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INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
Report on the Financial Statements
We have audited the accompanying financial statements of governmental activities, the business-type
activities, discretely presented component unit, each major fund, and the aggregate remaining fund
information of City of Palm Desert, California, (the City) as of and for the year ended June 30, 2018, and
the related notes to the financial statements, which collectively comprise the City’s basic financial
statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Phone: 714.672.0022
An Association of Independent Accounting Firms
To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
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, the discretely
presented component unit, each major fund, and the aggregate remaining fund information of the
City of Palm Desert, California, as of June 30, 2018, and the respective changes in financial position and,
where applicable, cash flows thereof for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
Change in Accounting Principle
As discussed in Note 18 to the financial statements, in 2018 the City adopted new accounting guidance,
GASB Statement No. 75, Accounting and Financial Reporting for Post-Employment Benefits Other Than
Pensions. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, the budgetary comparison schedules for the general fund and major special
revenue funds as listed in the table of contents, the schedule of changes in net pension liability and
related ratio, the schedule of contributions, the schedule of changes in net OPEB and related ratios, and
the schedule of contributions be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements and schedules, and statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. The information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the combining and individual nonmajor fund financial statements
and schedules are fairly stated in all material respects in relation to the basic financial statements as a
whole.
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To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 14, 2018 on our consideration of the City’s internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is solely to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City’s internal control
over financial reporting and compliance.
Brea, California
December 14, 2018
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CITY OF PALM DESERT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Our discussion and analysis of the City of Palm Desert’s financial performance for the fiscal year ended
June 30, 2018 provides: a comparison of current year to prior year ending results based on the
government-wide financial statements; an analysis of 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 the 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 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 total assets and deferred outflows exceeded its liabilities and deferred inflows by $793.31
million (net position).
The City’s governmental activities net position decreased $15.36 million, and the net position of the
business-type activities increased $0.06 million.
During the year, the City’s revenues were $88.89 million and expenses were $91.47 million in its
governmental activities, excluding transfers, compared to fiscal year 2017, where revenues were
$88.51 million and expenses were $86.61 million.
In the City’s business-type activities, expenses were $0.36 million less than the $10.05 million
generated in golf course green fees, merchandise sales, rental income and other revenues
compared to the prior year, where business-type activities revenues were $0.28 million more than
its expenses.
The City’s governmental activities program revenues and general revenues increased by $0.38
million, while program expenses increased $4.86 million.
Business-type activities revenues increased $0.64 million, from $9.41 million to $10.05 million.
Expenses increased from the $9.13 million to $9.69 million.
The City kept its General Fund expenditures within spending limits by $2.49 million. The revenues
available for expenditures were over budget by $0.06 million.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Position and
Statement of Activities (on pages 17, 18 and 19) provide information about the activities of the City as a
whole and present a long-term view of the City’s finances. The fund financial statements start on Page 22.
For governmental activities, these fund statements tell how these services were financed in the short term
as well as what remains for future spending. The 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.
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REPORTING THE CITY AS A WHOLE
The Statement of Net Position and the Statement of Activities:
Our analysis of the City as a whole begins on page 17. 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 Position 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 position and changes in them. Net position is the difference
between total assets and deferred outflows of resources less liabilities and deferred inflows, which is one
way to measure the City’s financial health, or financial position. Over time, increases or decreases in the
City’s net position are an indication of whether its financial health is improving or deteriorating. Other
non-financial factors should be considered, however, such as changes in the economy that could cause a
decrease in consumer spending.
In the Statement of Net Position and the Statement of Activities, we separate City activities as follows:
Governmental activities – Most of the City’s basic services are reported in this category, including general
administration (city manager, city clerk, finance, etc.), housing and redevelopment, public safety
(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 Parkview Office
Complex activities are reported in this category.
Component unit activities – The City includes one separate legal entity in its report – the Palm Desert
Recreational 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 has three types of funds: governmental, proprietary and fiduciary.
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.
6
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 Position and the Statement of Activities. 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 information such as a statement of cash flows.
Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial statement because the
resources of those funds are not available to support the City of Palm Desert operations. The accounting
used for fiduciary funds is much like that used for proprietary funds.
THE CITY AS TRUSTEE
Reporting the City’s Fiduciary Responsibilities:
The City is the trustee, or fiduciary, for the Successor Agency to the Palm Desert Redevelopment Agency’s
(Successor Agency) private-purpose trust fund and for certain agency funds held on behalf of developers
and its employees’ retiree service stipend fund. The City’s fiduciary activities are reported in separate
Statements of Net Position, Statement of Changes in Net Position, Statement of Assets and Liabilities, and
Statement of Changes in Assets and Liabilities. 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
During the fiscal year ending June 30, 2018, the City’s combined net position decreased $15.30 million
from $808.61 million to $793.31 million. A separate review of the net change in the governmental and
business-type activities is provided for the reader. Our analysis focuses on the net position (Table 1) and
changes in net position (Table 2) of the City’s governmental and business-type activities.
7
2018 2017 2018 2017 2018 2017
Current and restricted assets 344.26$ 349.47$ 6.62$ 5.96$ 350.88$ 355.43$
Capital assets 438.18 449.04 70.60 70.33 508.78 519.37
TOTAL ASSETS 782.44 798.51 77.22 76.29 859.66 874.80
Deferred outflows of resources 12.62$ 9.10$ -$ -$ 12.62$ 9.10$
Long-term liabilities
outstanding 48.49 43.34 1.49 0.50 49.98 43.84
Other liabilities 24.88 25.76 1.01 1.13 25.89 26.89
TOTAL LIABILITIES 73.37 69.10 2.50 1.63 75.87 70.73
Deferred inflows of resources 3.10$ 4.56$ -$ -$ 3.10$ 4.56$
Net position:
Net investment in capital
assets 438.18 449.04 69.11 69.83 507.29 518.87
Restricted 197.36 197.82 - - 197.36 197.82
Unrestricted 83.05 87.09 5.61 4.83 88.66 91.92
TOTAL NET
POSITION 718.59$ 733.95$ 74.72$ 74.66$ 793.31$ 808.61$
TABLE 1
NET POSITION
As of June 30, 2018 and 2017
TotalActivities
Business-TypeGovernmental
Activities
(IN MILLIONS)
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200
400
600
800
1,000
1,200
2018 2017 2018 2017 2018 2017
Governmental
Activities
BusinessͲType
Activities
Total
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Table 1Ͳ Graph
Total Assets&Liabilities
TotalAssets
TotalLiabilities
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The City’s governmental activities net position decreased $15.36 million. The City’s net position is made up
of three components: Net investment in capital assets; restricted net position; and unrestricted net position.
