets of governmental activities $ 320,647,387
See Notes to Financial Statements
23
CITY OF PALM DESERT
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2004
General
Special Revenue Capital Projects
Fund Fund
Prop A Redevelopment
Fire Agency
Tax Capital Projects
Revenues:
Taxes $ 30,887,340 $ 1,432,859 $
Special assessments collected
Licenses and permits 1,053,905
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
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 -
Public safety 13,052,963 2,171,008
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
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)
Bonds issued
Sale of property
Total Other Financing Sources (Uses) 233,147 726,605 25,311,289
Special Item:
Refunding of special assessment debt
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
6,643,151
48,815,268
3,199
2,645,116
18,687,141
31,718,814
$ 55,458,419 $ 2,648,315 $ 50,405,955
See Notes to Financial Statements
24
Debt Service
Funds
RDA
Financing
Authority
Redevelopment
Agency
Debt Service
Other
Governmental
Funds
$ - $ 55,994,780 $ 5,633,206
- 214,950
262,764
2,434,066
4,494,098
3,800
985,031 282,580 1,233,721
- 159,252
479,842 1,245,648
2,095,969
985,031
239
27,150, 000
15,739,454
42,889,693
(41,904,662)
17,466,578
(24,153,420)
48,690,000
42,003,158
98,496
6,561,018
56, 757,202 17, 777,474
13,719
24,051,292
122,707
903,595
25,091,313
31,665,889
Exhibit E
Total
Governmental
Funds
$ 93,948,185
214,950
1,316,669
6,067,555
4,494,098
1,052,467
4,241,506
306,630
2,083,598
2,095,969
115,821,627
12,897,265 27,122,532
24,051,292
66,725 15,290,696
2,638,386
4,897,566 10,153,096
15,867,513 18,927, 787
250,000 28,372,707
16,643,049
33,979,069 143,199,545
(16,201,595)
22,621,078
(25,257,948) (16,947,329)
1,728,522
(25,257,948)
6,407,941
432,941
7,402,271
(8,706,206)
(17,505,530)
120,721,127
$ 6,659,514 $ 6,840,882 $ 103,215,597
(27,377,918)
68,236,264
(68,236,264)
48,690,000
1,728,522
50,418,522
(8,706,206)
14,334,398
210,894,284
$ 225,228,682
25
CITY OF PALM DESERT Exhibit F
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
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,
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
current financial resources and, therefore, are not reported as expenditures in
governmental funds:
Net change in compensated absences for the current period.
Net change in accrued interest for the current period.
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:
(230,341)
(30,591)
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.
Deferred amounts in -lieu of property taxes not received from developer
Reimbursement revenue related to repairs completed by the City on behalf of the
public library.
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.
96,000
80,000
(172,217)
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
Enterprise Funds
Major Non -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
Noncurrent:
Capital leases payable
Total Noncurrent Liabilities
1,568,495 44,344 1,612,839
507,702 507,702
507,702 507,702
Total Liabilities 2,076,197 44,344 2,120,541
Op
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
CITY OF PALM DESERT Exhibit H
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2004
Operating Revenues:
Fees and rentals
Merchandise sales
Total Operating Revenues
Operating Expenses:
Maintenance and operations
Cost of merchandise
General and administrative
Depreciation and amortization
Total Operating Expenses
Operating Income (Loss)
Nonoperating Revenues (Expenses):
Interest revenue
Interest expense
Total Nonoperating
Revenues (Expenses)
Income (Loss) Before Contributions
Capital Contributions
Changes in Net Assets
Net Assets:
Beginning of Fiscal Year
End of Fiscal Year
Business -Type Activities
Enterprise Funds
Major Non -Major
Fund
Desert Willow
Golf Course
$ 5,446,645
790,442
6,237,087
4,215,430
426,426
1,129, 746
824,553
6,596,155
(359,068)
(61,065)
(61,065)
(420,133)
Fund
Office Complex
Parkview
Total
Enterprise
Funds
Governmental
Activities -
Internal
Service Funds
$ 851,763 $ 6,298,408 $ 213,137
- 790,442
851,763
197,426
178,144
194,565
570,135
281,628
7,088,850
4,412,856
426,426
1,307,890
1,019,118
7,166,290
(77,440)
213,137
213,137
213,137
34,634
(61,065)
(61,065) 34,634
281,628 (138,505) 34,634
267,951 - 267,951 139,824
(152,182)
60,182,517
$ 60,030,335
281,628 129,446 174,458
5,375,665 65,558,182 3,873,229
$ 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
Cash Flows From Operating Activities:
Receipts from customers
Payments to suppliers
Internal activity - payments to other funds
Receipts from interfund services
Net Cash Provided (Used) by Operating Activities
Cash Flows From Capital and Related
Financing Activities:
Purchases of capital assets
Principal paid on leases
Interest paid on leases
Net Cash Provided (Used) by Capital and
Related Financing Activities
Cash Flows From Investing Activities:
Interest and dividends
Net Cash Provided (Used) by Investing Activities
Net Increase (Decrease) in Cash and
Cash Equivalents
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year
Reconciliation of Operating Income (Loss) to Net
Cash Provided (Used) by Operating Activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation and amortization expense
Changes in assets and liabilities:
Receivables, net
Prepaids and deposits
Inventory
Accounts, accrued liabilities and deposits
payables
Unearned revenue
Business -Type Activities
Enterprise Funds
Major Non -Major
Fund Fund
Desert Willow Office Complex
Golf Course Parkview
Total
Enterprise
Funds
Governmental
Activities -
Internal
Service Funds
$ 6,418,874 $ 824,644 $ 7,243,518 $
(5,845,638) (391,887) (6,237,525)
(105,952) (105,952)
573,236 326,805
(7,655) (18,019)
(313,223)
(61,065)
(381,943)
191,293
339,521
(18,019)
308,786
1,900,018
900,041
(25,674)
(313,223)
(61,065)
(399,962)
500,079
2,239,539
213,137
213,137
(83,908)
(83,908)
34,634
34,634
163,863
2,954,965
$ 530,814 $ 2,208,804 $ 2,739,618 $ 3,118,828
$ (359,068) $ 281,628
824,553 194,565
157,848 (26,099)
(10,421)
70,975
(134,591) (120,604)
23,940 (2,685)
(77,440) $
1,019,118
131,749
(10,421)
70,975
(255,195)
21,255
213,137
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
CITY OF PALM DESERT Exhibit J
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS - AGENCY
JUNE 30, 2004
Assets:
Cash and investments $ 16,754,733
Receivables (net of allowance for uncollectibles):
Accounts 27,645,360
Interest 18,327
Total Assets $ 44,418,420
Liabilities:
Accounts payable $ 10,141
Deposits 44,408,279
Total Liabilities $ 44,418,420
See Notes to Financial Statements
30
NOTES TO BASIC FINANCIAL STATEMENTS TAB
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.
