COMPREHENSIVE ANNUAL FINANCIAL REPORT of the CITY OF PALM DESERT, CALIFORNIA For the Fiscal Year Ended JUNE 30, 2008 Prepared by the Finance Department City Treasurer/Director of Finance Paul S. Gibson Assistant Finance Director Jose Luis Espinoza, CPA Finance Staff (in alphabetical order by positions and names)
Accounting Technician II Deputy City Treasurer Information Systems James Bounds Thomas Jeffrey Technician Accounting Technician II Director of Information Ray Santos Horacio Celaya Systems Management Analyst Accounting Technician II Doug Van Gelder Jenny Barnes Sharon Christiansen G.I.S. Coordinator Office Assistant Accounting Technician II Robert Riches Vedrana Spasojevic Diana Leal G.I.S. Technician Office Assistant I Accounting Technician II John Urkov Cherie Thompson Barbara Wright Information Systems Senior Financial Analyst Administrative Secretary Analyst Anthony Hernandez Niamh Ortega Clay von Helf Sr. Office Assistant Business License Technician Information Systems Claudia Jaime Rob Bishop Technician Troy Kulas
CITY OF PALM DESERT
TABLE OF CONTENTS
JUNE 30, 2008
Page Number
INTRODUCTORY SECTION
Table of Contents i Letter of Transmittal vii GFOA Certificate of Achievement for Excellence in Financial Reporting xii List of Principal Officials xiii Organization Chart xiv
FINANCIAL SECTION
AUDITORS' REPORT
Independent Auditors' Report 1
MANAGEMENT’S DISCUSSION AND ANALYSIS 3
BASIC FINANCIAL STATEMENTS
Exhibit A - Statement of Net Assets 15
Exhibit B - Statement of Activities 16
Exhibit C - Balance Sheet - Governmental Funds 20
Exhibit D - Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 23
Exhibit E - Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 24
Exhibit F - Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 26
Exhibit G - Statement of Net Assets - Proprietary Funds 27
Exhibit H - Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds 28
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CITY OF PALM DESERT
TABLE OF CONTENTS (CONTINUED)
JUNE 30, 2008
Page Number BASIC FINANCIAL STATEMENTS (CONTINUED):
Exhibit I - Statement of Cash Flows - Proprietary Funds 29
Exhibit J - Statement of Fiduciary Assets and Liabilities – Agency Funds 31
Notes to Basic Financial Statements 33
REQUIRED SUPPLEMENTARY INFORMATION
Schedule 1 - Budgetary Comparison Schedule - General Fund 107
Schedule 2 - Budgetary Comparison Schedule - Prop A Fire Tax Special Revenue Fund 108
SUPPLEMENTARY SCHEDULES
General Fund: 111 Schedule 3 - Budgetary Comparison Schedule by Department - General Fund 112
Other Governmental Funds - Combining Statements: 117 Schedule 4 - Combining Balance Sheet - Other Governmental Funds 118
Schedule 5 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Other Governmental Funds 119
Other Governmental Funds - Other Special Revenue: 121 Schedule 6 - Combining Balance Sheet - Other Special Revenue Funds 124
Schedule 7 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Other Special Revenue Funds 128
Schedule 8 - Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Special Revenue Funds: A. Traffic Safety 132 B. Gas Tax 133 C. Housing Mitigation Fees 134 D. Community Development Block Grant 135 E. El Paseo Assessment District 136 F. City-Wide Business License 137 G. Landscape and Lighting Districts No. 1-17 138
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CITY OF PALM DESERT
TABLE OF CONTENTS (CONTINUED)
JUNE 30, 2008
Page Number SUPPLEMENTARY SCHEDULES (CONTINUED)
Other Governmental Funds - Other Debt Service: 139 Schedule 9 - Combining Balance Sheet - Other Debt Service Fund 140
Schedule 10 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Other Debt Service Fund 141
Other Governmental Funds - Other Capital Projects: 143 Schedule 11 - Combining Balance Sheet - Other Capital Projects Funds 144
Schedule 12 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Other Capital Projects Funds 148
Agency Funds: 153 Schedule 13 - Combining Statement of Assets and Liabilities - All Agency Funds 154
Schedule 14 - Combining Statement of Changes in Assets and Liabilities - All Agency Funds 155
STATISTICAL SECTION
Description of Statistical Section 157
Financial Trends Net Assets by Component 158 Changes in Net Assets 159 Fund Balances of Governmental Funds 161 Changes in Fund Balances of Governmental Funds 162 Graphs - Changes in Fund Balances of Governmental Funds 163 Supplemental Historical General Fund Revenues 164 Supplemental Graph - Historical General Fund Revenues 165 Supplemental Historical General Fund Expenditures 166 Supplemental Graph - Historical General Fund Expenditures 167 Supplemental Historical General Revenue and Expenditures Per Capita 169
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CITY OF PALM DESERT
TABLE OF CONTENTS (CONTINUED)
JUNE 30, 2008
Page Number STATISTICAL SECTION (CONTINUED) Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 170 Historical Net Assessed Taxable Values Citywide and Graph - Assessed Valuation Growth 171 Supplemental FY 2008 and 2007 Breakdown of Basic 1% Property Tax Rate Not in Redevelopment Project Area 172 Property Tax Rates Direct and Overlapping Property Tax Rates 173 Principal Property Taxpayers 174 Property Tax Levies and Collections 175 Supplemental Top 25 Sales Tax Generators and Graph - Historical Sales Tax Trends 176 Supplemental Taxable Sales by Category 177 Supplemental Principal Sales Tax Remitters 178
Debt Capacity Ratios of Outstanding Debt by Type 179 Ratios of General Bonded Debt Outstanding 180 Supplemental Special Assessment Information 181 Direct and Overlapping Government Activities Debt 182 Legal Debt Margin Information 183 Pledged-Revenue Coverage 184
Demographic and Economic Information Demographic and Economic Statistics 185 Principal Employers 186 Supplemental Miscellaneous Statistics 187
Operating Information Full-time Equivalent City Government Employee’s by Function/Program 188 Operating Indicators by Function/Program 189 Capital Asset Statistics by Function/Program 190
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CITY OF PALM DESERT
TABLE OF CONTENTS (CONTINUED)
JUNE 30, 2008
Page Number SUPPLEMENTAL REDEVELOPMENT AGENCY STATISTICAL SECTION
Redevelopment Agency Project Area Map 193 FY 2008 Top Twenty Property Taxpayers: Project Area No. 1 and 1982 Annex 194 Project Area No. 2 195 Project Area No. 3 196 Project Area No. 4 197 Project Area Statistics 198 Tax Allocation Bond Issue Information 199 FY 2007/2008 Breakdown of Basic 1% Property Tax Levy Rates 200 Historical Tax Increment Summary: Redevelopment Project Area No. 1 - Original 201 Redevelopment Project Area No. 1 - Amended 202 Redevelopment Project Area No. 2 203 Redevelopment Project Area No. 3 204 Redevelopment Project Area No. 4 205 Historical Net Assessed Taxable Values: Redevelopment Project Area No. 1 - Original 206 Change in Taxable Values: Redevelopment Project Area No. 1 - Original 207 Historical Net Assessed Taxable Values: Redevelopment Project Area No. 1 - Amended 208 Change in Taxable Values: Redevelopment Project Area No. 1 - Amended 209 Historical Net Assessed Taxable Values: Redevelopment Project Area No. 2 210 Change in Taxable Values: Redevelopment Project Area No. 2 211 Historical Net Assessed Taxable Values: Redevelopment Project Area No. 3 212 Change in Taxable Values: Redevelopment Project Area No. 3 213 Historical Net Assessed Taxable Values: Redevelopment Project Area No. 4 214 Change in Taxable Values: Redevelopment Project Area No. 4 215
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Citizens of the City of Palm Desert, Honorable Mayor and Members of the City Council November 17, 2008
CAFR Structure
The format and content of this report is presented in three sections:
Introductory Section, provides the reader with the organizational structure of the City, its services and operating environment. This section includes a title page, table of contents, a letter of transmittal, an organizational chart, a list of the City of Palm Desert’s elected and appointed officials, and the certificates of award from the Government Finance Officers Association of the United States and Canada.
Financial Section, presents the City’s independent auditor’s report on the Basic Financial Statements, the Management’s Discussion and Analysis (MD&A), the Basic Financial Statements, the notes to the financial statements, the Required Supplementary Information (RSI), and the non-major supplementary schedules.
Statistical Section, provides the reader with additional historical financial data and other information concerning the City.
PROFILE OF THE CITY OF PALM DESERT
Located in Riverside County in the geographical center of the Coachella Valley’s Palm Springs Desert Resorts area, Palm Desert was incorporated on November 26, 1973, as a General Law City. Fourteen years later on November 4, 1997, voters overwhelmingly approved Measure LL adopting a city charter.
Under the provisions of the charter, the City of Palm Desert has full authority over its own municipal affairs including bidding and contracting procedures, regulation of parks, libraries, and other facilities, certain fees, imposition of taxes, municipal zoning, salaries of officials and employees, municipal utilities, and municipal election procedures.
The City of Palm Desert operates under a Council-Manager form of Government. The City Council consists of five members elected by the residents of the City. Council terms are four years, elected in November of even-numbered years. Each November, the City Council selects the Mayor from among its members for a one-year term. The City Council appoints the City Manager and the City Clerk.
The City operates as a “contract city” utilizing, primarily, agreements with other governmental entities, private firms, and individuals to provide services. Contracted services include: police and fire protection through the County of Riverside; animal control; health services; legal services; and landscape maintenance. The City provides traditional municipal, public enterprise, and redevelopment services as shown below:
viii Citizens of the City of Palm Desert, Honorable Mayor an Members of the City Council November 17, 2008
Municipal Services Public Enterprise Services Public improvements, infrastructure and maintenance Golf Course Public art and community promotion Office Complex Planning, zoning, building and engineering Internal Service Housing and community development Code enforcement and inspections Blended & Discrete Component Economic development and business support Units Legislative, city clerk, visitor center, public information PD Redevelopment Agency General administration and fiscal services PD Financing Authority PD Housing Authority PD Recreational Facilities Corp.
The City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General, Special Revenue, Debt Service and Capital Project Funds are included in the annual appropriated budget. Budgetary amounts for Debt Service, Capital Projects, and Certain Special Revenue Funds are adopted annually; however, budgets are considered to be long-term in nature.
The City also maintains an encumbrance accounting system of purchase orders and contracts at the fund level as a means of accomplishing budgetary control. Open encumbrances are reported as a reservation of fund balance at the end of the fiscal year. Purchase orders are reviewed to ensure that funds are available and that requests are properly authorized prior to being released to vendors.
The adopted budget for fiscal year 2007-2008 was prepared in accordance with accounting principles generally accepted in the United States of America. As reflected in the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management.
LOCAL ECONOMY
The City comprises an area of approximately 26 square miles and, as of January 1, 2008, has a population of 50,907, according to data provided by the California Department of Finance. In addition to permanent residents, approximately 15,000 seasonal residents make Palm Desert their home for three to six months each year.
The City of Palm Desert has cultivated a sound foundation of general fund revenue including sales tax, transient occupancy tax, licenses and permits, property tax, and investment earnings. Tourism and sales tax are the City’s main revenue sources.
ix Citizens of the City of Palm Desert, Honorable Mayor an Members of the City Council November 17, 2008
A balanced community where economic, environmental, social, and cultural development flourishes, Palm Desert is a much sought-after destination as a place to visit and reside. The first city in Riverside County to create a public art program, Palm Desert is home to numerous cultural attractions including: the McCallum Theatre for the Performing Arts, a 1,127-seat theater which hosts some of the biggest names and well-known productions in show business; The Living Desert wildlife and botanical park, a 1,200-acre facility containing a wide array of plants and animals from desert regions around the world; and Palm Desert Art in Public Places, a museum without walls, featuring more than 100 works of art on permanent display throughout the City.
Palm Desert’s active Chamber of Commerce has more than 1,500 members who work to promote, support, and enhance business prosperity, civic vitality, and the quality of life within their community. Noted for its extensive array of retail options, including the world famous upscale shopping destination of El Paseo, the City is home to a variety of malls and retail centers including Westfield Palm Desert, Desert Crossing, and The Gardens on El Paseo.
The internationally acclaimed Desert Willow Golf Resort, one of the nation’s premier municipal courses, boasts 36 holes of championship golf and stunning scenery in close proximity to first- class hotel accommodations and fine dining restaurants.
In addition to being the home of the Coachella Valley’s only community college, College of the Desert, Palm Desert is the location of two new recently opened campuses for California State University, San Bernardino and the University of California, Riverside. Both of these institutions of higher learning offer multiple options for degree programs and continuing education.
A balanced foundation of tourism, culture, and education has strengthened the City’s labor force making it as strong as the economy. The State of California Employment Development Department Labor Market Information Division reported that for the period ending June 30, 2008 the City of Palm Desert had an unemployment rate of 4.1% compared to Riverside County, which had a rate of 8.4%.
LONG-TERM FINANCIAL PLANNING
In June 2008, the City Council approved a total of $52.05 million in funding for various capital improvement projects for the fiscal year of 2008-2009. Projects include traffic signals, sidewalk repairs and implementation, street widening, construction of landscaping medians where none existed, improving drainage areas, and completion of the development called Entrada El Paseo.
With all these projects slated for the coming fiscal year, it is evident that the City of Palm Desert is committed to promoting tourism, business, culture and education in an effort to maintain the high quality of life that the private and business community enjoys.
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CITY OF PALM DESERT
List of Principal Officials as of June 30, 2008
City Council - Manager Form of Government
CITY COUNCIL
JEAN M. BENSON Mayor
ROBERT A. SPIEGEL Mayor Pro-Tempore
JIM FERGUSON CINDY FINERTY RICHARD S. KELLY Council Member Council Member Council Member
CITY ADMINISTRATION
CARLOS L. ORTEGA City Manager
City Attorney - Best, Best & Krieger David J. Erwin Assistant City Manager for Community Services/City Clerk Sheila S. Gilligan Assistant City Manager for Development Services Homer Croy Assistant City Manager for Redevelopment Agency/Housing Justin McCarthy Director of Finance/City Treasurer Paul S. Gibson
REDEVELOPMENT AGENCY
Executive Director CARLOS L. ORTEGA
xiii FUNCTIONAL ORGANIZATION CHART
MAYOR and CITY COUNCIL
City Attorney City Manager Committee and Commissions Litigation I Advise City Dept. on Legal Matters RDA Executive Olr. Planning Commission I Architect Review Commission Operatlcins Overviewl Project Overview/Energy Management Publlo Safety I Technology I Legislative I Ren! Review Iinvesimeni Peraonnel/BudgeVPolicy Development/Citizen & Business Inquiries Golf Course I Landscape I Park & Recreation fRDA Project Area I Housing
Community Services Police & FireDepartment Finance DlrectorlTreasurer RedevelopmentfHousinglEconomic Development Services Assistant City Manager Contracted with County Sheriff Assistant City Manager Asslstsnt City Manager Contracted with County FirelState C.D.F.
City Clerk Police Department Accounting Redevelopment Agency Community Development
Administration Special Events Annual Financial Statement Financing of Projects Planning Division Cadet/Explorer Program General Ledger Reconciliation Redevelopment Implementation P.A.C.T. Program Grants Receivables and Control Specific Five-Year Plans Corporate Secretary to : Motorcycle Patrol Redevelopment Project Accounting Acquisition & Development PI."'"9 Cooo'., City Council Canine ~ CDBG and Housing Accounting Construction Management EnVironmental Review Development Review Redevelopment Agency Board Narcotics Task Force Golf Course and Office Complex Acoountlng Public Parking Lots Special Investigation General Services Development Agreements Zoning Review Housing Authority Board Gang Suppression Infrastructure Improvements Planning Commission Administration Prepare Agendas & Minutes Forensic Services Housing Development Architect Review Commission Admin. Legal Notices Crime Prevention Purchasing Renovation of Apartment Units ~ General & Specific Plan Coordination Ordinances & Resolutions Homicides & Assaults Accounts.Payables Adaptive Reuse for Exiating Structures Future Use Planning Public Records, Contl"l'lcts. Deeds Domestic Violence Process Police & Fire Purchsse Orders/Payments Economic Development Parks & Recreation Legislative Historic Documents Dispatch Operations Process Vendor Payments Proclamations & Certificates D.A.R.E Program Audit Payment Process Summons & Subpoenas Accident Investigation Centralized Supplies Business Outreach/Development C' Application & Appointments ••'.P.'" ~. Tramc Patrol Telephone Psyments Business Attraction & Retantion Administer contracts Records Maintenance Fire Department Copier Repalr/Malntenance/ Payments Industry/Demographic ~ New Walking & BikeTrails Legislative Tracking City-wide Dues to Organizations ~ Research & Analysis Park & Recreation Committee Library Oversight Bus. Loan Improvement Program Risk Management FaIr Political Practices Duties Fire Prevention Tre~as:::~~:~.Management Housing Authority Fire Marshall Building Review & Inspections Public Safety Commltee Local Filing Officer Paramedics Accounts Receivables Rental Assistance Disaster Preparedness Coordinator Conflict of Interest Trust Deposits Acqulstlon & Development Cal-OSHA Compliance Campaign Statements Search & Rescue Volunteer Fire Fighters Investments Affordable Monitoring Safety Programs Electionst Training Banking Services Neighborllood Clean-ups Liability Claims Special Events Business License Collection Self-help Housing ~ Crosalng Guards Coordinator Children Safety Programs Tranclent Occupancy Tax Collection Rehab Loans Facilities/Equip. Inspection Municipal Elections Dispatch Bank Accounts ReconclHatlon Relocation Assrstance Building Maintenance Oaths of Office Information Services Property Management Building & Safety Initiative/Other Petitions Mobile Home Rentals Humant Resources Emergency Shelter Grants Analyze needs & Specify Systems Building Permit Counter Assist with PC Hardware & Software General Training Struct\lral Plan Ched< Support Local Area Networks (LANs) Disabled Accessibility Employee Relations Support & Run City Computer Business System Stale Building Code Compliance New Employee Orientation Support City Telephone System Construction Inllpectlons Benefits & Compensation Support Golf Course Computers/Telephone Occupancy Inspections Employee Assistance Program Support library. Fire & Police Computers/Software Plumbing & Mechanical Plan Check New Hires(application/Interview/testing} Administer Internal Systems (Elactronlc mall, web site) Electrical Plan Check Perfomance Appraisals Geographical Information System Mapping (G.I.S.) Dangerous & Abandoned Buildings Discipline/Grievances Compliance with State/Federal Laws Management & Support Substandard Housing COBRA Code Enforcement Class/Comp. Surveys City Payroll Preparation & Distribution Workers Compensation Claims City Internal Audits Complaint Response Retirements Annual City & Agency BUdget Preparation Animal Control Special Events Revenue & Expenditure Monitoring Commercial Code Enfcrcement Franchise Contract Oversight Financial Forecasting Sign Code Enforcement Promotions & Advertising ~ Administer OutSide Agency Commlttee Abandoned Vehicles Administer AudiVFlnance/lnvestment Committee Nuisance Abatement Recreation Vehicle & Illegal Parking City Special Events Golf Cert Inspection Program Summer Concerts County Haaltll Department Issues ~ Promote City Tourism Bllslness License Enforcement Community Celendar Public Works Art in Public Places Visitor Information Center FUNCTIONAL ORGANIZATION CHART
DEVELOPMENT SERVICES
I I ADMINISTRATION I ENGINEERING
I I I I Clerical Support ~ Trafficengireerlrg Streets Parks I Traffic Signals Landscape Services Fleet Main!. I Radio Dispatch I I I I Purchasing Grarts/Contract trackirg ~ Review traffic studies General Administrative support I- Street Trees Park mainlenanoe Painted stripirg Landscape Guidelines I- Acquisition'reptaoemerl &reports ve~cles Development Services Irrigation repairs Raised pavemert markers Review of landscape medians of City r- Detours &stri~ng ~an check Overseeding Pai nted curbs tNew Capital Projects r- Tracking main!. t Traffic signal design &opo-ation I- Tree trimming, ~anting, Sprinklers EStreet ®ulatory design &construction t Fueting Arterial neighborhood traffic plans Provide map &plan checkirg removal, watering, Lagoon main!. sgrs Tree trimming review Vehicle main!. I- Design engineerirg t Analyze &condition fertitization Walerpumps Traffic signals Water conservation I"0grams development projects t Pesticide &fungicide Main!. of water &sew.. Sireetlighling t Special projects issue street work p..mits Tree stakirg medians &parkways tSafety cones & (Earth Day, !vbor Day) Develop project scope &budg~ ~ t Review environmental I- Roadway maintenanoe Restrooms barricades L Training of City & t Coniract administration of impact reports Civic Cenl.. maint. LUtilities I"ivate landscape cr""" design consultants L Transpalalion Services lennis court main!. Prepaire plans &specs for CIP Street sweepi rg t Define deferred &prevenlative Street repair maintenance needs r- Coordinate &monitor Pothole repair Right-of-way acquisition CIP implementation Sidewalk repailS Street abandonments I-Advocate &promote City's position Crack sealirg Property managemert on regional transpalalion CIP Overlays EFlood control &stann L Represent City on regional Slurry seals water runoff tranSfllrtation issues at Curb &gutter repairs L Conslruelion engireerirg CVAG, SCAG &RCTC Cross gutter repairs Storm drain' channel cleaning ~ Contract administration of L Environmental salitation construction ronlracts I- Inspection of all prqects in pu~ic righl-of-way Grafitti removal Survey services t Painting t Review of plars and specs of Weed aootement public prqecls for consiructabili~ Hazardous waste Emergency response City-owned vacant parcel maintenance
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xvi MICHAEL R. LUDIN, CPA A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS CRAIG W. SPRAKER, CPA NITIN P. PATEL, CPA ROBERT J. CALLANAN, CPA *PHILIP H. HOLTKAMP, CPA 5 CORPORATE PARK, SUITE 100 *THOMAS M. PERLOWSKI, CPA IRVINE, CALIFORNIA 92606-5165 *HARVEY J. SCHROEDER, CPA (949) 399-0600 • FAX (949) 399-0610 KENNETH R. AMES, CPA *WILLIAM C. PENTZ, CPA www.diehlevans.com *A PROFESSIONAL CORPORATION
November 10, 2008
INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor and Members of the City Council City of Palm Desert, California
We have audited the accompanying financial statements of the governmental activities, the business- type activities, the discretely presented component unit, each major fund and the aggregate remaining fund information of the City of Palm Desert, California, as of and for the year ended June 30, 2008, 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 Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund and the aggregate remaining fund information of the City of Palm Desert as of June 30, 2008, 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.
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OTHER OFFICES AT: 2965 ROOSEVELT STREET 613 W. VALLEY PARKWAY, SUITE 330 CARLSBAD, CALIFORNIA 92008-2389 ESCONDIDO, CALIFORNIA 92025-2598 (760) 729-2343 • FAX (760) 729-2234 (760) 741-3141 • FAX (760) 741-9890 In accordance with Government Auditing Standards, we have also issued our report dated November 10, 2008, 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, grant agreements and other matters. The purpose of that report is 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
The management’s discussion and analysis and the required supplementary information identified in the accompanying table of contents are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures to the management’s discussion and analysis, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this required supplementary information. However, we did not audit the management’s discussion and analysis and express no opinion on it. The budgetary comparison schedules and related note 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.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’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.
- 2 - 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, 2008 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 $70.58 million, and the net assets of the business-type activities decreased $.22 million. • During the year, the City revenues were $59.18 million more than the $128.87 million expenses recorded in its governmental activities. Compared to prior year, revenues were $72.99 million greater than expenses. • In the City’s business-type activities, expenses were $.22 million more than the $8.60 million generated in green fees, merchandise sales, rental income, capital contributions and other revenues. Compared to the prior year, the business-type activities income was $.56 million. • The City’s governmental activities program revenues and general revenues decreased by $11.75 million, or 5.90 percent from prior year, while program expenses increased $2.06 million. • Business-type activities revenues decreased by $0.67 million from $9.27 million to $8.60 million. This was due to a transfer of $1 million from Parkview Office Complex to the Capital Project Reserve Fund for park-related projects. Expenses increased by $.11 million from the prior year. • The revenues available for expenditure were $2.69 million more than budgeted in the General Fund. The City kept expenditures within spending limits by $4.28 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.
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 question 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.
See independent auditors’ report. - 3 - 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. 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 Assets 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.), 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 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 has two types of funds: governmental and proprietary.
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.
See independent auditors’ report. - 4 - 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 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
The City’s combined net assets increased $70.36 million from $566.66 million to $637.02 million. A separate review of the net change in the governmental and business-type activities is provided for the reader. Our analysis focuses on the net assets (Table 1) and changes in net assets (Table 2) of the City’s governmental and business-type activities.
TABLE 1
NET ASSETS (IN MILLIONS)
As of June 30, 2008 and 2007
Governmental Business-Type Activities Activities Total 2008 2007 2008 2007 2008 2007
Current and restricted assets$ 513.97 $ 536.31 $ 6.21 $ 6.15 $ 520.18 $ 542.46 Capital assets 543.81 461.39 64.40 65.14 608.21 526.53
TOTAL ASSETS 1,057.78 997.70 70.61 71.29 1,128.39 1,068.99
Long-term liabilities outstanding 425.50 434.88 1.58 2.18 427.08 437.06 Other liabilities 63.29 64.41 1.00 0.86 64.29 65.27
TOTAL LIABILITIES 488.79 499.29 2.58 3.04 491.37 502.33
Net assets: Invested in capital assets, net of related debt 287.54 213.69 62.82 62.95 350.36 276.64 Restricted 168.03 173.33 - - 168.03 173.33 Unrestricted 113.42 111.39 5.21 5.30 118.63 116.69
TOTAL NET ASSETS$ 568.99 $ 498.41 $ 68.03 $ 68.25 $ 637.02 $ 566.66
See independent auditors’ report. - 5 - Table 1 ‐ Graph Total Assets & Liabilities
1,200 1,000 800 Millions 600 in 400 200 Total Assets ‐
Dollars Total Liabilities 2008 2007 2008 2007 2008 2007
Governmental Business‐Type Total Activities Activities
Compared to prior year, net assets of the City’s governmental activities increased by 14.16 percent, or $70.58 million. The City’s Net Assets are 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 represent the part of net assets that can be used to finance day-to-day operations, accounted for 19.93 percent of the overall total net assets. It changed $2.03 million from $111.39 million to $113.42 million. This is an indication that the City’s Governmental Activities financial position recognized growth from prior year. The City now has $2.03 million in additional unrestricted funds that can be used to finance its operations. The increase is attributable to a one-time contribution of $2.65 million from the State of California Transportation Department (Cal-Trans) to the City for the transfer of maintenance and ownership of Highway 111 and Highway 74.
The decrease in restricted net assets of $5.30 million was due to the following; restricted capital projects decreased by $27.37 million due to the use of bond funds for payment of capital projects, restricted special projects increased by $5.11 million due to the decrease in restricted bond cash, and restricted debt projects increased 10.29 million due to an increase in tax increment and $6.67 increase in other post-employment benefits.
Investment in capital assets, net of related debt increased $73.85 million. The majority of the change was the contribution from the State of California for the infrastructure on Highway 111 and Highway 74, purchase of land, low- and moderate-income housing projects, and construction of various infrastructure.
The net assets of the business-type activities saw a decrease of $.22 million, from $68.25 million to $68.03 million. During the previous year, the business-type activities recognized a $.56 million increase. Both Parkview and Desert Willow Golf Resort recognized a net change in their gross revenues with minimal change in the overall expenditures. The major factor driving this decrease was a transfer of $1 million from Parkview Office Complex to the Capital Project Reserve Fund for park-related projects.
The major change in the City’s governmental activities total assets was the increase in capital assets. Changes in capital assets were the result of contributed capital from the State of California; purchases of various parcels of land for future development; low- to moderate-income housing projects including Laguna Palms, California Villas and La Rocca Villas; and the start and completion of various street, bridge, traffic signal, drainage and park projects.
Total liabilities decreased by $10.50 million. Most of the change is due to the retirement of debt by the City’s Redevelopment Agency.
See independent auditors’ report. - 6 - TABLE 2 CHANGES IN NET ASSETS (IN MILLIONS) As of June 30, 2008 and 2007
Governmental Business-Type Activities Activities Total 2008 2007 2008 2007 2008 2007 REVENUES: Program Revenues: Charges for services$ 19.22 $ 19.64 $ 9.12 $ 8.75 $ 28.34 $ 28.39 Operating grants and contributions 5.84 7.95 - - 5.84 7.95 Capital grants and contributions 42.55 57.13 0.21 0.28 42.76 57.41 General Revenues: Property taxes 6.25 6.05 - - 6.25 6.05 Tax increment (net of pass-through) 55.41 50.48 - - 55.41 50.48 Transient occupancy tax 8.60 8.63 - - 8.60 8.63 Sales tax 17.15 17.75 - - 17.15 17.75 Other taxes 3.11 3.86 - - 3.11 3.86 Investment earnings 15.31 17.52 0.27 0.24 15.58 17.76 Contribution not restricted for special purpose 7.24 - - - 7.24 - Other revenues 6.37 10.79 6.37 10.79 Transfer In/Out 1.00 - (1.00) - - - TOTAL REVENUES 188.05 199.80 8.60 9.27 196.65 209.07 EXPENSES: General government 46.05 39.96 - - 46.05 39.96 Public safety 26.85 24.67 - - 26.85 24.67 Parks, recreation and culture 8.01 4.99 - - 8.01 4.99 Public works 27.25 37.09 - - 27.25 37.09 Interest on long-term debt 20.71 20.10 - - 20.71 20.10 Golf Course-Desert Willow - - 8.17 7.99 8.17 7.99 Office Complex-Parkview - - 0.65 0.72 0.65 0.72 TOTAL EXPENSES 128.87 126.81 8.82 8.71 137.69 135.52 INCREASE (DECREASE) IN NET ASSETS 59.18 72.99 (0.22) 0.56 58.96 73.55 BEGINNING NET ASSETS 498.41 427.65 68.25 67.69 566.66 495.34 RESTATEMENT OF NET ASSETS 11.40 (2.23) - - 11.40 (2.23) ENDING NET ASSETS$ 568.99 $ 498.41 $ 68.03 $ 68.25 $ 637.02 $ 566.66
See independent auditors’ report. - 7 - Table 2- Graph Changes in Net Assets
Governmental Activities
Total revenue decreased from $199.80 million to $188.05 million, a 5.90 percent decrease. The decrease is the result of a 25.52 percent decrease in capital grants and contributions of $14.58 million, and a $2.21 million decrease in investment earnings. Governmental Activities revenues did see increases in tax increments of $4.93 million, and $7.24 million from contributions not restricted for special purpose. Factors that contributed to the changes in revenues are as follows:
• Prior year capital grants and contributions included contributions from property owners in the amount of $46 million for public improvements and zero for current year; • Decrease in City’s earnings due to lower yields in investment; • Increase in property values provided additional tax increment; and • Recognition of the net contribution for Other Post-employment Benefits from the City on behalf of its employees.
Total expenses increased from $126.81 million to $128.87 million. Two factors were contributed to the change in expenses. First, an increase in the governmental activities general government was the result of homes sold from the housing project Falcon Crest, and second, a decrease in public works expenses resulting from the capitalization of the expenditures for the University.
See independent auditors’ report. - 8 - The following schedule represents the net cost of providing services:
Governmental Activities Net (Expense) Revenue (In Millions)
2008 2007 General government ($32.52) ($27.38) Public safety (17.99) (15.44) Parks, recreation and culture (6.82) 0.29 Public works 16.77 20.54 Interest on long term debt (20.71) (20.10) Total ($61.27) ($42.09)
Business-type Activities
Business-type activities revenues, before transfers out, increased by $0.33 million, a 3.55 percent increase. Overall, however, the net effect of the transfer out reduced the total revenue by $0.67 million, a 7.22% decrease. An increase in golf rounds played and banquets at the clubhouse were the major factors in the increase for the business-type activities revenues, along with CPI adjustments in tenants’ rent at Parkview Office Complex.
Operating expenses for business-type activities increased from $8.71 million to $8.82 million, an increase of 1.26 percent. The majority of the increase was directly related to the golf resort and the increased cost for fuel and its effect on other items such as fertilizer and other supplies. Other changes were normal for the business entities and their respective industries.
See independent auditors’ report. - 9 - THE CITY’S FUNDS
On page 20, the governmental funds balance sheet is shown. The combined fund balance of $429.45 million decreased from $457.46 million, or 6.12 percent. This total includes the General Fund balance of $79.82 million, which increased by $3.71 million from prior year. The City’s General Fund balance has reserved $16.30 million for advances, encumbrances, loans, debt service, etc. The change in fund balance was a one-time contribution of $2.65 million from the State of California Transportation Department (Cal-Trans) to the City. Other major funds balance changes are noted below:
• The Prop A Fire Tax Fund, fund balance increased due to the change in the tax credit the City receives from the County. • The Redevelopment Agency Financing Authority Debt Service Fund, fund balance decreased due to the cost of administering the Redevelopment debt. • The Redevelopment Agency Debt Service Funds, fund balance increased due to 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 decreased due to the capital projects expenditures. • The Redevelopment Low-income Housing Fund, fund balance decreased due to the construction of housing projects for low-income housing.
More detailed information about the combined fund balance reserves is presented in Note 10 to the financial statements.
General Fund Budgetary Highlights
During the year, based upon recommendations 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 cost at the beginning of the project had been 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, the actual ending revenues of $55.09 million were $2.69 million more than the final budgeted revenues of $52.40 million. The majority of the variance was in the intergovernmental revenues. Within the intergovernmental revenues, the State of California awarded the City $2.65 million for the transfer of highways located in the City.
The General Fund actual ending expenditures of $51.38 million were $4.28 million less than the final budget of $55.66 million. There were changes in the original budget compared to the final budget during the year. The original expenditure budget was $52.23 million compared to the final budget of $55.66 million, a $3.43 million increase. The major change was due to the re-appropriations of prior year encumbrances and additional appropriations in the Public Works Street Resurfacing Division for the purpose of resurfacing streets in the City.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of 2008, the City had $608.21 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 $81.68 million, or 15.51 percent over prior year.
See independent auditors’ report. - 10 - TABLE 3
CAPITAL ASSETS AT YEAR-END (NET OF DEPRECIATION, IN MILLIONS)
For the years ended June 30, 2008 and 2007
Governmental Business-Type Activities Activities Total 2008 2007 2008 2007 2008 2007
Land$ 118.35 $ 110.65 $ 52.60 $ 52.51 $ 170.95 $ 163.16 Construction in progress 31.80 75.63 - - 31.80 75.63 Buildings and improvements 108.48 76.89 9.90 10.07 118.38 86.96 Equipment 3.26 3.20 1.90 2.56 5.16 5.76 Infrastructure 281.92 195.02 - - 281.92 195.02
TOTALS$ 543.81 $ 461.39 $ 64.40 $ 65.14 $ 608.21 $ 526.53
Table 3 ‐ Graph Capital Assets at Year‐End (Net of Depreciation in Millions)
800 Land 600 400 Construction in Progress millions 200 in ‐ Buildings and Improvements 2008 2007 2008 2007 2008 2007 Equipment Dollars Infrastructure Governmental Business Type Total Activities Activities Totals
This year’s major additions included (in millions):
Land acquisitions $ 2.19 Capital Contribution of Infrastructure from the State 30.19 Section 29 Infrastructure 12.80 University Infrastructure 8.89 Portola Bridge 2.54 Fred Waring Project 3.94 Henderson Building 5.66 $ 66.21
See independent auditors’ report. - 11 - The City’s fiscal year 2009 capital budget calls for it to spend an additional $52.05 million plus the continuing capital projects spending of $109.69 million from prior year, the majority being street 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 1d and Note 5 to the financial statements.
Debt
At year-end, the City’s governmental activities had $425.50 million in bonds, notes, contracts, and compensated absences versus $434.88 million last year, a decrease of $9.38 million, or 2.2 percent as shown in Table 4. The major cause for the decrease was the re-payment of principal payment by the Agency.
TABLE 4
OUTSTANDING DEBT, AT YEAR-END (IN MILLIONS)
For the years ended June 30, 2008 and 2007
Governmental Business-Type Activities Activities Total 2008 2007 2008 2007 2008 2007
Compensated absences$ 2.88 $ 2.53 $ - $ - $ 2.88 $ 2.53 Notes payable 0.49 0.61 - - 0.49 0.61 Contract and leases payable - - 1.58 2.18 1.58 2.18 Claims Payable 0.44 0.54 - - 0.44 0.54 Special assessments debt with government commitment 2.75 2.78 - - 2.75 2.78 Revenue bonds and notes (backed by specific tax and fee revenues) 418.94 428.42 - - 418.94 428.42
TOTALS$ 425.50 $ 434.88 $ 1.58 $ 2.18 $ 427.08 $ 437.06
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.
The City’s business-type activities debt decreased $.60 million from $2.18 million to $1.58 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 maintenance equipment to maintain a cash flow to operate the day-to-day activities. The decrease in the City’s business-type activities debt was directly related to the continued reduction in principal on the leases for golf course equipment, golf carts, and GPS tracking golf cart system. During the next few years, the debt for the business-type activities will be fully amortized. Within the next two years, the golf resort will determine whether to replace the maintenance equipment and golf carts as they reach the end of their useful life. As a result our liability will increase. More detailed information about the City’s long-term liabilities is presented in Note 6 to the financial statements.
See independent auditors’ report. - 12 - ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS
In preparing the budget for fiscal year 2009, management looked at the following economic factors:
• Energy and fuel cost: Uncertainty lingers regarding the energy crisis in California, and the repercussions of increased energy and fuel costs remain. The City of Palm Desert has considered measures to reduce energy usage in the high peak period without impacting the quantity and quality of service. The City created a new energy department whose main focus is to implement procedures which should reduce energy usage by 30% throughout the City of Palm Desert. In addition, the City of Palm Desert has a progressive ride-sharing program, which enables the employees to share fuel costs by commuting together. The City’s 2009 budget reflects the increase in energy and fuel.
• 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.
• The State of California’s budget crisis has started to affect the pass-through revenues that the City receives from the State. In addition, the State is holding payments that belong to the City to meet their obligations. The uncertainty of how the State will balance their budget has caused the City to look at ways to cut costs. Due to this uncertainty, the City’s revenues and expenditures have remained flat.
• National Economy: The City’s main revenue sources, sales tax (34.75%) and transient occupancy tax (15.55%), rely heavily on a strong national and local economy. With a strong national economy, the market demand for leisure activities such as travel, shopping and dining is increased. However, in an economic downturn or a slowing of the economy, the typical trend is for the consumer to reduce their spending of disposable income for leisure activities. The City of Palm Desert does not know the extent of the impact of the current economic environment’s effect on the city’s main revenue sources, but since the City relies on the local tourism industry for their revenue, a downturn in tourism would affect the City’s revenue.