For governmental activities, unrestricted net position, which represents the part of net position that can be
used to finance day-to-day operations, accounted for 11.56 percent of the overall total net position.
Unrestricted net position decreased $4.04 million from $87.09 million in 2017 to $83.05 million in 2018. At
first glance, an assumption can be made that the City did not fare as well as last year. However, when you
analyze the figures, the General Fund had a positive net change of $6.38 million. The main reason for the
decrease was the restatement of net position from $733.95 million to $720.87 million, a $13.08 million
decrease. The City implemented GASB No. 75, which required the City to record its net OPEB liability,
which was $4.12 million. In 2017, the City had $9.43 million as a Net OPEB Assets, representing the
difference between the Annual Required Contribution and actual contribution (see Note 18).
The decrease of $0.46 million in restricted net position was due to the following: restricted capital projects
decreased by $0.22 million from $110.16 million in 2017 to $109.94 million in 2018. During the year, capital
restricted funds were expended for street resurfacing, drainage improvements, and street improvements.
Restricted special projects decreased by $0.24 million, the majority of which is attributable to the cost of
maintaining the City’s affordable apartment complexes at a high standard and the cost of the City’s
fire protection services.
Investment in capital assets decreased $10.86 million. The decrease is attributed to current year
depreciation of $12.01 million. The calculation of investment in capital assets includes outstanding debt
used to purchase or construct the City’s capital assets.
The City’s governmental activities total assets and deferred outflow of resources combined decreased
$12.55 million from $807.61 million in 2017 to $795.06 million in 2018. The decrease is mostly attributable
to the $9.43 million decrease in the net OPEB Assets. Other major changes that affected total assets and
deferred outflow combined were the capital assets decrease of $10.86 million and a $3.52 million increase
in deferred outflow of resources which is due to the $2.31 million pension plan deferred outflows
(see Note 8d) and $1.21 million OPEB deferred outflows (see Note 12h).
Total liabilities and deferred inflows combined increased by $2.81 million from $73.66 in 2017 to
$76.47 million in 2018. The increase is due to OPEB liability of $4.12 million discussed above.
The net position of the business-type activities saw a slight increase of $0.06 million, from $74.66 million to
$74.72 million. The main factor for the increase in net position was overall increase in gross revenues which
increased by $0.64 million from the previous year. During the 2017-18 fiscal year, the regional golf market
recognized a 7.4 percent increase in the overall revenue per available golf round. Desert Willow’s dynamic
pricing strategy increased it’s revenue per available round by 11.3 percent.
Total liabilities increased $0.87 million from $1.63 million in 2017 to $2.50 million in 2018. The increase in
debt obligation for the new lease of golf course maintenance equipment (see Note 6) is the major factor for
the increase in total liabilities.
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2018 2017 2018 2017 2018 2017
REVENUES:
Program Revenues:
Charges for services 24.25$ 22.68$ 9.68$ 8.78$ 33.93$ 31.46$
Operating grants and
contributions 8.56 7.93 - - 8.56 7.93
Capital grants and
contributions 2.44 7.71 0.17 0.60 2.61 8.31
General Revenues:
Property taxes 11.51 10.85 - - 11.51 10.85
Transient occupancy tax 17.30 15.24 - - 17.30 15.24
Sales tax 18.25 18.39 - - 18.25 18.39
Other taxes 3.09 3.15 - - 3.09 3.15
Investment earnings 1.90 1.04 0.07 0.03 1.97 1.07
Gain on sale of capital assets 0.02 - - - 0.02 -
Other revenues 1.57 1.52 0.13 - 1.70 1.52
TOTAL REVENUES 88.89 88.51 10.05 9.41 98.94 97.92
EXPENSES:
General government 18.47 15.71 - - 18.47 15.71
Housing and redevelopment 9.61 10.95 - - 9.61 10.95
Public safety 36.54 34.94 - - 36.54 34.94
Parks, recreation and culture 8.24 9.85 - - 8.24 9.85
Public works 18.35 14.89 - - 18.35 14.89
Interest on long-term debt 0.26 0.27 - - 0.26 0.27
Golf Course-Desert Willow - - 8.76 8.24 8.76 8.24
Office Complex-Parkview - - 0.93 0.89 0.93 0.89
TOTAL EXPENSES 91.47 86.61 9.69 9.13 101.16 95.74
INCREASE (DECREASE ) IN NET
POSITION BEFORE TRANSFERS (2.58) 1.90 0.36 0.28 (2.22) 2.18
Transfers 0.30 0.30 (0.30) (0.30) - -
INCREASE (DECREASE) IN NET POSITION (2.28) 2.20 0.06 (0.02) (2.22) 2.18
BEGINNING NET POSITION, AS RESTATED 720.87 731.75 74.66 74.68 795.53 806.43
ENDING NET POSITION 718.59$ 733.95$ 74.72$ 74.66$ 793.31$ 808.61$
TABLE 2
CHANGES IN NET POSITION
As of June 30, 2018 and 2017
TotalActivities
Business-TypeGovernmental
Activities
(IN MILLIONS)
10
Table 2- Graph
Changes in Net Position
Governmental Activities
Total revenue (excluding transfers) increased from $88.51 million to $88.89 million. Factors that contributed
to the changes in revenues are as follows:
x Transient occupancy tax increase from $15.24 million in 2017 to $17.30 million in 2018, an increase
of $2.06 million.
x In 2018, the City accounted for $1.90 million in investment earnings compared to $1.04 million in
2017, an increase of $0.86 million.
x The City’s combined general property taxes and sales tax increased by $0.52 million from
$29.24 million in 2017 to $29.76 million in 2018. These increases were offset by:
x A decrease of $5.27 million in capital contributions and grants from $7.71 million in 2017 to
$2.44 million in 2018. In 2017, the Successor Agency made a capital contribution of $3.55 million
to be used for capital expenditures, no such contribution was made in 2018.