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
the Corporation's budget.
Complete financial statements of the Component Unit can be obtained from the City's
administrative offices.
b. 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 nonfiduciary activities of the
primary government and its component units. For the most part, the effect of
interfund activity has been removed from these statements. Governmental activities,
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
charges for support. Likewise, the primary government is reported separately from
certain legally separate component units for which the primary government is
financially accountable.
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 Projects 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.
Fiduciary Fund Type
Agency Funds - These funds are used to account for assets held by the City in a
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
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
all financial resources except those required to be accounted for in another fund.
The Prop A Fire Tax Special Revenue Fund is used to account for all revenues
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
Department) equipment or apparatus.
The Redevelopment Agency Capital Projects Fund is used to account for the fiscal
activities of the Palm Desert Redevelopment Agency.
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.
The Redevelopment Agency Debt Service Fund is used to account for resources and
payments of debt issued by the Redevelopment Agency.
Proprietary Fund
The Desert Willow Golf Course Fund is used to account for the fees collected and
expenses incurred in connection with operating the municipal golf course in the City
of Palm Desert.
c. Measurement Focus and Basis of Accounting
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.
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
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
City of Palm Desert
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.
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
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.
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
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.
When both restricted and unrestricted resources are available for use, it is the
government's policy to use restricted resources first, and then unrestricted resources
as 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
assets are recorded at estimated fair market value at the date of donation.
In accordance with GASB Statement No. 34, the City has reported general infrastructure
assets acquired in prior and current years.
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.
36
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)
f. Appropriations Limit
g•
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,
2004, proceeds of taxes did not exceed appropriations.
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
J.
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.
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.
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
Levy date
Due date
Delinquent date
January 1
July 1 to June 30
November 1 - 1st Installment, March 1 - 2nd installment
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
City of Palm Desert
Notes to Financial Statements (Continued)
Note 2: Cash and Investments (Continued)
Credit Risk
The City's investment policy requires certain types of investments to meet a minimum
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"
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
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
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.
As of June 30, 2004, none of the City's deposits or investments were exposed to
custodial credit risk.
Concentration of Credit Risk
The City's investment policy imposes restrictions on the percentage the City can invest in
certain types of investments and also the percentage the City can invest with any one
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:
Money market mutual funds - held by
fiscal agent
California Local Agency Investment Fund
California Asset Management Program
Federal Agencies
U.S. Treasury
Commercial Paper
Medium -Term Corporate Notes
Investment Maturities (in Years)
Less
Than 1 1 - 5
$ 30,687,261 $
86,110,129
40,850,990
20,996,204
30,664,469
21,044,387
14,056,285
Fair
Value
- $ 30,687,261
86,110,129
40,850,990
20,996,204
- 30,664,469
21,044,387
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)
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.
The City has $116,811 and the Agency has $79,205 in home improvement loans.
Payments of interest and principal are due monthly on these loans.
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 lc/0 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
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
Housing Program or 2024
Loan balance and interest
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
Mobilehome Park
Desert Rose
362,837 5.00 30 years Deed of Trust
from date
of loan
Loan balance and interest
due upon maturity. If
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.
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.
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
Funds
Due to
Other Funds
Desert Willow
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
Funds
Advances from Other Funds:
RDA Debt Service
Other Governmental Funds
Total
Advances to Other Funds
Other
General Governmental
Fund Funds
Total
$ 19,366,480 $ 13,419,000 $ 32,785,480
11,660 94,524 106,184
$ 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: Interfund Receivable, Payable and Transfers (Continued)
Due To/From Primary Government and Component Unit
Funds
Due to
Primary
Govemment
PDRFC Total
Due From Component Unit:
General Fund $ 672,000 $ 672,000
Desert Willow Golf Course 47,206 47,206
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.
Interfund Transfers
Transfers In
General
Prop A RDA RDA Other
Fire Financing Capital Governmental
Tax Authority Projects Funds
Total
Transfers Out:
General $ $ 726,605 $ $ $ 132,723 $ 859,328
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
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
Moderate Income Housing Special Revenue Fund,
3. transfer allocation of administrative expenses,
4. transfer revenues to provide for capital projects, and
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
Construction -in -progress 11,483,769 11,483,769 (3,052,006) 10,658,702 (155,377) 18,935,088
Total Capital Assets Not
Being Depreciated 191,491,733 (562,279) 190,929,454 (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 Depreciated 223,097,554 (21,727) 223,075,827 1,015,782 8,141,984 (232,108) 232,001,485
Less accumulated depreciation for:
Buildings (23,335,854) (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 Depreciated 148,332,216 (21,727) 148,310,489 1,015,782 1,540,832 (2,325) 150,864,778
Net Capital Assets
Governmental Activities $ 339,823,949 $ (584,006) $ 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 $
Total Capital Assets Not
Being Depreciated 52,173,499
Capital assets, being depreciated:
Buildings 12,688,403
Machinery and equipment 4,019,093
Total Capital Assets Being 16,707,496
Depreciated
Less accumulated depreciation for:
Buildings (1,623,236)
Machinery and equipment (1,841,483)
Total Accumulated
Depreciation
Net Capital Assets Being
Depreciated
- $ 52,173,499 $
52,173,499
- $ 175,937 $ - $ 52,349,436
175,937 - 52,349,436
12,688,403
18,019 - 12,706,422
4,019,093 103,189
(71,331) 4,050,951
16, 707,496 121,208
(71,331) 16,757,373
(1,623,236)
(1,841,483)
(3,464, 719) (3,464, 719)
(32,007) (407,236)
67,811 (1,994,668)
32,007 (611,882) - (2,421,358)
(1,019,118) 67,811 (4,416,026)
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) $ 64,690,783
*Adjustments are a result of prior years capitalization and reporting.
45
City of Palm Desert
Notes to Financial Statements (Continued)
Note 5:
Note 6:
Capital Assets (Continued)
1.
Land sold in 2001, but not removed from Capital Asset listing, and
2. Adjustment to infrastructure to remove overstatement caused
classification.