Compared to the prior year budget, the City’s general fund expenditures are projected to increase by $.99 million. Staff salaries and benefits increased due to the annual CPI increase and the increase 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 develop with new hotels, commercial and residential development, construction of a four-year university, street improvements, park construction, and various other projects. The 2009 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 infrastructure improvements. A copy of the City’s 2008-2009 financial plan can be obtained by contacting the City’s finance department or on the City’s web-site at www.cityofpalmdesert.org.
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.
See independent auditors’ report. - 13 -
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- 14 - Exhibit A CITY OF PALM DESERT
STATEMENT OF NET ASSETS
June 30, 2008
Component Primary Government Unit Palm Desert Recreational Governmental Business-type Facilities Activities Activities Total Corporation ASSETS Current assets: Cash and investments $ 274,195,214 $ 5,278,483 $ 279,473,697 $ 404,029 Receivables: Accounts 3,785,742 112,568 3,898,310 40,485 Notes 3,748,000 - 3,748,000 - Interest 3,619,177 - 3,619,177 - Loans 9,957,636 - 9,957,636 - Internal balances 1,801 (1,801) - - Prepaid costs 949,922 11,307 961,229 2,195 Inventories 47,906 240,769 288,675 50,917 Deposits 622,511 - 622,511 - Due from other governments 6,906,711 - 6,906,711 - Property held for resale 25,000 - 25,000 - Due from component unit 285,000 570,428 855,428 - Unamortized debt issuance costs 10,802,142 - 10,802,142 - Net OPEB asset 6,669,247 - 6,669,247 - Restricted assets: Cash with fiscal agent 192,347,811 - 192,347,811 - Noncurrent assets: Capital assets, not being depreciated 270,034,748 52,599,522 322,634,270 - Capital assets, net of depreciation 273,777,749 11,797,916 285,575,665 - TOTAL ASSETS 1,057,776,317 70,609,192 1,128,385,509 497,626 LIABILITIES AND NET ASSETS Current liabilities: Accounts payable 12,237,775 609,501 12,847,276 17,064 Accrued liabilities 517,386 194,127 711,513 35,521 Interest payable 5,342,066 - 5,342,066 - Unearned revenues 1,056,417 171,029 1,227,446 41,660 Deposits payable 713,620 25,112 738,732 - Due to primary government - - - 855,428 Amounts due under pass-through agreement 43,419,765 - 43,419,765 - Noncurrent liabilities: Due within one year 13,798,707 627,649 14,426,356 - Due in more than one year 411,704,051 955,133 412,659,184 - TOTAL LIABILITIES 488,789,787 2,582,551 491,372,338 949,673 NET ASSETS: Invested in capital assets, net of related debt 287,536,477 62,814,656 350,351,133 - Restricted for: Special projects 58,024,051 - 58,024,051 - Debt service 20,221,116 - 20,221,116 - Capital projects 83,115,487 - 83,115,487 - Other Post Employment Benefit 6,669,247 - 6,669,247 - Unrestricted (deficit) 113,420,152 5,211,985 118,632,137 (452,047) TOTAL NET ASSETS (DEFICIT) $ 568,986,530 $ 68,026,641 $ 637,013,171 $ (452,047)
See independent auditors' report and notes to basic financial statements. - 15 - CITY OF PALM DESERT
STATEMENT OF ACTIVITIES
For the year ended June 30, 2008
Program Revenue
Charges Operating Capital for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary Government: Governmental activities: General government$ 46,048,643 $ 8,454,683 $ 1,463,719 $ 3,613,443 Public safety 26,855,060 8,808,300 58,206 - Parks, recreation and culture 8,013,211 1,190,725 - - Public works 27,245,937 762,440 4,321,085 38,931,590 Interest on long term debt 20,706,514 - - Total governmental activities 128,869,365 19,216,148 5,843,010 42,545,033
Business-type activities: Desert Willow Golf Course 8,167,682 8,182,741 - 206,609 Office Complex - Parkview 649,548 934,833 - - Total business-type activities 8,817,230 9,117,574 - 206,609
Total primary government $137,686,595 $ 28,333,722 $ 5,843,010 $ 42,751,642
Component Unit: Palm Desert Recreational Facilities Corp.$ 2,642,042 $ 2,642,504 $ - $ -
General revenues: Taxes: Property taxes, levied for general purpose Tax increment, net of pass-throughs Transient occupancy taxes Sales taxes Franchise taxes Motor vehicle in lieu Investment earnings Contribution not restricted for specific purpose Miscellaneous Transfers
Total general revenues
Change in net assets
Net assets (deficit) - beginning of year, as restated
Net assets (deficit) - end of year
See independent auditors' report and notes to basic financial statements. - 16 - Exhibit B
Net (Expenses) Revenues and Changes in Net Assets Component Primary Government Unit Palm Desert Recreational Governmental Business-type Facilities Activities Activities Total Corporation
$ (32,516,798) $ - $ (32,516,798) $ - (17,988,554) - (17,988,554) - (6,822,486) - (6,822,486) - 16,769,178 - 16,769,178 - (20,706,514) - (20,706,514) - (61,265,174) - (61,265,174) -
- 221,668 221,668 - - 285,285 285,285 - - 506,953 506,953 -
(61,265,174) 506,953 (60,758,221) -
- - - 462
6,252,863 - 6,252,863 - 55,406,112 - 55,406,112 - 8,605,714 - 8,605,714 - 17,154,764 - 17,154,764 - 2,887,727 - 2,887,727 - 220,785 - 220,785 - 15,309,271 267,797 15,577,068 - 7,240,770 - 7,240,770 - 6,369,028 - 6,369,028 - 1,000,000 (1,000,000) - -
120,447,034 (732,203) 119,714,831 -
59,181,860 (225,250) 58,956,610 462
509,804,670 68,251,891 578,056,561 (452,509)
$ 568,986,530 $ 68,026,641 $ 637,013,171 $ (452,047)
- 17 -
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- 18 -
FUND FINANCIAL STATEMENTS
- 19 - CITY OF PALM DESERT
BALANCE SHEET - GOVERNMENTAL FUNDS
June 30, 2008
Special Revenue Funds RDA Prop A Low Income General Fire Tax Housing ASSETS: Pooled cash and investments$ 66,045,124 $ 3,776,373 $ 28,055,415 Receivables: Accounts 1,516,427 50 150,863 Assessments - - - Notes 3,748,000 - - Interest 1,724,482 - 105,789 Loans 231,176 - 7,695,368 Prepaid costs 920,938 - 156 Deposits - - - Due from other governments 3,249,502 691,209 340,074 Due from other funds 218,256 - - Advances to other funds 9,236,000 - - Inventories 47,906 - - Property held for resale - - 25,000 Due from component unit 285,000 - - Restricted assets: Cash and investments with fiscal agent - - 32,324,067 TOTAL ASSETS$ 87,222,811 $ 4,467,632 $ 68,696,732
LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable$ 4,489,023 $ 795,342 $ 311,808 Accrued liabilities 365,145 - 10,315 Due to other funds - - - Unearned revenues 1,170 - 1,925 Advances from other funds - - - Deferred revenue 2,548,185 - - Amounts due under pass-through agreements - - - Deposits payable - - 500 TOTAL LIABILITIES 7,403,523 795,342 324,548
FUND BALANCES: Reserved 16,304,234 - 19,912,697 Unreserved: Reported in Other Governmental Funds: Special revenue funds - - - Debt services funds - - - Capital projects funds - - - Designated for: Special revenue purposes - 3,672,290 48,459,487 Debt service - - - Capital outlay - - - Undesignated 63,515,054 - - TOTAL FUND BALANCES 79,819,288 3,672,290 68,372,184
TOTAL LIABILITIES AND FUND BALANCES$ 87,222,811 $ 4,467,632 $ 68,696,732 See independent auditors' report and notes to basic financial statements. - 20 - Exhibit C
Debt Service Funds RDA RDA RDA Other Total Financing Debt Capital Governmental Governmental Authority Service Projects Funds Funds
$ - $ 88,919,907 $ 8,661,452 $ 74,046,911 $ 269,505,182
- 1,275,400 1,683 841,319 3,785,742 - - - 2,699,594 2,699,594 - - - - 3,748,000 25,130 - 1,598,155 165,621 3,619,177 - - 2,000,000 31,092 9,957,636 - - 27,853 975 949,922 - - 621,281 1,230 622,511 - - - 2,625,926 6,906,711 - - - - 218,256 - - - 13,419,000 22,655,000 - - - - 47,906 - - - - 25,000 - - - - 285,000
12,091,959 - 112,002,654 35,929,131 192,347,811 $ 12,117,089 $ 90,195,307 $ 124,913,078 $ 129,760,799 $ 517,373,448
$ - $ 2,120 $ 2,510,550 $ 4,128,933 $ 12,237,776 - - 42,170 99,756 517,386 - - - 216,455 216,455 - - - 1,053,322 1,056,417 - 22,655,000 - - 22,655,000 - - - 4,556,645 7,104,830 - 43,419,765 - - 43,419,765 - - 15,000 698,120 713,620 - 66,076,885 2,567,720 10,753,231 87,921,249
630,500 - 69,620,170 53,871,441 160,339,042
- - - 20,346,422 20,346,422 - - - 101,009 101,009 - - - 44,707,586 44,707,586
- - - - 52,131,777 11,486,589 24,118,422 - - 35,605,011 - - 52,725,188 - 52,725,188 - - - (18,890) 63,496,164 12,117,089 24,118,422 122,345,358 119,007,568 429,452,199
$ 12,117,089 $ 90,195,307 $ 124,913,078 $ 129,760,799 $ 517,373,448
- 21 -
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- 22 - Exhibit D CITY OF PALM DESERT
RECONCILIATION OF THE BLANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS
June 30, 2008
Total fund balance for governmental funds $ 429,452,199 Amounts reported for governmental activities in the Statement of Net Assets are different because: When capital assets (land, buildings, equipment, etc.) that are to be used in governmental activities are purchased or constructed, the costs of those assets are reported as expenditures in governmental funds. However, the Statement of Net Assets includes those capital assets and contribution among the assets of the City as a whole: Beginning Balance, net depreciation $ 459,783,453 Prior period adjustment 11,396,588 Current year additions 52,256,552 Current year deletions (2,496,377) Current year depreciation (8,573,548) Transfer to internal service fund (125,166) Contribution from other governments 30,199,442 Ending Balance, net depreciation 542,440,944 Long-term debt activities and compensated absences have not been included in the governmental fund activities: Long-term debt (416,374,841) Bond premium (7,850,943) Unamortized loss on defeasance 1,606,250 Compensated absences (2,883,224) Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. (5,342,066) Cost of issuing bonds is recognized as an expenditure in the period paid, however, in the Statement of Net Assets it is amortized over the life of the bond. 10,802,142 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 285,000 Community Development Block Grant - relates to loans given to low to moderate income families 31,092 Capital reimbursement from developer for work completed by the City on behalf of the developer 1,400,367 Interest that was not paid at year-end 195,300 Sales tax true-up from the State 112,640 Redevelopment Agency payable for City project 325,838 Redevelopment Agency land purchase from City 2,055,000 4,405,237 Other post employment benefit asset is not available to fund current expenditures for governmental funds and therefore is not reported as an asset in the governmental funds. 6,669,247 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. 6,061,585 Net assets of governmental activities $ 568,986,530
See independent auditors' report and notes to basic financial statements. - 23 - CITY OF PALM DESERT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the year ended June 30, 2008
Special Revenue Funds RDA Prop A Low Income General Fire Tax Housing REVENUES: Taxes$ 40,876,935 $ 5,516,542 $ - Special assessments collected - 1,620,168 - Licenses and permits 1,180,020 - - Intergovernmental revenues 5,193,161 662,882 19,319 Rental income - - 2,844 Charges for services 1,190,725 - - Investment earnings 4,571,147 165,729 2,656,604 Fines and forfeitures 105,365 - - Sale of inventory - - 15,295,000 Miscellaneous 866,843 - 200,669 TOTAL REVENUES 53,984,196 7,965,321 18,174,436
EXPENDITURES: Current: General government 16,306,128 - 23,984,127 Pass-through agreement - - - Public safety 17,674,051 8,942,808 - Parks, recreation and culture 4,572,695 - - Public works 10,153,794 - - Capital outlay 531,589 80,132 1,829,895 Debt service: Principal retirement - - - Interest and fiscal charges - - - TOTAL EXPENDITURES 49,238,257 9,022,940 25,814,022
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 4,745,939 (1,057,619) (7,639,586)
OTHER FINANCING SOURCES (USES): Transfers in 1,101,610 1,650,000 18,141,936 Transfers out (2,142,660) - (13,021,024) Capital accreation on bonds - - - Sale of property - - - TOTAL OTHER FINANCING SOURCES (USES) (1,041,050) 1,650,000 5,120,912
NET CHANGE IN FUND BALANCES 3,704,889 592,381 (2,518,674)
FUND BALANCES - BEGINNING OF YEAR 76,114,399 3,079,909 70,890,858
FUND BALANCES - END OF YEAR$ 79,819,288 $ 3,672,290 $ 68,372,184
See independent auditors' report and notes to basic financial statements. - 24 - Exhibit E
Debt Service Funds RDA RDA RDA Other Total Financing Debt Capital Governmental Governmental Authority Service Projects Funds Funds
$ - $ 89,927,687 $ - $ 4,010,302 $ 140,331,466 - - - 440,623 2,060,791 - - - 273,157 1,453,177 - - 786,655 12,334,675 18,996,692 - - 83,754 4,702,823 4,789,421 - - - - 1,190,725 523,406 2,716,910 5,714,093 6,244,503 22,592,392 - - - 149,492 254,857 - - - - 15,295,000 - 624,163 1,754,882 1,422,542 4,869,099 523,406 93,268,760 8,339,384 29,578,117 211,833,620
- 50,334 8,057,814 14,397,201 62,795,604 - 38,993,445 - - 38,993,445 - - - 60,884 26,677,743 - - - - 4,572,695 - - - 12,782,927 22,936,721 - - 9,189,819 40,625,117 52,256,552
10,610,000 122,707 - 35,000 10,767,707 21,402,246 1,836,561 - 137,757 23,376,564 32,012,246 41,003,047 17,247,633 68,038,886 242,377,031
(31,488,840) 52,265,713 (8,908,249) (38,460,769) (30,543,411)
29,853,788 - 2,295,701 6,680,601 59,723,636 - (40,161,795) (648,997) (2,749,160) (58,723,636) 1,484,806 - - - 1,484,806 - - 47,000 - 47,000
31,338,594 (40,161,795) 1,693,704 3,931,441 2,531,806
(150,246) 12,103,918 (7,214,545) (34,529,328) (28,011,605)
12,267,335 12,014,504 129,559,903 153,536,896 457,463,804
$ 12,117,089 $ 24,118,422 $ 122,345,358 $ 119,007,568 $ 429,452,199
- 25 - Exhibit F CITY OF PALM DESERT
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For the year ended June 30, 2008
Net change in fund balances - total governmental funds $ (28,011,605) 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 a depreciation expense. This is the amount by which capital outlays exceeded depreciation and deletions in the current period: Current year additions $ 52,256,552 Current year deletions (2,621,543) Current year depreciation (8,573,548) 41,061,461 Donations of capital assets increase net assets in the Statement of Activities, but do not appear in the governmental funds because they are not financial resources. 30,199,442 Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. 10,767,707 Proceeds of bonds are reported as other financing sources in governmental funds, however, the receipts of debt increases liabilities in the Statement of Net Assets. (1,484,806) Costs of issuing bonds are recognized as an expenditures in the period paid, however, in the Statement of Net Assets, it is amortized over the life of the bond. (509,785) Premium on bonds is recognized as interest in the period received, however, in the Statement of Net Assets it is amortized over the life of the bond. 475,703 Losses on defeased bonds are recorded in the Statement of Net Assets as a reduction to long-term liabilities and amortized over the life of the bonds. (122,715) 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 (351,171) Net change in accrued interest for the current period 988,568 Net change in claims and judgments for the current period 95,688 Collection of deferred revenues is reported as revenues in governmental funds and thus has the effect of increasing fund balances. For the City as a whole, however, the collection of these receipts reduces the net assets in the Statement of Net Assets and does not result in revenues in the Statement of Activities: Deferred loans (4,781) Redevelopment expenditure offset by City receivables (344,070) 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 (180,000) Capital reimbursement revenue related to construction completed by the City on behalf of the developer (202,402) Interest on note issued by the City (178,300) Sales tax true-up from the State (40,979) Contributions from Fiduciary Fund to fund other post employment benefits. 7,240,770 Current year expense for other post employment benefits. (571,523) Internal service funds are used by management to charge the costs of certain activities, such as equipment. The net revenues (expenses) of the internal service funds are reported with governmental activities. 354,658 Change in net assets of governmental activities $ 59,181,860 See independent auditors' report and notes to basic financial statements. - 26 - Exhibit G CITY OF PALM DESERT
STATEMENT OF NET ASSETS PROPRIETARY FUNDS
June 30, 2008
Business-type Activities- Enterprise Funds Major Other Fund Fund Governmental Desert Office Total Activities- Willow Complex Enterprise Internal Golf Course Parkview Funds Service Funds ASSETS CURRENT ASSETS: Cash and investments$ 2,159,106 $ 3,119,377 $ 5,278,483 $ 4,690,032 Receivables: Accounts 53,506 59,062 112,568 - Prepaid costs 10,872 435 11,307 - Inventories 240,769 - 240,769 - Due from component unit (PDRFC) 570,428 - 570,428 - TOTAL CURRENT ASSETS 3,034,681 3,178,874 6,213,555 4,690,032
CAPITAL ASSETS: Nondepreciable 52,599,522 - 52,599,522 - Depreciable, net 8,737,381 3,060,535 11,797,916 1,371,553 CAPITAL ASSETS, NET 61,336,903 3,060,535 64,397,438 1,371,553
TOTAL ASSETS 64,371,584 6,239,409 70,610,993 6,061,585
LIABILITIES CURRENT LIABILITIES: Accounts payable 587,838 21,663 609,501 - Accrued liabilities 194,127 - 194,127 - Deposits payable - 25,112 25,112 - Unearned revenues 158,925 12,104 171,029 - Due to other funds 1,801 - 1,801 - Current portion - capital leases 627,649 - 627,649 - TOTAL CURRENT LIABILITIES 1,570,340 58,879 1,629,219 -
NONCURRENT LIABILITIES: Capital leases 955,133 - 955,133 - TOTAL NONCURRENT LIABILITIES 955,133 - 955,133 -
TOTAL LIABILITIES 2,525,473 58,879 2,584,352 -
NET ASSETS Invested in capital assets, net of related debt 59,754,121 3,060,535 62,814,656 1,371,553 Unrestricted 2,091,990 3,119,995 5,211,985 4,690,032
TOTAL NET ASSETS$ 61,846,111 $ 6,180,530 $ 68,026,641 $ 6,061,585
See independent auditors' report and notes to basic financial statements. - 27 - Exhibit H CITY OF PALM DESERT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS
For the year ended June 30, 2008
Business-type Activities- Enterprise Funds Major Other Fund Fund Governmental Desert Office Total Activities- Willow Complex Enterprise Internal Golf Course Parkview Funds Service Funds OPERATING REVENUES: Fees and rentals$ 7,201,359 $ 934,833 $ 8,136,192 $ 387,665 Merchandise sales 981,382 - 981,382 -
TOTAL OPERATING REVENUES 8,182,741 934,833 9,117,574 387,665
OPERATING EXPENSES: Maintenance and operations 4,302,302 216,187 4,518,489 1,899 Cost of merchandise 489,126 - 489,126 - General and administrative 2,119,199 220,564 2,339,763 - Depreciation and amortization 1,137,840 212,797 1,350,637 387,665
TOTAL OPERATING EXPENSES 8,048,467 649,548 8,698,015 389,564
OPERATING INCOME (LOSS) 134,274 285,285 419,559 (1,899)
NONOPERATING REVENUES (EXPENSES): Interest revenue 61,308 206,489 267,797 231,391 Interest expense (117,951) - (117,951) - Gain (loss) on capital assets (1,264) - (1,264) -
TOTAL NONOPERATING REVENUES (EXPENSES) (57,907) 206,489 148,582 231,391
INCOME BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 76,367 491,774 568,141 229,492
CAPITAL CONTRIBUTIONS 206,609 - 206,609 125,166 TRANSFERS OUT - (1,000,000) (1,000,000) -
CHANGE IN NET ASSETS 282,976 (508,226) (225,250) 354,658
NET ASSETS - BEGINNING OF YEAR 61,563,135 6,688,756 68,251,891 5,706,927
NET ASSETS - END OF YEAR$ 61,846,111 $ 6,180,530 $ 68,026,641 $ 6,061,585
See independent auditors' report and notes to basic financial statements. - 28 - Exhibit I CITY OF PALM DESERT
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS
For the year ended June 30, 2008
Business-type Activities- Enterprise Funds Major Other Fund Fund Governmental Desert Office Total Activities- Willow Complex Enterprise Internal Golf Course Parkview Funds Service Funds CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers$ 8,293,891 $ 917,341 $ 9,211,232 $ - Payments to suppliers (3,956,579) (512,046) (4,468,625) (6,492) Payments to employees (3,173,791) - (3,173,791) - Receipts from interfund services - - - 387,665 NET CASH PROVIDED BY OPERATING ACTIVITIES 1,163,521 405,295 1,568,816 381,173
CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES: Cash received from other funds - - - - Cash paid to other funds (657,892) (1,000,000) (1,657,892) - NET CASH PROVIDED (USED) BY NONCAPITAL AND RELATED ACTIVITIES (657,892) (1,000,000) (1,657,892) -
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchases of capital assets (261,182) (143,091) (404,273) (25,797) Principal paid on leases (598,764) - (598,764) - Interest paid on leases (117,951) - (117,951) - NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES (977,897) (143,091) (1,120,988) (25,797)
CASH FLOWS FROM INVESTING ACTIVITIES: Interest and dividends 61,308 206,489 267,797 231,391
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (410,960) (531,307) (942,267) 586,767
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2,570,066 3,650,684 6,220,750 4,103,265
CASH AND CASH EQUIVALENTS - END OF YEAR$ 2,159,106 $ 3,119,377 $ 5,278,483 $ 4,690,032
(Continued)
See independent auditors' report and notes to basic financial statements. - 29 - Exhibit I CITY OF PALM DESERT
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (CONTINUED)
For the year ended June 30, 2008
Business-type Activities- Enterprise Funds Major Other Fund Fund Governmental Desert Office Total Activities- Willow Complex Enterprise Internal Golf Course Parkview Funds Service Funds RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income (loss)$ 134,274 $ 285,285 $ 419,559 $ (1,899) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation and amortization 1,137,840 212,797 1,350,637 387,665 Changes in assets and liabilities: (Increase) decrease in receivables, net 79,213 (18,718) 60,495 - (Increase) decrease in prepaid costs 54,549 - 54,549 - (Increase) decrease in inventories (22,765) - (22,765) - (Increase) decrease in due from component unit (433,666) - (433,666) - Increase (decrease) in accrued liabilities 182,139 (71,734) 110,405 (4,593) Increase (decrease) in deposits payable (3,561) (3,561) - Increase (decrease) in unearned revenues 31,937 1,226 33,163 -
NET CASH PROVIDED BY OPERATING ACTIVITIES$ 1,163,521 $ 405,295 $ 1,568,816 $ 381,173
NONCASH ITEMS: Noncash items include $206,609 and $125,166 (net value) of capital assets contributed by the City of Palm Desert to Desert Willow Golf Course and the internal service fund, respectively.
See independent auditors' report and notes to basic financial statements. - 30 - Exhibit J CITY OF PALM DESERT
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUNDS
June 30, 2008
Total Agency Funds ASSETS Cash and investments $ 14,132,261 Receivables (net of allowance for uncollectibles): Accounts 112,628,103 Interest 20,857 Restricted assets: Cash with fiscal agent 10,035,516
TOTAL ASSETS $ 136,816,737
LIABILITIES
Deposits $ 136,816,737
See independent auditors' report and notes to basic financial statements - 31 -
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- 32 -
CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2008
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, 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 provides 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, which include the City of Palm Desert (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 special revenue, debt service, and capital projects funds.
See independent auditors’ report. - 33 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
a. Description of the Reporting Entity (Continued):
Blended Component Units (Continued)
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 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 City Council of Palm Desert is the governing body for the Agency, Housing Authority and Financing Authority.
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.
See independent auditors’ report. - 34 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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 latter 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.
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.
See independent auditors’ report. - 35 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
b. Basis of Presentation (Continued):
Fund Financial Statements (Continued)
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.
See independent auditors’ report. - 36 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
b. Basis of Presentation (Continued):
Fund Financial Statements (Continued)
The funds of the financial reporting entity are described below (Continued):
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.
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.
See independent auditors’ report. - 37 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
b. Basis of Presentation (Continued):
Fund Financial Statements (Continued)
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 to obtaining, furnishing, operating and maintaining fire protection and prevention services (currently under contract with Riverside County Fire Department) equipment or apparatus. This fund is reported as a major fund because the tax collected is a voter approved measure.
The RDA Low Income Housing Special Revenue Fund is used to account for the tax increment set aside to be spent on projects that benefit low and moderate income families.
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.
The Redevelopment Agency Capital Projects Fund is used to account for the financial resources to be used for the acquisition or construction of major capital facilities in the Palm Desert 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.
See independent auditors’ report. - 38 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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.
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:
1. 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.
2. The proprietary fund utilizes an "economic resources" measurement focus. Proprietary fund equity is classified as net assets.
3. 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.
See independent auditors’ report. - 39 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
c. Measurement Focus and Basis of Accounting (Continued):
Basis of Accounting (Continued)
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 that 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.
Interfund activity in the amount of $6,983,630 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. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic assets are 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.
See independent auditors’ report. - 40 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
c. Measurement Focus and Basis of Accounting (Continued):
Basis of Accounting (Continued)
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.
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:
Buildings 40 years Improvements other than buildings 20 years Machinery and equipment 5 to 8 years Infrastructure 20 to 75 years
See independent auditors’ report. - 41 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
e. Appropriations Limit:
Under Article XIII-B 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, 2008, proceeds of taxes did not exceed appropriations.
f. Investments:
Investments are stated at fair value (quoted market price or the best available estimate thereof).
g. 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, investments held in various instruments, and investments held in the California Local Agency Investment Fund (LAIF) and California Asset Management Program (CAMP).
h. Employee Compensated Absences:
It is the government's policy to permit employees to accumulate earned but unused vacation and sick leave (compensated absences). Vacation pay and sick leave, which are expected to be liquidated with expendable available resources, are reported as expenditure and liability of the governmental fund that will pay it only if they have matured, for example, as a result of employee resignations or retirements. Compensated absences in the amount of $2,883,224, which are not expected to be liquidated with expendable available financial resources, are reported as long-term liabilities.
i. Property Held for Resale:
The Agency purchased land within the Agency's project area. The land held for resale is recorded in the Redevelopment Agency Low Income Housing Special Revenue Fund as property held for resale at the lower of acquisition cost or net realizable value. At June 30, 2008, the cost of the property held for resale for various housing properties in Palm Desert totaled $25,000.
See independent auditors’ report. - 42 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
j. Inventories, Prepaid Costs and Deposits:
Inventory in the amount of $240,769 and $50,917 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 $47,906 in the general fund is stated at cost. Inventory is recorded as an expenditure when consumed rather than purchased.
Certain payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid costs in the government-wide and fund financial statements.
The Agency has a $571,281 deposit with Coachella Valley Water District for future sewer connection charges at the Indian Springs Mobile Home Park and $51,230 deposited in escrow to purchase various properties.
k. Property Tax Calendar:
Property taxes are assessed and collected each fiscal year according to the following property tax calendar:
Lien date: January 1 Levy date: July 1 to June 30 Due date: November 1 - 1st Installment March 1 - 2nd Installment Delinquent date: December 10 - 1st Installment April 10 - 2nd Installment
Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes go into a pool and are then allocated to the 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.
See independent auditors’ report. - 43 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
l. 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.
m. Use of Estimates:
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and, accordingly, include amounts that are based on management’s best estimates and judgments. The financial statements include estimates for the value of the capital assets (infrastructure), depreciation expense, fair value of investments, for the amounts reported for the schedule of funding progress for the Defined Benefit Plan (Note 9) and actuarial accrued liability for the other post-employment benefits (Note 13). Accordingly, actual results could differ from the estimates.
2. CASH AND INVESTMENTS:
As of June 30, 2008, cash and investments were reported in the accompanying financial statements as follows:
Governmental activities $ 466,543,025 Business-type activities 5,278,483 Component unit 404,029 Fiduciary funds 24,167,777
Total Cash and Investments $ 496,393,314
Cash and investments at June 30, 2008 consisted of the following:
Demand accounts $ 9,013,495 Petty cash 18,600 Escrow deposits 1,420,404 Investments 485,940,815
Total Cash and Investments $ 496,393,314
See independent auditors’ report. - 44 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
2. CASH AND INVESTMENTS (CONTINUED):
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, 2008, the carrying amount of the City’s deposits was $9,013,495, and the bank balance was $9,771,622. The $(758,127) difference represents outstanding checks and other reconciling items.
The California Government Code requires California banks and savings and loan associations to secure an Entity's deposits by pledging government securities with a value of 110% of an Entity's deposits. California law also allows financial institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of total deposits. The City Treasurer may waive the collateral requirement for deposits that are fully insured up to $100,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an Agent of Depository has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency.
Investments
Under provision of the City’s investment policy and in accordance with the California Government Code, the following investments are authorized:
• United States Treasury bills, notes, bonds or certificates of indebtedness • United States government-sponsored enterprise obligations, participations or other instruments • Banker’s Acceptances issued by commercial banks • Commercial Paper issued by general corporations • Negotiable Certificates of Deposits, issued by a nationally or state-chartered bank, a savings association, a federal association or by a state-licensed branch of a foreign bank • Time Certificates of Deposit issued by qualified public depositories.
See independent auditors’ report. - 45 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
2. CASH AND INVESTMENTS (CONTINUED):
Investments (Continued)
• Repurchase Agreements sold by authorized brokers • Medium-Term Notes issued by corporations organized and operating in the United States, or by depository institutions operating in the United States and licensed by the United States or by any state • Money Market Mutual Funds that are registered with the SEC under the Investment Act of 1940 • State of California Local Agency Investment Fund (LAIF) that is managed by the State Treasurer’s Office • Structured Notes in the form of callable securities or “STRIPS” issued by the United States Treasury, Federal Agencies or government-sponsored enterprises • Asset-Backed Commercial Paper issued by special purpose corporations, trusts or limited liability companies • Local Government Investment Pools
GASB Statement No. 31
The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values.
Credit Risk
The City Treasurer is authorized under state and municipal law to invest in various types of securities that meet specified credit quality standards, based upon credit risk ratings assigned by Standard and Poors (S&P) or by Moody’s Investor Services (Moody’s). Permissible City investments include medium-term notes that are rated “A” or higher at time of purchase; commercial paper that is rated “A-1+” or the equivalent; money market mutual funds that are rated “AAA”; and U.S. Government and Federal Agency securities (the quality of U.S. Treasury securities is not analyzed since they are not deemed to have credit risk).
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required, when applicable, by the California Government Code, the City’s investment policy, or debt agreements, and the Standard and Poor’s rating as of year-end for each investment type. See independent auditors’ report. - 46 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
2. CASH AND INVESTMENTS (CONTINUED):
Credit Risk (Continued)
Total Minimum as of Legal Investment Type June 30, 2008 Rating AAA Other Unrated California Local Agency Investment Fund $ 45,037 N/A $ - $ - $ 45,037 California Asset Management Program 96,578,844 AAA 96,578,844 - - U.S. Government-Sponsored Enterprise Securities 87,150,930 N/A 87,150,930 - - Medium-term corporate notes 104,618,758 A 12,174,590 92,444,168 - Held by Fiscal Agent: Money market mutual funds 197,547,246 AAA 197,547,246 - - Total $ 485,940,815 $ 393,451,610 $ 92,444,168 $ 45,037
N/A - Not Applicable
The actual ratings for the Medium Term Corporate Notes (MTN) are as follows:
Other: AA $ 33,457,952 AA- 39,704,371 A+ 19,281,845 $ 92,444,168
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 the 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, 2008, none of the City’s deposits or investments were exposed to custodial credit risk.
See independent auditors’ report. - 47 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
2. CASH AND INVESTMENTS (CONTINUED):
Concentration of Credit Risk
The City’s investment policy imposes restrictions on the percentage the City can invest in certain types of investments, which the City is in compliance. As of June 30, 2008, in accordance with GASB Statement No. 40, if the City has invested more than 5% of its total investments in any one issuer then they are exposed to concentration of credit risk. The following investments are considered to be exposed to concentration credit risk.
Issuer Type of Investment Amount Federal Home Loan Bank (FHLB) U.S. Government-Sponsored Enterprise Securities $ 34,797,872 Citigroup Medium-Term Corporate Note 26,157,366 Wells Fargo Bank Medium-Term Corporate Note 25,891,330
Investments guaranteed by the U.S. government, investments in mutual funds and external investment pools are excluded from this requirement.
The City’s Investment policy imposes the following restrictions on the maximum percentage it can invest in a single type of investment.
Portfolio Single Issuer Issuer Maximum Maximum United States Treasury Bills, Notes, Bonds 100% N/A U.S. Government-Sponsored Enterprise Securities 100% 30% Banker’s Acceptances 40% 30% Commercial Paper 25% 10% Negotiable Certificates of Deposit 30% N/A Time Certificates of Deposit 15% N/A Repurchase Agreements 20% N/A Medium-Term Corporate Notes 30% 15% Money Market Mutual Funds 20% N/A Local Agency Investment Fund (LAIF) $40M/Acct N/A Structured Notes (STRIPS) 20% N/A Asset-Backed Commercial Paper 25% N/A Local Government Investment Pools 30% N/A
N/A - Not Applicable
See independent auditors’ report. - 48 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
2. CASH AND INVESTMENTS (CONTINUED):
Concentration of Credit Risk (Continued)
The City’s policy is more conservative than state law, which has no issuer concentration limits on federal agency debt. The federal agency debt that the City purchases have implied credit ratings of “AAA/Aaa”.
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.
As of June 30, 2008, the City had the following investments and maturities:
Less Than 6 months - 1 year - 3 years - Fair 6 Months 1 year 3 years 5 years Value California Local Agency Investment Fund $ 45,037 $ - $ - $ - $ 45,037 California Asset Management Program 96,578,844 - - - 96,578,844 U.S. Government-Sponsored Enterprise Securities 31,049,944 - 56,100,986 - 87,150,930 Medium-term corporate notes 8,010,139 22,163,692 66,430,333 8,014,594 104,618,758 Held by Fiscal Agent: Money market mutual funds 197,547,246 - - - 197,547,246
$333,231,210 $ 22,163,692 $122,531,319 $ 8,014,594 $485,940,815
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. See independent auditors’ report. - 49 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
2. CASH AND INVESTMENTS (CONTINUED):
Investment in California Asset Management Program
The California Asset Management Program (CAMP) is a public joint powers authority which provides California Public Agencies with investment management services for surplus funds and comprehensive investment management, accounting and arbitrage rebate calculation services for proceeds of tax-exempt financings. The CAMP currently offers the Cash Reserve Portfolio, a short-term investment portfolio, as a means for Public Agencies to invest these funds. Public Agencies that invest in the Pool (Participants) purchase shares of beneficial interest. Participants may also establish individual, professionally managed investment accounts (Individual Portfolios) by separate agreement with the Investment Advisor.
Investments in the Pools and Individual Portfolios are made only in investments in which Public Agencies generally are permitted by California statute. The CAMP may reject any investment and may limit the size of a Participant’s account. The Pool seeks to maintain, but does not guarantee, a constant net asset value of $1.00 per share. A Participant may withdraw funds from its Pool accounts at any time by check or wire transfers. Requests for wire transfers must be made by 9:00 a.m. that day. Fair value of the Pool is determined by the fair value per share of the Pool’s underlying portfolio.
3. RECEIVABLES:
Primary Government's Governmental Funds
Notes and Loans Receivable:
The City has a note for $1,000,000 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, January 9, 2006, with interest accruing at 5.0% per annum. As of June 30, 2008 the outstanding balance of the note was $1,000,000.
On August 8, 2006, the City Palm Desert issued $3,165,000 of Limited Obligation Bonds. The proceeds of the Bonds will be used to finance the construction of the utility undergrounding and pay the cost of issuance. The debt service on the bonds is to be paid by assessments secured on the property tax rolls of those properties benefiting from the improvements. Bond maturities begin September 2, 2007, and continue annually through 2036. The interest rates of the bonds range from 3.85% to 5.15%. The City of Palm Desert is the only bondholder on record for the bonds and reports a receivable in the general fund that corresponds to the outstanding principal on the bonds. As of June 30, 2008, the receivable balance was $2,748,000.
See independent auditors’ report. - 50 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
3. RECEIVABLES (CONTINUED):
Primary Government's Governmental Funds (Continued)
Notes and Loans Receivable (Continued):
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, 2008, the amount outstanding on the loan is $2,000,000.
The City has $31,092 and the Agency has $35,931 in home improvement loans. Payments of interest and principal are due monthly on these loans.
The City entered into several individual loan agreements with residents of the Highlands Utility Undergrounding Assessment District No. 04-01. The loans were issued by the City to pay off the principal of the respective properties assessment. In turn, the residents agreed to pay to the City the full cost of the loan amount plus any accrued interest at a rate of 5.35%. The full amount of the loan along with all accrued interest is due and payable at the earliest of September 2, 2036 or any change in ownership of the property. At June 30, 2008 the total receivable from the Highlands Deferral Loan Program is $231,176.
A loan receivable for the construction of a multi-family affordable housing development dated June 14, 2001, with a balance of $7,659,437 is due from the Palm Desert Development Company. The loan is secured by a Deed of Trust with assignment to property, rent and fixtures on the housing development located in Palm Desert. Interest is earned and due annually at a rate of 1% per annum from the date on which the final certificate of occupancy is issued. Principal on the loan is based on the applicable agency’s percentage of positive net cash flow derived from the operations of the Development.
The Agency has issued loans for several other projects, all of which are secured by a deed of trust. A valuation allowance equal to the loan balance has been recognized where there is a significant possibility that these loans either become uncollectible or forgiven by the Agency at a future date if all the terms of the loans have been met.