Total expenses increased from $86.61 million to $91.47 million, a 5.61 percent increase. The primary
reason for the increase was in the public work function that increased 3.46 million. The increase is attributed
the City spending $4.30 million more on street resurfacing than in the prior year. Additional factors in the
change in amount of expenses for the year include, general government increased $2.76 million, which
was largely due to the City’s additional pension payment of $1.70 million. Public safety increased
$1.60 million attributed to the increase in police costs from $19.83 million to $20.51 million and the increase
in fire protection services from $12.10 million to $13.50 million.
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100
200
300
400
500
600
700
800
2018 2017
GovernmentalActivities
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10
20
30
40
50
60
70
80
2018 2017
BusinessͲTypeActivities
BeginningNet
Position
TotalRevenues
EndingNet
Position
TotalExpenses
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The following schedule represents the net cost of providing services:
Governmental Activities
Net (Expense) Revenue
(In Millions)
Business-type Activities
In the business-type activities, total revenues increased by 6.8 percent from $9.41 million to $10.05 million,
a $0.64 million increase. The overall increase was related to the dynamic pricing structure implemented at
the Desert Willow Golf Resort. Total green fees were $0.72 million more than the previous year.
Desert Willow Golf Resort management continued to utilize a strategic pricing structure, which allowed the
golf resort to retain the course utilization, which optimized the green fee revenue during periods that were
traditionally under-utilized and sold at a discount. The overall rounds mix and play remained consistent with
the previous years.
The Parkview Office Complex revenues increased slightly. The rental market remained soft during the
fiscal year; the tenant mix remained unchanged.
Operating expenses for business-type activities increased by $0.56 million from $9.13 million to
$9.69 million. The increase was directly related to increased golf course rounds, increased interest from a
$1.50 million dollar loan from the City of Palm Desert General Fund, and new golf course equipment lease
of $1.39 million. Both Desert Willow and the City continued to implement effective and efficient methods to
control costs without impacting service.
2018 2017
General government ($13.82) ($11.51)
Housing and redevelopment (1.96) (2.67)
Public safety (25.62) (23.99)
Parks, recreation and culture (4.97) (6.55)
Public works (9.59) (3.30)
Interest on long term debt (0.26) (0.27)
Total ($56.22) ($48.29)
25%
4%
44%
9%
18%
0%
2018
GovernmentalActivities
Net(Expense)Revenue
25%
4%50%
14%6%1%
2017
GovernmentalActivities
Net(Expense)Revenue Generalgovernment
Housingand
redevelopment
Publicsafety
Parks,recreation&
culture
Publicworks
Interestonlong
termdebt
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THE CITY’S FUNDS
On Page 22, the governmental funds balance sheet is shown. The combined fund balance of
$299.93 million increased from $295.05 million, or 1.65 percent. This total includes the General Fund
balance of $90.37 million, which increased by $6.38 million from the prior year. The City’s General Fund
balance has a non-spendable balance of $10.51 million, committed balance of $59.67 million, assigned
balance of $15.49 million, and $4.70 million of unassigned fund balance. The change in the General Fund’s
balance was due to growth in transient occupancy tax and investment earning. Other major fund balance
changes are noted below:
x The Prop A Fire Tax Special Revenue Fund: The fund balance decreased $0.41 million. The City
transferred $3.67 million to cover the shortage.
x The Housing Asset Fund: The fund balance had a decrease of $0.21 million. The housing asset
fund reimbursed the housing authority for costs associated with improvements to the Authority
owned affordable apartment complexes.
x Measure A Special Revenue Fund: the fund balance increased from $21.55 million to
$21.97 million. Projects budgeted at $29.98 million are at their early stage which resulted in non-
spending of available funds.
x Housing Authority Fund: This fund had a minor decrease of $0.26 million from $20.24 million to
$19.98 million.
x Capital Properties Fund: The fund balance decreased $0.40 million from $69.15 million to
$68.75 million. The decrease was due to the capital project expenditures.
More detailed information about the combined fund balance reserves is presented in Note 9 to the financial
statements.
General Fund Budgetary Highlights
Based upon recommendations from the staff, the City Council revised the budget several times during the
year. Adjustments were made on a monthly basis as City staff requested additional appropriations to cover
the cost of projects that either had change orders for additional work, or were underestimated. At mid-year,
no adjustments were requested as department budgets met current demands. At year-end, budgets were
adjusted for unanticipated approved expenditures. All amendments that either increase or decrease
appropriations are approved by the City Council.
For the City’s General Fund, the actual ending revenues of $60.85 million were $0.06 million more than the
final budgeted revenues of $60.79 million. Sales and transient occupancy taxes continue to be the top two
revenue generators for the City, totaling $36.65 million or 58.58 percent of the total General Fund actual
revenues.
The General Fund actual ending expenditures of $54.47 million were $2.49 million less than the final budget
of $56.96 million. There were changes in the original budget compared to the final budget during the year.
The original expenditure budget was $56.27 million compared to the final budget of $56.96 million, a
$0.69 million increase. An additional $1.70 million was appropriated to reduce the City’s pension liability,
which represents the major change between original budget and final budget.
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CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of 2018, the City had $508.78 million invested in a broad range of capital assets including land,
streets, bridges, drainage systems, traffic lights, parks, buildings, artwork, vehicles, golf courses and
equipment (See Table 3). This amount represents a net decrease (including additions and deductions) of
$10.59 million over the prior year, due mainly to depreciation.