Depreciation expense was charged to functions/programs of the
follows:
Governmental Activities:
General government
Public safety
Public works
Parks, recreation and culture
Depreciation expense for internal service funds is charged
to various functions based on usage of capital assets
Total Depreciation Expense -
Governmental Activities
Business -Type Activities:
Golf course - Desert Willow
Office complex - Parkview
by incorrect expenditure
primary government as
$ 2,093,875
176,806
2,921,436
1,195,898
213,137
$ 6,601,152
$ 824,553
194,565
Total Depreciation Expense -
Business -Type Activities $ 1,019,118
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
July 1, 2003 Adjustments (*) Additions Reduction
Balance at
June 30, 2004
Due Within
One Year
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
Business -Type Activities:
Capital leases
$ 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:
$ 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.
46
City of Palm Desert
Notes to Financial Statements (Continued)
Note 6: Long -Term Liabilities (Continued)
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,
(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
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.
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
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.
47
City of Palm Desert
Notes to Financial Statements (Continued)
Note 6: Long -Term Liabilities (Continued)
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
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
2025-2026 435,000 20,425 455,425
$ 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
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.
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
2005 $ 525,000 $ 141,195 $ 666,195
2006 555,000 113,378 668,378
2007 585,000 83,445 668,445
2008 600,000 51,592 651,592
2009 635,000 17,621 652,621
$ 2,900,000 $ 407,231 $ 3,307,231
1997 Series Tax Allocation Refunding Revenue Bonds
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.
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. The advance refunding resulted in an economic gain of
$1,148,752 (difference between the present value of the annual debt service
payments between the old debt and new debt) and a decrease in aggregate debt
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.
48
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
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
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
City of Palm Desert
Notes to Financial Statements (Continued)
Note 6: Long -Term Liabilities (Continued)
The future debt service requirements on the 1998 Series Tax Allocation Revenue
Bonds (Project Area No. 4) are as follows:
Year Ending
June 30,
Principal
Interest Total
2005 $ 225,000 $ 531,465 $ 756,465
2006 230,000 520,415 750,415
2007 250,000 508,759 758,759
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
2015-2019 1,975,000 1,778,373 3,753,373
2020-2024 2,545,000 1,198,990 3,743,990
2025-2029 3,285,000 444,470 3,729,470
$ 10,595,000 $ 8,172,314 $ 18,767,314
2001 Series Tax Allocation Revenue Bonds (Project 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.
The future debt service requirements on the 2001 Series Tax Allocation Revenue
Bonds (Project Area No. 4) are as follows:
Year Ending
June 30, Principal Interest Total
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
2020-2024 2,565,000 2,214,740 4,779,740
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
50
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,
2005
2006
2007
2008
2009
2010-2014
2015-2019
2020-2024
2025-2029
2030
Principal
4,780,000
14,830,000
2,460,000
Interest Total
$ 1,114,665
1,114,665
1,114,665
1,114,665
1,114,665
5,573,325
5,573,325
5,573,325
2,515,060
125,460
$ 1,114,665
1,114,665
1,114,665
1,114,665
1,114,665
5,573,325
5,573,325
10,353,325
17,345,060
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
Notes to Financial Statements (Continued)
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:
Year Ending
June 30,
Principal
Interest Total
2005 $ 665,000 $ 710,513 $ 1,375,513
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
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
$ 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
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.
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
2005 $ 240,000 $ 526,182 $ 766,182
2006 245,000 521,025 766,025
2007 250,000 515,143 765,143
2008 255,000 508,448 763,448
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
2030-2032 2,130,000 163,250 2,293,250
$ 11,865,000
$ 9,558,261 $ 21,423,261
52
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
910,000
2,485,000
11,475,000
Serial Bonds
Serial Bonds
Term Bonds
Term Bonds
The future debt service requirements on
Bonds (Project Area No. 2) are as follows:
Year Ending
June 30,
Principal
2005 $
2006
2007
2008
2009
2010-2014
2015-2019
2029-2024
2025-2029
2030-2034
875,000
6,275,000
8,595,000
$ 15,745,000
2003 Series Tax Allocation Revenue Bonds
August 1, 2023
August 1, 2024
August 1, 2026
August 1, 2033
the 2003 Series Tax Allocation Revenue
Interest Total
$ 769,006 $ 769,006
769,006 769,006
769,006 769,006
769,006 769,006
769,006 769,006
3,845,030 3,845,030
3,845,030 3,845,030
3,825,343 4,700,343
2,981,347 9,256,347
1,117,625 9,712,625
$ 19,459,405 $ 35,204,405
(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
City of Palm Desert
Notes to Financial Statements (Continued)
Note 6: Long -Term Liabilities (Continued)
Year Ending
June 30,
2005
2006
2007
2008
2009
2010-2014
2015-2019
2029-2024
2025-2029
2030
Principal
Interest Total
$ $ 950,000 $ 950,000
950,000 950,000
950,000 950,000
950,000 950,000
950,000 950,000
4,750,000 4,750,000
4,750,000 4,750,000
4,750,000 4,750,000
14,820,000 3,683,500 18,503,500
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
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.
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
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 Bonds (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
City of Palm Desert
Notes to Financial Statements (Continued)
Note 6: Long -Term Liabilities (Continued)
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
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
2003 Series Tax Allocation
Revenue Bonds (Project Area No. 3) 4,745,000 155,000 4,590,000
2004 Series A Tax Allocation
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
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
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.
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.
263,751
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.
Present value of net minimum lease payments
Less: current portion
7,809
833,359
(325,657)
$ 507,702
57
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:
Year Ending
June 30,
2005
2006
2007
2008
Minimum
Lease
Payments
$ 361,532
364,504
167,360
2,142
Less: Amounts
Representing
Interest
$ 35,875
20,351
5,785
168
Present Value of
Net Minimum
Lease Payments
$ 325,657
344,153
161,575
1,974
Total $ 895,538 $ 62,179 $ 833,359
The assets acquired through capital lease are as follows:
Assets:
Machinery and equipment
Less: accumulated depreciation
$ 1,428,332
(351,737)
Total $ 1,076,595
Note 7: Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with
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)
1996 Series B Tax Allocation Bonds
Note 11: Pension Plan
a. Plan Description
$ 22,195,000
6,840,000
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
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.