See independent auditors’ report. - 51 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
3. RECEIVABLES (CONTINUED):
Primary Government's Governmental Funds (Continued)
Notes and Loans Receivable (Continued):
Detailed information for these loans is as follows:
Loan Balance Interest Maturity Special Provisions Project Name Outstanding Rate Date Secured By of Loan Self-Help$ 429,000 7.25% 30 years Deed of Trust Loan balance and interest Housing Program or 2024 due upon maturity, unpaid balance of loan or interest will bear an interest rate of 12%.
Home Improvement 98,353 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 176,965 3.00% 30 years Deed of Trust Loan balance and interest Mobilehome Park from date will be forgiven at of loan maturity if debtor does not breach the terms and conditions of either the unit regulatory agreement or note.
Desert Rose 2,200,169 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.
See independent auditors’ report. - 52 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
3. RECEIVABLES (CONTINUED):
Primary Government's Governmental Funds (Continued)
Notes and Loans Receivable (Continued):
Detailed information for these loans (Continued):
Loan Balance Interest Maturity Special Provisions Project Name Outstanding Rate Date Secured By of Loan Falcon Crest$ 3,204,094 3.00% 45 years Deed of Trust Loan is payable upon from date change or transfer of title, of loan refinancing or upon the death of the borrower.
Acquisition, 190,510 3.00% 30 - 45 Deed of Trust Loan balance and interest Rehabilitation, years Assignment will be forgiven at maturity if debtor does not Resale from date of Rent breach the terms and of loan conditions of either the unit regulatory agreement or note.
4. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS:
The composition of interfund balances as of June 30, 2008, was as follows:
Due To/From Other Funds
Due From Due To Amount
General Fund Desert Willow Golf Course $ 1,801 Other Governmental Funds 216,455
$ 218,256
The General Fund receivable of $1,801 to Desert Willow Golf Course was to provide temporary funds for operations and $216,455 to the Gas Tax Fund was for uncollected taxes held by the State of California.
See independent auditors’ report. - 53 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
4. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS (CONTINUED):
The composition of interfund balances as of June 30, 2008, was as follows:
Advances To/From Other Funds
Advances From Advances To Amount
General Fund RDA Debt Service Fund $ 9,236,000
Other Governmental Funds RDA Debt Service Fund 13,419,000
$ 22,655,000
The advances from the General Fund and Other Governmental Funds were made to the Redevelopment Agency for capital improvements.
Due To/From Component Unit
Due From Component Unit Major Funds: General Fund $ 285,000 Desert Willow Golf Course 570,428
$ 855,428
The receivable by the General Fund is for rent owed by the Palm Desert Recreational Facilities Corporation (PDRFC), and the receivable by the Desert Willow Golf Course represents funds loaned to PDRFC for operations.
See independent auditors’ report. - 54 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
4. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS (CONTINUED):
The composition of interfund balances as of June 30, 2008, was as follows:
Interfund Transfers
Transfers In RDA Prop A Low Income RDA Fire Tax Hosing Financing RDA Special Special Authority Capital Other General Revenue Revenue Debt Service Projects Nonmajor Fund Fund Fund Fund Fund Funds Total Transfers Out: General Fund$ - $ 1,650,000 $ - $ - $ - $ 492,660 $ 2,142,660 RDA Low Income Housing - - - 9,021,007 507,165 3,492,852 13,021,024 RDA Debt Service - - 18,141,322 20,832,781 1,187,692 - 40,161,795 RDA Capital Projects 47,539 - 614 - 600,844 - 648,997 Other Governmental Funds 1,054,071 - - - - 1,695,089 2,749,160 Office Complex Parkview Enterprise Fund - - - - - 1,000,000 1,000,000
Totals$ 1,101,610 $ 1,650,000 $ 18,141,936 $ 29,853,788 $ 2,295,701 $ 6,680,601 $ 59,723,636
See independent auditors’ report. - 55 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
4. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS (CONTINUED):
Interfund Transfers (Continued)
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.
See independent auditors’ report. - 56 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
5. CAPITAL ASSETS:
A summary of changes in capital assets at June 30, 2008, was as follows:
Primary Government - Governmental Activities
Balance at July 1, 2007 Balance at (As Restated) Balance at June 30, 2007 Adjustments (See Note 10) Transfers Additions Deletions June 30, 2008 Capital assets, not being depreciated: Land$ 110,657,921 $ 5,627,304 $ 116,285,225 $ - $ 2,199,220 $ (135,690) $ 118,348,755 Right-of-way 109,694,446 - 109,694,446 - 10,189,864 - 119,884,310 Construction-in-progress 75,630,219 - 75,630,219 (54,969,212) 13,500,120 (2,359,444) 31,801,683 Total capital assets, not being depreciated 295,982,586 5,627,304 301,609,890 (54,969,212) 25,889,204 (2,495,134) 270,034,748
Capital assets, being depreciated: Buildings 90,419,563 - 90,419,563 14,111,868 3,785,406 - 108,316,837 Improvements other than buildings 28,402,435 - 28,402,435 14,740,242 3,435,146 - 46,577,823 Machinery and equipment 7,241,246 - 7,241,246 (43,687) 844,081 (236,249) 7,805,391 Infrastructure 137,370,434 5,769,284 143,139,718 26,035,623 48,502,157 - 217,677,498 Equipment - Internal service fund 4,662,343 - 4,662,343 125,166 25,797 - 4,813,306 Total capital assets, being depreciated 268,096,021 5,769,284 273,865,305 54,969,212 56,592,587 (236,249) 385,190,855
Less accumulated depreciation for: Buildings (30,769,773) - (30,769,773) - (2,517,239) - (33,287,012) Improvements other than buildings (11,160,138) - (11,160,138) - (1,967,315) - (13,127,453) Machinery and equipment (5,663,932) - (5,663,932) - (485,505) 235,006 (5,914,431) Infrastructure (52,038,968) - (52,038,968) - (3,603,489) - (55,642,457) Equipment - Internal service fund (3,054,088) - (3,054,088) - (387,665) - (3,441,753) Total accumulated depreciation (102,686,899) - (102,686,899) - (8,961,213) 235,006 (111,413,106)
Capital assets, being depreciated, net 165,409,122 5,769,284 171,178,406 54,969,212 47,631,374 (1,243) 273,777,749
Capital assets, net - Governmental Activities$ 461,391,708 $ 11,396,588 $ 472,788,296 $ - $ 73,520,578 $ (2,496,377) $ 543,812,497
See independent auditors’ report. - 57 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
5. CAPITAL ASSETS (CONTINUED):
A summary of changes in capital assets at June 30, 2008, was as follows:
Primary Government - Business-type Activities
Balance at Balance at Balance at June 30, 2007 Adjustments July 1, 2007 Transfers Additions Deletions June 30, 2008 Capital assets, not being depreciated: Land$ 52,510,900 $ - $ 52,510,900 $ - $ 88,622 $ - $ 52,599,522
Total capital assets, not being depreciated 52,510,900 - 52,510,900 - 88,622 - 52,599,522
Capital assets, being being depreciated: Buildings and improvements 13,043,921 - 13,043,921 - 282,264 - 13,326,185 Machinery and equipment 5,833,165 - 5,833,165 - 240,245 (272,890) 5,800,520
Total capital assets, being depreciated 18,877,086 - 18,877,086 - 522,509 (272,890) 19,126,705
Less accumulated depreciation for: Buildings and improvements (2,971,241) - (2,971,241) - (456,633) - (3,427,874) Machinery and equipment (3,278,288) - (3,278,288) - (894,004) 271,377 (3,900,915)
Total accumulated depreciation (6,249,529) - (6,249,529) - (1,350,637) 271,377 (7,328,789)
Capital assets, being depreciated, net 12,627,557 - 12,627,557 - (828,128) (1,513) 11,797,916
Capital assets, net - Business-type Activities$ 65,138,457 $ - $ 65,138,457 $ - $ (739,506) $ (1,513) $ 64,397,438
See independent auditors’ report. - 58 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
5. CAPITAL ASSETS (CONTINUED):
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities: General government $ 2,797,934 Public safety 182,266 Public works 4,018,153 Parks, recreation and culture 1,575,195 Depreciation expenses for internal service funds is charged to various functions based on usage of capital assets 387,665
Total depreciation expense - governmental activities $ 8,961,213
Business-type Activities: Desert Willow Golf Course $ 1,137,840 Parkview Office complex 212,797
Total depreciation expense - business-type activities $ 1,350,637
See independent auditors’ report. - 59 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES:
The following is a summary of long-term liability transactions of the City for the year ended June 30, 2008:
Primary Government - Governmental Activities
Balance Balance Due Within July 1, 2007 Additions Reductions June 30, 2008 One Year Special assessment debt with government commitment$ 2,783,000 $ - $ (35,000) $ 2,748,000 $ 46,000 Tax allocation bonds 421,819,894 1,484,806 (10,610,000) 412,694,700 12,610,000 Notes payable 613,535 - (122,707) 490,828 122,707 Claims and judgments payable 537,001 218,647 (314,335) 441,313 320,000 Compensated absences payable 2,532,053 1,868,277 (1,517,106) 2,883,224 700,000 Subtotal 428,285,483 3,571,730 (12,599,148) 419,258,065 13,798,707 Add: Unamortized bond premium 8,326,646 - (475,703) 7,850,943 - Less: Deferred amount on refunding (1,728,965) - 122,715 (1,606,250) -
Total$ 434,883,164 $ 3,571,730 $ (12,952,136) $ 425,502,758 $ 13,798,707
Debt service payments for the special assessment debt with government commitment, tax allocation bonds and notes payable are made from debt service funds.
Primary Government – Business-type Activities:
Capital leases$ 2,181,546 $ - $ (598,764) $ 1,582,782 $ 627,649
See independent auditors’ report. - 60 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Special Assessment Debt with Government Commitment
Highlands Undergrounding Assessment District No. 04-01, Limited Obligation Improvement Bonds, Series 2006
On August 8, 2006, the City Palm Desert issued $3,165,000 of Limited Obligation Bonds. The proceeds of the Bonds will be used to finance the construction of the utility undergrounding and pay the cost of issuance. The debt service on the bonds is to be paid by assessments secured on the property tax rolls of those properties benefiting from the improvements. In the event that assessment collections are insufficient to pay the debt service, the City has a potential obligation to provide additional funds to pay the debt service, therefore these bonds are reported as special assessment debt with government commitment. Bond maturities begin September 2, 2007, and continue annually through 2036. The interest rates of the bonds range from 3.85% to 5.15%. The City of Palm Desert is the only bondholder on record of the bonds.
The future debt service requirements on the Highlands Undergrounding Assessment District No. 04-01, Limited Obligation Improvement Bonds, Series 2006 are as follows:
Year Ending June 30, Principal Interest Total 2009$ 46,000 $ 136,187 $ 182,187 2010 48,000 134,306 182,306 2011 50,000 132,259 182,259 2012 52,000 130,065 182,065 2013 55,000 127,711 182,711 2014 - 2018 310,000 597,753 907,753 2019 - 2023 393,000 512,438 905,438 2024 - 2028 504,000 399,235 903,235 2029 - 2033 645,000 252,376 897,376 2034 - 2037 645,000 68,572 713,572
$ 2,748,000 $ 2,490,902 $ 5,238,902
See independent auditors’ report. - 61 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds
A summary of changes in tax allocation bonds at June 30, 2008, was as follows:
Balance Additions/ Repayments/ Balance Due Within July 1, 2007 Accretion Reductions June 30, 2008 One Year Project Area No. 1 2002A TARRBs, $22,070,000$ 22,070,000 $ - $ - $ 22,070,000 $ - 2003 TARBs, $19,000,000 19,000,000 - - 19,000,000 - 2004A TARRBs, $24,945,000 22,655,000 - (850,000) 21,805,000 1,030,000 2006 A & B TARBs, $62,320,000 60,105,000 - (1,965,000) 58,140,000 2,075,000 2007A TARRBs, $32,600,000 32,600,000 - (2,130,000) 30,470,000 2,410,000 1995A TARRBs, $6,305,000 1,235,000 - (600,000) 635,000 635,000 Project Area No. 2 2002A TARRBs, $17,310,000 14,680,000 - (650,000) 14,030,000 675,000 2003 TARBs, $15,745,000 15,745,000 - - 15,745,000 - 2006 A-D TARBs, $67,618,213 68,554,280 1,024,695 (940,000) 68,638,975 1,320,000 Project Area No. 3 2003 TARBs, $4,745,000 4,315,000 - (95,000) 4,220,000 100,000 2006 A-C TABs, $15,059,526 15,191,608 194,507 - 15,386,115 25,000 Project Area No. 4 1998 TARBs, $11,02,000 8,355,000 - - 8,355,000 - 2001 TARBs, $15,695,000 14,795,000 - (285,000) 14,510,000 310,000 2006A TARBs, $19,273,089 19,509,006 265,604 - 19,774,610 200,000 Combined Low and Moderate Housing 1998 TARBs, $48,760,000 5,725,000 - (655,000) 5,070,000 685,000 2002 TARBs, $12,100,000 11,130,000 - (255,000) 10,875,000 265,000 2007 TARBs, $86,155,000 86,155,000 - (2,185,000) 83,970,000 2,880,000
Total$ 421,819,894 $ 1,484,806 $ (10,610,000) $ 412,694,700 $ 12,610,000
Tax Allocation bonds used for capital improvements 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. The Agency purchased insurance from Ambac Assurance Corporation (Ambac) and MBIA Insurance Corporation (MBIA) for the purpose of enhancing the creditworthiness of the bonds. Since the date of purchase, Ambac and MBIA’s ratings by Moody’s Investors Services have been downgraded from “AAA” to “Baa1”, and “AAA” to “Baa1”, respectively. See independent auditors’ report. - 62 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
Pursuant to California Health and Safety Code Section 33670, the total number of dollars of taxes which may be divided and allocated to the Agency for Project Area No. 1 is $500,000,000, and it is estimated that the cap will be reached in the year 2022. Project Area No. 4’s total is $600,000,000, and it is estimated that this cap will be reached in the year 2034. The result of reaching the cap limits would preclude the Agency from receiving taxes and using the taxes to pay debt in these project areas, thereby requiring the Agency to call bonds prior to those dates.
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 fund various redevelopment capital projects of the Agency in Project Area No. 1. The bonds consist of $10,905,000 term bonds at 5.00% due April 1, 2025, and $11,165,000 term bonds at 5.10% due April 1, 2030. Interest is payable semi-annually on April 1 and October 1. Mandatory sinking fund redemptions begin April 1, 2024.
The future debt service requirements on the 2002 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended) are as follows:
Year Ending June 30, Principal Interest Total 2009$ - $ 1,114,666 $ 1,114,666 2010 - 1,114,666 1,114,666 2011 - 1,114,666 1,114,666 2012 - 1,114,666 1,114,666 2013 - 1,114,666 1,114,666 2014 - 2018 - 5,573,330 5,573,330 2019 - 2023 - 5,573,330 5,573,330 2024 - 2028 17,270,000 3,384,928 20,654,928 2029 - 2030 4,800,000 370,260 5,170,260
$ 22,070,000 $ 20,475,178 $ 42,545,178
See independent auditors’ report. - 63 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
2003 Series Tax Allocation Revenue Bonds (Project Area No. 1)
In July 2003, the Financing Authority issued $19,000,000 Tax Allocation Revenue Bonds (Project Area No. 1, as amended) 2003 Series. 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 fund various redevelopment capital projects 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 $11,950,000 term bonds due in 2030. Interest will be payable on April 1 and October 1 of each year beginning April 1, 2004. Principal payments will be on April 1 of the years stated above.
The future debt service requirements on the 2003 Series Tax Allocation Revenue Bonds (Project Area No. 1) are as follows:
Year Ending June 30, Principal Interest Total 2009$ - $ 950,000 $ 950,000 2010 - 950,000 950,000 2011 - 950,000 950,000 2012 - 950,000 950,000 2013 - 950,000 950,000 2014 - 2018 - 4,750,000 4,750,000 2019 - 2023 - 4,750,000 4,750,000 2024 - 2028 10,840,000 4,225,500 15,065,500 2029 - 2030 8,160,000 617,000 8,777,000
$ 19,000,000 $ 19,092,500 $ 38,092,500
See independent auditors’ report. - 64 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
2004 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended)
In June 2004, the Palm Desert Financing Authority issued $24,945,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended) 2004 Series A. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to refinance a portion of the Agency’s obligations from 1995, and to fund various redevelopment capital projects within or of benefit to the project area. Interest rates on the bonds vary from 3.0% to 5.0% per annum payable semi-annually on April 1 and October 1. Principal payments will be made annually beginning April 1, 2005.
The future debt service requirements on the 2004 Series A Tax Allocation Revenue Bonds (Project Area No. 1, as amended) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 1,030,000 $ 1,025,813 $ 2,055,813 2010 945,000 974,313 1,919,313 2011 1,130,000 927,063 2,057,063 2012 1,050,000 876,213 1,926,213 2013 1,155,000 828,963 1,983,963 2014 - 2018 6,520,000 3,358,600 9,878,600 2019 - 2023 6,460,000 1,715,250 8,175,250 2024 - 2025 3,515,000 238,750 3,753,750
$ 21,805,000 $ 9,944,965 $ 31,749,965
See independent auditors’ report. - 65 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
Tax Allocation Revenue Bonds (Project Area No. 1, as Amended) 2006 Series A and Series B (Taxable)
On July 6, 2006, the Palm Desert Financing Authority issued $37,780,000 of Tax Allocation Revenue Bonds (Project Area No. 1, as Amended) 2006 Series A and $24,540,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as Amended) 2006 Series B (Taxable). The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency. The proceeds of the Series A loan will be used to assist the Agency to fund various redevelopment capital projects within or of benefit to Project Area No. 1, as Amended, pay costs of issuance and pay the premium on a Reserve Fund surety bond. The proceeds of the Series B loan will be used to refinance the Agency’s obligations incurred under a loan agreement entered into in 1997, pay costs of issuance and pay the premium on a Reserve Fund surety bond. The Series A bonds consist of $26,415,000 Serial Bonds with interest rates ranging from 4.70% to 5.25% payable semiannually on October 1 and April 1. Bond maturities begin April 1, 2017, and continue annually through 2030. Term bonds in the amount of $11,365,000 carry an interest rate of 5.00% and mature April 1, 2022. The Series B bonds consist of $13,220,000 Serial Bonds with interest rates ranging from 5.56% to 5.77% payable semiannually on October 1 and April 1. Bond maturities begin April 1, 2007, and continue annually through 2012. Term bonds in the amount of $11,320,000 carry an interest rate of 5.82% and mature April 1, 2016.
The future debt service requirements on the 2006 Series A and Series B Tax Allocation Revenue Bonds (Project Area No. 1, as amended) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 2,075,000 $ 3,092,327 $ 5,167,327 2010 2,195,000 2,974,259 5,169,259 2011 2,320,000 2,848,266 5,168,266 2012 2,450,000 2,714,634 5,164,634 2013 2,595,000 2,573,269 5,168,269 2014 - 2018 10,730,000 10,557,021 21,287,021 2019 - 2023 29,405,000 6,317,125 35,722,125 2024 - 2028 5,805,000 890,538 6,695,538 2029 - 2030 565,000 40,613 605,613 $ 58,140,000 $ 32,008,052 $ 90,148,052
See independent auditors’ report. - 66 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended) 2007 Series A
On January 9, 2007, the Palm Desert Financing Authority issued $32,600,000 Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended) 2007 Series A. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency. The proceeds of the 2007 Loan will be used to refinance a portion of the outstanding obligations of the Redevelopment Agency, fund various redevelopment capital projects within the Palm Desert Redevelopment Agency Project Area No. 1, as amended, and pay the costs associated with the issuance of the bonds. The Series A bonds consist of $32,600,000 Serial Bonds with interest rates ranging from 3.50% to 5.00% payable semiannually on October 1 and April 1. Bond maturities begin April 1, 2008, and continue annually through 2018.
The future debt service requirements on the 2007 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 1, as amended) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 2,410,000 $ 1,416,825 $ 3,826,825 2010 2,640,000 1,320,425 3,960,425 2011 2,625,000 1,201,625 3,826,625 2012 2,870,000 1,083,500 3,953,500 2013 2,955,000 940,000 3,895,000 2014 - 2018 16,970,000 2,559,000 19,529,000
$ 30,470,000 $ 8,521,375 $ 38,991,375
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. At June 30, 2008, the Authority has a cash reserve balance of $630,500 which covers the actual reserve requirement of $630,500. Interest rates on the bonds vary from 3.80% to 5.55% with interest payable semi-annually on March 1 and September 1, with principal maturing annually on September 1.
See independent auditors’ report. - 67 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
1995 Series A Tax Allocation Revenue Refunding Bonds (Continued)
The future debt service requirements on the 1995 Series A Tax Allocation Revenue Refunding Bonds are as follows:
Year Ending June 30, Principal Interest Total 2009$ 635,000 $ 17,621 $ 652,621
2002 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 2)
In July 2002, the Palm Desert Financing Authority issued $17,310,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 2) 2002 Series A. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to prepay outstanding indebtedness and to fund various redevelopment capital projects within or of benefit to the project area. Interest rates on the bonds vary from 3.0% to 5.0% per annum payable semi- annually on February 1 and August 1.
The future debt service requirements on the 2002 Series A Tax Allocation Refunding Revenue Bonds (Project Area No. 2) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 675,000 $ 631,853 $ 1,306,853 2010 695,000 607,868 1,302,868 2011 720,000 581,498 1,301,498 2012 760,000 548,638 1,308,638 2013 795,000 509,763 1,304,763 2014 - 2018 4,565,000 1,971,064 6,536,064 2019 - 2023 5,820,000 752,388 6,572,388
$ 14,030,000 $ 5,603,072 $ 19,633,072
See independent auditors’ report. - 68 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (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) 2003 Series. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to fund various redevelopment capital projects of the Agency in Project Area No. 2. Interest rates on the bonds vary from 4.5% to 5.0% per annum payable semi-annually on February 1 and August 1, with principal maturing as follows:
$ 875,000 Serial Bonds August 1, 2023 910,000 Serial Bonds August 1, 2024 2,485,000 Term Bonds August 1, 2026 11,475,000 Term Bonds August 1, 2033
The future debt service requirements on the 2003 Series Tax Allocation Revenue Bonds (Project Area No. 2) are as follows:
Year Ending June 30, Principal Interest Total 2009$ - $ 769,006 $ 769,006 2010 - 769,006 769,006 2011 - 769,006 769,006 2012 - 769,006 769,006 2013 - 769,006 769,006 2014 - 2018 - 3,845,030 3,845,030 2019 - 2023 - 3,845,030 3,845,030 2024 - 2028 5,675,000 3,264,041 8,939,041 2029 - 2033 8,175,000 1,536,875 9,711,875 2034 1,895,000 47,375 1,942,375
$ 15,745,000 $ 16,383,381 $ 32,128,381
See independent auditors’ report. - 69 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
Project Area No. 2 Tax Allocation Refunding Revenue Bonds 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds 2006 Series B, Revenue Bonds 2006 Series C and Subordinate Tax Allocation Revenue Capital Appreciation Bonds 2006 Series D
On July 25, 2006, the Palm Desert Financing Authority issued its Project Area No. 2 $41,340,000 Tax Allocation Refunding Revenue Bonds 2006 Series A, $1,567,118 Tax Allocation Revenue Capital Appreciation Bonds 2006 Series B, $7,775,000 Tax Allocation Revenue Bonds 2006 Series C and $16,936,095 Subordinate Tax Allocation Revenue Capital Appreciation Bonds 2006 Series D. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency. The proceeds of the Series A, B and C Bonds will be used to make three loans to refinance the Agency’s obligations incurred under a loan agreement entered into in 1995, fund various redevelopment capital projects within or of benefit to its Project Area No. 2 Reserve Fund surety and pay costs of issuance of the bonds. The Agency will use the proceeds of the Series D Bonds to fund various redevelopment capital projects within or of benefit to the Project Area, fund a debt service reserve fund and pay cost of issuance of the bonds.
The Series A bonds consist of $16,250,000 Serial Bonds with interest rates ranging from 4.00% to 5.00% payable semiannually on August 1 and February 1. Bond maturities begin August 1, 2007, and continue annually through 2026. Term bonds in the amount of $8,225,000 carry an interest rate of 4.90% and mature August 1, 2031. Term bonds in the amount of $16,865,000 carry an interest rate of 5.125% and mature August 1, 2036. The Series B bonds consist of $1,567,118 Capital Appreciation Bonds with a reoffering yield ranging from 3.85% to 4.08%. Bond maturities begin April 1, 2007, and continue annually through 2010. The Series C bonds consist of $3,950,000 Serial Bonds with interest rates ranging from 3.90% to 4.90% payable semiannually on August 1 and February 1. Bond maturities begin August 1, 2010, and continue annually through 2026. Term bonds in the amount of $1,910,000 carry an interest rate of 4.90% and mature August 1, 2031. Term bonds in the amount of $1,915,000 carry an interest rate of 5.00% and mature August 1, 2035. The Series D bonds consist of $16,936,095 Capital Appreciation Bonds with a reoffering yield ranging from 4.65% to 6.10%. Bond maturities begin August 1, 2007, and continue annually through 2035. Each year the outstanding balance is increased for the accretion of interest associated with the bonds. The accreted interest at June 30, 2008 is $1,928,200.
See independent auditors’ report. - 70 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
Project Area No. 2 Tax Allocation Refunding Revenue Bonds 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds 2006 Series B, Revenue Bonds 2006 Series C and Subordinate Tax Allocation Revenue Capital Appreciation Bonds 2006 Series D (Continued)
The future debt service requirements on the 2006 Series A Tax Allocation Refunding Revenue Bonds, Series B Tax Allocation Revenue Capital Appreciation Bonds, Series C Revenue Bonds and Series D Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 1,221,594 $ 2,463,783 $ 3,685,377 2010 1,777,789 2,595,139 4,372,928 2011 1,547,001 2,589,956 4,136,957 2012 1,647,818 2,561,720 4,209,538 2013 1,808,558 2,628,779 4,437,337 2014 - 2018 8,060,967 12,717,428 20,778,395 2019 - 2023 8,711,794 13,361,735 22,073,529 2024 - 2028 12,124,808 14,248,755 26,373,563 2029 - 2033 12,375,398 11,123,708 23,499,106 2034 - 2037 17,435,048 6,252,386 23,687,434
$ 66,710,775 $ 70,543,389 $ 137,254,164
2003 Series Tax Allocation Revenue Bonds (Project Area No. 3)
In July 2003, the Financing Authority issued $4,745,000 of Tax Allocation Revenue Bonds (Project Area No. 3) 2003 Series. 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 fund various redevelopment capital projects 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 $2,270,000 are due in 2033.
See independent auditors’ report. - 71 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
2003 Series Tax Allocation Revenue Bonds (Project Area No. 3) (Continued)
The future debt service requirements on the 2003 Series Tax Allocation Revenue Bonds (Project Area No. 3) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 100,000 $ 195,898 $ 295,898 2010 100,000 193,048 293,048 2011 105,000 189,848 294,848 2012 110,000 186,225 296,225 2013 115,000 182,265 297,265 2014 - 2018 635,000 840,932 1,475,932 2019 - 2023 785,000 692,388 1,477,388 2024 - 2028 1,000,000 484,313 1,484,313 2029 - 2033 1,270,000 201,669 1,471,669
$ 4,220,000 $ 3,166,586 $ 7,386,586
Project Area No. 3 Tax Allocation Revenue Bonds 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds 2006 Series B and Subordinate Tax Allocation Revenue Capital Appreciation Bonds 2006 Series C
On July 25, 2006, the Palm Desert Financing Authority issued its Project Area No. 3 $11,915,000 Tax Allocation Revenue Bonds 2006 Series A, $383,660 Tax Allocation Revenue Capital Appreciation Bonds 2006 Series B and $2,760,866 Subordinate Tax Allocation Revenue Capital Appreciation Bonds 2006 Series C. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency. The proceeds of the Series A and B Bonds will be used to make two loans to fund various redevelopment capital projects within or of benefit to its Project Area No. 3, purchase a Reserve Fund surety policy and pay the costs of issuance of the bonds. The Agency will loan the proceeds of the Series C Bonds to fund various redevelopment capital projects within or of benefit to the Project Area, fund a debt service reserve fund and pay the costs of issuance of the bonds.
See independent auditors’ report. - 72 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
Project Area No. 3 Tax Allocation Revenue Bonds 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds 2006 Series B and Subordinate Tax Allocation Revenue Capital Appreciation Bonds 2006 Series C (Continued)
The Series A bonds consist of $2,980,000 Serial Bonds with interest rates ranging from 4.00% to 4.75% payable semiannually on April 1 and October 1. Bond maturities begin April 1, 2007, and continue annually through 2025. Term bonds in the amount of $4,465,000 carry an interest rate of 4.75% and mature April 1, 2036. Term bonds in the amount of $4,470,000 carry an interest rate of 5.00% and mature April 1, 2041. The Series B bonds consist of $383,660 Capital Appreciation Bonds with a yield ranging from 5.31% to 5.54%. Bond maturities are April 1, 2020, 2021, 2027 and 2028. The Series C bonds consist of $2,760,866 Capital Appreciation Bonds with a yield ranging from 4.80% to 6.10%. Bond maturities begin April 1, 2009, and continue annually through 2034. Each year the outstanding balance is increased for the accretion of interest associated with the bonds. The accreted interest at June 30, 2008 is $366,589.
The future debt service requirements on the 2006 Series A Tax Allocation Revenue Bonds, Series B Tax Allocation Revenue Capital Appreciation Bonds and Series C Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 3) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 22,012 $ 567,263 $ 589,275 2010 126,101 573,175 699,276 2011 160,871 570,204 731,075 2012 198,934 562,141 761,075 2013 228,133 565,742 793,875 2014 - 2018 1,524,953 2,954,028 4,478,981 2019 - 2023 1,701,040 3,668,229 5,369,269 2024 - 2028 1,866,831 4,042,744 5,909,575 2029 - 2033 2,398,858 3,990,717 6,389,575 2034 - 2038 3,981,793 1,768,244 5,750,037 2039 - 2041 2,810,000 285,750 3,095,750
$ 15,019,526 $ 19,548,237 $ 34,567,763
See independent auditors’ report. - 73 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
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) 1998 Series. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to fund various redevelopment capital projects 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. In July 2006, $1,785,000 of the outstanding balance was advance refunded by the issuance of Tax Allocation Refunding Revenue Bonds (Project Area No. 4) 2006 Series A.
The future debt service requirements on the 1998 Series Tax Allocation Revenue Bonds (Project Area No. 4) (after defeasance) are as follows:
Year Ending June 30, Principal Interest Total 2009$ - $ 429,590 $ 429,590 2010 - 429,590 429,590 2011 130,000 426,665 556,665 2012 135,000 420,635 555,635 2013 140,000 414,240 554,240 2014 - 2018 1,690,000 1,871,538 3,561,538 2019 - 2023 2,415,000 1,327,950 3,742,950 2024 - 2028 3,120,000 611,000 3,731,000 2029 725,000 18,850 743,850
$ 8,355,000 $ 5,950,058 $ 14,305,058
See independent auditors’ report. - 74 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
2001 Series Tax Allocation Revenue Bonds (Project Area No. 4)
In November 2001, the Palm Desert Financing Authority issued $15,695,000 of Tax Allocation Revenue Bonds (Project Area No. 4) 2001 Series. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to fund various redevelopment capital projects of the Agency in Project Area No. 4. Interest rates on the bonds vary from 3.5% to 4.9% per annum payable semi-annually on April 1 and October 1, with principal maturing annually on October 1.
The future debt service requirements on the 2001 Series Tax Allocation Revenue Bonds (Project Area No. 4) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 310,000 $ 662,313 $ 972,313 2010 305,000 651,250 956,250 2011 320,000 639,909 959,909 2012 325,000 628,011 953,011 2013 345,000 614,805 959,805 2014 - 2018 1,965,000 2,832,166 4,797,166 2019 - 2023 2,455,000 2,331,840 4,786,840 2024 - 2028 3,055,000 1,683,240 4,738,240 2029 - 2032 5,430,000 590,880 6,020,880
$ 14,510,000 $ 10,634,414 $ 25,144,414
See independent auditors’ report. - 75 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
Tax Allocation Refunding Revenue Bonds (Project Area No. 4) 2006 Series A and Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 4) Series B
On July 25, 2006, the Palm Desert Financing Authority issued $14,610,000 of Tax Allocation Refunding Revenue Bonds (Project Area No. 4) 2006 Series A and $4,663,089 of Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 4) 2006 Series B. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency. The proceeds of the Series A and B Bonds will be used to make two loans to refinance a portion of the outstanding obligations of the Redevelopment Agency under a loan agreement dated March 1, 1998, fund various redevelopment capital projects within or of benefit to its Project Area No. 4, purchase a Reserve Fund surety policy and pay the costs of issuance of the bonds. The Series A bonds consist of $8,155,000 Serial Bonds with interest rates ranging from 4.40% to 5.00% payable semiannually on October 1 and April 1. Bond maturities begin October 1, 2008, and continue annually through 2026. Term bonds in the amount of $2,200,000 carry an interest rate of 5.00% and mature October 1, 2029. Term bonds in the amount of $4,255,000 carry an interest rate of 5.00% and mature October 1, 2034. The Series B bonds consist of $4,663,089 Capital Appreciation Bonds with a yield ranging from 4.14% to 5.56%. Bond maturities begin October 1, 2009, and continue annually through 2034. Each year the outstanding balance is increased for the accretion of interest associated with the bonds. The accreted interest at June 30, 2008 is $501,521.
The future debt service requirements on the 2006 Series A Tax Allocation Refunding Bonds and Series B Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 4) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 200,000 $ 694,945 $ 894,945 2010 439,496 686,949 1,126,445 2011 435,000 662,658 1,097,658 2012 554,233 657,612 1,211,845 2013 656,190 651,686 1,307,876 2014 - 2018 2,342,938 2,917,343 5,260,281 2019 - 2023 1,950,111 2,840,986 4,791,097 2024 - 2028 4,013,240 3,106,161 7,119,401 2029 - 2033 4,968,195 6,220,055 11,188,250 2034 - 2035 3,713,686 4,182,689 7,896,375 $ 19,273,089 $ 22,621,084 $ 41,894,173
See independent auditors’ report. - 76 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
1998 Series Tax Allocation (Housing Set-Aside) Revenue Bonds
In January 1998, the Palm Desert Financing Authority issued $48,760,000 in Tax Allocation (Housing Set-Aside) Revenue Bonds. The proceeds from the bonds were loaned to the Palm Desert Redevelopment Agency to finance the acquisition of seven apartment complexes consisting of 725 rental units from the Housing Authority of the County of Riverside. Interest rates on the bonds vary from 4.0% to 5.1% per annum payable semi-annually on April 1 and October 1, with principal maturing annually on October 1. In February 2007, $38,740,000 of the outstanding balance was advance refunded by the issuance of Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds Series 2007.
The future debt service requirements on the 1998 Series Tax Allocation (Housing Set-Aside) Revenue Bonds (after defeasance) are as follows:
Year Ending June 30, Principal Interest Total 2009$ 685,000 $ 233,806 $ 918,806 2010 1,390,000 184,500 1,574,500 2011 1,460,000 113,250 1,573,250 2012 1,535,000 38,375 1,573,375 $ 5,070,000 $ 569,931 $ 5,639,931
See independent auditors’ report. - 77 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
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 2002 Series. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to fund various low and moderate housing capital projects 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 began October 1, 2003. The $5,545,000 term bonds bear an interest rate of 5.0% per annum and mature October 1, 2031.
The future debt service requirements on the 2002 Series Tax Allocation (Housing Set-Aside) Revenue Bonds are as follows:
Year Ending June 30, Principal Interest Total 2009$ 265,000 $ 500,572 $ 765,572 2010 275,000 491,454 766,454 2011 285,000 481,298 766,298 2012 295,000 470,201 765,201 2013 305,000 458,348 763,348 2014 - 2018 1,730,000 2,089,745 3,819,745 2019 - 2023 2,175,000 1,656,220 3,831,220 2024 - 2028 2,770,000 1,053,750 3,823,750 2029 - 2032 2,775,000 285,875 3,060,875
$ 10,875,000 $ 7,487,463 $ 18,362,463
See independent auditors’ report. - 78 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Tax Allocation Bonds (Continued)
Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds Series 2007
On February 7, 2007, the Palm Desert Financing Authority issued $86,155,000 Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds Series 2007. The Palm Desert Financing Authority loaned the proceeds to the Palm Desert Redevelopment Agency. The proceeds of the 2007 Loan will be used to finance the development of low and moderate income housing by the Redevelopment Agency, refinance a portion of the outstanding obligations of the Redevelopment Agency, purchase a debt service surety bond for deposit in the Reserve Fund, and pay certain costs associated with the issuance of the bonds. The Series 2007 bonds consist of $86,155,000 Serial Bonds with interest ranging from 4.00% to 5.00% payable semiannually on October 1 and April 1. Bond maturities begin October 1, 2007, and continue annually through 2027.
The future debt service requirements on the Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds Series 2007 are as follows:
Year Ending June 30, Principal Interest Total 2009$ 2,880,000 $ 3,861,963 $ 6,741,963 2010 3,005,000 3,736,750 6,741,750 2011 3,135,000 3,606,438 6,741,438 2012 3,265,000 3,478,438 6,743,438 2013 5,005,000 3,313,038 8,318,038 2014 - 2018 29,005,000 12,584,063 41,589,063 2019 - 2023 21,720,000 5,516,469 27,236,469 2024 - 2028 15,955,000 1,766,250 17,721,250
$ 83,970,000 $ 37,863,409 $ 121,833,409
See independent auditors’ report. - 79 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
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, 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, 2008, was $490,828. Annual payments on the note are $122,707.
Future debt service payments are as follows:
Year Ending June 30, Principal Interest Total 2009$ 122,707 $ - $ 122,707 2010 122,707 - 122,707 2011 122,707 - 122,707 2012 122,707 - 122,707
$ 490,828 $ - $ 490,828
Claims and Judgments Payable
Estimates for all workers' compensation and general liabilities up to the self-insured levels have been recorded as long-term liabilities. At June 30, 2008, total estimated workers' compensation and general liability claims payable, including a provision for incurred but not reported claims, were $247,961 and $193,352, respectively.
See independent auditors’ report. - 80 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Claims and Judgments Payable (Continued)
Changes in claims liabilities during the past two years are as follows:
June 30, 2007 June 30, 2008 Claims payable - Beginning of Year $ 481,317 $ 537,001 Incurred claims (including IBNR) and changes in estimates 367,479 218,647 Claims payments (311,795) (314,335)
Claims payable - End of Year $ 537,001 $ 441,313
Compensated Absences Payable
There is no fixed payment schedule to pay the governmental fund types' outstanding liability of $2,883,224 for compensated absences earned at June 30, 2008. Compensated absences are generally liquidated by the General Fund.