2018 2017 2018 2017 2018 2017
Land 79.29$ 79.45$ 53.31$ 53.31$ 132.60$ 132.76$
Construction-in-progress 2.51 2.02 - - 2.51 2.02
Buildings and improvements
other than buildings 99.92 105.69 15.67 16.40 115.59 122.09
Machinery and equipment 2.70 2.79 1.62 0.62 4.32 3.41
Infrastructure & right-of-way 253.76 259.09 - - 253.76 259.09
TOTALS 438.18$ 449.04$ 70.60$ 70.33$ 508.78$ 519.37$
TABLE 3
CAPITAL ASSETS AT YEAR-END
For the years ended June 30, 2018 and 2017
TotalActivities
Business-TypeGovernmental
Activities
(NET OF DEPRECIATION, IN MILLIONS)
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100
200
300
400
500
600
700
2018 2017 2018 2017 2018 2017
Governmental
Activities
BusinessͲType
Activities
Total
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Table3Ͳ Graph
CapitalAssetsatYearͲEnd
(NetofDepreciationinMillions)
Land
ConstructioninProgress
BuildingsandImprovements
Equipment
Infrastructure
Totals
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This year’s major additions included (in millions):
Street improvements $ 0.44
Park and recreation improvements 0.15
Equipment and software purchases 0.71
Land acquisitions 0.10
$ 1.41
The City’s fiscal year 2019 adopted capital budget calls for an additional $23.39 million to be spent, plus
continuing capital projects of $58.16 million from prior year, with the majority being spent on street,
infrastructure and golf course improvements. 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 1g and Note 5 to the financial statements.
Debt
At year-end, the City’s governmental activities had $48.49 million in bonds, claims, compensated absences,
OPEB liability and pension liability versus $43.34 million last year, an increase of $5.15 million as shown in
Table 4. The major increase was the City’s pension liability that grew from $37.55 million to $38.97 million,
which was the result of PERS changing the discount rate from 7.65 percent to 7.15 percent. In addition, a
new GASB standard required cities to report any OPEB liability. The City OPEB liability was $4.12 million.
2018 2017 2018 2017 2018 2017
Compensated absences payable 2.39$ 2.58$ -$ -$ 2.39$ 2.58$
Capital leases - - 1.49 0.50 1.49 0.50
Claims and judgements payable 0.36 0.40 - - 0.36 0.40
Special assessments debt with
government commitment 1.36 1.41 - - 1.36 1.41
Limited Obligation Improvement
bonds 1.29 1.40 - - 1.29 1.40
OPEB liability 4.12 - - - 4.12 -
Pension liability 38.97 37.55 - - 38.97 37.55
TOTALS 48.49$ 43.34$ 1.49$ 0.50$ 49.98$ 43.84$
TABLE 4
OUTSTANDING DEBT AT YEAR-END
For the years ended June 30, 2018 and 2017
TotalActivities
Business-TypeGovernmental
Activities
(IN MILLIONS)
15
The City was able to meet its current year debt obligation in a timely manner. Bonds that were issued in
prior years have been used to finance various capital projects.
The City’s business-type activities debt increased $0.99 million from $0.50 million to $1.49 million. Debt in
the business-type activities is for capital leasing of equipment. The City’s golf course uses leasing as an
alternative to purchasing golf carts and maintenance equipment to maintain a cash flow to operate the
day-to-day activities. The increase in the City’s business-type activities debt was directly related to entering
a new golf course equipment lease in the amount of $1.39 million. The City’s business-type activities were
able to meet their current year debt obligation in a timely manner. More detailed information about the City’s
long-term liabilities is presented in Note 6 to the financial statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS
In preparing the budget for fiscal year 2019, management focused three core principles: 1) maintain the
level of service expected by residents, businesses, and visitors; 2) review standards of infrastructure
maintenance and operation and adjust standards to provide quality City facilities in line with budget
considerations, including but not limited to parks, roads, and buildings; and 3) invest in infrastructure and
technology to address deferred maintenance and outdated hardware/software that resulted from necessary
cost-cutting measures in previous years. The following economic factors were considered by management:
x Goals of the strategic plan as top priority.
x Increase in healthcare and retirement costs.
x Increase in police and fire protection services.
The 2019 budget is a reflection of the City’s commitment to the residents of Palm Desert. The City’s
conservative approach has provided for a consistently high level of services. The City has made a
commitment to allocate resources for public safety, cultural/social programs, and necessary infrastructure
improvements. Copies of the City’s 2018-2019 Financial Plan can be obtained by contacting the City’s
Finance Department or by visiting the City’s website at www.cityofpalmdesert.org.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our residents, 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, please contact the Finance
Department at the City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert, California 92260-2578, or
(760) 346-0611.