59
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%
6/30/2004 1,581,184 100%
e. Schedule of Funding Progress for PERS
Actuarial
Accrued UAAL as
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)/C]
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)
General
Fund
RDA Financing
Financing
Authority Debt
Fund
Loans and notes receivable $ 5,100,000 $
Property held for resale
Advances(1) 17,323,140
Prepaid costs and deposits 1,599,074
Encumbrances 2,071,529
Continuing appropriations
Debt service 1,709,018 600,424
Inventory 36,058
RDA
Capital
Projects
Fund
$ 2,773,326
17,113
4,713,952
20,024,351
Other
Governmental
Funds
$ 7,991,269
865,335
13,513,524
3,854
4,938,173
28,161,819
Totals
$ 15,864,595
865,335
30,836,664
1,620,041
11,723,654
48,186,170
2,309,442
36,058
Total $ 27,838,819 $ 600,424 $ 27,528,742 $ 55,473,974 $ 111,441,959
(1) 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
City of Palm Desert
Notes to Financial Statements (Continued)
Note 12: Fund Equity (Continued)
b. Net Asset Restatements
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)
Total Net Asset Restatements $ (9,608,286)
Note 13: Risk Management
The City maintains self-insurance programs for workers' compensation, general public liability
and auto liability. Claims are processed by an outside insurance service which administers
the programs.
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
Southern California member cities and is organized under a Joint Powers Agreement
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
excess insurance coverage. Each member city has a representative on the Board of
Directors with officers of the Authority being elected annually by the Board Members.
General Liability
Annual deposits are paid by member cities and are adjusted retrospectively to cover
costs. Each member city, including Palm Desert, self -insures for the first $20,000 of each
loss. Participating cities then share in claims from $20,000 to $500,000 per loss
occurrence. Specific coverage includes comprehensive and general automotive liability,
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
and $50,000,000 has been purchased by the Authority. These deposits are also subject
to retrospective adjustment.
Workers' Compensation
Period deposits are paid by member cities and are adjusted retrospectively to cover
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
does not share or pay for losses of other cities under $50,000. Losses between $50,000
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
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
workers' compensation and general liability claims payable, including a provision for
incurred but not reported claims were $636,212 and $407,169, respectively.
62
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:
Claims payable - Beginning of Year
Incurred claims (including IBNR)
and changes in estimate
Claims payments
Claims payable - End of Year
June 30, 2003 June 30, 2004
$ 1,041,382 $ 1,441,680
1,135,161
(734,863)
270,918
(669,217)
$ 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
City of Palm Desert
Notes to Financial Statements (Continued)
Note 14: Deferred Revenues and Unearned Revenues (Continued)
Other Governmental Funds
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.
$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
when earned.
$51,885 of uncollected interest due from the Palm Desert Development
Company in the Low Income Housing fund of the Agency has been deferred.
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
The balance of $31,711 represents the unused portions of prepaid banquets.
Note 15: Other Post -Employment Benefits
Plan Description
The City offers the Public Agency Retirement Systems (PERS) Health Care Program to
its retirees. The City contributes $16 per month to PERS on behalf of each retiree eligible
for PERS. In addition, the City will make an additional contribution towards certain
retirees' premiums under a program called the Retiree Service Stipend.
A retiree will be eligible for the Retiree Service Stipend if:
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
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
retirees and their spouses and/or eligible dependents, provided the above eligibility
criteria are met. Spousal and dependent coverage is provided during the retiree's lifetime
only.
64
City of Palm Desert
Notes to Financial Statements (Continued)
Note 15: Other Post -Employment Benefits (Continued)
Note 16:
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
Less than 10
10
11
12
13
14
15 or more
Accounting and Funding
City Percent
0%
50%
55%
60%
65%
70%
75%
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.
Special Assessment Debt
Below is a summary of the changes in the Special Assessment Bonds Payable:
Assessment District 98-1
1995 Revenue Bonds
1997 Revenue Bonds
2003 Assessment Revenue Bonds
AD 98-1 Limited Obligation Refunding Bonds
Balance at
July 1, 2003 Additions
$ 13,575,000 $
1,590,000
20,940,000
4,423,000
2,955,000
Balance at
Reduction June 30, 2004
$ 13,575,000 $
405,000
870,000
10,000
1,185, 000
20,070,000
4,413,000
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
City of Palm Desert
Notes to Financial Statements (Continued)
Note 16: Special Assessment Debt (Continued)
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
Obligation Refunding Improvement Bonds.
As part of the refunding, the City transferred $8,706,206 from the Capital Projects Fund
for Assessment District No. 98-1 (Bighorn) into bond escrow. This amount has been
reported as a special item in both the government -wide and fund financial statements.
1995 Revenue Bonds
In September 1995, the Palm Desert Financing Authority issued $7,540,000 1995
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
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
rates on the Bonds is paid at a rate of 6.0% with interest payable semi-annually on March
2 and September 2 with principal maturing annually on September 1.
Debt Service requirements to maturity are as follows:
Year Ending
June 30,
Principal
Interest Total
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
Assessment District 87-1
$ 570,000
625,000
Total $ 1,195,000
66
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,
2005
2006
2007
2008
2009
2010-2014
2015-2019
2020-2021
Principal Interest Total
$ 870,000
915,000
960,000
1,005,000
1,060,000
6,240,000
7,270,000
1,750,000
$ 20,070,000
$ 1,123,756
1,078,674
1,030,381
978,789
923,536
3,635,026
1,552,140
102,000
$ 10,424,302
$ 1,993,756
1,993,674
1,990,381
1,983,789
1,983,536
9,875,026
8,822,140
1,852,000
$ 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
Assessment District 92-1
Assessment District 94-1
$ 19,428,000
27,000
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
Assessment District 94-3
Assessment District 01-1
$ 920,000
1,153,000
2,340,000
Total $ 4,413,000
67
City of Palm Desert
Notes to Financial Statements (Continued)
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
2008 185,000 183,205 368,205
2009 195,000 176,195 371,195
2010-2014 1,120,000 750,564 1,870,564
2015-2019 935,000 501,999 1,436,999
2020-2024 745,000 281,289 1,026,289
2025-2029 725,000 101,722 826,722
$ 4,413,000 $ 2,578,533 $ 6,991,533
Assessment District 98-1 Limited Obligation Refunding Improvement Bonds
The bonds were issued in an original amount of $2,955,000 in February 2004 to redeem
and defease the outstanding limited obligation improvement bonds of Assessment District
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
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-
annually on March 2 and September 2 with principal maturing annually on September 2.