Business-type Activities - Capital Leases
Obligations under capital leases are as follows:
Pure Plant Water, Inc. - The present value of the minimum lease payment on water purification equipment was capitalized at $2,802 using an interest rate of 4.94%. Lease is payable in 60 monthly installments of $53 beginning May 15, 2005. $ 1,113
Pure Plant Water, Inc. - The present value of the minimum lease payment on water purification equipment was capitalized at $10,752 using an interest rate of 5.15%. Lease is payable in 60 monthly installments of $204 beginning September 1, 2005. 4,818
Commerca Leasing Corporation - The present value of the minimum lease payment on the Uplink GPS system was capitalized at $569,046 using an interest rate of 6.00%. Lease is payable in 48 monthly installments of 13,364 beginning September 15, 2006. 315,825
See independent auditors’ report. - 81 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Business-type Activities - Capital Leases (Continued)
Citicapital Commercial Corporation - The present value of the minimum lease payment on the Club Car Golf Carts was capitalized at $663,256 using an interest rate of 5.220%. Lease is payable in 48 monthly installments of $12,249 beginning October 1, 2006. There is a balloon payment at the end of the lease of $165,300, which will be paid on October 1, 2010. $ 447,556
Wells Fargo Financial Leasing, Inc. - The present value of the minimum lease payment on the new golf course equipment (Greens Mowers) was capitalized at $63,292 using an interest rate of 6.00%. Lease is payable in 37 monthly installments of $1,915 beginning July 1, 2006. 18,642
Wells Fargo Financial Leasing, Inc. - The present value of the minimum lease payment on the new golf course equipment was capitalized at $1,325,933 using an interest rate of 3.720%. Lease is payable in 48 monthly installments of $29,680 beginning December 15, 2006. 794,828 Present value of net minimum lease payments 1,582,782 Less: current portion (627,649) $ 955,133
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, 2008:
Year Ending Minimum June 30, Lease Payments 2009$ 685,762 2010 666,498 2011 322,088 1,674,348 Less: amounts representing interest (91,566)
Present value of net minimum lease payments$ 1,582,782
See independent auditors’ report. - 82 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
6. LONG-TERM LIABILITIES (CONTINUED):
Business-type Activities - Capital Leases (Continued)
The assets acquired through capital lease are as follows:
Machinery and equipment $ 2,876,126 Less: accumulated depreciation (1,252,685)
$ 1,623,441
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 $9,050,688 held by NRS and ICMA of the 457 Plan are not reflected in the City’s financial statements.
8. AMOUNTS DUE UNDER REDEVELOPMENT AGENCY PASS-THROUGH AGREEMENTS:
Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are, except where otherwise provided by specific agreement, allocated to the Agency. 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.
See independent auditors’ report. - 83 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
8. AMOUNTS DUE UNDER REDEVELOPMENT AGENCY PASS-THROUGH AGREEMENTS (CONTINUED):
At June 30, 2008, the Agency was holding $43,419,765 in trust on behalf of other taxing agencies related to specific pass-through agreements as detailed below:
Balance at Balance at Entity July 1, 2007 Additions Payments June 30, 2008 Riverside County Capital Improvement$ 14,587,299 *$ 16,385,141 $ 18,046,062 $ 12,926,378 Riverside County - Schools 733,098 817,005 733,098 817,005 Riverside County - Library 5,684,682 * 2,039,240 - 7,723,922 Riverside County - Fire 2,990,357 3,248,130 2,990,357 3,248,130 Coachella Valley Mosquito Abatement District 596,686 661,403 596,686 661,403 Coachella Valley Water District 6,649,250 1,554,953 - 8,204,203 Desert Community College District 1,263,533 * 1,410,834 1,263,533 1,410,834 Desert Sands Unified School District 5,410,082 * 6,187,467 5,571,592 6,025,957 Coachella Valley Recreation and Park District 467,479 511,218 467,479 511,218 Coachella Valley Resources District 4,475 4,926 4,475 4,926 Palm Springs Unified School District 270,471 338,347 270,471 338,347 County Juvenile Health District 727,014 1,353,419 1,155,109 925,324 Other Deposits 579,234 263,877 220,993 622,118
$ 39,963,660 $ 34,775,960 $ 31,319,855 $ 43,419,765
* The Redevelopment Agency has used bond proceeds for the construction of capital improvements, which benefit these entities. These entities have agreements with the Redevelopment Agency, which will allow it to use a portion of these amounts to offset debt service costs.
See independent auditors’ report. - 84 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
9. PENSION PLAN:
a. Plan Description:
The City of Palm Desert contributes to the California Public Employees Retirement System (PERS), an agent multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of PERS' annual financial report may be obtained from their executive office: 400 Q Street, Sacramento, CA 95814.
b. Funding Policy:
Participants are required to contribute 8% of their annual covered salary. The City contributes 7% of the required employee contribution on their behalf and the employee contributes the remaining 1%. The City is required to contribute at an actuarially determined rate; the rate for fiscal year 2007-2008, was 17.546% 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.
c. Annual Pension Cost:
For 2008, the City's annual pension cost of $3,680,511 for PERS was equal to the City's required and actual contributions. The required contribution was determined as part of the June 30, 2005, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included: a) 7.75% investment rate of return (net of administrative expenses), b) projected annual salary increases of 3.25% to 14.45% depending on age, service and type of employment, and c) 3.25% per year cost-of-living adjustments. Both a) and b) included an inflation component of 3.00%. 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 was 17 years.
See independent auditors’ report. - 85 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
9. PENSION PLAN (CONTINUED):
d. Three-Year Trend Information for PERS:
Fiscal Annual Pension Percentage Net Pension Year Cost (APC) APC Contributed Obligation
6/30/06 $ 2,646,409 100% $ - 6/30/07 3,321,061 100% - 6/30/08 3,680,511 100% -
e. Schedule of Funding Progress for PERS:
As of June 30, 2007, the most recent actuarial valuation date, the plan was 75.0% funded. The actuarial accrued liability for benefits was $61.5 million, and the actuarial value of assets was $46.2 million, resulting in an unfunded actuarial accrued liability (UAAL) of $15.3 million. The covered payroll (annual payroll of active employees covered by the plan) was $13.3 million, and the ratio of the UAAL to the covered payroll was 115.8%.
The schedule of funding progress presented below, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
Entry Age Normal UAAL as a Actuarial Accrued Actuarial Unfunded % of Valuation Liability Value of AAL Funded Covered Covered Date (AAL) Assets (UAAL) Ratio Payroll Payroll (A) (B) (A-B) (B/A) (C) [(A-B)/C]
6/30/05 $ 43,479,283 $ 36,087,558 $ 7,391,725 83.0 % $ 9,403,830 78.6 % 6/30/06 52,739,452 40,523,105 12,216,347 76.8 % 11,845,746 103.1 % 6/30/07 61,535,809 46,180,367 15,355,442 75.0 % 13,263,198 115.8 %
See independent auditors’ report. - 86 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
10. FUND EQUITY:
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, 2008, were as follows:
RDA RDA Low Income Financing RDA Other General Hosing Authority Capital Governmental Fund Special Revenue Debt Service Projects Funds Total Encumbrances$ 1,724,981 $ 488,506 $ - $ 4,904,332 $ 9,775,686 $ 16,893,505 Inventory 47,905 - - - - 47,905 Continuing appropriations 149,357 11,703,667 - 62,066,704 30,656,063 104,575,791 Prepaid costs and deposits 920,938 156 - 649,134 2,205 1,572,433 Reserve requirement - - - - 18,487 18,487 Property held for resale - 25,000 - - - 25,000 Debt service 2,532,053 - 630,500 - - 3,162,553 Loans and notes receivable 3,748,000 7,695,368 - 2,000,000 - 13,443,368 Advances 7,181,000 - - - 13,419,000 20,600,000
Totals$ 16,304,234 $ 19,912,697 $ 630,500 $ 69,620,170 $ 53,871,441 $ 160,339,042
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, 2008. 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 is rebudgeted on July 1, by Council action.
Reserved for Inventory - This reserve is to restrict fund balance so that it will not be considered as current funds available.
Reserved for Continuing Appropriations - These reserves are for appropriations for capital projects, which are unexpended as of June 30, 2008, and are carried forward as continuing appropriations to be expended in 2008-2009.
See independent auditors’ report. - 87 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
10. FUND EQUITY (CONTINUED):
Reserves of Fund Balance (Continued)
Reserved for Prepaid Costs and Deposits - These reserves represent contractual obligations for cash payments made before June 30, 2008, but not recognized as an expenditure until after July 1, 2008, and noncurrent portions of deposits.
Reserved for Reserve Requirement - These reserves are set up for the maintenance requirements for the housing apartments.
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 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 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 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.
Net Asset Restatements
Net assets of the governmental activities have been restated as follows:
Net assets, July 1, 2007, as previously reported $ 498,408,082
To adjust capital assets to add prior year acquisition inadvertently not recorded 11,396,588
Net assets, July 1, 2007, as restated $ 509,804,670
See independent auditors’ report. - 88 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
11. RISK MANAGEMENT:
a. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement:
The City is a member of the California Joint Powers Insurance Authority (the Authority). The Authority is composed of 119 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group-purchased insurance for property and other coverage. The Authority's pool began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine member Executive Committee.
b. Self-Insurance Programs of the Authority:
General Liability
Each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year). After the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made for each open claims year. Claims are pooled separately between police and non-police. Costs are spread to members as follows: the first $30,000 of each occurrence is charged directly to the member's primary deposit; costs from $30,000 to $750,000 and the loss development reserves associated with losses up to $750,000 are pooled based on the member's share of losses under $30,000. Losses from $750,000 to $5,000,000 and the associated loss development reserves are pooled based on payroll. Costs of covered claims from $5,000,000 to $50,000,000 are currently paid by excess insurance. Costs of covered claims for subsidence losses from $15,000,000 to $25,000,000 are paid by excess insurance. The protection for each member is $50,000,000 per occurrence and $50,000,000 annual aggregate. Administrative expenses are paid from the Authority's investment earnings.
Workers' Compensation
The City of Palm Desert also participates in the workers' compensation pool administered by the Authority. Each member pays a primary deposit to cover estimated losses for a fiscal year (claims year). After the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made for each open claims year. Claims are pooled separately between public safety and non-public safety.
See independent auditors’ report. - 89 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
11. RISK MANAGEMENT (CONTINUED):
b. Self-Insurance Programs of the Authority (Continued):
Workers' Compensation (Continued)
Each member has a retention level of $50,000 for each loss and this is charged directly to the member's primary deposit. Losses from $50,000 to $100,000 and the loss development reserve associated with losses up to $100,000 are pooled based on the member's share of losses under $50,000. Losses from $100,000 to $2,000,000 and employer’s liability losses from $5,000,000 to $10,000,000 and loss development reserves associated with those losses are pooled based on payroll. Losses from $2,000,000 to $5,000,000 are pooled with California State Association of Counties - Excess Insurance Authority members. Costs from $2,000,000 to $300,000,000 are transferred to reinsurance carriers. Costs in excess of $300,000,000 are pooled among the Members based on payroll. Protection is provided per statutory liability under California Workers' Compensation law. Administrative expenses are paid from the Authority's investment earnings.
c. Purchased Insurance:
Property Insurance
The City of Palm Desert participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. The City of Palm Desert property is currently insured according to a schedule of covered property submitted by the City of Palm Desert to the Authority. The City’s property currently has all-risk property insurance protection in the amount of $129,477,524. There is a $5,000 deductible per occurrence except for non-emergency vehicle insurance which has $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retroactive adjustments.
Crime Insurance
The City of Palm Desert purchases crime insurance coverage in the amount of $1,000,000 with $2,500 deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retroactive adjustments.
See independent auditors’ report. - 90 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
11. RISK MANAGEMENT (CONTINUED):
c. Purchased Insurance (Continued):
Special Event Tenant User Liability Insurance
The City of Palm Desert further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on City property. The insurance premium is paid by the tenant user and is paid to the City of Palm Desert according to a schedule. The City of Palm Desert then pays for the insurance. The insurance is arranged by the Authority.
d. Adequacy of Protection:
During the past three fiscal (claims) years, none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year.
12. DEFERRED REVENUES AND UNEARNED REVENUES:
Major Governmental 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 (2.894% at June 30, 2008). Recognition of the revenue from the sale has been deferred until it becomes available.
On March 13, 1997, the City entered into an agreement; along with amendments on June 4, 1997 and May 18, 2004; with the Palm Desert Recreational Facilities Corporation (Corporation) for the use of property at the City's Golf Resort (Desert Willow). Payment is due when the Corporation's revenues exceed its expenses. At June 30, 2008, the Corporation owed the City rent totaling $285,000, which will be recognized as revenue by the City when the rent is paid by the Corporation.
See independent auditors’ report. - 91 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
12. DEFERRED REVENUES AND UNEARNED REVENUES (CONTINUED):
Major Governmental Funds (Continued)
General Fund (Continued):
On January 9, 2007, a promissory note for $1,000,000 was issued from the City to the Friends of the Desert Mountains. Any unpaid principal accrues interest at a rate of 5% per annum. The entire balance of principal and accrued interest is due within thirty-six months of issuance. As of June 30, 2008, $74,658 in interest has been accrued. Recognition of the interest revenue has been deferred until it becomes due.
The City entered into several individual loan agreements with residents of the Highlands Utility Undergrounding Assessment District No. 04-01. The residents agreed to pay to the City the full cost of the loan amount plus any accrued interest at a rate of 5.35%. The full amount of the loan along with all accrued interest is due and payable at the earliest of September 2, 2036, or any change in ownership of the property. As of June 30, 2008, $20,887 in interest has been accrued. Recognition of the interest revenue has been deferred until it becomes due.
The State of California collects taxes and fees for the City and makes payments to the City at various times. Due to the City’s policy of recognizing revenue, the amount of $112,640 for sales tax has been deferred.
Other amounts reported as unearned revenues include $1,170 in miscellaneous rents.
RDA Low Income Housing Special Revenue Fund:
Other amounts reported as unearned revenues include $1,925 in miscellaneous rents.
Other Governmental Funds:
Special Revenue Funds:
Gas Tax fund has $800,227 of unearned revenues representing Prop 1B funds received in advance.
Measure A fund has $26,222 of unearned revenue representing a deposit from a developer for street improvements and $6,603 of deferred revenue for work done on behalf of developer, however payment has not been received.
See independent auditors’ report. - 92 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
12. DEFERRED REVENUES AND UNEARNED REVENUES (CONTINUED):
Other Governmental Funds (Continued):
Special Revenue Funds (Continued):
Loans receivable in the amount of $31,092 for home improvement loans are recorded as deferred in the Community Development Block Grant Fund.
$42,226 and $47,320 of grant funds are deemed unearned until expenditures are incurred in the Recycling Fund and Public Safety Police Grants Fund, respectively.
Prepaid rents in the amount of $29,676 from the eight apartment complexes operated by the Palm Desert Housing Authority will be recognized as revenue when earned.
Debt Service Funds:
Assessment receivables in the amount of $2,699,594 represent future assessments to be received from property owners in Highlands Undergrounding Assessment Districts 04-1 to pay for long- term obligations incurred in making capital improvements in the Assessment District. Recognition of the revenue from the assessments has been deferred until it becomes available. Once received, the monies will be used to make annual debt service payments.
Capital Project Funds:
$1,719,601 has been deferred for capital reimbursements due from developers and other agencies for work completed by the City on their behalf.
On August 24, 2000, the City entered into a Reimbursement Agreement with Sunrise Desert Partners. The agreement calls for reimbursement to the City by the Developer for the amount of total costs incurred plus accrued interest of 6.0% per annum beginning two years from the final payment date of February 6, 2004. The entire balance of principal and accrued interest is due by February 6, 2009. As of June 30, 2008, $99,755 in interest has been accrued. Recognition of the interest revenue has been deferred until it becomes due.
$107,651 of unearned revenue represents deposits from developers for street improvements, which have not been spent as of June 30, 2008.
See independent auditors’ report. - 93 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
12. DEFERRED REVENUES AND UNEARNED REVENUES (CONTINUED):
Business-type Activities
The balance of $171,029 represents the unused portions of prepaid golf fees, value of unredeemed gift certificates and unearned rent.
Component Unit
The balance of $41,660 represents the unused portions of prepaid banquets.
13. OTHER POST-EMPLOYMENT BENEFITS:
a. Plan Description:
This study analyzes the postretirement held benefit plans provided by the City. The City provides post-employment medical benefits to eligible employees at retirement through the “Retiree Service Stipend Program”. All full-time or part-time employees who meet the eligibility requirements for this program may continue their medical coverage through the CalPERS Health Plan and receive reimbursement from the City for a portion of the costs for the coverage.
Employees Hired Prior to January 1, 2008
Eligibility for the stipend requires retirement simultaneously from the City and CalPERS on or after age 50 with at least 10 consecutive years of service with the City. Eligible employees must be covered under the CalPERS Health Plan at the time of retirement and elect to participate in the stipend program within 30 days of retirement. The City’s contribution towards the coverage is based on years of service as follows:
Consecutive Years of Service City’s Contribution With the City at Retirement Percentage 10 years of service 50% 11 years of service 55% 12 years of service 60% 13 years of service 65% 14 years of service 70% 15 or more years of service 75%
See independent auditors’ report. - 94 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
13. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED):
a. Plan Description (Continued):
Employees Hired On or After January 1, 2008
Eligibility for the stipend requires retirement simultaneously from the City and CalPERS on or after age 50 with at least 15 consecutive years of service with the City. Eligible employees must be covered under the CalPERS Health Plan at the time of retirement and elect to participate in the stipend program within 30 days of retirement. The stipend is discontinued when the retiree reaches Medicare eligibility age. The City’s contribution towards the coverage will be applied to the lowest cost plan and is based on age at retirement and consecutive years of service with the City as outlined in the following table:
Consecutive Years of Service at Retirement Age1516171819202122232425+ 50 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 51 10% 15% 20% 25% 30% 35% 40% 45% 50% 50% 50% 52 20% 25% 30% 35% 40% 45% 50% 50% 50% 50% 50% 53 30% 35% 40% 45% 50% 50% 50% 50% 50% 50% 50% 54 40% 45% 50% 50% 50% 50% 50% 50% 50% 50% 50% 55+ 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%
Employees with at least 5 years of service, not meeting the eligibility requirements for the stipend program, who retire simultaneously from the City and CalPERS are eligible to continue medical coverage through the CalPERS Health Plan. The City is required to pay the CalPERS minimum employer contribution ($80.80 in 2007 and $97.00 in 2008) for these employees.
b. Funding Policy:
The contribution requirements of plan members and the City are established and may be amended by the City, City Council, and/or the employee associations. Currently, contributions are not required from plan members. During the fiscal year ended June 30, 2008, the City contributed $7,428,386 to the plan, which included $759,139 of the Annual Required Contribution of which $187,616 were pay-as-you-go premiums. The purpose of these contributions is to cover the required City contribution rate of 5.5% of annual covered payroll (annual payroll of active employees covered by the plan) and to prefund benefits. As a result, the City calculated and recorded a Net OPEB Asset, representing the difference between the Annual Required Contribution (ARC) and actual contributions, as presented below:
See independent auditors’ report. - 95 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
13. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED):
b. Funding Policy (Continued):
Annual required contribution (ARC)$ 759,139 Interest on Net OPEB obligation - Adjustment to ARC - Annual OPEB cost 759,139 Contribution made 7,428,386 Increase in Net OPEB obligation (asset) (6,669,247) Net OPEB obligation (asset) at June 30, 2007 -
Net OPEB obligation (asset) at June 30, 2008$ (6,669,247)
The contribution rate of 5.5% is based on the ARC of $759,139, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis is projected to cover the annual normal cost and the amortization of unfunded actuarial accrued liabilities (or funding excess) over a thirty year period.
c. Annual OPEB Cost and Net OPEB Obligation (Asset):
For fiscal year 2008, the City’s annual OPEB cost (expense) of $759,139 was equal to the ARC. Since this fiscal year is the transition year, information on the annual OPEB cost, percentage of Annual OPEB Cost contributed, and Net OPEB Obligation is only available for the current fiscal year, are presented below:
Actual Percentage of Fiscal Annual Contribution Annual Net OPEB Year OPEB (Net of OPEB Cost Obligation Ended Cost Adjustments) Contributed (Asset)
6/30/2008 $ 759,139 $ 7,428,386 979% $ (6,669,247)
See independent auditors’ report. - 96 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
13. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED):
d. Funded Status and Funding Progress:
The funded status of the plan as of July 1, 2007 is as follows:
Actuarial accrued liability (AAL)$ 6,481,631 Actuarial value of plan assets -
Unfunded actuarial accrued liability (UAAL)$ 6,481,631
Funded ration (actuarial value of plan assets/AAL) 0.0%
Covered payroll (active plan members)$ 13,800,864
UAAL as a percentage of covered payroll 46.97%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress is presented below:
Actuarial UAAL as a Actuarial Accrued Actuarial Unfunded % of Valuation Liability Value of AAL Funded Covered Covered Date (AAL) Assets (UAAL) Ratio Payroll Payroll (A) (B) (A-B) (B/A) (C) [(A-B)/C] 7/01/07 $ 6,481,631 $ - $ 6,481,631 - % $13,800,864 46.97 %
e. Actuarial Methods and Assumptions:
Projections of benefits for financial reporting purposes are based on the substantive plan and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets consistent with the long-term perspective of the calculations.
See independent auditors’ report. - 97 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
13. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED):
e. Actuarial Methods and Assumptions (Continued):
In the July 1, 2007, actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumptions included a 7.75% investment rate of return (net of administrative expenses) and an initial annual healthcare cost trend rate of 10%, reduced by decrements to an ultimate rate of 5% after ten years. A 3.25% annual rate of increase in future salaries is also assumed in the valuation. The City’s unfunded actuarial accrued liability will be amortized as a level percentage of projected covered payroll on a closed basis. The amortization period at July 1, 2007, was thirty years.
14. SPECIAL ASSESSMENT DEBT:
Below is a summary of the changes in the special assessment bonds payable:
Balance at Payments and Balance at July 1, 2007 Additions Reductions June 30, 2008 1995 Revenue Bonds$ 220,000 $ - $ (220,000) $ - 1997 Revenue Bonds 17,265,000 - (17,265,000) - 2003 Assessment Revenue Bonds 3,765,000 - (265,000) 3,500,000 AD 98-1 Limited Obligation Refunding Bonds 1,015,000 - (145,000) 870,000 CFD 2005-1 Special Tax Bonds Series 2006A 67,915,000 - - 67,915,000 AD 2004-2 Limited Obligation Improvement Bonds 29,430,000 - - 29,430,000 2008 Special Tax Refunding Bonds - 10,935,000 - 10,935,000 $ 119,610,000 $ 10,935,000 $ (17,895,000) $ 112,650,000
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.
See independent auditors’ report. - 98 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
14. SPECIAL ASSESSMENT DEBT (CONTINUED):
Special assessment bonds payable, as described below, and are not recorded as long-term liabilities, as these obligations do not constitute a debt or obligation of the City.
1995 Revenue Bonds
In September 1995, the Palm Desert Financing Authority issued $7,540,000 of 1995 Revenue Bonds. The proceeds from the revenue bonds were loaned to the Assessment Districts to provide funds to refund in advance $900,000 in 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 are 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. As of June 30, 2008, the bonds are paid off.
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 in Assessment District No. 92-1 Bonds, $11,870,000 in Community Facilities District No. 91-1 (1992 Bonds), $6,945,000 in Assessment District No. 94-1 Bonds and $12,835,000 in 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.
During the fiscal year, portions of the bonds were called and the remaining balance was defeased by the 2008 Special Tax Refunding Bonds.
See independent auditors’ report. - 99 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
14. SPECIAL ASSESSMENT DEBT (CONTINUED):
2003 Assessment Revenue Bonds
In June 2003, the Palm Desert Financing Authority issued $4,423,000 in 2003 Assessment Revenue Bonds. The proceeds were used to purchase three series of limited obligation improvement bonds issued by the City in connection with the financing and refinancing of certain improvements of benefit to property within the City’s Assessment District No. 94-2 (Sunterrace), Assessment District No. 94-3 (Merano) and Silver Spur Ranch Utility Undergrounding Assessment District No. 01-01. These bonds were issued under the 1915 Improvement Bond Act to provide funds for public improvements in the respective assessment districts.
Debt service requirements to maturity are as follows:
Year Ending June 30, Principal Interest Total 2009$ 175,000 $ 166,336 $ 341,336 2010 185,000 159,355 344,355 2011 195,000 151,755 346,755 2012 205,000 143,550 348,550 2013 215,000 134,408 349,408 2014-2018 945,000 525,460 1,470,460 2019-2023 770,000 306,701 1,076,701 2024-2028 660,000 132,419 792,419 2029 150,000 4,031 154,031
$ 3,500,000 $ 1,724,015 $ 5,224,015
As of June 30, 2008, the principal amounts to be repaid by each assessment district to pay off the loans from the Financing Authority are as follows:
Assessment District 94-2$ 520,000 Assessment District 94-3 960,000 Assessment District 01-1 2,020,000
$ 3,500,000
See independent auditors’ report. - 100 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
14. SPECIAL ASSESSSMENT DEBT (CONTINUED):
Assessment District 98-1 Limited Obligation Refunding Improvement Bonds
The bonds were issued in an original amount of $2,955,000 in February 2004, to redeem and defease the outstanding limited obligation improvement bonds of Assessment District No. 98-1, which were issued in 1998. The bonds are secured by unpaid assessments on parcels within the District.
Under the 1915 Act, annual assessments on the unpaid assessments sufficient to meet the scheduled debt service requirements are to be included on the regular county tax bills for the assessed parcels for which there are unpaid assessments. Interest rates vary from 1.5% to 5.1% with interest payable semi-annually on March 2 and September 2, with principal maturing annually on September 2.
Debt service requirements to maturity are as follows:
Year Ending June 30, Principal Interest Total 2009$ 65,000 $ 37,186 $ 102,186 2010 65,000 35,025 100,025 2011 70,000 32,575 102,575 2012 70,000 29,863 99,863 2013 75,000 26,888 101,888 2014-2018 425,000 79,544 504,544 2019-2021 100,000 2,549 102,549
$ 870,000 $ 243,630 $ 1,113,630
Community Facilities District No. 2005-1
The bonds were issued in an original amount of $50,000,000 in May 2006, to construct and acquire certain public facilities of benefit to the District, provide for the establishment of a reserve account, provide capitalized interest, and pay the costs of issuance of the bonds. The bonds are secured by and payable from a pledge of net taxes derived from special taxes to be levied by the District on real properties within the boundaries of the District from the net proceeds of any foreclosure actions brought following delinquency in the payment of the special taxes, and from amounts held in certain funds under the indenture. Interest rates vary from 4.0% to 5.5% with interest payable semi-annually on March 1 and September 1, with principal maturing annually on September 1.
See independent auditors’ report. - 101 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
14. SPECIAL ASSESSSMENT DEBT (CONTINUED):
Community Facilities District No. 2005-1 (Continued)
In May 2007, the 2007 Bonds were issued in the amount of $17,915,000 pursuant to the Bond Indenture in May 2006, as supplemented by a First supplemental Indenture in May 2007, to provide construct and acquire certain public facilities of benefit to the District, provide capitalized interest, and pay the costs of issuance of the 2007 Bonds. The bonds are secured by and payable, on parity with the bonds issued in May 2006 for $50,000,000, from a pledge of net taxes derived from special taxes to be levied by the District on real properties within the boundaries of the District from the net proceeds of any foreclosure actions brought following delinquency in the payment of the special taxes, and from amounts held in certain funds under the indenture. Interest rates vary from 3.875% to 5.20% with interest payable semi-annually on March 1 and September 1, with principal maturing annually on September 1.
Debt service requirements to maturity are as follows:
Year Ending June 30, Principal Interest Total 2009$ 825,000 $ 3,462,259 $ 4,287,259 2010 1,165,000 3,422,219 4,587,219 2011 1,210,000 3,373,361 4,583,361 2012 1,260,000 3,320,818 4,580,818 2013 1,310,000 3,264,628 4,574,628 2014-2018 7,515,000 15,339,701 22,854,701 2019-2023 9,525,000 13,276,441 22,801,441 2024-2028 12,205,000 10,504,399 22,709,399 2029-2033 15,795,000 6,818,120 22,613,120 2034-2038 17,105,000 2,055,230 19,160,230
$ 67,915,000 $ 64,837,176 $ 132,752,176
See independent auditors’ report. - 102 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
14. SPECIAL ASSESSSMENT DEBT (CONTINUED):
Section 29 Assessment District (No 2004-02), Limited Obligation Improvement Bonds, Series 2007
In March 2007, the City of Palm Desert issued $29,430,000 Limited Obligation Improvement Bonds. The proceeds of the Bonds will be used to finance certain infrastructure improvements within the City’s Section 29 Assessment District (No. 2004-02). The debt service on the bonds is to be paid by assessments secured on the property tax rolls of those properties benefiting from the improvements. The bonds consist of Serial Bonds in the amount of $6,870,000 with interest ranging from 4.00% to 4.70% payable semiannually on March 2 and September 2. Bond maturities begin September 2, 2009, and continue annually through 2019. Term bonds in the amount of $2,525,000 carry an interest rate of 4.75% and mature September 2, 2022. Term bonds in the amount of $5,110,000 carry an interest rate of 5.05% and mature September 2, 2027. Term bonds in the amount of $14,925,000 carry an interest rate of 5.10% and mature September 2, 2037.
Debt service requirements to maturity are as follows:
Year Ending June 30, Principal Interest Total 2009$ - $ 1,437,860 $ 1,437,860 2010 505,000 1,427,760 1,932,760 2011 525,000 1,407,160 1,932,160 2012 545,000 1,385,760 1,930,760 2013 570,000 1,363,175 1,933,175 2014-2018 3,220,000 6,421,108 9,641,108 2019-2023 4,030,000 5,590,868 9,620,868 2024-2028 5,110,000 4,476,263 9,586,263 2029-2033 6,535,000 3,005,813 9,540,813 2034-2038 8,390,000 1,112,563 9,502,563
$ 29,430,000 $ 27,628,330 $ 57,058,330
See independent auditors’ report. - 103 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
14. SPECIAL ASSESSSMENT DEBT (CONTINUED):
2008 Special Tax Refunding Bonds
In December 2007, the City of Palm Desert Communities Facilities District No. 91-1 (Indian Ridge Public Improvements) issued $10,935,000 of Special Tax Refunding Bonds, Series 2008 to refund and defease all the outstanding $16,260,000 principal amount of the Palm Desert Financing Authority 1997 Revenue Bonds. These bonds were issued pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California.
Debt service requirements to maturity are as follows:
Year Ending June 30, Principal Interest Total 2009$ 1,665,000 $ 427,903 $ 2,092,903 2010 855,000 301,385 1,156,385 2011 880,000 274,920 1,154,920 2012 905,000 247,026 1,152,026 2013 935,000 217,813 1,152,813 2014-2018 5,170,000 583,336 5,753,336 2019-2021 525,000 31,900 556,900
$ 10,935,000 $ 2,084,283 $ 13,019,283
Bond Reserve Requirements
At June 30, 2008, the fund balance reserve requirements and actual reserve balances were as follows:
Requirement Actual Assessment District 98-1$ 87,000 $ 142,152 2003 Financing Authority Revenue Bonds 310,594 337,735 CFD 2005-1 Special Tax Bonds 4,587,219 4,654,779 Assessment District 29 1,933,175 1,963,935 2008 Special Tax Refunding Bonds 1,093,500 1,100,415
See independent auditors’ report. - 104 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
15. CONDUIT DEBT OBLIGATIONS:
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: a) finance the construction of a County animal shelter and related facilities located in the unincorporated area of Thousand Palms, California; b) finance construction of certain County medical clinic facilities located in Mecca, California; c) refund the Palm Desert Financing Authority Lease Revenue Bonds Series 1996; d) acquire a debt service reserve insurance policy; e) fund capitalized interest on the bonds; and f) 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, 2008, the outstanding amount was $20,365,000.
16. OTHER DISCLOSURERS:
The Palm Desert Recreational Facilities Corporation has a net asset deficit of $452,047, which will be eliminated by increasing revenues through banquet reservations.
See independent auditors’ report. - 105 - CITY OF PALM DESERT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2008
17. CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS:
Construction Commitments
Current Year Spent Remaining Project Spent to Date Commitment Parks$ 89,664 $ 89,664 $ 195,821 Low income housing 4,064,433 10,100,119 3,791,448 Street resurfacing 27,644 27,644 110,664 Building construction 5,527,239 8,084,114 1,671,103 Street improvements 4,199,773 4,809,899 1,929,200 Freeway on-ramp improvements 284,562 1,140,282 493,911 Bridge consturction 256,957 463,109 129,473 Residential street construction 9,757,868 9,757,868 2,749,781 Sewer construction 226,174 433,242 140,210 Parking lot construction - 1,558,073 599,747 24,434,314 36,464,014 11,811,358 Miscellaneous non construction 1,259,015 2,354,981 5,198,773
$ 25,693,329 $ 38,818,995 $ 17,010,131
18. CONTINGENCIES:
The City is a defendant in several pending lawsuits of a nature common to many similar jurisdictions. City management estimates that the potential claims against the City not covered by insurance resulting from such litigation would not materially affect the financial position of the City.
The City incurs various costs under federal and state grant reimbursement programs and records the related revenue and receivables for grant claims. Such grant claims are subject to final audit by federal and state agencies.
See independent auditors’ report. - 106 - Schedule 1 CITY OF PALM DESERT
BUDGETARY COMPARISON SCHEDULE GENERAL FUND
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 76,114,399 $ 76,114,399 $ 76,114,399 $ -
Resources (inflows): Taxes 42,620,000 42,620,000 40,876,935 (1,743,065) Licenses and permits 2,100,000 1,600,000 1,180,020 (419,980) Intergovernmental revenues 2,471,100 2,471,100 5,193,161 2,722,061 Charges of services 500,000 1,000,000 1,190,725 190,725 Fines and forfeitures 175,000 175,000 105,365 (69,635) Investment earnings 2,650,000 2,650,000 4,571,147 1,921,147 Miscellaneous 480,000 480,000 866,843 386,843 Transfers from other funds 1,400,000 1,400,000 1,101,610 (298,390)
Total resources 52,396,100 52,396,100 55,085,806 2,689,706
Charges to appropriations (outflows): Current: General government 15,126,596 17,767,739 16,306,128 1,461,611 Public safety 19,686,625 18,412,806 17,674,051 738,755 Public works 9,064,500 11,194,387 10,153,794 1,040,593 Parks, recreation and culture 5,728,802 5,105,335 4,572,695 532,640 Capital outlay - 531,589 531,589 - Transfers to other funds 2,625,000 2,652,225 2,142,660 509,565
Total charges to appropriations 52,231,523 55,664,081 51,380,917 4,283,164
Excess of resources over (under) charges to appropriations 164,577 (3,267,981) 3,704,889 6,972,870
Fund balance, June 30$ 76,278,976 $ 72,846,418 $ 79,819,288 $ 6,972,870
See independent auditors' report and note to required supplementary information. - 107 - Schedule 2 CITY OF PALM DESERT
BUDGETARY COMPARISON SCHEDULE PROP A FIRE TAX SPECIAL REVENUE FUND
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 3,079,909 $ 3,079,909 $ 3,079,909 $ -
Resources (inflows): Taxes 4,400,000 4,400,000 5,516,542 1,116,542 Special assessments collected 2,550,000 2,550,000 1,620,168 (929,832) Intergovernmental revenues 719,000 719,000 662,882 (56,118) Investment earnings - - 165,729 165,729 Transfers from other funds 1,852,000 1,852,000 1,650,000 (202,000)
Total resources 9,521,000 9,521,000 9,615,321 94,321
Charges to appropriations (outflows): Current: Public safety 8,855,671 8,912,866 8,942,808 (29,942) Capital outlay - 185,302 80,132 105,170
Total charges to appropriations 8,855,671 9,098,168 9,022,940 75,228
Excess of resources over (under) charges to appropriations 665,329 422,832 592,381 169,549
Fund balance, June 30$ 3,745,238 $ 3,502,741 $ 3,672,290 $ 169,549
See independent auditors' report and note to required supplementary information. - 108 - CITY OF PALM DESERT
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
June 30, 2008
BUDGETS AND BUDGETARY ACCOUNTING:
The City used 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) between an object of a General Fund Department. 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 that 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:
Prop A Fire Tax Traffic Safety Gas Tax Housing Mitigation Fees Community Development Block Grant El Paseo Assessment District City-Wide Business License Landscape and Lighting District No. 1-17
See independent auditors’ report. - 109 -
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- 110 - 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 that includes the operating budgets for all the departments and the majority of the City’s tax revenues.