16
CITY OF PALM DESERT
STATEMENT OF NET POSITION
Component
Unit
Governmental Business-Type
Activities Activities Total
ASSETS:
Cash and investments 176,991,043$ 7,613,487$ 184,604,530$ 120,150$
Receivables:
Accounts 2,350,390 98,972 2,449,362 2,877
Notes 1,369,200 - 1,369,200 -
Accrued interest 6,282,188 - 6,282,188 -
Loans 9,817,074 - 9,817,074 -
Internal balances 2,000,000 (2,000,000) - -
Prepaid costs 192,991 94,446 287,437 16,368
Deposits 15,393,231 - 15,393,231 -
Due from other governments 5,333,143 - 5,333,143 -
Inventories 4,868 199,741 204,609 47,624
Property held for resale 61,516 - 61,516 -
Due from component unit 285,000 608,947 893,947 -
Restricted assets:
Cash with fiscal agent 96,804,305 - 96,804,305 -
Advances to Successor Agency 27,366,140 - 27,366,140 -
Capital assets, not being depreciated 202,902,112 53,304,965 256,207,077 -
Capital assets, net of depreciation 235,281,958 17,300,162 252,582,120 -
TOTAL ASSETS 782,435,159 77,220,720 859,655,879 187,019
DEFERRED OUTFLOWS OF RESOURCES:
Deferred outflows from pensions 11,410,531 - 11,410,531 -
Deferred outflows from OPEB 1,217,465 - 1,217,465 -
Total Deferred Outflows
of Resources 12,627,996 - 12,627,996 -
LIABILITIES:
Accounts payable 7,993,501 787,222 8,780,723 38,922
Accrued liabilities 286,450 52,135 338,585 12,059
Accrued interest 84,239 - 84,239 -
Due to primary government - - - 893,947
Unearned revenue 15,623,162 138,564 15,761,726 79,452
Deposits payable 892,664 27,829 920,493 -
Long-term liabilities:
Due within one year 451,000 562,498 1,013,498 -
Due in more than one year 4,954,009 930,832 5,884,841 -
Net OPEB liability 4,120,584 - 4,120,584 -
Net pension liability 38,965,978 - 38,965,978 -
TOTAL LIABILITIES 73,371,587 2,499,080 75,870,667 1,024,380
DEFERRED INFLOWS OF RESOURCES:
Deferred inflows from pensions 3,054,378 - 3,054,378 -
Deferred inflows from OPEB 49,049 - 49,049 -
Total Deferred Inflows
of Resources 3,103,427 - 3,103,427 -
NET POSITION:
Net investment in capital assets 438,184,070 69,111,797 507,295,867 -
Restricted for:
Special projects 87,404,989 - 87,404,989 -
Capital projects 109,944,375 - 109,944,375 -
Unrestricted (deficit)83,054,707 5,609,843 88,664,550 (837,361)
TOTAL NET POSITION 718,588,141$ 74,721,640$ 793,309,781$ (837,361)$
JUNE 30, 2018
Primary Government
Palm Desert
Recreational
Facilities
Corporation
See Notes to Financial Statements 17
CITY OF PALM DESERT
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2018
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants
Primary Government:
Governmental activities:
General government 18,467,097$ 2,388,260$ 874,490$ 1,386,262$
Housing and redevelopment 9,605,756 7,551,760 - 92,273
Public safety 36,543,050 10,801,436 84,196 35,084
Parks, recreation and culture 8,240,115 821,824 2,211,563 237,136
Public works 18,358,907 2,685,831 5,385,632 691,866
Interest on long-term debt 259,250 - - -
Total governmental activities 91,474,175 24,249,111 8,555,881 2,442,621
Business-type activities:
Desert Willow Golf Course 8,763,220 8,432,273 - 167,670
SewerParkview Office Complex 930,815 1,250,456 - -
Total Business-Type Activities 9,694,035 9,682,729 - 167,670
Total Primary Government 101,168,210$ 33,931,840$ 8,555,881$ 2,610,291$
Component Unit:
Palm Desert Recreational Facilities Corp.2,742,877$ 3,030,343$ -$ -$
General Revenues:
Taxes:
Property taxes, levied for general purpose
Transient occupancy taxes
Sales taxes
Franchise taxes
Investment earnings
Miscellaneous
Gain on sale of capital assets
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of year
Restatement of Net Position
Net position - beginning of year, as restated
Net position - end of year
Program Revenues
Functions/Programs
See Notes to Financial Statements 18
Net (Expenses) Revenues and Changes in Net Position
Primary Government
Component
Unit
Governmental Business-Type
Activities Activities Total
(13,818,085)$ -$ (13,818,085)$ -$
(1,961,723) - (1,961,723) -
(25,622,334) - (25,622,334) -
(4,969,592) - (4,969,592) -
(9,595,578) - (9,595,578) -
(259,250) - (259,250) -
(56,226,562) - (56,226,562) -
- (163,277) (163,277) -
- 319,641 319,641 -
- 156,364 156,364 -
(56,226,562) 156,364 (56,070,198) -
-$ -$ -$ 287,466$
11,512,243 - 11,512,243 -
17,295,857 - 17,295,857 -
18,245,029 - 18,245,029 -
3,097,521 - 3,097,521 -
1,901,536 74,873 1,976,409 -
1,573,106 131,175 1,704,281 -
17,274 - 17,274 -
300,000 (300,000) - -
53,942,566 (93,952) 53,848,614 -
(2,283,996) 62,412 (2,221,584) 287,466
733,953,668 74,659,228 808,612,896 (1,124,827)
(13,081,531) - (13,081,531) -
720,872,137 74,659,228 795,531,365 (1,124,827)
718,588,141$ 74,721,640$ 793,309,781$ (837,361)$
Palm Desert
Recreational
Facilities
Corporation
See Notes to Financial Statements 19
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20
FUND FINANCIAL STATEMENTS
21
CITY OF PALM DESERT
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2018
General
ASSETS:
Pooled cash and investments 79,377,363$ 21,309,404$ 2,718,350$ 8,552,903$
Receivables:
Accounts 1,865,849 ---
Assessments ----
Notes 1,368,000 --1,200
Interest 2,501,225 -- 1,111,702
Loans 14,978 -- 6,420,276
Prepaid costs 154,316 --476
Deposits - 15,393,231 --
Due from other governments 3,611,229 660,745 611,638 -
Due from other funds 3,638,000 -- 4,531,000
Inventories ----
Property held for resale ---61,516
Due from component unit 285,000 ---
Restricted assets:
Cash and investments with fiscal agent --- 22,977,137
Advances to Successor Agency 9,236,000 -- 4,711,140
TOTAL ASSETS 102,051,960$ 37,363,380$ 3,329,988$ 48,367,350$
Liabilities, Deferred Inflows of
Resources and Fund Balances
LIABILITIES:
Accounts payable 4,781,718$ 130$ 1,434,921$ -$
Accrued liabilities 203,839 ---
Unearned revenues 2,198 15,393,231 --
Deposits payable ----
Due to other funds 1,847,200 ---
TOTAL LIABILITIES 6,834,955 15,393,361 1,434,921 -
DEFERED INFLOWS OF RESOURCES:
Unavailable revenue 4,846,457 - -1,052,054
4,846,457 - - 1,052,054
FUND BALANCES:
Nonspendable 10,509,094 --476
Restricted - 21,970,019 1,895,067 47,314,820
Committed 59,666,638 ---
Assigned 15,492,508 - --
Unassigned 4,702,308 - --
Total Fund Balances 90,370,548 21,970,019 1,895,067 47,315,296
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 102,051,960$ 37,363,380$ 3,329,988$ 48,367,350$
Special Revenue Funds
Measure A
Prop A Fire
Tax
Housing
Asset Fund
See Notes to Financial Statements 22
CITY OF PALM DESERT
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2018
ASSETS:
Pooled cash and investments
Receivables:
Accounts
Assessments
Notes
Interest
Loans
Prepaid costs
Deposits
Due from other governments
Due from other funds
Inventories
Property held for resale
Due from component unit
Restricted assets:
Cash and investments with fiscal agent
Advances to Successor Agency
TOTAL ASSETS
Liabilities, Deferred Inflows of