Debt service requirements to maturity are as follows:
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
2009 140,000 81,634 221,634
2010-2014 790,000 324,441 1,114,441
2015-2019 980,000 126,327 1,106,327
$ 2,955,000 $ 902,388 $ 3,857,388
68
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 bonds 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
THIS PAGE INTENTIONALLY LEFT BLANK
70
REQUIRED SUPPLEMENTARY INFORMATION TAB
CITY OF PALM DESERT Schedule 1
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
YEAR ENDED JUNE 30, 2004
Budgetary Fund Balance, July 1
Resources (Inflows):
Taxes
Licenses and permits
Intergovernmental revenues
Charges for services
Fines and forfeitures
Use of money and property
Miscellaneous revenues
Transfers from other funds
Amounts Available for Appropriation
Charges to Appropriation (Outflow):
General government
Public safety
Public works
Parks, recreation and culture
Capital outlay
Transfers to other funds
Total Charges to Appropriations
Budget Amounts
Original Final
$ 48,815,268
27,638,000
862,400
4,066,393
588,000
165,000
2,100,000
165,500
1,000,000
85,400,561
Actual
Amounts
$ 48,815,268 $ 48,815,268
27,638,000
862,400
4,066,393
588,000
165,000
2,100,000
165,500
1,000,000
85,400,561
11,705,490 12,405,980
13,757,657 13,923,159
6,342,061 7,633,351
3,445,924 3,450,705
340,238
1,072,605 1,072,605
30,887,340
1,053,905
3,633,489
1,048,667
147,378
1,135,952
178,016
1,092,475
Variance with
Final Budget
Positive
(Negative)
$
3,249,340
191,505
(432,904)
460,667
(17,622)
(964,048)
12,516
92,475
87,992,490 2,591,929
10,497,307
13,052,963
5,255,530
2,638,386
230,557
859,328
36,323,737 38,826,038 32,534,071
1,908,673
870,196
2,377,821
812,319
109,681
213,277
6,291,967
Budgetary Fund Balance, June 30 $ 49,076,824 $ 46,574,523 $ 55,458,419 $ 8,883,896
71
CITY OF PALM DESERT Schedule 2
BUDGETARY COMPARISON SCHEDULE
PROP A FIRE TAX - SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2004
Budgetary Fund Balance, July 1
Resources (Inflows):
Taxes
Use of money and property
Transfers from other funds
Amounts Available for Appropriation
Charges to Appropriation (Outflow):
General government
Public safety
Total Charges to Appropriations
Budgetary Fund Balance, June 30
Budget Amounts
Original
$ 2,645,116
1,420,000
34,000
728,605
4,827,721
13,500
3,220,105
3,233,605
Final
Actual
Amounts
$ 2,645,116 $ 2,645,116
1,420,000
34,000
728,605
4,827,721
13,500
3,220,105
1,432,859
26,679
726,605
4,831,259
11,936
2,171,008
3,233,605 2,182,944
Variance with
Final Budget
Positive
(Negative)
$
12,859
(7,321)
(2,000)
3,538
1,564
1,049,097
1,050,661
$ 1,594,116 $ 1,594,116 $ 2,648,315 $ 1,054,199
72
SUPPLEMENTARY SCHEDULES TAB
GENERAL FUND
The General Fund is used to account for all financial resources traditionally associated with
government, except those required to be accounted for in another fund. It is the primary operating
fund which includes the operating budgets for all the departments and the majority of the City's
tax revenues.
73
CITY OF PALM DESERT Schedule 3
BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT
GENERAL FUND
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:
Property taxes 2,850,000 2,850,000 3,369,711 519,711
Property transfer tax 450,000 450,000 870,415 420,415
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
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
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
Licenses and Permits:
Building permits 750,000 750,000 860,547 110,547
Grading permits 55,000 55,000 110,279 55,279
Valet parking permits 400 400 425 25
Encroachment permits 12,000 12,000 9,917 (2,083)
Miscellaneous permits - - 4,893 4,893
Business regulatory permits 45,000 45,000 67,844 22,844
Total Licenses and Permits
862,400 862,400 1,053,905 191,505
Intergovernmental Revenues:
County grants 849 849
State grants - 37,518 37,518
Motor vehicle in -lieu fees 2,670,000 2,670,000 2,019,129 (650,871)
Off highway in -lieu fees 500 500 1,454 954
Monthly parking bail 20,000 20,000 26,677 6,677
Reimbursement RDA costs 726,000 726,000 958,946 232,946
Other reimbursements 649,893 649,893 588,916 (60,977)
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
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)
74
CITY OF PALM DESERT Schedule 3
BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT
GENERAL FUND
YEAR ENDED JUNE 30, 2004
Use of Money and Property:
Interest income
Interest on advances
Interest on notes receivable
Total Use of Money and Property
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
1,000,000 1,000,000 400,077 (599,923)
1,000,000 1,000,000 597,669 (402,331)
100,000 100,000 138,206 38,206
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 165,500 165,500 178,016 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 - 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 - Nondepartmental:
Contributions to other agencies 601,950 692,950 692,905 45
75
CITY OF PALM DESERT Schedule 3
BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT
GENERAL FUND
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
Total Parks, Recreation and Culture
Capital Outlay:
Departmental capital outlay
Land purchase
Total Capital Outlay
Transfers to other funds
Total Charges to Appropriations
3,445,924 3,450,705 2,638,386 812,319
155,238 155,238
185,000 75,319 109,681
340,238 230,557 109,681
1,072,605 1,072,605 859,328 213,277
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
76
OTHER GOVERNMENTAL FUNDS TAB
CITY OF PALM DESERT Schedule 4
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
JUNE 30, 2004
Assets:
Pooled cash and investments
Receivables:
Accounts
Notes
Interest
Loans
Prepaid costs
Deposits
Due from other governments
Advances to other funds
Property held for resale
Restricted assets:
Cash and investments with fiscal agents
Total Assets
Liabilities and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Unearned revenues
Advances from other funds
Deferred revenues
Deposits payable
Total Liabilities
Fund Balances:
Reserved:
Reserved for encumbrances
Reserved for continuing appropriation
Reserved for prepaid costs and deposits
Reserved for property held for resale
Reserved for loans receivables
Reserved for advances to other funds
Unreserved:
Designated for capital outlay
Designated for special revenue purposes
Total Fund Balances
Total Liabilities and Fund Balances
Special
Revenue
Capital
Projects
$ 48,171,022 $ 24,175,462
197,995
76,865
8,002,634
1,621
1,025
780,852
748,524
865,335
4,933,334
368
108,930
1,487
1,208
12,765,000
6,160,815
Total
Other
Governmental
Funds
$ 72,346,484
198,363
108,930
78,352
8,002,634
2,829
1,025
780,852
13,513,524
865,335
11,094,149
$ 63,779,207 $ 43,213,270 $ 106,992,477
$ 1,076,278 $
93,501
111,753
106,184
116,811
309,804
1,814,331
2,632,090
19,867,899
2,646
865,335
7,882,339
748,524
29,966,043
61,964,876
$ 63,779,207
1,856,295
990
105,264
1,962,549
2,306,083
8,293,920
1,208
108,930
12,765,000
17,775,580
41,250,721
$ 2,932,573
94,491
111,753
106,184
116,811
415,068
3,776,880
4,938,173
28,161,819
3,854
865,335
7,991,269
13,513,524
17,775,580
29,966,043
103,215,597
$ 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
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
Use of money and property 560,174 673,547 1,233,721
Fines and forfeitures 159,252 159,252
Miscellaneous 1,243,997 1,651 1,245,648
Contributions from property owners 2,095,969 2,095,969
Total Revenues 14,558,866 3,218,608 17,777,474
Expenditures:
Current:
General government 7,788,253 5,109,012 12,897,265
Public safety 66,725 66,725
Public works 458,398 4,439,168 4,897,566
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
Over (Under) Expenditures (5,305,460)
(10,896,135) (16,201,595)
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
Total Other Financing Sources
(Uses) 6,655,886 746,385 7,402,271
Special Item:
Refunding of special assessment debt
(8,706,206) (8,706,206)
Net Change in Fund Balances 1,350,426 (18,855,956) (17,505,530)
Fund Balances, Beginning of Year 60,614,450 60,106,677 120,721,127
Fund Balances, End of Year $ 61,964,876 $ 41,250,721 $ 103,215,597
78
OTHER GOVERNMENTAL FUNDS - SPECIAL REVENUE TAB
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.