- 111 - Schedule 3 CITY OF PALM DESERT
BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERAL FUND
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 76,114,399 $ 76,114,399 $ 76,114,399 $ -
Resources (inflows): Taxes: Property taxes 5,500,000 5,500,000 5,648,627 148,627 Property transfer tax 900,000 900,000 604,236 (295,764) Property tax in lieu 3,600,000 3,600,000 3,685,215 85,215 Timeshare mitigation fee 750,000 750,000 881,350 131,350 Sales tax 19,500,000 19,500,000 17,195,743 (2,304,257) Business license tax 1,430,000 1,400,000 1,311,090 (88,910) Job valuation fees 40,000 40,000 38,872 (1,128) Transient occupancy tax 8,150,000 8,150,000 8,605,714 455,714 Franchises 2,750,000 2,750,000 2,887,727 137,727 Penalties and interest on taxes - 30,000 18,361 (11,639)
Total Taxes 42,620,000 42,620,000 40,876,935 (1,743,065)
Licenses and Permits: Building permits 2,100,000 1,500,000 974,676 (525,324) Grading - - 620 620 Valet parking permits - - 700 700 Encroachment permits - 50,000 131,340 81,340 Miscellaneous permits - - 2,650 2,650 Business regulatory permits - 50,000 70,034 20,034
Total Licenses and Permits 2,100,000 1,600,000 1,180,020 (419,980)
Intergovernmental Revenues: Federal grants - - 7,053 7,053 State grants - - 10,373 10,373 Motor vehicle in-;lieu fees 400,000 400,000 220,785 (179,215) Monthly parking ball - - 21,143 21,143 Reimbursement RDA costs 1,771,100 1,771,100 1,585,225 (185,875) Other reimbursements 300,000 300,000 3,348,582 3,048,582
Total Intergovernmental Revenues 2,471,100 2,471,100 5,193,161 2,722,061
See independent auditors' report. (Continued) - 112 - Schedule 3 CITY OF PALM DESERT
BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERAL FUND (CONTINUED)
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Resources (inflows) (Continued): Charges for Services: Subdivision fees$ - $ 500,000 $ 465,360 $ (34,640) Zoning fees - - 102,484 102,484 Plan check fees 500,000 500,000 562,930 62,930 Sale of maps and publications - - 21,369 21,369 Microfilm fees - - 18,346 18,346 Other fees - - 20,236 20,236
Total Charges for Services 500,000 1,000,000 1,190,725 190,725
Fines and Forfeitures: Vehicle code fines 75,000 75,000 37,535 (37,465) Municipal court fines 100,000 100,000 67,830 (32,170)
Total Fines and Forfeitures 175,000 175,000 105,365 (69,635)
Investment Earnings: Interest income 1,950,000 1,950,000 3,255,223 1,305,223 Interest on advances 700,000 700,000 1,150,492 450,492 Interest on notes receivable - - 165,432 165,432
Total Investment Earnings 2,650,000 2,650,000 4,571,147 1,921,147
Miscellaneous Revenues: Code compliance - - 200 200 Strong motion instrument fee - - 15,531 15,531 Special investigation fee - - 2,298 2,298 Certificate of compliance fee - - 1,775 1,775 Nuisance abatement tax - - 52,153 52,153 Abandoned vehicle abatement - - 62,552 62,552 Rental income 300,000 300,000 418,998 118,998 Other revenue 180,000 180,000 313,336 133,336
Total Miscellaneous Revenues 480,000 480,000 866,843 386,843
Transfers from other funds 1,400,000 1,400,000 1,101,610 (298,390)
Amounts Available for Appropriation 52,396,100 52,396,100 55,085,806 2,689,706
See independent auditors' report. (Continued) - 113 - Schedule 3 CITY OF PALM DESERT
BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERAL FUND (CONTINUED)
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Charges to appropriations (outflows): General Government - Departmental: City council $ 403,814 $ 445,814 $ 442,643 $ 3,171 City clerk 521,904 581,904 580,562 1,342 Legislative advocacy 63,000 63,000 41,427 21,573 City attorney 216,000 216,000 216,000 - Legal special services 273,000 883,000 871,778 11,222 City manager 700,907 806,075 804,174 1,901 Community services 1,786,800 1,899,747 1,872,934 26,813 Finance 1,812,454 1,862,015 1,861,970 45 Auditing 80,000 103,510 42,760 60,750 Human resources 855,100 855,100 749,129 105,971 General services 580,300 654,238 654,110 128 Data processing 1,400,140 1,429,844 1,340,120 89,724 Unemployment insurance 25,000 25,000 11,618 13,382 Insurance 648,500 648,500 371,881 276,619 Community promotions 2,112,690 3,023,986 2,532,637 491,349 Community development 1,058,950 1,095,612 918,435 177,177 Office of energy management 440,700 706,602 636,434 70,168 Marketing 1,172,337 1,387,161 1,319,621 67,540
Total General Government - Departmental 14,151,596 16,687,108 15,268,233 1,418,875
General Government - Nondepartmental: Contributions to other agencies 975,000 1,080,631 1,037,895 42,736
Public Safety: Police services 14,436,425 12,888,711 12,786,719 101,992 Animal regulation 240,000 240,000 224,702 15,298 Traffic safety 628,000 802,374 477,336 325,038 Development services 1,144,800 1,158,764 924,439 234,325 Building and safety 3,237,400 3,322,957 3,260,855 62,102
Total Public Safety 19,686,625 18,412,806 17,674,051 738,755
See independent auditors' report. (Continued) - 114 - Schedule 3 CITY OF PALM DESERT
BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERAL FUND (CONTINUED)
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Charges to appropriations (outflows) (Continued): Public Works: Administration $ 3,286,900 $ 3,384,829 $ 3,329,792 $ 55,037 Street maintenance 2,186,050 2,175,966 2,133,448 42,518 Street resurfacing 1,750,000 3,559,900 3,342,542 217,358 Curb and gutter 200,000 200,716 198,779 1,937 Parking lot 100,000 100,716 284 100,432 Storm drain 100,000 100,000 7,637 92,363 Stripping 150,000 346,500 - 346,500 Corporate yard 83,500 78,623 70,801 7,822 Equipment 430,000 479,673 353,388 126,285 Building maintenance 644,350 640,018 598,276 41,742 Portola community center 83,700 77,446 75,615 1,831 Storm water permit 50,000 50,000 43,232 6,768
Total Public Works 9,064,500 11,194,387 10,153,794 1,040,593
Parks, Recreation and Culture: Park maintenance 1,469,918 717,881 657,782 60,099 Civic center park 1,384,034 1,374,095 1,368,513 5,582 Landscape service 2,165,750 2,302,917 1,874,321 428,596 Visitors center 709,100 710,442 672,079 38,363
Total Parks, Recreation and Culture 5,728,802 5,105,335 4,572,695 532,640
Capital Outlay - Departmental - 531,589 531,589 -
Transfers to other funds 2,625,000 2,652,225 2,142,660 509,565
Amounts Charged to Appropriation 52,231,523 55,664,081 51,380,917 4,283,164
Excess of resources over (under) charges to appropriations 164,577 (3,267,981) 3,704,889 6,972,870
Fund balance, June 30$ 76,278,976 $ 72,846,418 $ 79,819,288 $ 6,972,870
See independent auditors' report. - 115 -
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- 116 -
OTHER GOVERNMENTAL FUNDS COMBINING STATEMENTS
- 117 - Schedule 4 CITY OF PALM DESERT
COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS
June 30, 2008
Total Special Debt Capital Other Revenue Service Projects Governmental Funds Fund Funds Funds ASSETS: Pooled cash and investments$ 40,909,505 $ 93,924 $ 33,043,482 $ 74,046,911 Receivables: Accounts 135,054 - 706,265 841,319 Assessments - 2,699,594 - 2,699,594 Interest 165 - 165,456 165,621 Loans 31,092 - - 31,092 Prepaid costs - - 975 975 Deposits - - 1,230 1,230 Due from other governments 995,437 7,085 1,623,404 2,625,926 Advances to other funds 654,000 - 12,765,000 13,419,000 Restricted assets: Cash and investments with fiscal agent 3,415,635 - 32,513,496 35,929,131
TOTAL ASSETS$ 46,140,888 $ 2,800,603 $ 80,819,308 $ 129,760,799
LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable$ 1,825,943 $ - $ 2,302,990 $ 4,128,933 Accrued liabilities 96,335 - 3,421 99,756 Due to other funds 216,455 - - 216,455 Unearned revenues 945,671 - 107,651 1,053,322 Deferred revenue 37,695 2,699,594 1,819,356 4,556,645 Deposits payable 370,168 - 327,952 698,120
TOTAL LIABILITIES 3,492,267 2,699,594 4,561,370 10,753,231
FUND BALANCES: Reserved for: Encumbrances 4,660,693 - 5,114,993 9,775,686 Continuing appropriation 16,987,909 - 13,668,154 30,656,063 Prepaids and deposits - - 2,205 2,205 Advances to other funds 654,000 - 12,765,000 13,419,000 Reserve requirement 18,487 - - 18,487 Unreserved: Designated for: Special revenue purposes 20,346,422 - - 20,346,422 Debt service - 101,009 - 101,009 Capital outlay - - 44,707,586 44,707,586 Undesignated (18,890) - - (18,890)
TOTAL FUND BALANCES 42,648,621 101,009 76,257,938 119,007,568
TOTAL LIABILITIES AND FUND BALANCES$ 46,140,888 $ 2,800,603 $ 80,819,308 $ 129,760,799 See independent auditors' report. - 118 - Schedule 5 CITY OF PALM DESERT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
For the year ended June 30, 2008
Total Special Debt Capital Other Revenue Service Projects Governmental Funds Fund Funds Funds REVENUES: Taxes$ 4,010,302 $ - $ - $ 4,010,302 Special assessments collected 264,877 175,746 - 440,623 Licenses and permits - - 273,157 273,157 Intergovernmental revenues 3,725,087 - 8,609,588 12,334,675 Rental income 4,702,823 - - 4,702,823 Investment earnings 2,252,978 3,288 3,988,237 6,244,503 Fines and forfeitures 149,492 - - 149,492 Miscellaneous 1,197,266 - 225,276 1,422,542
TOTAL REVENUES 16,302,825 179,034 13,096,258 29,578,117
EXPENDITURES: Current: General government 9,727,182 1,896 4,668,123 14,397,201 Public safety 60,884 - - 60,884 Public works 668,664 - 12,114,263 12,782,927 Capital outlay 8,087,092 - 32,538,025 40,625,117 Debt service: Principal retirement - 35,000 - 35,000 Interest and fiscal charges - 137,757 - 137,757
TOTAL EXPENDITURES 18,543,822 174,653 49,320,411 68,038,886
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (2,240,997) 4,381 (36,224,153) (38,460,769)
OTHER FINANCING SOURCES (USES): Transfers in 3,554,343 - 3,126,258 6,680,601 Transfers out (2,730,329) - (18,831) (2,749,160)
TOTAL OTHER FINANCING SOURCES (USES) 824,014 - 3,107,427 3,931,441
NET CHANGE IN FUND BALANCES (1,416,983) 4,381 (33,116,726) (34,529,328)
FUND BALANCES - BEGINNING OF YEAR 44,065,604 96,628 109,374,664 153,536,896
FUND BALANCES - END OF YEAR$ 42,648,621 $ 101,009 $ 76,257,938 $ 119,007,568
See independent auditors' report. - 119 -
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- 120 - 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 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, 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 an 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.
Traffic Signals Fund - This fund is used to account for fees collected for residential, commercial and industrial developments 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 from lower landfill tipping fees of $8.50 per ton, which took effect in July 1996. Due to limited landfill resources, it will be used for the implementation of appropriate long-range plans to be determined by the City Council for municipal solid waste disposal.
- 121 -
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- 122 - OTHER GOVERNMENTAL FUNDS - SPECIAL REVENUE (CONTINUED)
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.
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, forty-five percent of which is disbursed to the Coachella Valley Association of Governments. The remaining fifty-five percent 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 the College of the Desert Alumni Association Fair collected from all street fair vendors at $2.00 per day for each space. Fifty percent of the proceeds are spent for city-wide business promotion and the other fifty percent is transferred to the General Fund for partial business licensing cost recovery.
Various Landscape and Lighting District Funds - These funds are used to account for expenditures and receipts of property taxes and service fees levied to the property owners in the various landscaping and lighting districts, which were formed to provide landscaping and street lighting maintenance. Individual landscaping and lighting funds are set up for Districts No. 1 through 17.
AIPP Maintenance Fund - This fund is used to account for monies set aside to maintain the artwork in the City of Palm Desert.
Child Care Program Fund - This fund is used to collect funds from developers for the purpose of providing child care programs.
Golf Course Maintenance Fund - This fund is used to offset the cost of capital improvements, equipment purchases, perimeter maintenance, pay off assessments and other nonrecurring costs that will arise as a result of Desert Willow Golf Course Resort. Funding sources for the Golf Course Maintenance Fund are collections from the IROC and Standard Vacation Ownership, Inc. time-share project.
Fire Facilities Restoration Fund - This fund is used to collect funds from developers for the purpose of construction, restoration and purchase of equipment for fire stations within the City.
Redevelopment Agency Housing Authority Fund - This fund is used to account for revenues and expenditures related to rental units owned by the Housing Authority.
- 123 - CITY OF PALM DESERT
COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS
June 30, 2008
Housing Traffic Mitigation Safety Gas Tax Measure A Fee ASSETS: Pooled cash and investments$ - $ 800,227 $ 13,516,535 $ 1,939,036 Receivables: Accounts - - - - Interest - - - - Loans - - - - Due from other governments 33,143 297,545 537,038 - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agent - - - -
TOTAL ASSETS$ 33,143 $ 1,097,772 $ 14,053,573 $ 1,939,036
LIABILITIES AND FUND BALANCES
LIABILITIES: Accounts payable$ - $ - $ 36,506 $ - Accrued liabilities - - - - Due to other funds - 216,455 - - Unearned revenues - 800,227 26,222 - Deferred revenue - - 6,603 - Deposits payable - - - -
TOTAL LIABILITIES - 1,016,682 69,331 -
FUND BALANCES: Reserved for: Encumbrances - - 592,774 - Continuing appropriation - - 10,741,686 - Advances to other funds - - - - Reserve requirement - - - - Unreserved: Designated for: Special revenue purposes 33,143 81,090 2,649,782 1,939,036 Undesignated - - - -
TOTAL FUND BALANCES 33,143 81,090 13,984,242 1,939,036
TOTAL LIABILITIES AND FUND BALANCES$ 33,143 $ 1,097,772 $ 14,053,573 $ 1,939,036
See independent auditors' report. - 124 - Schedule 6
Community New Park and Public Development Construction Planned Recreation Traffic Safety Police Block Grant Tax Drainage Facilities Signals Recycling Grants
$ 5,801 $ 50,630 $ 5,360,504 $ 3,257,889 $ 774,449 $ 6,170,055 $ 73,457
- - - - - 128,782 ------31,092 ------99,729 - - - - 1,295 3,253 - 654,000 - - - - -
------
$ 136,622 $ 704,630 $ 5,360,504 $ 3,257,889 $ 774,449 $ 6,300,132 $ 76,710
$ 59,234 $ 35,665 $ - $ 88,214 $ - $ 142,237 $ 18,257 - - - - - 1,754 ------42,226 47,320 31,092 ------
90,326 35,665 - 88,214 - 186,217 65,577
155,350 323 50,602 151,522 - 110,889 30,023 - 6,473 - 2,959,242 515,000 480,000 - - 654,000 ------
(109,054) 8,169 5,309,902 58,911 259,449 5,523,026 ------(18,890)
46,296 668,965 5,360,504 3,169,675 774,449 6,113,915 11,133
$ 136,622 $ 704,630 $ 5,360,504 $ 3,257,889 $ 774,449 $ 6,300,132 $ 76,710
(Continued) - 125 - CITY OF PALM DESERT
COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS (CONTINUED)
June 30, 2008
Landscape El Paseo Air City Wide and Lighting Assessment Quality Business Districts District Management License Nos. 1 - 17 ASSETS: Pooled cash and investments$ 52,604 $ 209,088 $ 199,634 $ 742,746 Receivables: Accounts - - 1,424 - Interest - - - - Loans - - - - Due from other governments - 15,528 - 7,906 Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agent - - - -
TOTAL ASSETS$ 52,604 $ 224,616 $ 201,058 $ 750,652
LIABILITIES AND FUND BALANCES
LIABILITIES: Accounts payable$ 10,331 $ 6,987 $ - $ 46,820 Accrued liabilities - - - - Due to other funds - - - - Unearned revenues - - - - Deferred revenue - - - - Deposits payable - - - -
TOTAL LIABILITIES 10,331 6,987 - 46,820
FUND BALANCES: Reserved for: Encumbrances - - 25,000 12,608 Continuing appropriation - 80,000 - - Advances to other funds - - - - Reserve requirement - - - - Unreserved: Designated for: Special revenue purposes 42,273 137,629 176,058 691,224 Undesignated - - - -
TOTAL FUND BALANCES 42,273 217,629 201,058 703,832
TOTAL LIABILITIES AND FUND BALANCES$ 52,604 $ 224,616 $ 201,058 $ 750,652
See independent auditors' report. - 126 - Schedule 6
Redevelopment Total Fire Agency Other AIPP Child Care Golf Course Facilities Housing Special Revenue Maintenance Program Maintenance Restoration Authority Funds
$ 55,090 $ 1,260,759 $ 2,440,556 $ 484,281 $ 3,516,164 $ 40,909,505
- - - - 4,848 135,054 - - - - 165 165 - - - - - 31,092 - - - - - 995,437 - - - - - 654,000
- - - - 3,415,635 3,415,635
$ 55,090 $ 1,260,759 $ 2,440,556 $ 484,281 $ 6,936,812 $ 46,140,888
$ 4,235 $ - $ 17,688 $ - $ 1,359,769 $ 1,825,943 - - - - 94,581 96,335 - - - - - 216,455 - - - - 29,676 945,671 - - - - - 37,695 - - - - 370,168 370,168
4,235 - 17,688 - 1,854,194 3,492,267
35,955 6,223 146,520 - 3,342,904 4,660,693 - - - 484,281 1,721,227 16,987,909 - - - - - 654,000 - - - - 18,487 18,487
14,900 1,254,536 2,276,348 - - 20,346,422 - - - - - (18,890)
50,855 1,260,759 2,422,868 484,281 5,082,618 42,648,621
$ 55,090 $ 1,260,759 $ 2,440,556 $ 484,281 $ 6,936,812 $ 46,140,888
- 127 - CITY OF PALM DESERT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER SPECIAL REVENUE FUNDS
For the year ended June 30, 2008
Housing Traffic Mitigation Safety Gas Tax Measure A Fee REVENUES: Taxes$ - $ - $ 2,451,091 $ 233,857 Special assessments collected - - - - Intergovernmental revenues - 890,642 256,781 2,010,000 Rental income - - - - Investment earnings 2,189 30,122 652,234 65,560 Fines and forfeitures 149,492 - - - Miscellaneous - - 40,215 -
TOTAL REVENUES 151,681 920,764 3,400,321 2,309,417
EXPENDITURES: Current: General government - - - 2,010,000 Public safety - - - - Public works - - - - Capital outlay - - 438,455 -
TOTAL EXPENDITURES - - 438,455 2,010,000
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 151,681 920,764 2,961,866 299,417
OTHER FINANCING SOURCES (USES): Transfers in - - - - Transfers out (128,248) (925,823) - -
TOTAL OTHER FINANCING SOURCES (USES) (128,248) (925,823) - -
NET CHANGE IN FUND BALANCES 23,433 (5,059) 2,961,866 299,417
FUND BALANCES - BEGINNING OF YEAR 9,710 86,149 11,022,376 1,639,619
FUND BALANCES - END OF YEAR$ 33,143 $ 81,090 $ 13,984,242 $ 1,939,036
See independent auditors' report. - 128 - Schedule 7
Community New Park and Public Development Construction Planned Recreation Traffic Safety Police Block Grant Tax Drainage Facilities Signals Recycling Grants
$ - $ 311,433 $ 12,960 $ - $ 86,929 $ - $ ------366,367 - - - - 70,351 71,524 ------4,725 33,149 297,965 177,094 50,734 322,472 2,273 ------33,570 - 545,005 -
371,092 344,582 310,925 210,664 137,663 937,828 73,797
456,590 - - - - 524,939 ------60,884 - 1,719 168,442 58,179 - - - - 272,214 311,301 120,964 3,446 - 12,859
456,590 273,933 479,743 179,143 3,446 524,939 73,743
(85,498) 70,649 (168,818) 31,521 134,217 412,889 54
------(676,258) - -
- - - - (676,258) - -
(85,498) 70,649 (168,818) 31,521 (542,041) 412,889 54
131,794 598,316 5,529,322 3,138,154 1,316,490 5,701,026 11,079
$ 46,296 $ 668,965 $ 5,360,504 $ 3,169,675 $ 774,449 $ 6,113,915 $ 11,133
(Continued) - 129 - CITY OF PALM DESERT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER SPECIAL REVENUE FUNDS (CONTINUED)
For the year ended June 30, 2008
Landscape El Paseo Air City Wide and Lighting Assessment Quality Business Districts District Management License Nos. 1 - 17 REVENUES: Taxes$ - $ - $ 46,347 $ 574,745 Special assessments collected 264,877 - - - Intergovernmental revenues - 59,422 - - Rental income - - - - Investment earnings - 10,104 9,274 11,329 Fines and forfeitures - - - - Miscellaneous - - - -
TOTAL REVENUES 264,877 69,526 55,621 586,074
EXPENDITURES: Current: General government 249,626 19,982 - - Public safety - - - - Public works - - - 440,324 Capital outlay - - - -
TOTAL EXPENDITURES 249,626 19,982 - 440,324
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 15,251 49,544 55,621 145,750
OTHER FINANCING SOURCES (USES): Transfers in - - - 42,660 Transfers out - - - -
TOTAL OTHER FINANCING SOURCES (USES) - - - 42,660
NET CHANGE IN FUND BALANCES 15,251 49,544 55,621 188,410
FUND BALANCES - BEGINNING OF YEAR 27,022 168,085 145,437 515,422
FUND BALANCES - END OF YEAR$ 42,273 $ 217,629 $ 201,058 $ 703,832
See independent auditors' report. - 130 - Schedule 7
Redevelopment Total Fire Agency Other AIPP Child Care Golf Course Facilities Housing Special Revenue Maintenance Program Maintenance Restoration Authority Funds
$ - $ 197,399 $ - $ 95,541 $ - $ 4,010,302 - - - - - 264,877 - - - - - 3,725,087 - - - - 4,702,823 4,702,823 3,182 60,281 169,225 22,768 328,298 2,252,978 - - - - - 149,492 - - 578,476 - - 1,197,266
3,182 257,680 747,701 118,309 5,031,121 16,302,825
56,145 26,277 406,745 - 5,976,878 9,727,182 - - - - - 60,884 - - - - - 668,664 - - - - 6,927,853 8,087,092
56,145 26,277 406,745 - 12,904,731 18,543,822
(52,963) 231,403 340,956 118,309 (7,873,610) (2,240,997)
18,830 - - - 3,492,853 3,554,343 - - (1,000,000) - - (2,730,329)
18,830 - (1,000,000) - 3,492,853 824,014
(34,133) 231,403 (659,044) 118,309 (4,380,757) (1,416,983)
84,988 1,029,356 3,081,912 365,972 9,463,375 44,065,604
$ 50,855 $ 1,260,759 $ 2,422,868 $ 484,281 $ 5,082,618 $ 42,648,621
- 131 - Schedule 8-A CITY OF PALM DESERT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL TRAFFIC SAFETY
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 9,710 $ 9,710 $ 9,710 $ -
Resources (inflows): Investment earnings 5,000 5,000 2,189 (2,811) Fines and forfeitures 220,000 220,000 149,492 (70,508)
Total resources 225,000 225,000 151,681 (73,319)
Charges to appropriations (outflows): Transfers to other funds 225,000 225,000 128,248 96,752
Total charges to appropriations 225,000 225,000 128,248 96,752
Excess of resources over (under) charges to appropriations - - 23,433 23,433
Fund balance, June 30$ 9,710 $ 9,710 $ 33,143 $ 23,433
See independent auditors' report. - 132 - Schedule 8-B CITY OF PALM DESERT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GAS TAX
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 86,149 $ 86,149 $ 86,149 $ -
Resources (inflows): Intergovernmental revenues 1,330,000 1,330,000 890,642 (439,358) Investment earnings 20,000 20,000 30,122 10,122
Total resources 1,350,000 1,350,000 920,764 (429,236)
Charges to appropriations (outflows): Current: Public works 250,000 250,000 - 250,000 Transfers to other funds 1,100,000 1,100,000 925,823 174,177
Total charges to appropriations 1,350,000 1,350,000 925,823 424,177
Excess of resources over (under) charges to appropriations - - (5,059) (5,059)
Fund balance, June 30$ 86,149 $ 86,149 $ 81,090 $ (5,059)
See independent auditors' report. - 133 - Schedule 8-C CITY OF PALM DESERT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL HOUSING MITIGATION FEES
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 1,639,619 $ 1,639,619 $ 1,639,619 $ -
Resources (inflows): Taxes 240,000 240,000 233,857 (6,143) Intergovernmental revenues 2,790,000 2,790,000 2,010,000 (780,000) Investment earnings 30,000 30,000 65,560 35,560
Total resources 3,060,000 3,060,000 2,309,417 (750,583)
Charges to appropriations (outflows): Current: General government - 2,010,000 2,010,000 -
Excess of resources over (under) charges to appropriations 3,060,000 1,050,000 299,417 (750,583)
Fund balance, June 30$ 4,699,619 $ 2,689,619 $ 1,939,036 $ (750,583)
See independent auditors' report. - 134 - Schedule 8-D CITY OF PALM DESERT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL COMMUNITY DEVELOPMENT BLOCK GRANT
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 131,794 $ 131,794 $ 131,794 $ -
Resources (inflows): Intergovernmental revenues 240,000 240,000 366,367 126,367 Investment earnings 6,500 6,500 4,725 (1,775)
Total resources 246,500 246,500 371,092 124,592
Charges to appropriations (outflows): Current: General government 351,500 782,191 456,590 325,601
Total charges to appropriations 351,500 782,191 456,590 325,601
Excess of resources over (under) charges to appropriations (105,000) (535,691) (85,498) 450,193
Fund balance, June 30$ 26,794 $ (403,897) $ 46,296 $ 450,193
See independent auditors' report. - 135 - Schedule 8-E CITY OF PALM DESERT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL EL PASEO ASSESSMENT DISTRICT
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 27,022 $ 27,022 $ 27,022 $ -
Resources (inflows): Special assessments collected 260,000 260,000 264,877 4,877
Total resources 260,000 260,000 264,877 4,877
Charges to appropriations (outflows): Current: General government 260,000 260,000 249,626 10,374
Total charges to appropriations 260,000 260,000 249,626 10,374
Excess of resources over (under) charges to appropriations - - 15,251 15,251
Fund balance, June 30$ 27,022 $ 27,022 $ 42,273 $ 15,251
See independent auditors' report. - 136 - Schedule 8-F CITY OF PALM DESERT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL CITY WIDE BUSINESS LICENSE
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 145,437 $ 145,437 $ 145,437 $ -
Resources (inflows): Taxes 50,000 50,000 46,347 (3,653) Investment earnings 5,000 5,000 9,274 4,274
Total resources 55,000 55,000 55,621 621
Charges to appropriations (outflows): Current: General government 51,000 76,000 - 76,000
Total charges to appropriations 51,000 76,000 - 76,000
Excess of resources over (under) charges to appropriations 4,000 (21,000) 55,621 76,621
Fund balance, June 30$ 149,437 $ 124,437 $ 201,058 $ 76,621
See independent auditors' report. - 137 - Schedule 8-G CITY OF PALM DESERT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL LANDSCAPE AND LIGHTING DISTRICTS NOS. 1 - 17
For the year ended June 30, 2008
Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative)
Fund balance, July 1$ 515,422 $ 515,422 $ 515,422 $ -
Resources (inflows): Taxes 587,431 587,431 574,745 (12,686) Investment earnings - 11,329 11,329 Transfers from other funds 75,000 75,000 42,660 (32,340)
Total resources 662,431 662,431 628,734 (33,697)
Charges to appropriations (outflows): Current: Public works 543,745 593,366 440,324 153,042
Total charges to appropriations 543,745 593,366 440,324 153,042
Excess of resources over (under) charges to appropriations 118,686 69,065 188,410 119,345
Fund balance, June 30$ 634,108 $ 584,487 $ 703,832 $ 119,345
See independent auditors' report. - 138 - OTHER GOVERNMENTAL FUNDS - DEBT SERVICE
City Highlands Undergrounding Fund - This fund is used to account for the resources and payment for debt related to Highlands Undergrounding.
- 139 - Schedule 9 CITY OF PALM DESERT
COMBINING BALANCE SHEET OTHER DEBT SERVICE FUND
June 30, 2008
Total City Other Highlands Debt Service Undergrounding Fund ASSETS: Pooled cash and investments$ 93,924 $ 93,924 Receivables: Assessments 2,699,594 2,699,594 Due from other governments 7,085 7,085
TOTAL ASSETS$ 2,800,603 $ 2,800,603
LIABILITIES AND FUND BALANCES
LIABILITIES: Deferred revenue$ 2,699,594 $ 2,699,594
TOTAL LIABILITIES 2,699,594 2,699,594
FUND BALANCES: Unreserved: Designated for: Debt service 101,009 101,009
TOTAL FUND BALANCES 101,009 101,009
TOTAL LIABILITIES AND FUND BALANCES$ 2,800,603 $ 2,800,603
See independent auditors' report. - 140 - Schedule 10 CITY OF PALM DESERT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER DEBT SERVICE FUND
For the year ended June 30, 2008
Total City Other Highlands Debt Service Undergrounding Fund REVENUES: Special assessments collected$ 175,746 $ 175,746 Investment earnings 3,288 3,288
TOTAL REVENUES 179,034 179,034
EXPENDITURES: Current: General government 1,896 1,896 Debt service: Principal retirement 35,000 35,000 Interest and fiscal charges 137,757 137,757
TOTAL EXPENDITURES 174,653 174,653
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 4,381 4,381
FUND BALANCES - BEGINNING OF YEAR 96,628 96,628
FUND BALANCES - END OF YEAR$ 101,009 $ 101,009
See independent auditors' report. - 141 -
THIS PAGE INTENTIONALLY LEFT BLANK
- 142 - 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. 94-3 Merano
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.
Highlands Undergrounding - This fund is used to account for the construction of public improvements from bond proceeds resulting from the creation of this District.
CFD University - This fund is used to account for the construction of public improvements from proceeds resulting from the creation of this District.
Assessment 29 - This fund is used to account for the construction of public improvement from proceeds resulting from the creation of this District.
- 143 - CITY OF PALM DESERT
COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS
June 30, 2008
Capital Arts in Projects Drainage Public Places Reserve Facilities ASSETS: Pooled cash and investments$ 2,655,402 $ 14,919,898 $ 3,182,188 Receivables: Accounts - 706,265 - Interest - 99,755 - Prepaid costs - - - Deposits - 1,230 - Due from other governments - 1,623,404 - Advances to other funds - 8,000,000 - Restricted assets: Cash and investments with fiscal agent - - -
TOTAL ASSETS$ 2,655,402 $ 25,350,552 $ 3,182,188
LIABILITIES AND FUND BALANCES
LIABILITIES: Accounts payable$ 4,104 $ 583,782 $ 7,625 Accrued liabilities 3,421 - - Deferred revenue - 1,819,356 - Unearned revenue - 107,651 - Deposits payable 327,952 - -
TOTAL LIABILITIES 335,477 2,510,789 7,625
FUND BALANCES: Reserved for: Encumbrances 1,500 2,607,079 34,610 Continuing appropriation 277,000 12,194,990 - Prepaid costs and deposits - 1,230 - Advances to other funds - 8,000,000 - Unreserved: Designated for: Capital outlay 2,041,425 36,464 3,139,953
TOTAL FUND BALANCES 2,319,925 22,839,763 3,174,563
TOTAL LIABILITIES AND FUND BALANCES$ 2,655,402 $ 25,350,552 $ 3,182,188
See independent auditors' report. - 144 - Schedule 11
Parks and Assessment Recreation CFD District No. 94-3 Facilities Signalization Buildings Library Indian Ridge Merano
$ 1,265,910 $ 341,405 $ 3,692,842 $ 544,203 $ 7,401 $ -
------368 ------4,765,000 - - - - -
- - - - - 177,230
$ 6,030,910 $ 341,405 $ 3,692,842 $ 544,203 $ 7,401 $ 177,598
$ - $ - $ - $ 20,153 $ - $ ------
- - - 20,153 - -
49,430 - 85,030 - - - 1,096,164 - 100,000 ------4,765,000 - - - - -
120,316 341,405 3,507,812 524,050 7,401 177,598
6,030,910 341,405 3,692,842 524,050 7,401 177,598
$ 6,030,910 $ 341,405 $ 3,692,842 $ 544,203 $ 7,401 $ 177,598
(Continued) - 145 - CITY OF PALM DESERT
COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS (CONTINUED)
June 30, 2008
Town Center Silver Spur Parking Lot Ranch ASSETS: Pooled cash and investments$ 220,556 $ 569 Receivables: Accounts - - Interest - - Prepaid costs - - Deposits - - Due from other governments - - Advances to other funds - - Restricted assets: Cash and investments with fiscal agent - -
TOTAL ASSETS$ 220,556 $ 569
LIABILITIES AND FUND BALANCES
LIABILITIES: Accounts payable$ 220,556 $ - Accrued liabilities - - Deferred revenue - - Unearned revenue - - Deposits payable - -
TOTAL LIABILITIES 220,556 -
FUND BALANCES: Reserved for: Encumbrances - - Continuing appropriation - - Prepaid costs and deposits - - Advances to other funds - - Unreserved: Designated for: Capital outlay - 569
TOTAL FUND BALANCES - 569
TOTAL LIABILITIES AND FUND BALANCES$ 220,556 $ 569
See independent auditors' report. - 146 - Schedule 11
Total Other Highlands CFD Assessment Capital Projects Undergrounding University 29 Funds
$ 1,016,368 $ - $ 5,196,740 $ 33,043,482
- - - 706,265 - 64,058 1,275 165,456 - - 975 975 - - - 1,230 - - - 1,623,404 - - - 12,765,000
- 30,302,033 2,034,233 32,513,496
$ 1,016,368 $ 30,366,091 $ 7,233,223 $ 80,819,308
$ - $ - $ 1,466,770 $ 2,302,990 - - - 3,421 - - - 1,819,356 - - - 107,651 - - - 327,952
- - 1,466,770 4,561,370
286,659 - 2,050,685 5,114,993 - - - 13,668,154 - - 975 2,205 - - - 12,765,000
729,709 30,366,091 3,714,793 44,707,586
1,016,368 30,366,091 5,766,453 76,257,938
$ 1,016,368 $ 30,366,091 $ 7,233,223 $ 80,819,308
- 147 - CITY OF PALM DESERT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS
For the year ended June 30, 2008
Capital Arts in Projects Drainage Public Places Reserve Facilities REVENUES: Licenses and permits$ 273,157 $ - $ - Intergovernmental revenues - 8,609,588 - Investment earnings 139,145 1,023,132 168,809 Miscellaneous 540 218,133 -
TOTAL REVENUES 412,842 9,850,853 168,809
EXPENDITURES: Current: General government 278,710 - - Public works - 4,462,242 79,509 Capital outlay 176,744 8,838,127 30,259
TOTAL EXPENDITURES 455,454 13,300,369 109,768
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (42,612) (3,449,516) 59,041
OTHER FINANCING SOURCES (USES): Transfers in - 2,676,258 - Transfers out (18,831) - -
TOTAL OTHER FINANCING SOURCES (USES) (18,831) 2,676,258 -
NET CHANGE IN FUND BALANCES (61,443) (773,258) 59,041
FUND BALANCES - BEGINNING OF YEAR 2,381,368 23,613,021 3,115,522
FUND BALANCES - END OF YEAR$ 2,319,925 $ 22,839,763 $ 3,174,563
See independent auditors' report. - 148 - Schedule 12
Parks and Assessment Recreation CFD District No. 94-3 Facilities Signalization Buildings Library Indian Ridge Merano
$ - $ - $ - $ - $ - $ ------270,625 18,071 196,008 - 134,662 6,414 ------
270,625 18,071 196,008 - 134,662 6,414
- - - 278,393 - - 70,000 - 2,793 - 5,093,980 - 44,716 - 18,096 - 88,677 -
114,716 - 20,889 278,393 5,182,657 -
155,909 18,071 175,119 (278,393) (5,047,995) 6,414
- - - 450,000 ------
- - - 450,000 - -
155,909 18,071 175,119 171,607 (5,047,995) 6,414
5,875,001 323,334 3,517,723 352,443 5,055,396 171,184
$ 6,030,910 $ 341,405 $ 3,692,842 $ 524,050 $ 7,401 $ 177,598
(Continued) - 149 - CITY OF PALM DESERT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS (CONTINUED)
For the year ended June 30, 2008
Town Center Silver Spur Parking Lot Ranch REVENUES: Licenses and permits $ - $ - Intergovernmental revenues - - Investment earnings - 30 Miscellaneous - -
TOTAL REVENUES - 30
EXPENDITURES: Current: General government - - Public works - - Capital outlay - -
TOTAL EXPENDITURES - -
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - 30
OTHER FINANCING SOURCES (USES): Transfers in - - Transfers out - -
TOTAL OTHER FINANCING SOURCES (USES) - -
NET CHANGE IN FUND BALANCES - 30
FUND BALANCES - BEGINNING OF YEAR - 539
FUND BALANCES - END OF YEAR$ - $ 569
See independent auditors' report. - 150 - Schedule 12
Total Other Highlands CFD Assessment Capital Projects Undergrounding University 29 Funds
$ - $ - $ - $ 273,157 - - - 8,609,588 57,142 1,417,217 556,982 3,988,237 - 3,567 3,036 225,276
57,142 1,420,784 560,018 13,096,258
- - 4,111,020 4,668,123 187,730 2,218,009 - 12,114,263 - 10,536,649 12,804,757 32,538,025
187,730 12,754,658 16,915,777 49,320,411
(130,588) (11,333,874) (16,355,759) (36,224,153)
- - - 3,126,258 - - - (18,831)
- - - 3,107,427
(130,588) (11,333,874) (16,355,759) (33,116,726)
1,146,956 41,699,965 22,122,212 109,374,664
$ 1,016,368 $ 30,366,091 $ 5,766,453 $ 76,257,938
- 151 -
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- 152 - 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 is determined.
Treasurers 1911 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.