Resources and Fund Balances
LIABILITIES:
Accounts payable
Accrued liabilities
Unearned revenues
Deposits payable
Due to other funds
TOTAL LIABILITIES
DEFERED INFLOWS OF RESOURCES:
Unavailable revenue
FUND BALANCES:
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
Special
Revenue
Funds
Capital
Projects Funds
17,725,742$ 15,718$ 36,233,193$ 165,932,673$
3,932 - 480,609 2,350,390
- - 1,227,632 1,227,632
- - - 1,369,200
33 81,269 2,587,959 6,282,188
- - 3,381,820 9,817,074
- - 1,250 156,042
- - - 15,393,231
- - 449,531 5,333,143
- - 500,000 8,669,000
- - 4,868 4,868
- - - 61,516
- - - 285,000
3,006,404 68,800,391 2,020,373 96,804,305
- - 13,419,000 27,366,140
20,736,111$ 68,897,378$ 60,306,235$ 341,052,402$
144,139$ 142,630$ 1,440,533$ 7,944,071$
73,303 - 9,308 286,450
13,098 - 214,635 15,623,162
527,568 - 365,096 892,664
- - 4,821,800 6,669,000
758,108 142,630 6,851,372 31,415,347
- - 3,807,260 9,705,771
- - 3,807,260 9,705,771
- - 1,250 10,510,820
8,102,515 68,754,748 21,511,957 169,549,126
11,875,488 - 4,876,333 76,418,459
- - 23,258,063 38,750,571
- - - 4,702,308
19,978,003 68,754,748 49,647,603 299,931,284
20,736,111$ 68,897,378$ 60,306,235$ 341,052,402$
Housing
Authority
Capital
Properties
Other
Governmental
Funds
Total
Governmental
Funds
See Notes to Financial Statements 23
THIS PAGE INTENTIONALLY LEFT BLANK
24
CITY OF PALM DESERT
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2018
Total fund balance for governmental funds 299,931,284$
Amounts reported for governmental activities in the Statement of Net Position are
different because:
Capital assets net of depreciation have not been included as financial resources
in the govenmental fund activity.436,029,572
Deferred outflows related to pension and OPEB related items are not included in the
governmental fund activity:
Pension
Contributions made after the measurement date 5,396,908$
Changes in assumptions 4,911,815
Net Difference between projected and actual earning on plan investments 1,101,808 11,410,531
OPEB
Contributions made after the measurement date 1,217,465
Deferred inflows related to pension and OPEB related items are not included in the
governmental fund activity:
Pension
Changes in assumptions (130,710)
Differences between expected and actual experiences (2,923,668) (3,054,378)
OPEB
Net Difference between projected and actual earning on plan investments (49,049)
Long-term debt, claims and judgements, net OPEB, and net pension liability are not
the governmental fund activity:
Bonds (2,658,000)
Claims and judgments (360,237)
Net OPEB liability (4,120,584)
Net pension liability (38,965,978) (46,104,799)
Interest on long-term debt is not accrued in governmental funds, but rather is
recognized as an expenditure when due.(84,239)
Unavailable revenues are not reported as revenues in governmental funds and thus
has the effect of decreasing fund balances. For the City as a whole, however, the
collection of these receipts increases the net position in the Statement of Net Position
and results in revenues in the Statement of Activities.8,478,139
Internal service funds are used by management to charge the costs of certain activities,
such as equipment and compensated absences to individual funds. The assets and
liabilities of the internal service fund must be added to the Statement of Net Position.
10,813,615
Net Position of Governmental Activities 718,588,141$
See Notes to Financial Statements 25
CITY OF PALM DESERT
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2018
General
REVENUES:
Taxes 52,936,454$ 2,765,692$ 5,909,280$ -$
Special assessments collected -- 2,237,916 -
Licenses and permits 1,144,404 ---
Intergovernmental revenues 1,443,808 200,450 1,188,743 -
Rental income 161,038 ---
Charges for services 1,659,248 ---
Investment earnings 1,237,562 254,693 21,772 470,234
Fines and forfeitures 149,576 - --
Miscellaneous 509,309 75,000 62,247 45,748
TOTAL REVENUES 59,241,399 3,295,835 9,419,958 515,982
EXPENDITURES:
Current:
General government 17,836,155 ---
Public safety 22,668,601 - 13,476,152 -
Parks, recreation and culture 3,835,946 ---
Public works 5,490,461 2,871,083 --
Housing and redevelopment --- 722,168
Capital outlay 161,225 -19,579 -
Debt service:
Principal retirement ----
Interest and fiscal charges ----
TOTAL EXPENDITURES 49,992,388 2,871,083 13,495,731 722,168
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 9,249,011 424,752 (4,075,773) (206,186)
OTHER FINANNCING SOURCES (USES):
Transfers in 1,610,830 - 3,668,540 -
Transfers out (4,475,837) ---
TOTAL OTHER FINANCING
SOURCES (USES)(2,865,007) - 3,668,540 -
NET CHANGE IN FUND BALANCES 6,384,004 424,752 (407,233) (206,186)
FUND BALANCES - BEGINNING OF YEAR 83,986,544 21,545,267 2,302,300 47,521,482
FUND BALANCES - END OF YEAR 90,370,548$ 21,970,019$ 1,895,067$ 47,315,296$
Special Revenue Funds
Housing
Asset Fund
Prop A Fire
Tax Measure A
See Notes to Financial Statements 26
CITY OF PALM DESERT
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2018
REVENUES:
Taxes
Special assessments collected
Licenses and permits
Intergovernmental revenues
Rental income
Charges for services
Investment earnings
Fines and forfeitures
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Public safety
Parks, recreation and culture
Public works
Housing and redevelopment
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANNCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING OF YEAR
FUND BALANCES - END OF YEAR
Special
Revenue
Funds
Capital
Projects
Funds
-$ -$ 295,433$ 61,906,859$
- - 1,207,330 3,445,246
- - 181,645 1,326,049
632,541 - 2,217,162 5,682,704
6,514,594 - - 6,675,632
- - 1,235,573 2,894,821
264,030 640,924 737,677 3,626,892
- - 12,794 162,370
121,443 - 2,072,795 2,886,542
7,532,608 640,924 7,960,409 88,607,115
- - 1,444,947 19,281,102
- - 102,903 36,247,656
- 667,245 1,964,522 6,467,713
- 79,748 3,742,560 12,183,852
7,243,409 - 557,224 8,522,801
10,424 291,221 432,973 915,422
- - 150,000 150,000
- - 260,971 260,971
7,253,833 1,038,214 8,656,100 84,029,517
278,775 (397,290) (695,691) 4,577,598
- - 1,333,982 6,613,352
(536,434) - (1,301,081) (6,313,352)
(536,434) - 32,901 300,000
(257,659) (397,290) (662,790) 4,877,598
20,235,662 69,152,038 50,310,393 295,053,686
19,978,003$ 68,754,748$ 49,647,603$ 299,931,284$
Capital
Properties
Housing
Authority
Other
Governmental
Funds
Total
Governmental
Funds
See Notes to Financial Statements 27
CITY OF PALM DESERT
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2018
Net change in fund balances - total governmental funds 4,877,598$
Amounts reported for governmental activities in the statement of activities are
different because:
Governmental funds report capital outlays as expenditures. However, in the statement
of activities, the costs of those assets are allocated over their estimated useful lives
as depreciation expense.