Gas 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)
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 Tong -range plans to be determined by the City Council
for municipal solid waste disposal.
Public Safety Police Grants Fund - This fund is used to account for grants received from the U.S.
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
purpose of purchasing library books and materials for the Multi -Agency Library Foundation, a
non-profit entity.
El Paseo Assessment District Fund - This fund is used to collect assessments on all business
establishments located within the boundaries set for the El Paseo parking and business
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.
Air Quality Management Fund - This fund accounts for receipts from South Coast Air Quality
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.
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
percent is transferred to the General Fund for partial business licensing cost recovery.
Various Landscape and Lighting District Funds - These funds are used to account for
expenditures and receipts of property taxes and service fees levied to the property owners in the
various landscaping and lighting districts which were formed to provide landscaping and street
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
artwork in the City of Palm Desert.
80
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
Assets:
Pooled cash and investments
Receivables:
Accounts
Interest
Loans
Prepaid costs
Deposits
Due from other governments
Advances to other funds
Property held for resale
Restricted assets:
Cash and investments with
fiscal agents
CITY OF PALM DESERT
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2004
Housing
Mitigation
Traffic Safety Gas Tax Measure A Fee
$
$ - $ 4,063,811 $
31,306 81,166 587,788
Total Assets $ 31,306 $ 81,166 $ 4,651,599
Liabilities and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Unearned revenues
Advances from other funds
Deferred revenues
Deposits payable
IS
$ $ $ 724,403 $
Total Liabilities 724,403
Fund Balances:
Reserved:
Reserved for encumbrances 860,125
Reserved for continuing appropriation 2,802,428
Reserved for prepaid costs and deposits
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
11,660
116,811
447
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
Assets:
Pooled cash and investments
Receivables:
Accounts
Interest
Loans
Prepaid costs
Deposits
Due from other governments
Advances to other funds
Property held for resale
Restricted assets:
Cash and investments with
fiscal agents
Total Assets
CITY OF PALM DESERT
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2004
Public El Paseo Air
Safety Police Library Assessment Quality
Grants Foundation District Management
$ 33,782 $ 5,257 $ 34,256 $ 129,942
13,830
$ 33,782 $ 5,257 $ 34,256 $ 143,772
Liabilities and Fund Balances:
Liabilities:
Accounts payable $ 9,743 $ $ 16,644 $ 4,610
Accrued liabilities
Unearned revenues 25,683
Advances from other funds
Deferred revenues -
Deposits payable
Total Liabilities 35,426 16,644 4,610
Fund Balances:
Reserved:
Reserved for encumbrances 1,370
Reserved for continuing appropriation
Reserved for prepaid costs and deposits
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
84
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
CITY OF PALM DESERT Schedule 6
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
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
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:
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
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
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87
CITY OF PALM DESERT
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2004
Revenues:
Taxes
Special assessments collected
Intergovernmental revenues
Rental income
Charges for services
Use of money and property
Fines and forfeitures
Miscellaneous
Total Revenues
Expenditures:
Current:
General government
Public safety
Public works
Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Sale of property
Total Other Financing Sources
(Uses)
Housing
Mitigation
Traffic Safety Gas Tax Measure A Fee
$
$ $ 2,260,912 $ 232,209
834,570 1,091,870
300
1,114 5,375 60,651 1,561
159,252
160,366 839,945 3,413,733 233,770
IN
29,798
6,668,206
29,798 6,668,206
IN
160,366 810,147 (3,254,473) 233,770
(163,633) (843,523) (233,770)
(163,633) (843,523) - (233,770)
Net Change in Fund Balances (3,267) (33,376) (3,254,473)
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
3,554
93,580
61,388
400
- 46,447
- 3,500 - -
62,317 26,951 13,392 47,165
- - 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 3,818,371
$ 16,911 $ 4,941,418 $ 4,969,447 $ 2,263,499 $ 812,316 $ 4,377,411
89
CITY OF PALM DESERT
COMBINING STATEMENT OF REVENUES
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2004
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
Rental income -
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
Public safety
Public works
Capital outlay
66,725
42,163
224,939 17,137
Total Expenditures 108,888 224,939 17,137
Excess (Deficiency) of Revenues
Over (Under) Expenditures (1,644)
Other Financing Sources (Uses):
Transfers in
Transfers out
Sale of property
Total Other Financing Sources
(Uses)
(9,989) 35,580
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
City Wide
Business
License
$ 48,630
503
49,133
55,800
55,800
(6,667)
(6,667)
70,097
$ 63,430
Landscape
and Lighting AIPP
Districts No. 1-15 Maintenance
$ 395,441 $
1,797
397,238
410,066
410,066
(12,828)
62,722
62,722
49,894
267,602
3,735
3,735
58,859
58,859
(55,124)
(55,124)
319,263
Child Care
Program
Schedule 7
Golf Course
Maintenance
- $ 1,874,908
1,933
1,933
1,933
1,933
158,610
21,049
1,895,957
478,167
478,167
1,417,790
1,417,790
1,355,339
$ 317,496 $ 264,139 $ 160,543 $ 2,773,129
91
CITY OF PALM DESERT Schedule 7
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2004
Revenues:
Taxes
Special assessments collected
Intergovernmental revenues
Rental income
Charges for services
Use of money and property
Fines and forfeitures
Miscellaneous
Total Revenues