- 153 - Schedule 13 CITY OF PALM DESERT
COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS
June 30, 2008
Special Treasurers Retiree Service Assessment Agency 1991 Bond Act Stipend Fund Funds Totals ASSETS Cash and investments$ 3,492,113 $ 270,664 $ 3,708,059 $ 6,661,425 $ 14,132,261 Receivables (net of allowance for uncollectibles): Accounts - - - 112,628,103 112,628,103 Interest - - - 20,857 20,857 Restricted assets: Cash with fiscal agent 43 - - 10,035,473 10,035,516
TOTAL ASSETS$ 3,492,156 $ 270,664 $ 3,708,059 $ 129,345,858 $ 136,816,737
LIABILITIES
Deposits$ 3,492,156 $ 270,664 $ 3,708,059 $ 129,345,858 $ 136,816,737
TOTAL LIABILITIES$ 3,492,156 $ 270,664 $ 3,708,059 $ 129,345,858 $ 136,816,737
See independent auditors' report. - 154 - Schedule 14
CITY OF PALM DESERT
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS
For the year ended June 30, 2008
Balance Balance July 1, June 30, 2007 Additions Deletions 2008 AGENCY
ASSETS: Cash and investments$ 3,466,152 $ 2,660,629 $ 2,634,668 $ 3,492,113 Restricted assets: Cash with fiscal agent 627,956 461,483 1,089,396 43
TOTAL ASSETS$ 4,094,108 $ 3,122,112 $ 3,724,064 $ 3,492,156
LIABILITIES: Deposits$ 4,094,108 $ 3,122,112 $ 3,724,064 $ 3,492,156
TOTAL LIABILITIES$ 4,094,108 $ 3,122,112 $ 3,724,064 $ 3,492,156
TREASURERS 1911 BOND ACT
ASSETS: Cash and investments$ 274,514 $ - $ 3,850 $ 270,664
TOTAL ASSETS$ 274,514 $ - $ 3,850 $ 270,664
LIABILITIES: Deposits$ 274,514 $ - $ 3,850 $ 270,664
TOTAL LIABILITIES$ 274,514 $ - $ 3,850 $ 270,664
RETIREE SERVICES STIPEND FUND
ASSETS: Cash and investments$ 10,119,163 $ 1,025,148 $ 7,436,252 $ 3,708,059
TOTAL ASSETS$ 10,119,163 $ 1,025,148 $ 7,436,252 $ 3,708,059
LIABILITIES: Deposits$ 10,119,163 $ 1,025,148 $ 7,436,252 $ 3,708,059
TOTAL LIABILITIES$ 10,119,163 $ 1,025,148 $ 7,436,252 $ 3,708,059
See independent auditors' report (Continued) - 155 - Schedule 14
CITY OF PALM DESERT
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS (CONTINUED)
For the year ended June 30, 2008
Balance Balance July 1, June 30, 2007 Additions Deletions 2008 SPECIAL ASSESSMENT FUNDS
ASSETS: Cash and investments$ 4,590,670 $ 6,608,024 $ 4,537,269 $ 6,661,425 Receivables (net of allowance for uncollectibles): Accounts 119,146,524 94,013 6,612,434 112,628,103 Interest 56,410 20,857 56,410 20,857 Restricted assets: Cash with fiscal agent 13,383,596 18,591,270 21,939,393 10,035,473
TOTAL ASSETS$ 137,177,200 $ 25,314,164 $ 33,145,506 $ 129,345,858
LIABILITIES: Deposits$ 137,177,200 $ 25,314,164 $ 33,145,506 $ 129,345,858
TOTAL LIABILTIES$ 137,177,200 $ 25,314,164 $ 33,145,506 $ 129,345,858
TOTAL - ALL AGENCY FUNDS ASSETS: Cash and investments$ 18,450,499 $ 10,293,801 $ 14,612,039 $ 14,132,261 Receivables (net of allowance for uncollectibles): Accounts 119,146,524 94,013 6,612,434 112,628,103 Interest 56,410 20,857 56,410 20,857 Restricted assets: Cash with fiscal agent 14,011,552 19,052,753 23,028,789 10,035,516
TOTAL ASSETS$ 151,664,985 $ 29,461,424 $ 44,309,672 $ 136,816,737
LIABILITIES: Deposits$ 151,664,985 $ 29,461,424 $ 44,309,672 $ 136,816,737
TOTAL LIABILITIES$ 151,664,985 $ 29,461,424 $ 44,309,672 $ 136,816,737
See independent auditors' report. - 156 - DESCRIPTION OF STATISTICAL SECTION CONTENTS
June 30, 2008
This part of the City of Palm Desert’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the City’s overall financial health.
Contents
Financial Trends Theses schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time.
Revenue Capacity These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax.
Debt Capacity These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.
Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place.
Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in 2001; schedules presenting government-wide information include information beginning in that year.
157 City of Palm Desert Net Assets by Component Last Eight Fiscal Years (Accrual Basis of Accounting)
Governmental Activities 2008 2007 2006 2005 2004 2003
Invested in capital assets, net of related debt 287,536,477 (3) 213,685,471 166,229,783 147,410,323 141,303,283 143,448,973 Restricted 168,029,901 173,335,615 (2) 153,342,045 (1) 103,701,569 100,268,597 99,313,317 Unrestricted 113,420,152 111,386,996 108,077,101 96,445,212 79,075,507 80,229,689 Total Governmental Activities Net Assets 568,986,530 498,408,082 427,648,929 347,557,104 320,647,387 322,991,979 Business-Type Activities Invested in capital assets, net of related debt 62,814,656 62,956,911 63,233,079 63,588,616 63,857,424 64,269,694 Restricted ------Unrestricted 5,211,985 5,294,980 4,459,840 2,948,910 1,830,204 1,288,488 Total Business-type Activities Net Assets 68,026,641 68,251,891 67,692,919 66,537,526 65,687,628 65,558,182 Primary Government Invested in capital assets, net of related debt 350,351,133 276,642,382 229,462,862 210,998,939 205,160,707 207,718,667 Restricted 168,029,901 173,335,615 153,342,045 103,701,569 100,268,597 99,313,317 Unrestricted 118,632,137 116,681,976 112,536,941 99,394,122 80,905,711 81,518,177 Total Primary Government Net Assets 637,013,171 566,659,973 495,341,848 414,094,630 386,335,015 388,550,161
Governmental Activities 2002 2001 Invested in capital assets, net of related debt 44,179,223 41,332,088 Restricted 78,732,876 72,610,266 Unrestricted 88,266,933 80,007,103 Total Governmental Activities Net Assets 211,179,032 193,949,457 Business-Type Activities Invested in capital assets, net of related debt 64,085,563 64,702,174 Restricted - Unrestricted 1,494,726 1,419,665 Total Business-type Activities Net Assets 65,580,289 66,121,839 Primary Government Invested in capital assets, net of related debt 108,264,786 106,034,262 Restricted 78,732,876 72,610,266 Unrestricted 89,761,659 81,426,768 Total Primary Government Net Assets 276,759,321 260,071,296
(1)The increase for FY 2006 is due to issuance of District Bond, see note #6.
(2)The increase for FY 2007 is due to issuance of District Bond, see note #6.
(3) The increase for FY 2008 is due to Capital Contribution of Hwy 111 & Hwy 74 infastructure totalling $30.19 million from the State of California.
Note: The City of Palm Desert implemented GASB 34 for the fiscal year ended June 30, 2001. Schedules presenting government-wide information include information beginning in that year.
158 City of Palm Desert Changes in Net Assets Last Eight Fiscal Years (Accrual Basis of Accounting)
Expenses 2008 2007 2006 2005 2004 2003 2002 2001 Governmental Activities: General government 46,048,643 39,956,767 34,362,850 27,144,038 28,402,902 21,055,957 20,830,544 18,625,329 Public safety 26,855,060 24,674,424 21,856,311 18,743,083 15,420,151 15,601,833 14,547,981 12,744,434 Parks, recreation and culture 8,013,211 4,996,692 4,243,119 4,043,034 3,977,447 3,480,264 19,686,164 3,542,671 Public works 27,245,937 37,091,512 13,894,980 10,428,219 13,046,864 23,009,640 3,775,417 15,595,997 Interest on long term debt 20,706,514 20,097,198 12,526,964 12,749,188 14,124,371 14,443,467 15,271,200 16,224,248 Total Governmental Activites Expenses 128,869,365 126,816,593 86,884,224 73,107,562 74,971,735 77,591,161 74,111,306 66,732,679 Business-Type Activities: Desert Willow Golf Course 8,167,682 7,989,321 6,913,517 6,636,889 6,657,220 6,653,242 6,629,866 6,901,576 Office Complex - Parkview 649,548 716,592 646,769 609,298 570,135 511,272 534,865 1,481,938 Total Business-Type Activities 8,817,230 8,705,913 7,560,286 7,246,187 7,227,355 7,164,514 7,164,731 8,383,514 Total primary government expenses 137,686,595 135,522,506 94,444,510 80,353,749 82,199,090 84,755,675 81,276,037 75,116,193 Program Revenues Governmental Activities Charges for services General government 8,454,683 8,225,112 8,318,175 7,059,609 6,540,065 6,605,215 6,166,557 6,237,731 Public safety 8,808,300 9,078,214 8,376,981 3,945,395 2,737,585 2,737,571 2,903,623 2,882,947 Parks, recreation and culture 1,190,725 1,822,685 1,994,163 1,442,098 1,048,667 868,255 394,263 322,606 Public works 762,440 514,838 491,179 540,028 511,317 455,676 959,412 845,097 Operating grants & contributions 5,843,010 7,951,650 4,930,120 4,800,413 4,632,297 6,249,955 5,568,966 4,607,448 Capital grants & contributions (1) 42,545,033 57,132,742 51,780,221 5,166,856 7,134,158 4,325,033 4,434,722 5,300,829 Total Governmental Activites Program Revenues 67,604,191 84,725,241 75,890,839 22,954,399 22,604,089 21,241,705 20,427,543 20,196,658 Business-Type Activities Charges for Service: Desert Willow Golf Course 8,182,741 7,830,863 7,442,330 6,814,638 6,237,087 5,824,079 5,753,581 5,882,813 Office Complex - Parkview 934,833 915,975 864,447 898,884 851,763 843,812 861,405 943,895 Capital grants & contributions 206,609 278,757 295,304 338,478 267,951 414,967 8,195 543,303 Total Business-type activites program revenue 9,324,183 9,025,595 8,602,081 8,052,000 7,356,801 7,082,858 6,623,181 7,370,011 Total Primary Government program revenue 76,928,374 93,750,836 84,492,920 31,006,399 29,960,890 28,324,563 27,050,724 27,566,669
Net (Expense) / Revenue Governmental Activites (61,265,174) (42,091,352) (47,837,446) (80,336,571) (76,418,938) (78,490,293) (71,417,934) (60,853,995) Business-type activites 506,953 319,682 1,041,795 805,813 129,446 (81,656) (541,550) (1,013,503) Total Primary Government Net Expense (60,758,221) (41,771,670) (46,795,651) (79,530,758) (76,289,492) (76,289,492) (71,959,484) (61,867,498) General Revenues & Other Changes in Net Assets Governmental Activities: Taxes: (Combined/Net Pass-through) 90,527,965 86,766,864 114,826,387 96,926,134 87,551,146 81,297,385 73,257,210 66,975,636 Investment Earnings 15,309,271 17,521,600 6,197,595 4,240,360 2,985,463 3,366,548 6,388,234 11,539,085 Contributions from fiduciary funds 7,240,770 ------Gain(loss) on sales of assets - - - 17,459 - (984,837) 204,000 764,000 Contributions from other agencies ------262,193 4,328,656 Miscellaneous 6,369,028 10,790,417 7,025,216 6,347,396 1,852,229 3,997,338 4,709,580 2,785,106 Refunding of special assessment debt - - - - (8,706,206) - - - Transfers In 1,000,000 ------
Total Governmental Activites Net Revenues 120,447,034 115,078,881 128,049,198 107,531,349 83,682,632 87,676,434 84,821,217 86,392,483 Business-Type Activities: Use of money and property 267,797 239,290 113,598 43,831 - 11,718 - - Transfers Out (1,000,000) - - 254 - 47,831 - - Total Business-type activites (732,203) 239,290 113,598 44,085 - 59,549 - - Total primary government 119,714,831 115,318,171 128,162,796 107,575,434 83,682,632 87,735,983 84,821,217 86,392,483 Change in Net Assets Governmental Activities: 59,181,860 72,987,529 80,211,752 27,194,778 7,263,694 9,186,141 13,403,283 25,538,488 Business-Type Activities: (225,250) 558,972 1,155,393 849,898 129,446 (22,107) (541,550) (1,013,503) Total primary government 58,956,610 73,546,501 81,367,145 28,044,676 7,393,140 9,164,034 12,861,733 24,524,985
(1) The Increase for FY 2006 is due to Bond Funds received for capital improvement at the District known as University Park and Assessment 29.
Note: The City of Palm Desert implemented GASB 34 for the fiscal year ended June 30, 2001. Schedules presenting government-wide information include information beginning in that year.
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160 City of Palm Desert Fund Balances of Governmental Funds Last Eight Fiscal Years (Modified Accrual Basis of Accounting)
General Fund: 2008 2007 2006 2005 2004 2003 2002 2001
Reserved 16,304,234 25,198,118 26,345,859 26,505,414 27,838,819 25,701,984 27,506,623 22,951,643 Unreserved 63,515,054 50,916,281 48,004,509 36,793,370 27,619,600 23,113,284 23,827,558 24,419,570 Total General Fund 79,819,288 76,114,399 74,350,368 63,298,784 55,458,419 48,815,268 51,334,181 47,371,213 All other Governmental Funds: Reserved 144,034,808 133,768,988 115,924,400 96,349,160 83,603,140 86,423,841 89,223,387 77,271,685 Unreserved, reported in: Special revenue funds 72,478,199 48,231,447 19,944,227 25,991,171 32,614,358 24,709,698 24,222,615 15,521,068 Capital projects funds 97,413,884 175,094,003 55,995,596 34,196,750 40,652,793 48,976,239 46,630,038 53,720,744 Debt service funds 35,706,020 24,254,967 10,095,576 8,430,170 12,899,972 11,641,650 5,803,153 6,744,244 Total all other Governmental Funds 349,632,911 381,349,405 201,959,799 164,967,251 169,770,263 171,751,428 165,879,193 153,257,741
Note: The City of Palm Desert implemented GASB 34 for the fiscal year ended June 30, 2001. Schedules presenting government-wide information include information beginning in that year.
161 City of Palm Desert Changes in Fund Balances of Governmental Funds Last Eight Fiscal Years (Modified Accrual Basis of Accounting)
Revenues: 2008 2007 2006 2005 2004 2003 2002 2001
Taxes 140,331,466 138,272,454 131,303,483 102,020,742 93,948,185 83,762,760 78,631,363 72,173,943 Special assessments collected (2) (5) 2,060,791 929,348 269,036 227,848 214,950 5,818,624 6,684,402 12,884,346 Licenses & permits 1,453,177 2,691,486 2,685,415 2,056,554 1,316,669 1,286,262 1,417,012 1,511,652 Intergovernmental revenues 18,996,692 23,499,937 11,095,613 11,064,037 6,067,555 11,488,993 10,581,051 6,463,484 Rental income 4,789,421 4,513,146 4,737,861 4,430,915 4,494,098 4,115,892 4,186,607 3,943,706 Charges for services 1,190,725 1,822,685 1,994,163 1,463,850 1,052,467 873,605 975,841 845,097 Investment Earnings 22,592,392 23,985,001 9,351,716 5,654,986 3,322,733 5,035,799 7,671,358 15,114,698 Fines & forfeitures 254,857 274,365 310,868 323,775 306,630 367,903 305,197 238,872 Miscellaneous (4) 20,164,099 2,847,802 2,470,623 3,232,825 4,179,567 2,443,684 1,405,298 11,037,622 Contributions from property owners (1) - 46,006,292 42,979,973 - - - - - Total Revenues 211,833,620 244,842,516 207,198,751 130,475,532 114,902,854 115,193,522 111,858,129 124,213,420 Expenditures:
General government 62,795,604 44,587,985 34,506,987 26,112,125 27,122,532 20,034,295 19,194,096 17,286,613 Pass-through-agreement 38,993,445 35,719,075 36,844,061 30,183,408 24,051,292 22,140,837 17,734,171 14,317,974 Public safety 26,677,743 24,550,431 21,715,373 18,567,736 15,290,696 15,410,711 14,368,399 12,598,263 Parks, recreation & culture 4,572,695 3,921,063 3,304,867 2,889,789 2,638,386 2,656,809 2,580,841 2,434,884 Public works 22,936,721 33,925,623 11,103,943 7,306,791 10,153,096 20,631,322 17,657,120 13,167,046 Capital outlay 52,256,552 85,604,515 35,359,139 22,409,057 18,927,787 36,687,223 17,159,885 14,330,725 Debt service: Principal retirement 10,767,707 8,209,707 5,607,707 9,788,423 28,372,707 25,975,000 28,360,000 16,820,000 Interest and fiscal charges 23,376,564 25,814,526 14,072,572 13,537,219 16,643,049 17,071,421 17,062,974 16,452,210 Total Expenditures 242,377,031 262,332,925 162,514,649 130,794,548 143,199,545 160,607,618 134,117,486 107,407,715
Excess(deficiency of Revenues (30,543,411) (17,490,409) 44,684,102 (319,016) (27,377,918) (45,414,096) (22,259,357) 16,805,705 over(under) expenditures Other financing sources (uses) Transfers in 59,723,636 249,249,847 50,225,747 48,697,604 68,236,264 87,390,536 60,894,943 37,122,796 Transfers out (58,723,636) (249,249,847) (50,225,747) (48,697,604) (68,236,264) (90,285,014) (60,894,943) (37,122,796) Bond Premiums - 7,785,375 - - 915,773 - - - Bonds issued/Capital Accreation on bonds (3) 1,484,806 287,534,894 - - 48,690,000 50,682,363 37,765,000 - Payment refunded bond escrow agent (101,656,501) ------Sale of property (4) 47,000 5,230,000 3,360,030 3,356,369 1,728,522 979,533 766,279 767,500 Total Other financing sources (uses) 2,531,806 198,893,768 3,360,030 3,356,369 51,334,295 48,767,418 38,531,279 767,500
Net Change In Fund Balance (28,011,605) 181,403,359 48,044,132 3,037,353 14,334,398 3,353,322 16,271,922 17,573,205
Debt service as a percentage of noncapital 18.0% 19.3% 15.5% 21.5% 36.2% 34.7% 38.8% 35.8% expenditures
(1)Bond was issued in FY 2006 and FY 2007. See note #16 for further explanation.
(2) Prior to 2004, the City was recording Assessment District Property Taxes in its debt service funds, city has since removed these from its debt service funds.
(3) See Note #6 of the Financial Statement, included Capital Accreation of Bonds.
(4) Pior to 2008 Sale of Property/Inventory was recorded as other financing sources. In 2008 Sale of Inventory was moved to General Revenue
(5) The $1.6 million in special assessment collected represents the amount received from property owners for Fire Protection. In prior years funds received from property owners were classified as taxes.
Note: The City of Palm Desert implemented GASB 34 for the fiscal year ended June 30, 2001.
162 City of Palm Desert Graphs - Changes in Fund Balances of Governmentals Funds Last Eight Fiscal Years (Modified Accrual Basis of Accounting)
Total Revenues $350,000,000 Combined other (1) $300,000,000
$250,000,000 Miscellaneous other (2)
$200,000,000
$150,000,000 Intergovernmental revenues
$100,000,000 Licenses & permits $50,000,000
$0 Taxes & Special Assessments FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 FY 2003 FY 2002 FY 2001 FY
Total Expenditures $350,000,000 Parks, recreation & culture $300,000,000
Pass-through-agreement $250,000,000
$200,000,000 Debt Expenditures (3)
$150,000,000 Capital outlay
$100,000,000 Public works $50,000,000
Public safety $0
General Government FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 FY 2003 FY 2002 FY 2001 FY
Combined Other(1) is a combination of rental income, use of money & property, and charges for services.
Miscellaneous Other(2) is a combination of fines and forefeitures, miscellaneous and contributions from property owners
Debt Expenditures(3) is a combination of interest/fiscal charges and principal retirement
Note: The City of Palm Desert implemented GASB 34 for the fiscal year ended June 30, 2001.
163 City of Palm Desert Supplemental - Historical General Fund Revenues (Including Transfers In) Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004 Revenue Type: Sales Tax $ 17,195,743 $ 17,918,375 $ 17,776,928 $ 15,453,148 $ 15,138,424 Transient Occupancy Tax 8,605,714 8,627,221 8,026,101 7,715,624 7,660,831 Property Tax (3) 9,333,842 8,714,568 8,261,944 4,003,585 3,369,711 Interest 4,571,147 4,890,891 2,636,050 1,486,830 1,135,952 Transfer In 1,101,610 1,122,224 1,083,589 1,130,231 1,092,475 Franchises 2,887,727 2,907,062 2,580,917 2,439,134 2,417,856 State Subventions (1) (3) 220,785 267,595 358,954 3,712,256 2,020,583 Building & Grading Permits 975,296 1,476,290 1,963,733 1,446,524 970,826 Reimbursments 4,933,807 2,465,685 1,982,846 1,830,295 1,547,862 Business License Tax 1,311,090 1,231,587 1,242,721 1,154,143 955,501 Timeshare Mitigation Fee 881,350 782,739 661,187 526,271 392,988 Plan Check Fees 562,930 617,999 702,857 701,215 459,046 Property Transfer Tax 604,236 671,806 1,030,412 1,099,665 870,415 Other Revenues (2) 1,900,529 2,436,664 2,606,760 2,019,035 1,144,752 Total General Revenue $ 55,085,806 $ 54,130,706 $ 50,914,999 $ 44,717,956 $ 39,177,222
FY 2003 2002 2001 2000 1999 Revenue Type: Sales Tax $ 13,463,197 $ 13,027,395 $ 13,619,607 $ 13,203,564 $ 10,877,715 Transient Occupancy Tax 6,816,682 7,043,454 7,385,707 7,280,625 6,725,876 Property Tax 3,078,047 2,765,556 2,466,758 2,393,368 2,417,572 Interest 1,573,165 2,379,764 3,147,544 2,688,963 2,169,894 Transfer In 2,450,600 870,624 934,039 957,817 1,026,956 Franchises 2,198,663 2,131,820 1,981,697 1,837,806 1,612,054 State Subventions (1) 2,634,949 2,555,811 2,262,535 1,991,034 1,679,519 Building & Grading Permits 876,372 1,064,097 1,101,743 1,182,392 1,517,286 Reimbursments 1,367,303 1,036,133 2,125,784 958,858 830,198 Business License Tax 961,675 898,113 826,591 749,831 744,444 Timeshare Mitigation Fee 262,403 158,302 265,350 553,800 476,050 Plan Check Fees 472,356 612,845 623,936 538,590 866,757 Property Transfer Tax 689,147 497,967 578,238 698,934 516,513 Other Revenues (2) 1,845,700 1,116,608 711,438 1,255,860 1,142,810 Total General Revenue $ 38,690,259 $ 36,158,489 $ 38,030,967 $ 36,291,442 $ 32,603,644
(1) State Subventions is any combination of motor vehicle and off-highway in-lieus, and subventions from state.
(2) Other Revenues is any combination of miscellaneous penalties and interest, permits, grants, parking bails, fees, sales of maps and publications, vehicle and court fines and other revenues.
(3) The State of California reprogramed motor vehicle fees, the City now receives this as property taxes.
164 City of Palm Desert Supplemental Graph - Historical General Fund Revenues (Including Transfers In) Last Ten Fiscal Years
$70,000,000
$60,000,000
$50,000,000 Combined Other (1)
Interest $40,000,000 Property Tax
$30,000,000 Transient Occupancy Tax Sales Tax $20,000,000
$10,000,000
$0 8 7 6 5 4 3 2 1 0 9 0 0 0 0 0 0 0 0 0 9 FY 20 FY 20 FY 20 FY 20 FY 20 FY 20 FY 20 FY 20 FY 20 FY 19 FY
(1) Combined Other is any combination of transfers, franchises, state subventions*, building and grading permits, reimbursements, business license taxes, timeshare mitigation fees, plan check fees, property transfer taxes. It also may include any combination of miscellaneous bails, fees, fines, grants, incomes, penalties, permits, sales and taxes.
*State Subventions is any combination of trailer coach fees, motor vehicle and off-highway in-lieus, and subventions from state.
165 City of Palm Desert Supplemental - Historical General Fund Expenditures (Including Transfers Out) Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004 Expenditure: Public Safety (1) $ 14,413,196 $ 13,404,056 $ 12,323,448 $ 12,135,671 $ 11,432,803 City Administration (2) 9,861,106 8,588,341 8,410,706 7,196,081 5,999,228 Public Works Administration 3,329,792 3,014,583 2,823,359 2,506,688 2,270,854 Community Promotions 2,532,637 2,402,435 1,687,148 1,616,071 1,420,717 Street Maintenance 2,133,448 1,968,849 1,681,583 1,558,970 1,411,018 Building Safety 3,260,855 3,084,015 2,695,889 2,297,814 1,620,160 Street Resurfacing 3,342,542 1,192,629 1,277,554 1,375,409 897,153 Public Works 1,348,012 1,204,079 1,117,417 934,821 676,505 Other Expenditures (3) 11,159,329 17,989,005 7,846,311 7,256,066 6,805,633
Total Expenditures $ 51,380,917 $ 52,847,992 $ 39,863,415 $ 36,877,591 $ 32,534,071
FY 2003 2002 2001 2000 1999 Expenditure: Public Safety (1) $ 10,869,991 $ 10,732,159 $ 9,489,468 $ 8,841,693 $ 7,932,755 City Administration (2) 6,573,351 6,461,706 4,972,981 4,617,682 4,375,851 Public Works Administration 1,937,184 1,745,513 1,764,947 1,673,434 1,607,836 Community Promotions 1,654,768 2,262,129 2,052,281 1,676,995 1,677,282 Street Maintenance 1,323,955 1,378,064 1,455,268 1,451,917 1,515,287 Building Safety 1,535,427 1,386,988 1,201,802 1,134,696 1,424,124 Street Resurfacing 2,078,218 608,616 1,422,637 1,028,354 861,490 Public Works 1,007,637 880,295 918,575 1,035,644 934,744 Other Expenditures (3) 14,228,641 7,052,549 8,398,278 11,503,552 6,161,641
Total Expenditures $ 41,209,172 $ 32,508,019 $ 31,676,237 $ 32,963,967 $ 26,491,010
(1) Public Safety is any combination of animal regulation, development services, police services, and traffic safety expenditures.
(2) City Administration is any combination of community services, auditing, City attorney, City clerk, City council and City manager, data processing, elections, finance, general services, human resources, insurance, legal special services, legistlative advocacy and unemployment insurance expenditures.
(3) Other Expenditures is any combination of aquisitions, centers, committees, contributions, community development, office of energy management, newsletter, marketing, interfund transfers, parks, recreation and culture, and visitor center.
166 City of Palm Desert Supplemental Graph - Historical General Fund Expenditures (Including Transfers Out) Last Ten Fiscal Years
$60,000,000
Combined Other (1) $50,000,000
Community Promotions $40,000,000
Public Works $30,000,000 Administration
$20,000,000 City Administration (2)
$10,000,000 Public Safety (3)
$0 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 FY 2003 FY 2002 FY 2001 FY 2000 FY 1999
(1) "Combined Other" is any combination of street maintenance, building safety, street resurfacing and public works. It mayyq also be aquisitions, centers, committees, contributions, community yp development, office of energy management, newsletter, marketing, interfund transfers, parks, recreation and culture, visitor center.
(2) City Administration is any combination of community services, auditing, City attorney, City clerk, City council and City manager, data processing, elections, finance, general services, human resources, insurance, legal special services, legistlative advocacy and unemployment insurance expenditures.
(3) Public Safety is any combination of animal regulation, development services, police services, and traffic safety expenditures.
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168 City of Palm Desert Supplemental Historical General Revenue and Expenditures Per Capita Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004
Total General Revenue (2) $ 53,984,196 $ 53,008,482 $ 49,831,410 $ 43,587,725 $ 38,084,747
Population (1) 50,907 49,752 49,539 49,280 44,812
General Revenue Per Capita $ 1,060 $ 1,065 $ 1,006 $ 884 $ 850
FY 2003 2002 2001 2000 1999
Total General Revenue (2) $ 36,239,659 $ 35,287,865 $ 37,096,928 $ 35,333,625 $ 31,576,688
Population (1) 43,917 42,863 42,334 37,634 36,287
General Revenue Per Capita $ 825 $ 823 $ 876 $ 939 $ 870
FY 2008 2007 2006 2005 2004
Total General Expenditures (2) $ 49,238,257 $ 43,565,108 $ 38,488,367 $ 35,426,268 $ 31,674,743
Population (1) 50,907 49,752 49,539 49,280 44,812 General Expenditures Per $ 967 $ 876 $ 777 $ 719 $ 707 Capita
FY 2003 2002 2001 2000 1999
Total General Expenditures (2) $ 34,935,591 $ 30,941,156 $ 28,902,706 $ 26,343,720 $ 25,059,899
Population (1) 43,917 42,863 42,334 37,634 36,287 General Expenditures Per $ 795 $ 722 $ 683 $ 700 $ 691 Capita
(1) Population figures are as of January start of fiscal year. (2) Interfund Transfers In/Out are not included in total.
Sources: Population figures from State Department of Finance
169 City of Palm Desert Assessed Value and Estimated Actual Value of Taxable Property Last Eight Fiscal Years
Commercial Fiscal Year Residential Institutional Less: Tax Total Taxable Total Direct Estimated Actual Industrial Vacant Land Ended June 30 Property Property Exempt Assessed Value Tax Rate Taxable Value (1) Property
2008 9,160,443,514 1,929,224,481 134,910,803 688,045,095 (242,839,445) 13,491,080,286 1.00000 13,114,105,220 2007 8,931,447,910 1,684,439,737 143,634,396 639,825,947 (248,095,775) 13,057,672,383 1.00000 11,853,797,089 2006 7,913,843,803 1,368,116,067 165,117,456 483,558,265 (247,676,185) 11,794,104,029 1.00000 10,503,193,237 2005 6,775,427,147 1,084,068,343 135,508,543 385,678,161 (239,745,884) 10,423,734,072 1.00000 9,281,846,679 2004 6,061,076,589 1,306,579,384 108,881,615 372,012,186 (199,616,295) 9,073,467,947 1.00000 8,704,132,380 2003 5,360,801,928 1,200,179,536 88,013,166 328,049,073 (184,027,529) 8,001,196,907 1.00000 8,066,795,481 2002 4,806,079,266 1,069,623,656 79,499,056 332,450,596 (173,452,485) 7,227,186,866 1.00000 7,291,094,312 2001 4,153,891,190 838,518,408 70,951,558 296,706,514 (161,253,540) 6,450,141,599 1.00000 6,511,773,110
(1) Estimated Actual Taxable Value = Net Taxable Value
Notes: Property Taxes in Riverside County are subject to the State of California's Proposition 13, Jarvis-Gann Initiative which allows reappraisals of real property only when there is a change in ownership or new construction takes place. Further, the proposition limits property assessment increase to no more than two(2%) percent annually. Property is assessed at one hundred percent (100%) of its fair market value at the time of new construction or change in ownership. The tax rate is one (1%) percent of the assessed value.
The City of Palm Desert chose to implement this schedule retroactively for the last eight years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years. Per GASB44 assessed values are shown by major type.
Source: Riverside County Assessor thru HDL Coren & Cone
170 City of Palm Desert Historical Net Assessed Taxable Values Citywide Graph - Assessed Valuation Growth Last Eight Fiscal Years
Net Assessed Valuation - Historical Comparison Value in Millions FY 2001 to FY 2008
$14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- 2001 2002 2003 2004 2005 2006 2007 2008
Percent Increase in Assessed Valuation FY 2001 to FY 2008
27.71% 30.00% 24.86% 23.88% 25.00% 19.38% 20.67% 20.00% 12.76% 11.97% 15.06% 15.00% 10.00% 5.00% 0.00% 2001 2002 2003 2004 2005 2006 2007 2008
Historical Major Additions Annexations FY Retail Centers FY Cook Street Area 88/89 Town Center Mall 83/84 Country Club #28 93/94 Desert Springs Marriott 86/87 Price Club/Costco 93/94 One Eleven Town Ctr 88/89 Palm Desert CC #29 94/95 Mervyn's Center 92/93 Palm Desert Greens 04/05 Desert Crossing 95/96 Suncrest 04/05 Lucky's/Albertson Deep Canyon 96/97 Remodel 111 Town Ctr (Best Buy) 97/98 Gardens on El Paseo 98/99 Remodel Westfield Mall (Sears, Barnes & Noble) 04/05 Sears Automotive 04/05 Lowes Home Improvement 05/06 Walmart / Sams Supercenters 05/06 Kohls 07/08
171 City of Palm Desert Supplemental FY 2008 and 2007 Breakdown of Basic 1% Property Tax Rate Not In Redevelopment Project Area
Taxing Agency FY 2008 Rate FY 2007 Rate
County General 28.177327% 28.177327%
County Free Library 2.728242% 2.728242%
County Structure Fire Protection 5.873086% 5.873086%
City of Palm Desert (1) 0.000000% 0.000000%
Desert Sands Unified School District 36.221587% 36.221587%
Desert Community College 7.526714% 7.526714%
Riverside County Reg. Park & Open Space 0.426231% 0.426231%
Riverside County Office of Education 4.094919% 4.094919%
Desert Hospital 1.996808% 1.996808%
Coachella Valley Public Cemetary 0.339927% 0.339927%
Coachella Valley Recreation & Park 2.071624% 2.071624%
Coachella Valley Mosquito & Vector Control 1.369698% 1.369698%
Coachella Valley County Water 2.736607% 2.736607%
Coachella Valley County Water Imp. District 80 2.972906% 2.972906%
Coachella Valley County Water Storm Water Unit 3.464324% 3.464324%
General Purpose Basic 1% 100.000000% 100.000000%
(1) City of Palm Desert is a No-Low Property Tax City and the 7% represents what the state allocates to No-Low Property Tax Cities.
Source: County of Riverside, Property Tax Allocation Percentages, TRA 018-041.
172 City of Palm Desert Property Tax Rates Direct and Overlapping Property Tax Rates Last Eight Fiscal Years
City Direct Overlapping Rates Basic Total Desert Sands Desert Coachella Coachella Fiscal County-wide Direct Tax Unified School Community Valley Water Valley Water Year Levy Rate District College Dist. District District I.D. 58 2008 1.00000 1.00000 0.07561 0.01995 0.04000 0.00230
2007 1.00000 1.00000 0.07613 0.01995 0.02080 0.01560
2006 1.00000 1.00000 0.07674 0.01995 0.02080 0.02520
2005 1.00000 1.00000 0.09581 0.01994 0.02080 0.02690
2004 1.00000 1.00000 0.09750 0.00000 0.02080 0.02870
2003 1.00000 1.00000 0.09750 0.00000 0.02080 0.03060
2002 1.00000 1.00000 0.09750 0.00000 0.02080 0.03060 2001 1.00000 1.00000 0.09750 0.00000 0.02080 0.04060
Notes: Proposition 13 limits the ability of the city to raise the property tax rate.
The City of Palm Desert chose to implement this schedule retroactively for the last eight years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years.
Source: CalMuni Statistics Inc
173 City of Palm Desert Principal Property Taxpayers Current Year and Ten Years Ago
2008 1999 Percentage of Percentage of Taxable Taxable Total City Tax Total City Tax Taxpayer Rank Taxpayer Assessed Rank Assessed Value Assessed Assessed Value Value Value
Marriott Desert Springs$ 269,412,639 1 2.97% Marriott Desert Springs $180,082,114 1 4.37% Teachers Insurance & WEA Palm Desert 133,043,368 2 1.51% 67,233,066 2 1.91% Annuity Assoc Pru of Desert Crossing II Property California 84,863,834 3 0.96% 59,679,408 3 1.69% LLC SCJLW One Corp. Colony Cablevision of Gardens SPE II 75,697,198 4 0.76% 23,778,809 4 0.61% California Marriott Ownership 80,872,011 5 0.55% Winmar Palm Desert 21,075,491 5 0.55% Resorts Inc El Paseo Properties Palm Desert Funding Co 37,127,327 6 0.41% 18,771,663 6 0.53% Limited Partnership Federated West / Big Horn Development 41,819,730 7 0.38% 17,648,792 7 0.50% Macy's Macy's Department Store 33,649,303 8 0.38% Altamira Venture 16,377,049 8 0.47% Inc Sunrise Desert Harsch Investment Realty 28,769,329 9 0.33% 48,707,276 9 0.45% Partners
El Paseo Collection 25,364,517 10 0.29% American Realty Inc 17,223,749 10 0.42%
Total $ 810,619,256 8.54% Total $ 470,577,417 11.50%
Note: The estimated property tax revenue stated above is based upon net taxable values, tax ratios and base year values that impact the revenue calculation. As a result, parcels with the same assessed value that are assigned to different tax rate areas may contribute dissimilar amounts of total revenue to the City and Redevelopment Agency.
Source: HdL Coren & Cone thru Riverside County Assessor 07/08 Combined Tax Rolls
174 City of Palm Desert Property Tax Levies and Collections Last Eight Fiscal Years
Collected within the Fiscal Fiscal Year of the Levy (1) (2) (3) Year Taxes Levied Collections Total Collections to Date Ended for the Percentage in Subsequent Percentage June 30, Fiscal Year Amount of Levy Years (4) Amount (4) of Levy
2001 2,426,812 2,387,760 98.39% 39,052 $ 2,426,812 100.00% 2002 2,603,643 2,475,308 95.07% 128,335 $ 2,603,643 100.00% 2003 3,273,730 2,723,336 83.19% 550,394 $ 3,273,730 100.00% 2004 3,080,422 3,007,652 97.64% 72,770 $ 3,080,422 100.00% 2005 3,768,896 3,501,718 92.91% 267,178 $ 3,768,896 100.00% 2006 4,318,880 4,243,595 98.26% 75,285 $ 4,318,880 100.00% 2007 4,820,583 4,575,158 94.91% 245,425 $ 4,820,583 100.00% 2008 5,206,384 4,734,970 90.95% 471,414 $ 5,206,384 100.00%
(1) City of Palm Desert is on the "Teeter Plan" with the County of Riverside. The first payment was received in the fiscal year 1993/94.
(2) City of Palm Desert is a "No-Low Property Tax City". Proposition 13 rolled the tax rates back to 1973 which is when the City of Palm Desert Incorporated and the Property Tax rates were zero. Based on current state law the County allocates 7% of the 1% assessed values within the City less the Redevelopment Agency tax increment. Fiscal Year 1992/93 was the first year to receive the No/Low taxes.
(3) Fiscal Year 1996/97 final total collected includes adjustments for No-Low property tax collections from prior years modified by the County of Riverside. The County adjusted the payment to the City of Palm Desert (FY 1995/96) for the annexation of Palm Desert Country Club.
(4) Inlcludes tax collections accrued as of June 30, 2008 and received before the completion of the audit field work.
Note: The City of Palm Desert chose to implement this schedule retroactively for the last seven years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years.