Capital outlay 915,422$
Gain/(loss) on sale and disposal of capital assets (252,796)
Depreciation (11,558,228) (10,895,602)
Repayment of debt principal is an expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the statement of net position.150,000
Some expenses reported in the Statement of Activities do not require the use of
current financial resources and, therefore, are not reported as expenditures in
governmental funds:
Net change in accrued interest for the current period 1,721
Net change in claims and judgments for the current period 38,446 40,167
Pension obligation and OPEB expenses are expenditures in the governmental funds,
but reduce the Net Pension Liability and Net OPEB Liability in the statement of net position:
Pension expense 2,402,162
OPEB expense 697,005 3,099,167
Unavailable revenues are not reported as revenues in governmental funds and thus
has the effect of decreasing fund balances. For the City as a whole, however, the
collection of these receipts increases the net position in the Statement of Net Position
and results in revenues in the Statement of Activities.819,946
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.(375,272)
Change in Net Position of Governmental Activities (2,283,996)$
See Notes to Financial Statements 28
CITY OF PALM DESERT
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2018
Major Fund Other Fund
ASSETS:
CURRENT ASSETS:
Cash and investments 2,803,640 $ 4,809,847 $ 7,613,487$ 11,058,370 $
Receivables:
Accounts 48,119 50,853 98,972 -
Prepaid costs 94,272 174 94,446 36,949
Inventories 199,741 - 199,741 -
Due from component unit (PDRFC)608,947 - 608,947 -
TOTAL CURRENT ASSETS 3,754,719 4,860,874 8,615,593 11,095,319
CAPITAL ASSETS:
Nondepreciable 53,304,965 - 53,304,965 224,011
Depreciable, net 10,749,583 6,550,579 17,300,162 1,930,487
CAPITAL ASSETS, NET 64,054,548 6,550,579 70,605,127 2,154,498
TOTAL ASSETS 67,809,267$ 11,411,453$ 79,220,720$ 13,249,817$
LIABILITIES:
CURRENT LIABILITIES:
Accounts payable 757,794$ 29,428$ 787,222$ 49,430$
Accrued liabilities 52,135 - 52,135 -
Unearned revenues 129,654 8,910 138,564 -
Deposits payable - 27,829 27,829 -
Due to other funds 2,000,000 - 2,000,000 -
Compensated absences - - - 300,000
Capital leases 562,498 - 562,498 -
TOTAL CURRENT LIABILITIES 3,502,081 66,167 3,568,248 349,430
NONCURRENT LIABILITIES:
Compensated absences - - - 2,086,772
Capital leases 930,832 - 930,832 -
TOTAL NONCURRENT LIABILITIES 930,832 - 930,832 2,086,772
TOTAL LIABILITIES 4,432,913 66,167 4,499,080 2,436,202
Net Position:
Net investment in capital assets 62,561,218 6,550,579 69,111,797 2,154,498
Unrestricted 815,136 4,794,707 5,609,843 8,659,117
Total Net Position 63,376,354 11,345,286 74,721,640 10,813,615
Total Liabilities, Deferred Inflows
of Resources, and Net Position 67,809,267$ 11,411,453$ 79,220,720$ 13,249,817$
Parkview
Office
Complex
Total
Enterprise Funds
Governmental
Activities -
Internal
Service Funds
Business-Type Activities -
Enterprise Funds
Desert Willow
Golf Course
See Notes to Financial Statements 29
CITY OF PALM DESERT
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2018
Major Fund Other Fund
OPERATING REVENUES:
Fees and rentals 7,098,349$ 1,250,456$ 8,348,805$ -$
Miscellaneous 125,728 5,447 131,175 -
Merchandise sales 1,333,924 -1,333,924 -
TOTAL OPERATING REVENUES 8,558,001 1,255,903 9,813,904 -
OPERATING EXPENSES:
General and administrative 2,405,293 200,410 2,605,703 -
Cost of merchandise 555,763 -555,763 -
Maintenance and operations 4,578,672 367,603 4,946,275 78,934
Depreciation and amortization 1,062,033 362,802 1,424,835 453,019
TOTAL OPERATING EXPENSES 8,601,761 930,815 9,532,576 531,953
OPERATING INCOME (LOSS)(43,760) 325,088 281,328 (531,953)
NONOPERATING REVENUES (EXPENSES)
Interest revenue 16,326 58,547 74,873 139,407
Interest expense (161,459) -(161,459) -
Gain on disposal of capital assets - - -17,274
TOTAL NONOPERATING
REVENUES (EXPENSES)(145,133) 58,547 (86,586) 156,681
INCOME (LOSS) BEFORE
CAPITAL CONTRIBUTIONS & TRANSFERS (188,893) 383,635 194,742 (375,272)
CAPITAL CONTRIBUTIONS 167,670 -167,670 -
TRANSFERS OUT -(300,000) (300,000) -
CHANGE IN NET POSITION (21,223) 83,635 62,412 (375,272)
NET POSITION - BEGINNING OF YEAR 63,397,577 11,261,651 74,659,228 11,188,887
NET POSITION - END OF YEAR 63,376,354$ 11,345,286$ 74,721,640$ 10,813,615$
Parkview
Office
Complex
Business-Type Activities - Enterprise Funds
Total
Enterprise Funds
Governmental
Activities -
Internal Service
Funds
Desert Willow
Golf Course
See Notes to Financial Statements 30
CITY OF PALM DESERT
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2018
Major