Redevelopment Agency Total
Low Non -Major
Income Housing Special Revenue
Housing Authority Funds
$ $ $ 5,633,206
214,950
2,249,389
5,509 4,488,589 4,494,098
3,800
178,569 67,051 560,174
159,252
286,653 211,843 1,243,997
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
Budgetary Fund Balance, July 1
Resources (Inflows):
Use of money and property
Fines and forfeitures
Amounts Available for Appropriation
Charges to Appropriation (Outflow):
Transfers to other funds
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
$ 34,573 $ 34,573 $ 34,573 $
2,000 2,000
120,000 120,000
1,114 (886)
159,252 39,252
156,573 156,573 194,939 38,366
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
93
CITY OF PALM DESERT Schedule 8B
BUDGETARY COMPARISON SCHEDULE
GAS TAX
YEAR ENDED JUNE 30, 2004
Budgetary Fund Balance, July 1
Resources (Inflows):
Intergovernmental
Use of money and property
Amounts Available for Appropriation
Charges to Appropriation (Outflow):
Public works
Transfers to other funds
Total Charges to Appropriations
Original Final
Variance with
Final Budget
Budget Amounts Actual Positive
Amounts (Negative)
$ 114,542 $ 114,542 $ 114,542 $
848,000
15,000
977,542
863,000
863,000
848,000
15,000
977,542
29,798
873,322
903,120
834,570
5,375
954,487
29,798
843,523
873,321
(13,430)
(9,625)
(23,055)
29,799
29,799
Budgetary Fund Balance, June 30 $ 114,542 $ 74,422 $ 81,166 $ 6,744
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
Total Charges to Appropriations
34,000
233,770 233,770
34,000 233,770 233,770
Budgetary Fund Balance, June 30 $ $ (199,770) $ $ 199,770
95
CITY OF PALM DESERT Schedule 8D
BUDGETARY COMPARISON SCHEDULE
COMMUNITY DEVELOPMENT BLOCK GRANT
YEAR ENDED JUNE 30, 2004
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 51,502 $ 51,502 $ 51,502 $
Resources (Inflows):
Intergovernmental 400,000 400,000 121,424 (278,576)
Use of money and property - 3,554 3,554
Other - 93,580 93,580
Amounts Available for Appropriation
Charges to Appropriation (Outflow):
General government - nondepartmental
Total Charges to Appropriations
451,502 451,502
400,000 415,840
270,060 (181,442)
253,149 162,691
400,000 415,840 253,149 162,691
Budgetary Fund Balance, June 30 $ 51,502 $ 35,662 $ 16,911 $ (18,751)
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
CITY OF PALM DESERT Schedule 8F
BUDGETARY COMPARISON SCHEDULE
CITY-WIDE BUSINESS LICENSE
YEAR ENDED JUNE 30, 2004
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
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)
98
CITY OF PALM DESERT Schedule 8G
BUDGETARY COMPARISON SCHEDULE
LANDSCAPE AND LIGHTING DISTRICTS NO. 1-15
YEAR ENDED JUNE 30, 2004
Budgetary Fund Balance, July 1
Resources (Inflows):
Taxes
Use of money and property
Transfers from other funds
Amounts Available for Appropriation
Charges to Appropriation (Outflow):
Public works
Total Charges to Appropriations
Budgetary Fund Balance, June 30
Budget Amounts
Original Final
$ 267,602 $ 267,602
374,997
5,000
48,000
695,599
418,620
418,620
$ 276,979
374,997
5,000
48,000
695,599
428,266
428,266
Actual
Amounts
$ 267,602
395,441
1,797
62,722
727,562
410,066
410,066
$ 267,333 $ 317,496
Variance with
Final Budget
Positive
(Negative)
$
20,444
(3,203)
14,722
31,963
18,200
18,200
$ 50,163
99
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100
OTHER GOVERNMENTAL FUNDS - CAPITAL PROJECTS TAB
OTHER GOVERNMENTAL FUNDS - CAPITAL PROJECTS
Capital Projects Funds are used to account for the acquisition and construction of major capital
facilities, except for those financed by certain Special Revenue and Enterprise funds.
Arts in Public Places Fund - This fund is used to account for fees collected from residential,
commercial and public facilities development except for street and drainage projects. Its use is
restricted for acquisition, installation, improvement and maintenance of artwork to be displayed in
the City, the administration of the program and community public art education programs.
Capital Projects Reserve Fund - This fund is used to account for resources and expenditures for
capital improvement projects that are related to the acquisition and development of public
facilities, infrastructure and equipment.
Drainage Facilities Fund - This fund is used to account for resources and expenditures for
planned capital improvement projects that are under the Master Drainage Plan.
Park and Recreational Facilities Fund - This fund is used to account for resources and
expenditures for capital improvement projects that are related to park development, maintenance
and equipment.
Signalization Fund - This fund is used to account for resources and expenditures for capital
improvement projects that are related to the acquisition and maintenance of traffic signals.
Buildings Fund - This fund is used to account for resources and expenditures for capital
improvement projects that are related to the improvement and maintenance of public facilities and
structures.
Library Fund - This fund is used to account for resources and expenditures for capital
improvement projects that are related to the purchase of library resources for the Multi -Agency
Library.
CFD Indian Ridge Fund - This fund is used to account for the construction of public improvements
from bond proceeds Series A resulting from the creation of this District.
Special Assessment District Funds - This fund is used to account for the construction of public
improvements from proceeds resulting from the creation of various assessment Districts.
Assessment District No. 94-2 Sunterrace
Assessment District No. 94-3 Merano
Assessment District No. 98-1 Bighorn
Bighorn Series B — This fund is used to account for the construction of public improvement from
residents proceeds resulting from the creation of this District.
Town Center Parking Lot - This fund is used to account for resources and expenditures for
construction of a two-story parking lot at the Westfield Shopping Center.
Silver Spur Ranch Fund - This fund is used to account for the construction of public
improvements from bond proceeds resulting from the creation of this District.