Source: Riverside County Auditor Controller Office and City of Palm Desert
175 City of Palm Desert Supplemental Top 25 Sales Tax Generators
Graph - Historical Sales Tax Trends June 30, 2008
Top 25 Sales Tax Generators (1) Primary Economic Category
ALBERTSON'S FOOD CENTERS FOOD MARKETS
ARCO AM/PM SERVICE STATIONS
BED BATH & BEYOND MISCELLANEOUS RETAIL
BEST BUY STORES LP FURNITURE/APPLIANCE
CIRCUIT CITY STORES FURNITURE/APPLIANCE
CHEVRON USA SERVICE STATIONS
COSTCO WHOLESALE COMPANY DEPARTMENT STORES
DESERT ELECTRIC SUPPLY BLDG.MATLS-WHSLE
DESERT SPRINGS RESORT & SPA RESTAURANTS
HIGH TECH IRRIGATION SPECIAL MATLS-WHSLE
J.C.PENNY COMPANY INC DEPARTMENT STORES
KOHLS DEPARTMENT STORES
LEGACY HOME FURNISHINGS FURNITURE/APPLIANCE
LOWE'S HOME IMPROVEMENT BLDG.MATLS-WHSLE
MACY'S DEPARTMENT STORES DEPARTMENT STORES
MARSHALLS OF CA APPAREL STORES
MERVYN'S STORE APPAREL STORES
PETE CARLSONS GOLF & TENNIS RECREATION PRODUCTS
SAKS FIFTH AVENUE DEPARTMENT STORES
SAM'S CLUB DEPARTMENT STORES
SEARS-ROEBUCK AND CO DEPARTMENT STORES
TARGET STORE DEPARTMENT STORES
TOMMY BAHAMA RESTAURANTS
WAL-MART SUPERCENTER SPECIAL MATLS-WHSLE
WEST COAST TURF DEPARTMENT STORES
(1) Listed in Alphabetical Order
Sales and Use Tax Trends FY 2001 - 2008
% = % Change from Prior Year Millions $20.0 $19.0 15.0% 0.8% $18.0 -2.5% $17.0 2.0% $16.0 11.1% $15.0 -In Lieu * 3.1% 3.2% $14.0 -4.5% $13.0 $12.0 $11.0 $10.0
Amounts 2001 2002 2003 2004 2005 2006 2007 2008 in Millions 13.620 13.027 13.463 15.138 15.453 17.776 17.918 17.481
Note : Current California law prohibits production of individual tax information as an effort not to infringe on proprietary information, therefore confidential information which is protected by law is not disclosed.
* The State of California exchanged Sales Tax Revenue with Property taxes, this amount represents the portion of sales tax that were exchanged.
Source: SBOE Data, MuniServices LLC. In Lieu given to city from State ERAF Property Taxes, City of Palm Desert
176 City of Palm Desert Supplemental Taxable Sales by Category Last Eight Calendar Years
2007 2006 2005 2004 2003 2002 2001 2000
Apparel Stores$ 159,207 $ 155,859 $ 141,510 $ 132,831 $ 108,829 $ 97,924 $ 93,792 $ 92,192 General Merchandise 388,583 392,738 362,512 340,277 307,186 278,583 272,856 269,776 Food Markets 49,398 53,870 50,556 47,455 52,461 51,738 52,282 55,817 Restaurants 181,731 184,954 178,248 167,315 152,508 148,228 155,911 153,970 Furniture/Appliance 135,775 161,997 166,109 155,921 135,694 128,623 125,130 128,899 Bldg.Matls-Wholesale 95,633 69,773 73,228 68,737 56,180 54,111 64,251 57,865 Automotive 8,596 6,121 6,245 5,862 8,211 6,904 8,825 8,108 Service Stations 63,969 59,401 48,564 45,585 39,146 23,930 22,633 25,807 Other Retail 282,973 295,830 281,388 264,129 243,474 228,286 220,252 227,591
Non-Retail (1) 219,411 222,177 218,591 205,184 193,041 190,058 195,137 197,961 Amounts in millions Totals$ 1,585,276 $ 1 ,602,720 $ 1,526,951 $ 1,433,296 $1,296,730 $ 1,208,385 $ 1,211,069 $ 1,217,986
City direct sales tax rate 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
(1) Non-retail are a mix of manufacturers, distributors, builders and professionals selling direct to consumers.
Note: The combined sales tax rate for the City of Palm Desert is 7.75%, which represents the State of California mandated tax rate of 7.25% and 0.5% additional sales tax imposed by the County of Riverside. The Cityyf of Palm Desert receives 1% of f all sales tax ggenerated within the city y limits.
The City of Palm Desert chose to implement this schedule retroactively for the last eight years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years.
Source: Economics and Politics Inc via California State Board of Equalization
177 City of Palm Desert Supplemental Prinicipal Sales Tax Remitters Current and Eight Calendar Years Ago(2)
2007 2000 Industry Tax Amount Rank Percentage Tax Amount Rank Percentage
General Merchandise$ 388,583 1 24.51%$ 269,800 1 22.15%
Other Retail 282,973 2 17.85% 227,600 2 18.69%
Non-Retail (1) 219,411 3 13.84% 198,000 3 16.26%
Restaurants 181,731 4 11.46% 154,000 4 12.64%
Apparel Stores 159,207 5 10.04% 128,900 5 10.58%
Furniture/Appliance 135,775 6 8.56% 92,200 6 7.57%
Bldg.Matls-Wholesale 95,633 7 6.03% 57,870 7 4.75%
Service Stations 63,969 8 4.04% 25,800 9 2.12%
Food Markets 49,398 9 3.12% 55,800 8 4.58%
Automotive 8,596 10 0.54% 8,100 10 0.66%
Amounts in millions Totals$ 1,585,276 $ 1,218,070
(1) Non-retail are a mix of manufacturers, distributors, builders and professionals selling direct to consumers.
(2) City only has the last eight years of information available.
Note: Current California law prohibits production of individual tax information as an effort not to infringe on proprietary information, therefore confidential information which is protected by law is not disclosed.
Source: Economics and Politics Inc via California State Board of Equalization
178 City of Palm Desert Ratios of Outstanding Debt by Type Last Eight Fiscal Years
Governmental Activities Business Type Activities Special Total Percentage Fiscal Redevelopment Assessment Note Capital Primary of Personal Per Year Bonds Bonds d Payable Leases Government Income b Capita b
2001 193,015,000 48,415,000 - 373,556 241,803,556 13.90% 5,712 2002 207,990,000 43,145,000 - 106,373 251,241,373 15.96% 5,861 2003 234,464,000 40,528,000 1,104,363 1,146,582 277,242,945 16.73% 6,313 2004 256,000,000 28,623,000 981,656 833,358 286,438,014 16.16% 6,392 2005 250,485,000 26,050,000 858,949 509,755 277,903,704 13.45% C 5,639 2006 245,000,000 73,855,000 736,242 170,493 319,025,493 15.21% C 6,440 2007 a 421,819,894 122,393,000 613,535 2,181,546 547,007,975 25.65% C 10,987 2008 412,694,700 115,398,000 490,828 1,582,782 530,166,310 21.49% 10,414
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
The City of Palm Desert chose to implement this schedule retroactively for the last eight years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years. a - The city issued $50.51 million of special assessment bonds in fiscal year end 2007 allocated to three separate assessment districts. In addition the City's Redevelopment Agency issued $284.37 in bonds of which $183.15 was new debt. b - Personal income, population and per capita information provide by John E. Husing, Ph.D. Economics & Politics, Inc ., California Department of Finance, and U.S Census Bureau. c - Personal Income estimated based on average growth rate of previous four years. The growth rate factor used was 1.5%. Income data will be updated once the actual data is available. d - Special Assessment includes Highlands Undergrounding AD No# 04-01, as of June 30, 2008 the balance was $2,748,000
179 City of Palm Desert Ratios of General Bonded Debt Outstanding Last Eight Fiscal Years
General Bonded Debt Outstanding
Percentage of Actual Fiscal Redevelopment Special Assessment Taxable Value of Per Year Bonds Bonds Property a Capita b 2001 193,015,000 2.990%$ 4,559 2002 207,990,000 2.880%$ 4,852 2003 234,464,000 2.930%$ 5,339 2004 256,000,000 2.820%$ 5,713 2005 250,485,000 2.400%$ 5,083 2006 245,000,000 2.080%$ 4,946 2007 421,819,894 2,783,000 3.250%$ 8,478 2008 412,694,700 2,748,000 3.170%$ 8,107
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
The City of Palm Desert chose to implement this schedule retroactively for the last eight years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years.
a - County of Riverside, County Auditor Controller, Assessed Valuations
b - Population information provided by John E. Husing , Ph.D. Economics & Politics, Inc., California Department of Finance., and U.S Census Bureau.
180 City of Palm Desert Supplemental Special Assesment Information June 30, 2008
1995 C 2003 01-01 2003 01-01 2003 01-01 2004 R-Bonds Revenue Bonds Silver District Name\Description Marks-Roos Pool Revenue Bonds 94- Revenue Bonds 94- 98-1 (6) Spur Ranch (87-1) 2 Sunterrace 3 Merano Utility Undergrounding Canyons @ Bighorn
Bond Issue Date 09/26/95 06/25/03 06/25/03 06/25/03 02/19/04 Final Maturity Date 09/02/08 09/02/14 09/02/20 09/02/28 09/02/18 Highest Interest Rate 5.70% 4.80% 5.25% 5.375% 5.100% Bond Issue Amount 1,775,000 930,000 1,153,000 2,340,000 2,955,000 Matured Principal 1,280,000 340,000 248,000 265,000 955,000 Called Principal 495,000 235,000 - 110,000 1,220,000 Outstanding Bonds (4) - 355,000 905,000 1,965,000 780,000 Redemption Premium 3.25% 3.00% 3.00% 3.00% 3.00% Original Parcels 1,317 71 201 250 73 Active Parcels 193 65 121 197 20 Reserve Requirement (5) $ 0 $ 35,500 $ 90,500 $ 166,000 $ 78,000 Reserve Balance 08/09 (1) $ 0 $ 90,516 $ 80,408 $ 166,477 $ 142,152 Principal Due 08/09 (2) 0 70,000 55,000 60,000 65,000 Principal Levied 08/09 (3) - 77,817 55,000 62,297 67,468 Interest Due 08/09 (2) 0 18,750 42,310 99,813 35,025 Interest Levied 08/09 (3) 0 22,480 40,410 100,680 36,958 08/09 Delinquency Rate 0.73% 1.51% 3.41% 8.24% 0.00% Arbitrage Installment Computation Date: 09/02/10 09/02/09 09/02/09 12/17/08 12/16/08 90% Rebate Due Arbitrage Yield Rate 5.8194% 7.9769% 6.672% 5.1577% 5.8386% Arbitrage-Amount Owed - - - - - Continuing Disclosure Last Report 12/12/2007 12/12/2007 12/12/2007 12/12/2007 12/12/2007 Issued: 2004-2 Community Series 2008 1997 Bonds Section 29 2004-1 Palm Desert Facilities District No. Community Facilities 91-1 Assessment District Highlands District Name\Description 2005-1 (University District No. 91-1 Limited Obligation Undergrounding Indian Ridge Park) Special Tax (7) Improvement Series 2006 Special Tax 1992A R Bonds Series 2006A Bonds Refunding Bonds
Bond Issue Date 12/11/97 05/09/06 3/29/2007 8/8/2006 12/19/2007 Final Maturity Date 10/01/20 09/01/36 9/2/2037 9/2/2036 10/1/2020 Highest Interest Rate 6.800% 5.371% 5.100% 0.000% 4.000% Bond Issue Amount 23,509,000 67,915,000 29,430,000 3,165,000 10,935,000 Matured Principal 7,189,000 825,000 - 81,000 1,665,000 Called Principal 16,320,000 - - 382,000 - Outstanding Bonds (4) - 67,090,000 29,430,000 2,702,000 9,270,000 Redemption Premium 3.00% 3.00% 3.00% 3.00% 3.00% Original Parcels 1,154 37 167 172 1,154 Active Parcels 1,063 27 318 135 1,063 Reserve Requirement (5) $ 0 $ 4,587,219 $ 1,945,358 NA$ 1,093,500 Reserve Balance 07/08 (1) $ 0 $ 4,620,473 $ 1,945,358 NA$ 1,093,500 Principal Due 08/09 (2) - 1,165,000 505,000 48,000 855,000 Principal Levied 08/09 (3) - 1,165,000 505,000 47,438 855,000 Interest Due 08/09 (2) - 3,422,219 1,437,860 134,306 314,210 Interest Levied 08/09 (3) - 3,445,759 1,437,860 135,180 314,210 07/08 Delinquency Rate 0.00% 0.63% 0.00% 5.44% 1.60% Arbitrage Installment Computation Date: NA 05/09/11 03/29/12 08/08/11 08/08/11 90% Rebate Due Arbitrage Yield Rate 0.0000% 5.3599% 5.0134% 5.0691% 3.8681% Arbitrage-Amount Owed - - - - - Continuing Disclosure Last Report 12/12/2007 12/12/2007 01/15/2008 NA NA Issued:
(1) Reserve Balances are as of 9/30/08, shortfall will be recovered by additional levy, and interest earnings see Financial Statements Note 10
(2) Amount represents principal and interest to be collected on the FY 07/08 tax roll for Debt Service Payment due in FY 08/09.
(3) Levied amounts reflect adjustments for construction funds, reserve funds, redemption funds and other adjustments.
(4) Represents Outstanding Bonds after September 2, 2008 principal payment.
(5) Reserve Requirement as of 9/2/08
(6) The 1995 C Marks-Roos Pool (87-1) was paid in full during the 2007-2008 fiscal year. There are no more bonds outstanding for this issue.
(7) The 1997 91-1 Bonds was refunded in full on April 1, 2008, with Communities Facilities District no. 91-1 Improvement) Special Tax Refunding Bonds
Source: Muni Financial Annual Report
181 City of Palm Desert Direct and Overlapping Government Acitivities Debt JUNE 30, 2008
2007/08 Assessed Valuation:$ 13,142,781,016 Redevelopment Incremental Valuation: 8,434,944,115 Adjusted Assessed Valuation:$ 4,707,836,901
City's Share of DIRECT AND OVERLAPPING TAX ASSESSEMENT DEBT: Total Debt 6/30/08 % Applicable (1) Debt 6/30/08 Desert Community College District$ 337,870,330 13.293%$ 44,913,103 Desert Sands Unified School District General Obligation Bonds 214,839,044 27.725% 59,564,125 Desert Sands Unified School District Lease Tax Obligations 13,590,000 27.725% 3,767,828 Palm Springs Unified School District 237,685,000 2.321% 5,516,669 Coachella Valley County Water District, ID No. 54 3,275,000 62.450% 2,045,238 Coachella Valley County Water District, ID No. 55 4,590,000 4.306% 197,645 Coachella Valley County Water District, ID No. 58 2,160,000 34.259% 739,994
City of Palm Desert 0 100.000% 0 City of Palm Desert 1915 Act Bonds 36,748,000 100.000% 36,748,000 City of Palm Desert Community Facilities District No. 91-1 10,935,000 100.000% 10,935,000 City of Palm Desert Community Facilities District No. 2005-1 67,915,000 100.000% 67,915,000 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $ 232,342,602
OVERLAPPING GENERAL FUND OBLIGATION DEBT: Riverside County General Fund Obligations$ 701,562,000 2.710%$ 19,012,345 Riverside County Pensions Obligations 387,995,000 2.710% 10,514,665 Riverside County Board of Education Certificate of Participation 9,275,000 2.710% 251,353 Desert Sands Unified School District Certificates of Participation 12,470,000 27.725% 3,443,445 Coachella Valley Recreation and Park District Certificates of Participation 2,510,000 21.997% 552,125 Coachella Valley County Water District, ID No. 71 Certificate of Participation 6,390,000 19.006% 1,214,483
TOTAL GROSS OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 34,988,416 Less: Riverside County Administrative Center Authority 474,361 Palm Desert Water Services District Certificates of Participation (3) - TOTAL NET OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 34,514,055
GROSS COMBINED TOTAL DEBT 267,331,018 (2) NET COMBINED TOTAL DEBT 266,856,657
(1) Percentage of overlapping ageny's assessed valuation located within bondaries of city (2) Excludes tax revenue anticipation noted, enterprise revenue, mortage revenue and tax allocation bonds and non-bonded capital lease obligations (3) Palm Desert Water Services District C.O.P. was assumed by Coachella Valley Water District
Ratios to 2007-08 Assessed Valualtions: Direct Debt 0.00% Total Direct and Overlapping Tax and Assessment Debt 1.77%
Ratios to Adjusted Valuations Gross Combined Total Debt 5.68% Net Combined Total Debt 5.67%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/08 $ 0
Source: California Municipal Statistics, Inc., San Francisco
182 City of Palm Desert Legal Debt Margin Information Last Eight Fiscal Years
Legal Debt Margin Calculation for Fiscal Year 2008
Assessed Value$ 13,142,781,016 Debt Limit (15% of Assessed Value) (1) 1,971,408,152 Debt Applicable to Limit:
General Obligation Bonds 2,748,000 Less: Amount set aside for repayment of general obligation debt -
Total Debt Applicable to Limit 2,748,000
Legal debt margin $ 1,968,660,152
FISCAL YEAR 2001 2002 2003 2004 2005 2006 2007 2008
Debt Limit 967,521,240 1,084,078,030 1,200,179,536 1,306,436,757 1,397,304,489 1,582,592,579 1,783,572,979 1,971,408,152
Total Net debt applicable to limit ------2,783,000 2,748,000
Legal debt margin 967,521,240 1,084,078,030 1,200,179,536 1,306,436,757 1,397,304,489 1,582,592,579 1,780,789,979 1,968,660,152
Total net debt applicable to the limit as a percentage of debt limit 0% 0% 0% 0% 0% 0% 0.16% 0.14%
(1) Section 43605 of the California Government Code.
Note: The City of Palm Desert chose to implement this schedule retroactively for the last eight years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years.
Source: California Municipal Statistic, Inc. San Francisco
183 City of Palm Desert Pledged-Revenue Coverage Last Eight Fiscal Years
Special Assessment Bonds Tax Increment b Special Debt Service Special Debt Service Fiscal Assessment Assessment Year Collections Principal Interest Coverage Collections Principal Interest Coverage
2001 5,471,643 2,485,000 3,436,552 0.9240 14,993,158 3,895,000 10,610,473 1.03 2002 4,623,412 2,295,000 2,730,780 0.9199 16,294,794 3,960,000 10,538,582 1.12 2003 4,495,603 1,930,000 2,451,363 1.0261 18,496,636 4,195,000 10,960,525 1.22 2004 4,606,935 1,790,000 2,161,283 1.1659 20,344,776 4,800,000 11,748,004 1.23 2005 2,878,134 2,073,000 1,483,245 0.8093 23,585,980 5,260,000 12,366,733 1.34 2006 a 2,788,698 1,645,000 1,378,548 0.9223 24,065,285 5,485,000 12,409,968 1.34 2007 a 4,444,967 1,972,000 3,464,355 0.8176 28,675,094 7,704,000 16,434,841 1.19 2008 6,245,888 1,635,000 c 5,414,793 0.8860 41,978,187 10,610,000 21,402,246 1.31
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
The City of Palm Desert chose to implement this schedule retroactively for the last eight years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years. a - The city issued $50.51 million of special assessment bonds in fiscal year end 2007. The RDA issued $284.37 million of debt of which $183.15 was new debt. b - Tax increment bonds are backed by property tax increment based on calculation provided by the Riverside County tax assessor office. Additional informantion on tax increment can be found in the notes to the financial statements. c - The 1997 91-1 Bonds was refunded in full on April 1, 2008, with Communities Facilities District no. 91-1 Improvement) Special Tax Refunding Bonds Additional principal on note 14 reflects the total principal paid along with the refunded portion.
184 City of Palm Desert Demographic & Economic Statistics Last Eight Calendar Years
Fiscal Percentage Per Capita Riverside Percentage City Year City Increase Personal Personal County Increase Unemployment End Population (Decrease) Income CY a b Income CY Population (Decrease) Rate c
2008 50,907 2.3%$ 2,439,420,309 $ 47,919 2,088,322 6.91% 4.1% 2007 49,752 0.4% 2,132,710,348 42,867 2,031,625 4.01% 3.6% 2006 49,539 0.5% 2,097,434,084 42,339 1,953,330 4.07% 2.9% 2005 49,280 10.0% 2,066,437,521 41,933 1,877,000 5.64% 3.1% 2004 44,812 2.0% 1,772,405,266 39,552 1,776,743 5.00% 3.5% 2003 43,917 2.5% 1,657,414,199 37,740 1,692,187 2.91% 3.8% 2002 42,863 1.2% 1,573,796,241 36,717 1,644,341 3.06% 3.7% 2001 42,334 12.5% 1,739,444,000 41,089 1,595,576 5.73% 3.2% 2000 37,634 3.7% 1,713,352,340 45,527 1,509,114 2.43% 3.1%
Note: The City of Palm Desert chose to implement this schedule retroactively for the last eight years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years. a - Personal income, population and per capita information provided by John E. Husing, Ph.D. Economics & Politics Inc ., Californa Department of Finance., and U.S. Census Bureau. b - Personal Income estimated based on average growth rate of previous four years. The growth rate factor used was 1.5%. Income data will be updated once the actual data is available. c - Unemployment rate for fiscal year 07/08 is based on June 30, 2008 State of California Employment Development Department Labor Market Information Division (not seasonally adjusted)
Sources: State Department of Finance, U.S. Dept of Labor, John E. Husing, PhD, Economics & Politics, Inc, State Employment Development Department
185 City of Palm Desert Principal Employers Current and Ten Years Ago
2008 2 1999 1 Percentage of Percentage of Employer Employees Rank Total City Employer Employees Rank Total City Employment Employment JW Marriot-Desert Springs Resort 1,300 1 3.95%
Securitas-Security Service USA 700 2 2.13%
College of the Desert 630 3 1.91%
Marriott's Desert Spa Villas 500 4 1.52%
Sunshine Landscape Corp 500 5 1.52%
Desert Valley Industries 400 6 1.22%
Marriott Ownership Resorts 300 7 0.91%
Sunrise Colony Co. 250 8 0.76%
Foundation for the Retarded 236 9 0.72%
Time Warner Cable 220 10 0.67%
Totals 5,036 15% Totals - 0%
(1) The information for 1999 is not available
(2) As of Jauary 1, 2008
Sources: MBIA Muni-Services thru America's Labor Market Information System (ALMIS).
186 City of Palm Desert Supplemental Miscellaneous Statistics 1-Jun June 30, 2008 City/ Municipal Government Form of Gorvernment: Council - City Manager/Charter City Date of Incorporation: November 26, 1973
Number of Employees 169 Full Time Employees
Size of City 25.5 Square Miles
Geographic Location: Located 117 miles east of Los Angeles and 515 miles south of San Francisco.
Streets 159 paved street miles
Number of Business Licenses 10,992 active business licenses
CONTRACT SERVICES: Police Department Contract with Riverside County Sheriff - 75 positions plus 19 support staff Fire Department Contract with Riverside County/State Fire 47 positions plus 5 Fire Prevention Staff Animal Control Riverside County Animal Services Water & Sewer: Coachella Valley Water District Trash Collection Burrtec - Waste Management Electric Southern Calif. Edison Gas Southern California Gas Telephone Verizon Airport Palm Springs International Airport
Public Education Elementary School (grades K - 5) 3 Middle School (grades 6 - 8) 1 High School (grades 9 - 12) 1 Community College - C.O.D. 1 CSUSB - Palm Desert Campus 1
Insurance Coverage General Liability Coverage Calif. Joint Powers Insurance Authority 50 Million/Event (Excludes Earthquake & Flood) Excess Coverage: American Guarantee & Liab. Insurance
Special Events Calif. Joint Powers Insurance Authority 1 Million
Workers Compensation Calif. Joint Powers Insurance 5 Million Property Insurance Robert Driver Based on Prop. Value
Health Insurance Medical California PERS; choice of PPO, HMO Dental Delta Dental Vision Vision Service Plan Disability Insurance Disability - Standard Insurance Company Life Standard Insurance Company Retirement California PERS - Public Employers Retirement System
Source: City of Palm Desert
187 City of Palm Desert Full-time Equivalent City Government Employee's by Function / Program Last Eight Fiscal Years
Function / Program 2008 2007 2006 2005 2004 2003 2002 2001 General Government City 49 51 53 52 51 51 48 45 Redevelopment Agency 19 19 19 19 18 18 15 11
Public Safety 35 35 28 28 28 32 30 31 Police & Fire (1) 146 143 129 123 123 126 126 125
Public Works 52 44 49 39 39 39 36 35
Parks, recreation & culture 14 18 11 16 16 16 16 14
Totals 315 310 289 277 275 282 271 261
(1) The City operates as a "contract city" utilizing, primarily, agreement with other governmental entities, private firms and individuals to provide services. Contracted services include: Police and Fire protection through the County of Riverside, animal control, health services, legal services and landscape maintenance.
Note: The City of Palm Desert chose to implement this schedule retroactively, for the last eight years. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years.
Source: City of Palm Desert Financial Plan, California Department of Forestry and Fire Protection, Riverside County Sheriffs Department
188 City of Palm Desert Operating Indicators by Function / Program Last Three Fiscal Years
Function / Program 2008 2007 2006 General Government Business License Inspections 489 447 420
Contracted Services - Burrtec Waste (1) Refuse Collected (tons) 67,940 73,467 71,820 Recyclables Collected 23,798 24,089 24,359
Public Safety Physical Arrests 1,550 1,430 543 Parking Violations 770 694 1,374 Traffic Violations 5,929 6,875 4,527 Emergency Responses-Fire Department 6,908 6,785 6,600 Fires Extinguished 154 241 928 Fire Inspections 4,267 5,934 1,845 Building Permits Issued 4,012 5,813 5,683 Building Inspections Conducted 26,401 33,215 29,925
Public Works Street Resurfacing (miles) 17 9 11
Parks, recreation & culture Athletic Field Permits Issued 5,949 4,510 2,967 Amphitheater / Pavilions Permits Issued 133 84 81 CommunityCommunity Center Admissions 112112,540,540 9797,339,339 9292,083,083
(1) The City operates as a "contract city" utilizing, primarily, agreement with other governmental entities, private firms and individuals to provide services. Contracted services include: Police and Fire protection through the County of Riverside, animal control, health services, legal services and landscape maintenance.
Note: The City of Palm Desert chose to implement this schedule retroactively. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years.
Sources: Riverside County Sheriffs Dept., California State Department of Forestry & Fire Protection, City of Palm Desert, Coachella Valley Recreation & Park District, Burrtec Waste
189 City of Palm Desert Capital Asset Statistics by Function / Program Last Three Fiscal Years
Function / Program 2008 2007 2006 General Government Contracted Services (1) Collection trucks 69 61 71 Public Safety - Police & Fire Police Stations 111 Police Sub Stations 222 Patrol Units-Cars 29 29 28 Patrol Units-Motorcyclesy 754
Fire Stations 333 Fire Trucks 4 plus 2 Reserved 4 plus 2 Reserved 4 plus 2 Reserved Ambulance 3 plus 1 Breathing Support 3 plus 1 Breathing Support 3 plus 1 Breathing Support Fire Prevention Pick-ups 333 Public Works Streets (miles) 159 154.11 154.11 Traffic Signals 99 87 85
Parks, recreation & culture Acreageg 200 200 200 Total Parks 13 13 11 Playgrounds 987 Baseball/softball diamonds 11 11 8 Soccer/football fields 775 Basketball Courts 996 Tennis Courts 10 10 8 Volleyball Courts 10 10 6 Community Centers 222 Skateboard Park 221 CommercialCo e c a OOffice ce Space (Parkview Office Complex) Leaseable Space (square feet) 50,322 50,322 50,322 Occupancy Rate 100% 100% 100% Number of Tenants by Type Government (State, local regional) 11 10 9 Non-Profit 766 Private 688 Square Footage lease by tenant Government (State, local regional) 34,402 33,298 32,457 NonNon-Profit Profit 6,188 5,708 5,708 Private 9,732 11,316 10,836 Vacant 0 0 1,321 Municipal Golf Course (Desert Willow Golf Resort) Courses - Fire Cliff and Mountain View 222 Holes 36 36 36 Golf Carts 160 160 160 Clubhouse square footage 33,000 33,000 33,000 Rounds per Course Fire Cliff 46,688 47,263 46,602 Mountain View 43,8983 898 41,1821 182 43,72532 Total Annual Rounds 90,586 88,445 90,327
(1) The City operates as a "contract city" utilizing, primarily, agreement with other governmental entities, private firms and individuals to provide services. Contracted services include: Police and Fire protection through the County of Riverside, animal control, health services, legal services and landscape maintenance.
Note: The City of Palm Desert chose to implement this schedule retroactively. Governments are encouraged, but not required, to implement retroactively. Ultimately, this schedule will include ten years.
Sources: Riverside County Sheriffs Dept., California State Department of Forestry & Fire Protection, City of Palm Desert, Coachella Valley Recreation & Park District, Burrtec Waste
190 Supplemental Redevelopment Agency Statistical Section City of Palm Desert, California
Note: This section is not required by GASB No. 44, however, City believes that statistical information is beneficial to the reader.
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192 IN T ER S TA TE H W City of Palm Desert Y 1 DINAH SHORE DR 0 E V A
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July, 2004 City of Palm Desert RDA Project Area #1 and 1982 Annex FY 2008 Top Twenty Property Taxpayers
Owner Assessed Value Cumulative % Business Description (Number of Parcels) $ (1)
800,000 sq. ft. Retail Shopping Mall Westfield WEA Palm Desert (7)$ 133,043,368 20.5% Shopping Town
Pru of Desert Crossing II LLC(11)$ 84,863,834 13.1% Major Commercial / Retail Buildings
Elisabeth Stewart-Marrakesh CC(279)$ 80,929,883 12.5% Golf Course/Country Club
Garden's at El Paseo up-scale retail shopping Gardens SPE II (1)$ 75,697,198 11.7% Center. Mix Commercial Buildings One-Eleven Town Harsch Investment Realty LLC(11)$ 28,769,329 4.4% Center Shopping Center
Bighorn Development (61)$ 28,762,407 4.4% Recreational / Residential Land Developer
Felcor TRS Borrower (4)$ 25,746,944 4.0% 198 Suite Hotel
Desert El Paseo (2)$ 20,400,000 3.1% Commercial Shopping Center
Macys Calif (1)$ 19,367,644 3.0% Retail Store in Westfield Mall (Macy's)
Commercial Center Palms to Pines 26 Del Sure Palms LLC (3)$ 17,450,000 2.7% Ralphs/Washington Mutual
Nationwide Health Properties Inc. (1)$ 15,875,802 2.4% Assissted Living Center
Sears Roebuck & Company (1)$ 14,958,006 2.3% Retail Store in Westfield Mall (Sears)
Macys Calif (1)$ 14,267,778 2.2% Westfield Mall (Macy's Parking Structure)
Seven Palms Development (6)$ 14,159,620 2.2% Residential Land Bighorn Development
Bernard Jacques Debonne Trust (5)$ 14,047,254 2.2% Vacant Commercial Land (Village Court)
L. Lee Bosley Trust (2)$ 13,299,488 2.0% Residential Land Bighorn Development
Dayton Hudson Corporation (1)$ 12,592,614 1.9% Commercial Shopping Center & Parking lot
El Paseo Land Company (2)$ 12,546,000 1.9% Commercial Shopping Center & Parking lot
Seoul Garden Plaza Inc (3)$ 11,523,991 1.8% 152 Room Hotel
Summit Cable Services of Georgia (1)$ 11,126,572 1.7% Residential Development
Total Net Assessed Value$ 649,427,732 100%
(1) Cumulative represents only the top twenty properties.
Source: Muniservices LLC and Riverside County Assessor 2007/2008 Combined Tax Rolls
194 City of Palm Desert RDA Project Area #2 FY 2008 Top Twenty Property Taxpayers
Owner Assessed Value Cumulative % Business Description (Number of Parcels) $ (1)
Desert Springs Hotel (8)$ 257,455,433 48.5% Marriott Desert Springs Resort 895 room Hotel
Palm Desert Funding Company (6)$ 37,127,327 7.0% Vacant Commercial/Residential Land
Time Share Condos/Villas (Shadow Ridge & Marriot Ownership Resort Inc (24)$ 32,255,461 6.1% Desert Springs Villas) Sanderson J. Ray Desert Springs $ 25,331,593 4.8% Mixed Use shopping Center (Ralphs/ Walgreens) Partnership (18) Courtyard 151 Room and Residence Inn 130 Room RST4 Tenant, Lessee (1)$ 25,210,660 4.8% Hotels
Palm Desert North 80 (2)$ 20,681,427 3.9% Vacant Commercial Land
WL Homes (1)$ 20,100,000 3.8% Vacant Residential Land
Desert Wells 237 (6)$ 13,741,930 2.6% Vacant Commercial Land
DS Hotel Services (2)$ 11,901,070 2.2% Desert Springs Golf Course
Sinatra & Cook Project (1)$ 11,366,370 2.1% Vacant Commercial Land
Desert Falls Country Club Inc (3)$ 9,798,968 1.8% Private Golf Course & Homes
BNY Western Company Trust (48)$ 9,568,784 1.8% Golf Course Timeshares Condominiums
Manor Healthcare Corporation (1)$ 9,095,144 1.7% Assissted Living Center
La Quinta Village Business Center (2)$ 7,941,034 1.5% Vacant Commercial Land
WVC Rancho Mirage Inc. (18)$ 7,918,317 1.5% Golf Course Timeshares Land
Obed Enterprises Inc (2)$ 7,282,799 1.4% Vacant Commercial Land
Host Marriott Corporation (1)$ 6,958,393 1.3% Desert Springs Golf Course
City of Palm Desert (2)$ 6,051,646 1.1% Vacant Commercial Land
Wilow View (1)$ 5,430,357 1.0% Office Buildings
Resort Ventures (31)$ 5,314,857 1.0% Golf Course Timeshares Land
Total Net Assessed Value$ 530,531,570 100%
(1) Cumulative represents only the top twenty properties.
Source: Muniservices LLC and Riverside County Assessor 2007/2008 Combined Tax Rolls
195 City of Palm Desert RDA Project Area #3 2008 Top Twenty Property Taxpayers
Owner Assessed Cumulative % Business Description (Number of Parcels) Value $ (1)
Multi Family Dwelling (Canterra Apts & Vacant PR XIV (1)$ 32,157,097 17.3% land) Senior Citizens Assisted Living Center(The Sunrise IV Carlotta SL (1)$ 27,565,888 14.8% Fountains)
Time Warner Entertainment Advance (5)$ 18,123,504 9.7% Cable Operator (Commercial Office Buildings)
Business Park of the Desert (22)$ 10,666,952 5.7% Industrial / Commercial Business Park
Burrtec Waste & Recycling (3)$ 10,057,144 5.4% Refuse Collection Base / Industrial Offices
Homuth Grant (1)$ 9,200,200 4.9% Industrial / Commercial Business Park
SAG Palm Desert (1)$ 8,359,666 4.5% Industrial / Commercial Business Park
Northern Trust Bank of California (8)$ 7,591,626 4.1% Industrial / Commercial Business Park
Guthy Renker Corporation (2)$ 7,424,247 4.0% Business / Commercial Offices
Desert Properties LLC (5)$ 6,443,505 3.5% Industrial Offices & Parking Lot
VPM Rancho Vista (7)$ 6,190,380 3.3% Multi Family Dwellings (Rancho Vista Apts)
Eddleman Roy T (1)$ 6,152,924 3.3% Industrial / Commercial Business Park
SMG 17 (1)$ 6,068,842 3.3% Business / Commercial Offices
43100 Cook St (1)$ 5,362,437 2.9% Business / Commercial Offices
Business / Commercial Offices (Corner of Cook St. Office (1)$ 5,005,815 2.7% Cook/Hovley St)
Lakeside Investment Properties (5)$ 4,573,434 2.5% Mix Use Industrial/Commercial Buildings/Stores
Desert Art Properties (1)$ 4,161,600 2.2% Industrial / Commercial Business Park
Stor N Lock Partners 16 (1)$ 3,788,533 2.0% Storage Facility (Stor-n-Lock)
Eclectic Associates (1)$ 3,661,166 2.0% Business / Commercial Offices
WR XVII (1)$ 3,627,135 1.9% Vacant Commercial Land
Total Net Assessed Value$ 186,182,095 100%
(1) Cumulative represents only the top twenty properties.
Source: Muniservices LLC and Riverside County Assessor 2007/2008 Combined Tax Rolls
196 City of Palm Desert RDA Project Area #4 2008 Top Twenty Property Taxpayers
Owner Assessed Cumulative % Business Description (Number of Parcels) Value $ (1)
Indian Ridge Country Club Inc. (29)$ 32,829,509 19.3% Indian Ridge Golf Course & Homes (Private)
Ashford Park Holdings (1)$ 28,064,225 16.5% Multi-Family Dwellings (Desert Oasis Apts)
FKC Palm Desert (4)$ 19,352,306 11.4% Business / Commercial Offices
Cherokee Investment (2)$ 12,734,494 7.5% Storage Facility (Sure Save Storage)
Palm Desert SPE (4)$ 12,042,013 7.1% Multi-Family Dwellings (Palm Desert Apts)
PDCC Development LLC (14)$ 9,324,196 5.5% Palm Desert C.C. Golf Course & Clubhouse
Multi-Family Dwellings (Villas on th Green, PD Villas on the Green (1)$ 7,761,402 4.6% 55+Apts)
Royal Palms Realty LLC (46)$ 5,666,561 3.3% Multi-Family Dwellings (Royal Palms Apts)
CT Woodhaven (4)$ 5,413,863 3.2% Woodhaven Golf Course
SR Mutual Investment Corp. (6)$ 5,188,900 3.1% Palm Desert Resort Golf Course & Clubhouse
D R Horton Los Angeles (31)$ 5,132,005 3.0% Multiple Singe Family Residences (PDCC)
Joseph Lopez A (2)$ 3,687,467 2.2% Single Family Residences Business / Commercial Offices (Corner of Fred First Interstate Bank of California (1)$ 3,563,555 2.1% Waring & Washington St) Edward R. Chiuminatta (2)$ 3,461,051 2.0% Single Family Residence (Indian Ridge C.C.)
Denver Braden (2)$ 3,196,816 1.9% 2 Single Family Residences (Indian Ridge C.C.)
Monta Vista (1)$ 2,775,559 1.6% Multi-Family Dwelling
Peggy M. Hoffman (2)$ 2,595,119 1.5% 2 Single Family Residences (Indian Ridge C.C.)
Frank Kerrigan T (1)$ 2,402,351 1.4% Professional Medical
Toscana Limited LP (1)$ 2,390,344 1.4% Commercial Bldg & Parking Lot(Indian Ridge C.C.)
Fusco Properties (3)$ 2,298,977 1.4% 3 Single Family Residence (Indian Ridge C.C.)
Total Net Assessed Value$ 169,880,713 100%
(1) Cumulative represents only the top twenty properties.