Fund Other Fund
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers 8,980,556$ 1,254,520$ 10,235,076$ -$
Payments to suppliers (7,632,052) (564,471) (8,196,523) (59,181)
Cash paid to employees for services - - - (196,947)
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES 1,348,504 690,049 2,038,553 (256,128)
CASH FLOWS FROM NONCAPITAL AND
RELATED FINANCING ACTIVITIES:
Interest paid on loan (50,000) - (50,000) -
Cash received from other funds 1,500,000 - 1,500,000 -
Cash paid to other funds - (300,000) (300,000) -
NET CASH PROVIDED (USED) BY
NONCAPITAL AND RELATED
FINANCING ACTIVITIES 1,450,000 (300,000) 1,150,000 -
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Purchases of capital assets (121,834) (11,522) (133,356) (496,066)
Principal paid on leases (405,834) - (405,834) -
Interest paid on leases (111,459) - (111,459) -
Proceeds from sales of capital assets - - - 17,819
NET CASH USED BY CAPITAL AND
RELATED FINANCING ACTIVITIES (639,127) (11,522) (650,649) (478,247)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and dividends 16,326 58,547 74,873 139,407
Net Cash Provided (Used) by
Investing Activities 16,326 58,547 74,873 139,407
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 2,175,703 437,074 2,612,777 (594,968)
CASH AND CASH EQUIVALENTS -
BEGINNING OF YEAR 627,937 4,372,773 5,000,710 11,653,338
CASH AND CASH EQUIVALENTS -
END OF YEAR 2,803,640$ 4,809,847$ 7,613,487$ 11,058,370$
RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES:
Operating income (loss)(43,760)$ 325,088$ 281,328$ (531,953)$
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization 1,062,033 362,802 1,424,835 453,019
Changes in assets and liabilities:
(Increase) decrease in receivables, net 73,626 (21) 73,605 -
(Increase) decrease in prepaid costs (35,825) 297 (35,528) (13,269)
(Increase) decrease in inventories 65,720 - 65,720 -
(Increase) decrease in due
from component unit 356,010 - 356,010 -
Increase (decrease) in accounts payable
and accrued liabilities (122,219) 3,246 (118,973) 33,022
Increase (decrease) in deposits payable - 1,975 1,975 -
Increase (decrease) in unearned revenue (7,081) (3,338) (10,419) -
Increase (decrease) in compensated absences - - - (196,947)
Total Adjustments 1,392,264 364,961 1,757,225 275,825
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES 1,348,504$ 690,049$ 2,038,553$ (256,128)$
NONCASH ITEMS:
Capital Contributions 167,670$ -$ 167,670$ -$
Capital Lease 1,399,284 - 1,399,284 -
Governmental
Activities -
Internal Service
Funds
Parkview
Office Complex
Total
Enterprise
Funds
Desert Willow
Golf Course
See Notes to Financial Statements 31
CITY OF PALM DESERT
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2018
Private-Purpose
Trust Fund
Agency
Funds
Assets:
Pooled cash and investments 11,367,398$ 19,038,309$
Receivables:
Accounts 1,875 -
Assessments 53,894,172 -
Accrued interest 15,197 25,781
Prepaid costs - 1,836,915
Due from other governments 69,468 50
Restricted assets:
Cash and investments with fiscal agents 4,682,972 23,556,767
Capital assets:
Capital assets, not being depreciated - 34,933,959
Capital assets, being depreciated - 898,151
Total Assets 70,031,082$ 80,289,932$
Deferred Outflows of Resources:
Deferred charge on refunding 52,612$
Total Deferred Outflows of Resources 52,612$
Liabilities:
Accounts payable -$ 423,159$
Deposits payable 70,031,082 200,000
Long-term liabilities:
Due in one year - 17,210,000
Due in more than one year - 239,474,246
Advances from City of Palm Desert - 22,655,000
Interest payable - 7,442,195
Advances from Housing Authority - 4,711,140
Total Liabilities 70,031,082$ 292,115,740$
Deferred Inflows of Resources:
Deferred charge on refunding 650,958$
Total Deferred Inflows or Resources 650,958$
Net Position:
Held in trust (212,424,154)$
Total Net Position (212,424,154)$
Successor Agency
to the Palm Desert
Redevelopment
Agency Private-
Purpose Trust Fund
See Notes to Financial Statements 32
CITY OF PALM DESERT
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
YEAR ENDED JUNE 30, 2018
ADDITIONS:
Taxes 31,863,474$
Investment income 292,418
Gain on disposition and transfer of property 1,891,106
Other 125,150
TOTAL ADDITIONS 34,172,148
DEDUCTIONS
Housing and development 3,650,937
Interest 9,295,985
Depreciation 31,622
TOTAL DEDUCTIONS 12,978,544
CHANGES IN NET POSITION 21,193,604
NET POSITION - BEGINNING OF YEAR (233,617,758)
NET POSITION - END OF YEAR (212,424,154)$
Private-Purpose Trust
Fund
Successor Agency to
the Palm Desert
Redevelopment
Agency Private-
Purpose Trust Fund
See Notes to Financial Statements 33
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