101
CITY OF PALM DESERT
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
JUNE 30, 2004
Assets:
Pooled cash and investments
Receivables:
Accounts
Notes
Interest
Prepaid costs
Advances to other funds
Restricted assets:
Cash and investments with
fiscal agents
Total Assets
Liabilities and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Deposits payable
Total Liabilities
Fund Balances:
Reserved:
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
Total Fund Balances
Arts In
Public
Places
Capital
Projects
Reserve
$ 1,810,190 $ 11,973,872
368
1,208
108,930
8,000,000
$ 1,811,766 $ 20,082,802
Drainage
Facilites
$ 3,075,317
$ 3,075,317
$ 16,935 $ 273,359 $
990
105,264
123,189 273,359
84,375
483,322
1,208
1,119,672
1,956,054
4,506,532
108,930
8,000,000
5,237,927
1,688,577 19,809,443
50,259
50,259
94,852
1,008,704
1,921,502
3,025,058
Total Liabilities and Fund Balances $ 1,811,766 $ 20,082,802 $ 3,075,317
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
Total Assets $ 315,607 $ 835,900 $
Liabilities and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Deposits payable
Total Liabilities
$
Fund Balances:
Reserved:
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
IN
Total Liabilities and Fund Balances $ 315,607 $ 835,900 $
104
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
NONMAJOR CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2004
Arts In Capital
Public Projects Drainage
Places Reserve Facilites
Revenues:
Licenses and permits $ 262,764 $ $ -
Intergovernmental revenues 158,630 26,047
Use of money and property 21,514 383,993 39,665
Miscellaneous 200 951
Contributions from property owners
Total Revenues
284,478 543,574 65,712
Expenditures:
Current:
General government 188,185 4,650,000
Public works 378,575 2,335
Capital outlay 88,464 3,645,296 455,470
Debt service:
Principal retirement 250,000
Total Expenditures 276,649 8,923,871 457,805
Excess (Deficiency) of Revenues
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
Total Other Financing Sources
(Uses) 11,055,630
Special Item:
Refunding of special assessment debt
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
7,829
1,680,748
2,675,333
17,134,110
(392,093)
3,417,151
$ 1,688,577 $ 19,809,443 $ 3,025,058
106
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)
6,954,008
1,602
304,686
37,927
3,112,797
(198,198)
459,171
34,236
4,735,427
46
44,222
$ 6,906,153 $ 306,288 $ 3,150,724 $ 260,973 $ 4,769,663 $ 44,268
107
CITY OF PALM DESERT
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2004
Revenues:
Licenses and permits
Intergovernmental revenues
Use of money and property
Miscellaneous
Contributions from property owners
Assessment Assessment
District No. 94-3 District No. 98-1 Bighorn
Merano Bighorn Series B
$
- $ $
1,369 45,853
867,518 1,228,451
Total Revenues 1,369 913,371 1,228,451
Expenditures:
Current:
General government
Public works
Capital outlay
Debt service:
Principal retirement
1,043 436,377 1,228,451
Total Expenditures 1,043 436,377 1,228,451
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Sale of property
Total Other Financing Sources
(Uses)
326 476,994
Special Item:
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
Fund Balances, End of Year $ 315,607 $ 835,900 $
108
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)
(10,379,245)
11,125,630
(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
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110
AGENCY FUNDS TAB
AGENCY FUNDS
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
Assets:
Cash and investments
Receivables (net of alowance
for uncollectibles):
Accounts
Interest
Total Assets
Liabilities:
Accounts payable
Deposits
CITY OF PALM DESERT Schedule 11
COMBINING BALANCE SHEET
ALL AGENCY FUNDS
JUNE 30, 2004
Agency
$ 1,677,716
Treasurers
1991 Bond
Act
Retiree
Service
Stipend Fund
$ 274,514 $ 7,605,609
$ 1,677,716 $ 274,514
1,677,716
$ 274,514
Total Liabilities $ 1,677,716 $ 274,514
16,319
Special
Assessment
Funds
Totals
$ 7,196,894 $ 16,754,733
27,645,360
2,008
27,645,360
18,327
$ 7,621,928 $34,844,262 $ 44,418,420
$ 228
7,621,700
$ 7,621,928
$ 9,913 $ 10,141
34,834,349 44,408,279
$34,844,262 $ 44,418,420
112
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113
CITY OF PALM DESERT Schedule 12
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
ALL AGENCY FUNDS
YEAR ENDED JUNE 30, 2004
Agency
Assets:
Cash and investments
Total Assets
Balance Balance
July 1, 2003 Additions Deletions June 30, 2004
$ 1,778,081 $ 1,289,169 $ 1,389,534 $ 1,677,716
$ 1,778,081 $ 1,289,169 $ 1,389,534 $ 1,677,716
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
Treasurers 1991 Bond Act
Assets:
Cash and investments
Total Assets
$ 10,126 $ 264,388 $ $ 274,514
$ 10,126 $ 264,388 $ $ 274,514
Liabilities:
Deposits $ 10,126 $ 264,388 $ $ 274,514
Total Liabilities
$ 10,126 $ 264,388 $ $ 274,514
Retiree Service Stipend Fund
Assets:
Cash and investments $ 5,798,655 $ 5,006,475 $ 3,199,521 $ 7,605,609
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
Liabilities:
Accounts payable $ 3,215,840 $ 228 $ 3,215,840 $ 228
Deposits 2,599,134 5,022,566 - 7,621,700
Total Liabilities $ 5,814,974 $ 5,022,794 $ 3,215,840 $ 7,621,928
114
CITY OF PALM DESERT
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
ALL AGENCY FUNDS
YEAR ENDED JUNE 30, 2004
Special Assessment Funds
Assets:
Cash and investments
Receivables (net of allowance
for uncollectibles):
Accounts
Interest
Total Assets
Liabilities:
Accounts payable
Deposits
Total Liabilities
Totals - All Agency Funds
Assets:
Cash and investments
Receivables (net of allowance
for uncollectibles):
Accounts
Interest
Total Assets
Liabilities:
Accounts payable
Deposits payable
Total Liabilities
Balance
July 1, 2003
Additions
$ 26,213,982 $ 8,657,101
40,435,676
12,815
3,228,155
2,008
$ 66,662,473 $ 11,887,264
$ 4,997
66,657,476
$ 66,662,473
$ 33,800,844
40,435,676
29,134
$ 74,265,654
$ 3,220,837
71,044,817
$ 74,265,654
$ 9,913
5,714,165
$ 5,724,078
$ 15,217,133
3,228,155
18,327
$ 18,463,615
$ 10,141
12,290,288
$ 12,300,429
Deletions
$ 27,674,189
16,018,471
12,815
$ 43,705,475
$ 4,997
37,537,292
$ 37,542,289
$ 32,263,244
16,018,471
29,134
$ 48,310,849
$ 3,220,837
38,926,826
$ 42,147,663
Schedule 12
Balance
June 30, 2004
$ 7,196,894
27,645,360
2,008
$ 34,844,262
$ 9,913
34,834,349
$ 34,844,262
$ 16,754,733
27,645,360
18,327
$ 44,418,420
$ 10,141
44,408,279
$ 44,418,420
115
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116
STATISTICAL SECTION TAB
REVENUE AND EXPENSES STATISTICS
CITY OF PALM DESERT, CALIFORNIA
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166