Source: Muniservices LLC and Riverside County Assessor 2007/2008 Combined Tax Rolls
197 City of Palm Desert Project Area Statistics June 30, 2008 RDA 1 RDA 1 1982 Description RDA 2 RDA 3 RDA 4 Original Annex Date Project Area was 07/16/75 11/25/81 07/15/87 07/17/91 07/19/93 Established Most Recent Amendment 12/09/04 12/09/04 12/09/04 12/09/04 12/09/04 Date Established Time Limits: -Repayment of 7/16/2026 11/25/2032 7/15/2038 7/17/2042 7/19/2044 Indebtedness -Project Duration 7/16/2016 11/25/2022 7/15/2028 7/17/2032 7/19/2034 -Last Date to incur Repealed Repealed Repealed Repealed Repealed indebtedness Debt Limits none$ 200,000,000 $ 150,000,000 $ 100,000,000 $ 135,000,000
Tax Increment Limit (1)$ 758,000,000 $ 500,000,000 $ 800,000,000 $ 360,000,000 $ 600,000,000 Types of Area in Project R, C, P R, C, P R, C, P, O R, I, C, P R, I, C, P Acreage Size of 580 5,240 2,927 764 2,260 Project Area
R = Residential, C= Commercial, P= Public Facilities, I= Industrial, O= Other (1) Figures are unadjusted and should be annually adjusted by Consumers Price Index set by the Bureau of Labor Statistics for RDA 2 (Adjusted Limit at $1,489,892,031 through 2007 ).
Source: Palm Desert Redevelopment Agency
198 City of Palm Desert Redevelopment Agency Tax Allocation Bond Issue Information June 30, 2008
PROJECT AREA #1 $22,070,000 $19,000,000 $24,945,000 $62,300,000 $32,600,000 $6,305,000 DESCRIPTION Tax Allocation Tax Allocation Tax Allocation Tax Allocation Tax Allocation Tax Allocation Bonds Bonds Bonds Revenue Revenue Revenue Bonds Years 28 27 21 24Bd 11 13 Bond Issue Date 03/13/02 08/05/03 06/24/04 07/06/06 01/09/07 08/01/95 Final Maturity Date 04/01/30 04/01/30 04/01/25 04/01/30 04/01/18 09/01/08 Highest Interest Rate 5.100% 5.000% 5.000% 5.820% 5.000% 5.550% Bond Issue Amount$ 22,070,000 $ 19,000,000 $ 24,945,000 $ 62,320,000 $ 32,600,000 $ 6,305,000 Outstanding Bond Amount$ 22,070,000 $ 19,000,000 $ 21,805,000 $ 58,140,000 $ 30,470,000 $ 635,000 Call Premium 0 - 2.00% 0.00% 0.00% 0.00% 0.00% 0-2.00% Bond Insurer MBIA MBIA AMBAC MBIA MBIA MBIA Reserve Requirement (1) 2,804,344 950,000 2,430,750 13,117,662 13,116,979 123,500 Reserve Balance (1) (1) (1) (1) (1) (1) 123,500 Called Bonds$ - $ - $ - $ - $ - $ - Principle due 08/09 - 1,030,000 2,075,000 2,410,000 635,000 Interest Due 08/09 1,114,665 950,000 1,025,813 3,092,327 1,416,825 17,621 Arbritage Yield Rate 5.2939% 4.8571% 4.7961% 4.7182% 3.8374% 5.2231% Arbritage-Amount Owed - - - - - Arbritage Five Year Due Date: 04/13/12 08/05/08 06/24/09 07/06/11 01/09/12 09/01/08
PROJECT AREA #2 PROJECT AREA #3 $17,310,000 $15,745,000 $67,600,000 $4,745,000 $15,050,000 DESCRIPTION Tax Allocation Tax Allocation Tax Allocation Tax Allocation Tax Allocation Revenue Bonds Revenue Bonds Revenue Bonds Bonds Revenue Years 20 30 30 30 35 Bond Issue Date 07/17/02 03/26/03 07/25/06 08/05/03 07/25/06 Final Maturity Date 08/01/22 08/01/33 08/01/36 04/01/33 04/01/41 Highest Interest Rate 5.000% 5.00% 6.10% 5.13% 6.10% Bond Issue Amount$ 17,310,000 $ 15,745,000 $ 67,618,213 $ 4,745,000 $ 15,059,526 Outstanding Bond Amount$ 14,030,000 $ 15,745,000 $ 68,638,975 $ 4,220,000 $ 15,386,115 Call Premium 0 - 2.00% 1 - 2.00% 0.00% 2.00% 0.00% Bond Insurer MBIA MBIA AMBAC MBIA MBIA Reserve Requirement (1) 1,324,750 769,006 5,309,825 297,953 1,034,250 Reserve Balance (1) (1) (1) (1) (1) (1) Called Bonds$ - $ - $ - $ - Principle due 08/09 675,000 - 1,221,594 100,000 25,000 Interest Due 08/09 631,858 769,006 2,463,783 195,898 567,263 Arbritage Yield Rate 4.7043% 4.9502% 5.2580% 4.9358% 5.3626% Arbritage-Amount Owed - - - - - Arbritage Five Year Due Date: 07/17/12 03/26/08 07/25/11 08/05/08 07/25/11
PROJECT AREA #4 HOUSING FUND $11,020,000 $15,695,000 $19,273,089 $48,760,000 $12,100,000 $86,155,000 DESCRIPTION Tax Allocation Tax Allocation Tax Allocation Tax Allocation Tax Allocation Tax Allocation Revenue Bonds Revenue Bonds Revenue Revenue Bonds Revenue Bonds Revenue Years 30 30 28 30 30 20 Bond Issue Date 03/01/98 11/28/01 07/25/06 01/01/98 09/05/02 02/07/07 Final Maturity Date 10/01/28 10/01/31 10/01/34 10/01/27 10/01/31 10/01/27 Highest Interest Rate 5.00% 4.80% 5.56% 5.10% 4.90% 5.00% Bond Issue Amount$ 11,020,000 $ 15,695,000 $ 19,273,089 $ 48,760,000 $ 12,100,000 $ 86,155,000 Outstanding Bond Amount$ 8,355,000 $ 14,510,000 $ 19,774,610 $ 5,070,000 $ 10,875,000 $ 83,970,000 Call Premium 0 - 2.00% 0 - 2.00% 0.00% 0 - 2.00% 1 - 2.00% 0.00% Bond Insurer MBIA MBIA MBIA MBIA MBIA MBIA Reserve Requirement (1) 768,020 482,890 3,740,843 572,500 767,625 7,887,224 Reserve Balance (1) (1) (1) (1) (1) (1) (1) Called Bonds$ 105,000 $ - $ - $ - $ - $ - Principle due 08/09 - 310,000 200,000 685,000 265,000 2,880,000 Interest Due 08/09 429,590 662,313 694,945 233,806 500,572 3,861,963 Arbritage Yield Rate 5.2271% 4.9464% 5.1111% 5.1343% 4.8290% 4.1830% Arbritage-Amount Owed ------Arbritage Five Year Due Date: 10/01/12 11/28/11 07/25/11 10/01/12 09/05/12 02/07/12
(1) A surety bond was issued by MBIA Insurance, future reserve balance's will be zero.
Source: City of Palm Desert and Redevelopment Agency
199 City of Palm Desert FY 2007/2008 Breakdown of Basic 1% Property Tax Levy Rates Redevelopment Project Areas Rate Taxing Agency RDA 1 Original RDA 1 1982 Annex RDA 2 RDA 3 RDA 4
County General 28.40651296% 28.33884282% 26.79017236% 25.4134567% 21.90819693% County Library 2.75042000% 2.88437501% 2.93918534% 2.8166515% 2.82811205% County Fire 5.92083447% 6.20920014% 6.32718444% 6.0634120% 6.08807843% City of Indian Wells Annex 0.00000000% 0.00000000% 0.00000000% 0.00000000% 0.00000597% Supervisor Road District 4 0.00000000% 0.00007714% 0.00000000% 0.00000000% 0.00000000%
City of Palm Desert 0.00000000% 2.12289319% 4.41618414% 4.4435240% 8.70369381%
Rancho Mirage Library 0.00000000% 0.01431487% 0.00000000% 0.00000000% 0.00000000%
Rancho Mirage Fire Asmt. 0.00000000% 0.03081565% 0.00000000% 0.00000000% 0.00000000%
Desert Sands Unified School District 36.51609457% 36.92797169% 24.06019277% 37.3954253% 37.54753251%
Palm Springs Unified School District 0.00000000% 0.00000000% 10.89242058% 0.00000000% 0.00000000%
Desert Community College 7.58790746% 8.02811785% 8.10866944% 7.7706301% 7.80224016%
County Superintendent of Schools 4.12820919% 4.36770739% 4.41153204% 4.2276196% 4.24482042%
Riverside County Reg Park & Open 0.42967360% 0.42965824% 0.40524693% 0.3844155% 0.44183209% Space
Rancho Mirage Community Service 0.00000000% 0.00000000% 0.00000000% 0.0000000% 0.00000000%
Coachella Valley Public Cemetary 0.34268622% 0.30395515% 0.22579576% 0.3509372% 0.35236897%
Palm Springs Public Cemetary 0.00000000% 0.02696317% 0.06459145% 0.0000000% 0.00000000%
Desert Hospital 2.01303889% 1.30913346% 1.78897514% 1.0680300% 0.00000000%
Coachella Valley Mosquito & Vector 1.38082974% 1.46093990% 1.47559998% 1.4140803% 1.41983589% Control
Coachella Valley Recreation & Park 2.08846295% 1.85241315% 1.37607609% 2.1387538% 2.14745746%
Coachella Valley Water District 2.75885213% 2.91794190% 2.94819696% 2.8252874% 2.88607351%
Coachella Valley Resource Cons. 0.00000000% 0.02046901% 0.03779673% 0.0317706% 0.03636678%
Coachella Valley Imp District 80 2.18399077% 1.01028948% 0.0000000% 0.0794184% 0.00225180%
Coachella Valley Water District Storm 3.49248704% 1.74391483% 3.73217986% 3.5765875% 3.59113917% Water Unit
ERAF RDV 0.00000000% 0.00000000% 0.00000000% 0.00000000% 0.00000000%
General Purpose Basic 1% Rate 100.00000000% 100.00000000% 100.00000000% 100.00000000% 100.00000000%
Source: Palm Desert Redevelopment Agency, Tax Increment Calculations & County of Riverside
200 City of Palm Desert Historical Tax Increment Summary Redevelopment Project Area #1 - Original Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004
Secured/Unsecured $ 9,112,173 $ 8,618,586 $ 7,996,533 $ 7,406,602 $ 6,934,754 Supplemental 330,285 255,077 817,902 200,879 151,075 SBE (Utility) 362,009 358,243 280,131 300,931 297,098 Total Gross Increment 9,804,467 9,231,907 9,094,566 7,908,412 7,382,927 Low/Mod Housing Set Aside (1,960,893) (1,829,832) (1,803,116) (1,561,352) (1,455,810) Tax Increment Less Low/Mod 7,843,574 7,402,075 7,291,450 6,347,059 5,927,117 Total Pass-Throughs (841,237) (724,021) (830,846) (279,854) (316,366) SB 2557 Charges (86,539) (82,749) (78,987) (101,653) (103,877)
Net Tax Increment Agency (2) $ 6,915,798 $ 6,595,305 $ 6,381,617 $ 5,965,552 $ 5,506,874
FY 2003 2002 2001 2000 1999
Secured/Unsecured $ 6,503,515 $ 6,360,760 $ 6,199,196 $ 5,549,207 $ 5,484,253 Supplemental 49,849 104,267 140,667 58,949 0 SBE (Utility) 288,489 285,323 292,520 332,579 322,956 Total Gross Increment 6,841,853 6,750,350 6,632,383 5,940,736 5,807,209 Low/Mod Housing Set Aside (1,348 ,011) (1,328 ,643) (1,305 ,693) (1,168 ,457) (1,161 ,442) Tax Increment Less Low/Mod 5,493,842 5,421,707 5,326,690 4,772,279 4,645,767 Total Pass-Throughs (1) (696,443) (922,984) 0 0 0 SB 2557 Charges (101,797) (107,137) (103,919) (98,451) (104,485)
Net Tax Increment Agency (2) $ 4,695,602 $ 4,391,586 $ 5,222,771 $ 4,673,828 $ 4,541,282
Percentage represents change from prior year.
$9,000,000 5.94% $7,500,000 3.35% 6.97% 8.33% 17.28% $6,000,000 $4,500,000 $3,000,000 $1,500,000 $0 2008 2007 2006 2005 2004
(1) RDA Project Area 1 does not have Total Pass-Throughs with the exception of FY 1991/92. (2) Net Tax Increment Agency does not include Debt Service payments.
Sources: City of Palm Desert, Tax Increment Calculations & County of Riverside
201 City of Palm Desert Historical Tax Increment Summary Redevelopment Project Area # 1 - Amended Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004
Secured/Unsecured $ 40,030,758 $ 36,240,089 $ 31,237,832 $ 27,778,894 $ 25,247,194 Supplemental 2,644,698 3,587,825 5,644,432 1,502,190 886,454 SBE (Utility) 280,014 255,476 167,752 142,166 144,829 Total Gross Increment 42,955,470 40,083,390 37,050,016 29,423,250 26,278,477 Low/Mod Housing Set Aside (8,591,094) (7,949,224) (7,350,269) (5,811,002) (5,182,761) Tax Increment Less Low/Mod 34,364,376 32,134,166 29,699,746 23,612,248 21,095,716 Total Pass-Throughs (20,349,225) (18,869,733) (17,382,480) (13,463,639) (11,740,730) SB 2557 Charges (368,824) (337,271) (298,669) (368,240) (364,672)
Net Tax Increment Agency (1) $ 13,646,327 $ 12,927,162 $ 12,018,598 $ 9,780,369 $ 8,990,314
FY 2003 2002 2001 2000 1999
Secured/Unsecured $ 22,967,677 $ 19,826,224 $ 15,969,365 $ 12,683,176 $ 11,791,667 Supplemental 910,786 2,011,351 1,352,695 879,432 91,071 SBE (Utility) 136,296 134,804 138,207 152,108 142,885 Total Gross Increment 24,014,759 21,972,379 17,460,268 13,714,716 12,025,622 Low/Mod Housing Set Aside (4,733 ,721) (4,330 ,166) (3,440 ,490) (2 ,699 ,974) (2,405 ,124) Tax Increment Less Low/Mod 19,281,038 17,642,213 14,019,778 11,014,742 9,620,498 Total Pass-Throughs (10,523,374) (9,583,446) (7,339,195) (4,598,001) (3,966,585) SB 2557 Charges (346,155) (321,551) (257,820) (214,847) (214,426)
Net Tax Increment Agency (1) $ 8,411,509 $ 7,737,217 $ 6,422,763 $ 6,201,894 $ 5,439,487
Percentage represents change from prior year. $18,000,000
$15,000,000 6.53% 7.56% 22.88% $12,000,000 8.79% 16.20% $9,000,000
$6,000,000
$3,000,000
$0 2008 2007 2006 2005 2004
(1) Net Tax Increment Agency does not include Debt Service payments.
Sources: City of Palm Desert, Tax Increment Calculations Worksheets & County of Riverside
202 City of Palm Desert Historical Tax Increment Summary Redevelopment Project Area # 2 Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004
Secured/Unsecured $ 17,779,922 $ 15,816,298 $ 13,756,558 $ 12,629,958 $ 11,717,869 Supplemental 1,121,602 1,332,272 1,553,145 698,023 812,847 SBE (Utility) 81,421 70,380 39,774 23,747 25,689 Total Gross Increment 18,982,945 17,218,950 15,349,478 13,351,728 12,556,405 Low/Mod Housing Set Aside (3,796,589) (3,414,421) (3,043,663) (2,636,969) (2,477,550) Tax Increment Less Low/Mod 15,186,356 13,804,529 12,305,815 10,714,759 10,078,855 Total Pass-Throughs (7,598,015) (6,846,307) (6,072,950) (5,459,600) (4,683,769) SB 2557 Charges (163,443) (146,845) (131,163) (166,884) (168,655)
Net Tax Increment Agency (1) $ 7,424,898 $ 6,811,376 $ 6,101,702 $ 5,088,275 $ 5,226,431
FY 2003 2002 2001 2000 1999
Secured/Unsecured $ 10,422,746 $ 8,575,348 $ 7,816,649 $ 7,120,210 $ 6,330,882 Supplemental 548,517 257,896 391,197 244,912 312,878 SBE (Utility) 22,768 22,519 23,088 25,187 21,385 Total Gross Increment 10,994,031 8,855,763 8,230,934 7,390,309 6,665,145 Low/Mod Housing Set Aside (2,167,507) (1,743,454) (1,621,091) (1,454,141) (1,333,029) Tax Increment Less Low/Mod 8,826,524 7,112,309 6,609,843 5,936,168 5,332,116 Total Pass-Throughs (4,320,158) (3,296,575) (2,790,025) (2,423,175) (2,152,320) SB 2557 Charges (156,494) (138,491) (125,482) (119,606) (114,107)
Net Tax Increment Agency (1) $ 4,349,872 $ 3,677,242 $ 3,694,336 $ 3,393,387 $ 3,065,689
Percentage represents change from prior year. $10,000,000 10.56% $8,000,000 11.63% 19.92% $6,000,000 -2.64% 20.15%
$4,000,000
$2,000,000
$0 2008 2007 2006 2005 2004
(1) Net Tax Increment Agency does not include Debt Service payments.
Sources: City of Palm Desert, Tax Increment Calculations Worksheets
203 City of Palm Desert Historical Tax Increment Summary Redevelopment Project Area #3 Last Ten Fiscal Years FY 2008 2007 2006 2005 2004
Secured/Unsecured $ 3,924,542 $ 3,402,301 $ 2,858,918 $ 2,137,750 $ 2,040,874 Supplemental 454,199 185,346 607,706 261,674 150,716 SBE (Utility) 9,990 6,910 3,147 763 1,001 Total Gross Increment 4,388,731 3,594,557 3,469,772 2,400,187 2,192,591 Low/Mod Housing Set Aside (877,746) (712,606) (688,513) (474,397) (432,653) Tax Increment Less Low/Mod 3,510,985 2,881,951 2,781,259 1,925,790 1,759,938 Total Pass-Throughs (2,173,895) (1,806,340) (1,750,650) (1,197,599) (899,766) SB 2557 Charges (1) (36,007) (31,526) (27,207) (28,204) (29,324)
Net Tax Increment Agency $ 1,301,083 $ 1,044,084 $ 1,003,402 $ 699,987 $ 830,848
FY 2003 2002 2001 2000 1999 Secured/Unsecured $ 1,359,556 $ 1,204,009 $ 1,028,201 $ 854,991 $ 677,494 Supplemental 79,744 130,497 47,444 15,963 37,064 SBE (Utility) 731 723 742 908 538 Total Gross Increment 1,440,031 1,335,229 1,076,387 871,862 715,096 Low/Mod Housing Set Aside (283,930) (263,165) (211,984) (171,507) (143,019) Tax Increment Less Low/Mod 1,156,101 1,072,064 864,403 700,355 572,077 Total Pass-Throughs (448,489) (183,986) (548,192) (519,921) (660,139) SB 2557 Charges (1) (20,379) (19,405) (16,469) (14,327) (12,181) Net Tax Increment Agency (2) $ 687,233 $ 868,673 $ 299,742 $ 166,107 $ (100,243)
Percentage represents change from prior year. $2,100,000 $1,800,000
$1,500,000 24.98%
$1,200,000 4.05% 43.35% 20.90% $900,000 -15.75% $600,000 $300,000
$0 2008 2007 2006 2005 2004
(1) Data for SB 2557 Charges is available from FY 1993/94. (2) Negative Tax Increment for FY 1997/98 and FY 1998/99 due to Regional Access Project pass through, prior year tax increment used to cover deficit.
Sources: City of Palm Desert, Tax Increment Calculations Worksheets 204 City of Palm Desert Historical Tax Increment Summary Redevelopment Project Area # 4 Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004
Secured/Unsecured $ 13,518,052 $ 12,117,535 $ 10,483,484 $ 9,017,457 $ 8,044,541 Supplemental 1,013,384 1,296,818 2,197,486 694,864 318,307 SBE (Utility) 43,558 34,914 15,009 2,036 3,641 Total Gross Increment 14,574,994 13,449,266 12,695,978 9,714,357 8,366,489 Low/Mod Housing Set Aside (2,914,999) (2,667,385) (2,519,237) (1,919,081) (1,650,181) Tax Increment Less Low/Mod 11,659,995 10,781,881 10,176,742 7,795,276 6,716,308 Total Pass-Throughs (8,032,775) (7,426,842) (6,778,536) (5,145,220) (3,569,212) SB 2557 Charges (1) (124,107) (112,342) (99,794) (118,954) (115,583)
Net Tax Increment Agency $ 3,503,113 $ 3,242,697 $ 3,298,411 $ 2,531,102 $ 3,031,513
FY 2003 2002 2001 2000 1999
Secured/Unsecured $ 7,275,223 $ 6,205,401 $ 4,612,165 $ 3,293,418 $ 1,981,390 Supplemental 411,994 854,021 829,389 1,027,462 455,457 SBE ((y)Utility) 1,952 1,930 1,979 2,117 1,044 Total Gross Increment 7,689,169 7,061,353 5,443,533 4,322,997 2,437,892 Low/Mod Housing Set Aside (1,516,029) (1,392,274) (1,073,936) (853,567) (487,578) Tax Increment Less Low/Mod 6,173,140 5,669,078 4,369,597 3,469,431 1,950,314 Total Pass-Throughs (3,863,556) (3,747,180) (3,640,563) (2,856,325) (1,312,022) SB 2557 Charges (1) (109,024) (99,981) (73,853) (55,164) (35,617)
Net Tax Increment Agency $ 2,200,560 $ 1,821,917 $ 655,182 $ 557,941 $ 602,675
Percentage represents change from prior year.
$5,000,000 8.49% -1.69% 30.32% $4,000,000 37.76% -16.51% $3,000,000 $2,000,000 $1,000,000 $0 2008 2007 2006 2005 2004
(1) Data for SB 2557 Charges is available from FY 1995/96.
Source: Palm Desert Redevelopment Agency, Tax Increment Calculations & County of Riverside
205 City of Palm Desert Historical Net Assessed Taxable Values Redevelopment Project Area # 1 - Original Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004 Secured: (1) Land $ 233,208,647 $ 216,759,847 $ 209,051,600 $ 193,066,855 $ 180,571,588 Improvements 584,395,005 552,604,613 515,092,610 468,555,559 430,563,506 Personal Property 4,856,393 6,825,265 7,420,696 4,909,559 2,970,008 Penalty 0 0 0 0 0 Less Other Exempt (1,570,949) (760,295) (610,338) (730,777) (100) Less Home Owner Value (63,000) (70,000) (70,000) (70,000) (77,000) Less B Inv. Value 0 0 0 0 0 Total Net Assessed Taxable Secured Value 820,826,096 775,359,430 730,884,568 665,731,196 614,028,002 Unsecured: Land 1,245 1,220 396 156,701 174,128 Improvements 60,185,535 56,536,963 48,736,306 51,133,704 52,581,364 Personal Property 57,684,012 57,404,440 47,480,402 51,093,465 54,158,601 Penalty 0 0 0 0 0 Less Other Exempt (56,785) (32,652) (32,573) (39,043) (57,842) Total Net Assessed Taxable Unsecured Value 117,814,007 113,909,971 96,184,531 102,344,827 106,856,251
Total Net Assessed Taxable Value $ 938,640,103 $ 889,269,401 $ 827,069,099 $ 768,076,023 $ 720,884,253
FY 2003 2002 2001 2000 1999 Secured: (1) Land $ 175,028,644 $ 171,440,095 $ 167,254,618 $ 157,749,660 $ 158,233,158 Improvements 403,984,613 389,716,686 381,168,647 342,048,525 335,487,546 Personal Property 3,290,180 3,824,393 4,621,105 3,958,876 4,284,839 Penalty 0 2,536 61,938 24,969 55,034 Less Other Exempt 0 0 0 0 0 Less Home Owner Value (75,600) (70,000) (49,000) (56,000) (35,000) Less B Inv. Value 0 0 0 0 0 Total Net Assessed Taxable Secured Value 582,227,837 564,913,710 553,057,308 503,726,030 498,025,577 Unsecured: Land 201,461 229,626 191,925 211,902 225,314 Improvements 48,916,729 52,533,594 47,281,799 44,481,799 43,198,389 Personal Property 46,472,846 44,331,125 44,847,382 33,234,094 33,519,839 Penalty 0 1,592,700 2,089,768 735,012 748,851 Less Other Exempt (57,121) (58,570) (61,394) (38,283) (69,264) Total Net Assessed Taxable Unsecured Value 95,533,915 98,628,475 94,349,480 78,624,524 77,623,129
Total Net Assessed Taxable Value $ 677,761,752 $ 663,542,185 $ 647,406,788 $ 582,350,554 $ 575,648,706
(1) Secured values include State assessed data.
Source: County of Riverside, County Auditor Controller, Assessed Valuations
206 City of Palm Desert Change in Taxable Values Redevelopment Project Area # 1 - Original 2008 versus 2007
FY 2008 2007 Secured: (1) Land $ 233,208,647 $ 216,759,847 Improvements $ 584,395,005 $ 552,604,613 Personal Property $ 4,856,393 $ 6,825,265 Penalty $ 0 $ 0 Less Other Exempt $ (1,570,949) $ (760,295) Less Home Owner Value $ (63,000) $ (70,000) Total Net Assessed Taxable Secured Value $ 820,826,096 $ 775,359,430 Unsecured: Land $ 1,245 $ 1,220 Improvements $ 60,185,535 $ 56,536,963 Personal Property $ 57,684,012 $ 57,404,440 Penalty $ 0 $ 0 Less Other Exempt $ (56,785) $ (32,652) Total Net Assessed Taxable Unsecured Value $ 117,814,007 $ 113,909,971
Total Net Assessed Taxable Value $ 938,640,103 $ 889,269,401
(1) Secured values include State assessed data.
Source: County of Riverside, County Auditor Controller, Assessed Valuations
207 City of Palm Desert Historical Net Assessed Taxable Values Redevelopment Project Area # 1 - Amended Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004 Secured: (1) Land $ 1,548,363,317 $ 1,404,883,142 $ 1,221,817,819 $ 1,099,974,404 $ 1,037,831,772 Improvements 3,098,549,660 2,848,708,294 2,548,978,946 2,322,285,503 2,109,457,532 Personal Property 4,850,231 5,159,912 5,081,062 4,080,748 3,722,255 Penalty 0 0 0 0 0 Less Other Exempt (84,042,297) (71,117,424) (75,212,626) (72,356,678) (50,011,055) Less Home Owner Value (30,606,235) (30,941,142) (30,902,546) (31,114,156) (30,819,292) Less B Inv. Value 0 0 0 0 0 Total Net Assessed Taxable Secured Value 4,537,114,676 4,156,692,782 3,669,762,655 3,322,869,821 3,070,181,212 Unsecured: Land 714 781 0 1,449 9,581 Improvements 36,438,840 38,277,529 33,710,842 33,165,394 32,087,933 Personal Property 62,971,014 57,326,123 51,779,049 53,234,502 56,477,588 Penalty 0 0 0 0 0 Less Other Exempt (7,990,591) (3,164,410) (6,306,859) (6,430,836) (8,791,155) Total Net Assessed Taxable Unsecured Value 91,419,977 92,440,023 79,183,032 79,970,509 79,783,947
Total Net Assessed Taxable Value $ 4,628,534,653 $ 4,249,132,805 $ 3,748,945,687 $ 3,402,840,330 $ 3,149,965,159
2003 2002 2001 2000 1999 Secured: (1) Land $ 964,043,115 $ 887,797,124 $ 746,195,135 $ 631,896,282 $ 607,328,618 Improvements 1,966,604,300 1,742,745,364 1,493,036,846 1,292,074,218 1,230,571,559 Personal Property 4,822,804 4,009,942 3,266,563 1,984,406 1,632,328 Penalty 0 31,999 159,145 37,717 54,377 Less Other Exempt (50,251,474) (55,711,920) (47,407,077) (46,013,692) (44,781,911) Less Home Owner Value (28,898,212) (28,025,997) (27,838,129) (27,464,787) (28,135,860) Less B Inv. Value 0 0 0 0 0 Total Net Assessed Taxable Secured Value 2,856,320,533 2,550,846,512 2,167,412,483 1,852,514,144 1,766,669,111 Unsecured: Land 135,778 143,855 52,422 46,483 169,654 Improvements 29,960,052 26,976,720 27,217,181 20,563,813 15,262,873 Personal Property 46,150,607 42,134,507 40,144,238 29,967,514 26,532,412 Penalty 0 494,612 673,565 181,234 592,583 Less Other Exempt (8,632,424) (9,613,037) (10,316,419) (6,335,363) (1,377,178) Total Net Assessed Taxable Unsecured Value 67,614,013 60,136,657 57,770,987 44,423,681 41,180,344
Total Net Assessed Taxable Value $ 2,923,934,546 $ 2,610,983,169 $ 2,225,183,470 $ 1,896,937,825 $ 1,807,849,455
(1) Secured values include State assessed data.
Source: County of Riverside, County Auditor Controller, Assessed Valuations
208 City of Palm Desert Change in Taxable Value Redevelopment Project Area # 1 - Amended 2008 versus 2007
FY 2008 2007 % Change Secured: (1) Land $ 1,548,363,317 $ 1,404,883,142 10.2% Improvements $ 3,098,549,660 $ 2,848,708,294 8.8% Personal Property $ 4,850,231 $ 5,159,912 -6.0% Penalty $ 0 $ 0 0.0% Less Other Exempt $ (84,042,297) $ (71,117,424) 18.2% Less Home Owner Value $ (30,606,235) $ (30,941,142) -1.1% Total Net Assessed Taxable Secured Value $ 4,537,114,676 $ 4,156,692,782 9.2% Unsecured: Land $ 714 $ 781 -8.6% Improvements $ 36,438,840 $ 38,277,529 -4.8% Personal Property $ 62,971,014 $ 57,326,123 9.8% Penalty $ 0 $ 0 0.0% Less Other Exempt $ (7,990,591) $ (3,164,410) 152.5%
Total Net Assessed Taxable Unsecured Value $ 91,419,977 $ 92,440,023 -1.1%
Total Net Assessed Taxable Value $ 4,628,534,653 $ 4,249,132,805 8.9%
(1) Secured values include State assessed data.
Source: County of Riverside, County Auditor Controller, Assessed Valuations
209 City of Palm Desert Historical Net Assessed Taxable Values Redevelopment Project Area # 2 Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004 Secured: (1) Land $ 587,058,715 $ 521,340,003 $ 414,088,670 $ 377,500,739 $ 338,504,943 Improvements 1,276,315,674 1,137,488,315 1,043,768,419 964,730,831 915,313,076 Personal Property 590,836 6,592,802 6,930,907 8,309,969 7,136,535 Penalty (2) 0 0 0 0 0 Less Other Exempt (9,550,463) (7,655,384) (3,292,024) (3,133,357) (2,979,597) Less Home Owner Value (3,735,200) (3,752,000) (3,752,000) (3,689,000) (3,316,600) Less B Inv. Value 0 0 0 0 0 Total Net Assessed Taxable Secured Value 1,850,679,562 1,654,013,736 1,457,743,972 1,343,719,182 1,254,658,357 Unsecured: Land 0 0 0 0 0 Improvements 5,343,621 6,215,099 4,187,472 3,853,947 4,482,615 Personal Property 20,391,298 19,806,418 12,129,847 13,891,105 11,486,746 Penalty 0 0 0 0 0 Total Net Assessed Taxable Unsecured Value 25,734,919 26,021,517 16,317,319 17,745,052 15,969,361
Total Net Assessed Taxable Value $ 1,876,414,481 $ 1,680,035,253 $ 1,474,061,291 $ 1,361,464,234 $ 1,270,627,718
FY 2003 2002 2001 2000 1999 Secured: (1) Land $ 298,852,366 $ 268,700,076 $ 254,353,602 $ 241,562,963 $ 221,877,005 Improvements 830,436,695 675,455,198 615,751,576 557,262,592 502,284,327 Personal Property 7,539,988 6,840,530 6,545,424 10,603,177 6,563,588 Penalty (2) 0 0 0 75,371 Less Other Exempt (2,823,135) (2,767,781) (1,213,512) (1,189,719) (1,168,077) Less Home Owner Value (2,853,200) (2,639,000) (2,623,600) (2,522,800) (2,403,800) Less B Inv. Value 0 0 0 0 0 Total Net Assessed Taxable Secured Value 1,131,152,714 945,589,023 872,813,490 805,716,213 727,228,414 Unsecured: Land 0 0 0 0 0 Improvements 2,799,545 2,910,472 2,417,234 1,877,417 1,860,565 Personal Property 7,626,600 8,438,055 5,921,587 3,984,295 4,363,617 Penalty 0 115,676 46,458 77,730 57,857 Total Net Assessed Taxable Unsecured Value 10,426,145 11,464,203 8,385,279 5,939,442 6,282,039
Total Net Assessed Taxable Value $ 1,141,578,859 $ 957,053,226 $ 881,198,769 $ 811,655,655 $ 733,510,453
(1) Secured values include State assessed data.
Source: Palm Desert Redevelopment Agency, Tax Increment Calculations & County of Riverside
210 City of Palm Desert Change in Taxable Value Redevelopment Project Area # 2 2008 versus 2007
FY 2008 2007 Secured: (1) Land $ 587,058,715 $ 521,340,003 Improvements $ 1,276,315,674 $ 1,137,488,315 Personal Property $ 590,836 $ 6,592,802 Penalty $ 0 $ 0 Less Other Exempt $ (9,550,463) $ (7,655,384) Less Home Owner Value $ (3,735,200) $ (3,752,000) Less B Inv. Value $ 0 $ 0 Total Net Assessed Taxable Secured Value 1,850,679,562 1,654,013,736 Unsecured: Land $ 0 $ 0 Improvements $ 5,343,621 $ 6,215,099 Personal Property $ 20,391,298 $ 19,806,418 Penalty $ 0 $ 0 Total Net Assessed Taxable Unsecured Value 25,734,919 26,021,517
Total Net Assessed Taxable Value $ 1,876,414,481 $ 1,680,035,253
(1) Secured values include State assessed data.
Source: County of Riverside, County Auditor Controller, Assessed Valuations 211 City of Palm Desert Historical Net Assessed Taxable Values Redevelopment Project Area # 3 Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004 Secured: (1) Land $ 119,422,958 $ 114,253,170 $ 103,496,559 $ 91,523,675 $ 83,600,129 Improvements 375,240,496 333,347,161 298,197,384 243,139,587 221,590,995 Personal Property 3,629,771 3,893,071 3,890,560 3,152,374 1,581,880 Penalty 0 0 0 0 0 Less Other Exempt (19,251,214) (19,311,510) (20,251,190) (19,430,222) (3,149,364) Less Home Owner Value (2,203,600) (2,206,400) (2,046,800) (1,974,000) (1,912,400) Total Net Assessed Taxable Secured Value 476,838,411 429,975,492 383,286,513 316,411,414 301,711,240 Unsecured: Land 0 0 370 2,138 2,138 Improvements 17,795,034 13,109,332 12,424,085 9,635,015 13,245,112 Personal Property 45,542,975 44,899,884 38,091,911 35,730,772 37,209,995 Penalty 0 0 0 0 0 Less Other Exempt (402,531) (437,726) (434,582) (455,101) (470,220) Total Net Assessed Taxable Unsecured Value 62,935,478 57,571,490 50,081,784 44,912,824 49,987,025
Total Net Assessed Taxable Value $ 539,773,889 $ 487,546,982 $ 433,368,297 $ 361,324,238 $ 351,698,265
FY 2003 2002 2001 2000 1999 Secured: (1) Land $ 76,423,641 $ 70,984,182 $ 67,042,691 $ 62,879,457 $ 62,465,266 Improvements 176,923,362 167,824,429 149,512,375 142,889,361 143,323,854 Personal Property 1,224,360 1,221,819 1,739,556 4,247,032 4,474,127 Penalty 0 255 40,255 0 2,295 Less Other Exempt (2,977,801) (2,868,530) (2,651,190) (2,429,452) (19,068,851) Less Home Owner Value (1,750,000) (1,687,000) (1,762,600) (1,789,200) (1,807,400) Total Net Assessed Taxable Secured Value 249,843,562 235,475,155 213,921,087 205,797,198 189,389,291 Unsecured: Land 2,213 29,325 29,992 31,781 29,656 Improvements 8,281,641 11,021,570 11,069,151 8,832,767 8,843,353 Personal Property 26,061,080 21,453,363 24,808,691 18,345,262 18,062,689 Penalty 0 904,695 1,176,179 625,647 711,922 Less Other Exempt (459,656) (646,953) (424,328) (399,507) (341,825) Total Net Assessed Taxable Unsecured Value 33,885,278 32,762,000 36,659,685 27,435,950 27,305,795
Total Net Assessed Taxable Value $ 283,728,840 $ 268,237,155 $ 250,580,772 $ 233,233,148 $ 216,695,086
(1) Secured values include State assessed data.
Source: Palm Desert Redevelopment Agency, Tax Increment Calculations & County of Riverside
212 City of Palm Desert Change in Taxable Values Redevelopment Project Area # 3 2008 versus 2007
FY 2008 2007 % Change Secured: (1) Land $ 119,422,958 $ 114,253,170 4.5% Improvements $ 375,240,496 $ 333,347,161 12.6% Personal Property $ 3,629,771 $ 3,893,071 -6.8% Penalty $ 0 $ 0 0.0% Less Other Exempt $ (19,251,214) $ (19,311,510) -0.3% Less Home Owner Value $ (2,203,600) $ (2,206,400) -0.1% Total Net Assessed Taxable Secured Value 476,838,411 429,975,492 10.9% Unsecured: Land $ 0 $ 0 0.0% Improvements $ 17,795,034 $ 13,109,332 35.7% Personal Property $ 45,542,975 $ 44,899,884 1.4% Penalty $ 0 $ 0 0.0% Less Other Exempt $ (402,531) $ (437,726) -8.0% Total Net Assessed Taxable Unsecured Value 62,935,478 57,571,490 9.3%
Total Net Assessed Taxable Value $ 539,773,889 $ 487,546,982 10.7%
(1) Secured values include State assessed data.
Source: County of Riverside, County Auditor Controller, Assessed Valuations
213 City of Palm Desert Historical Net Assessed Taxable Values Redevelopment Project Area # 4 Last Ten Fiscal Years
FY 2008 2007 2006 2005 2004 Secured: (1) Land $ 589,549,492 $ 538,079,392 $ 480,264,736 $ 423,136,913 $ 387,894,896 Improvements 1,340,102,309 1,253,230,590 1,145,343,698 1,060,291,261 1,000,472,990 Personal Property 4,306,781 895,558 1,037,306 1,039,548 903,523 Penalty (2) 0 0 0 0 0 Less Other Exempt (3,046,149) (2,814,993) (2,988,924) (2,213,136) (2,236,588) Less Home Owner Value (15,577,800) (15,797,600) (15,874,600) (16,083,200) (16,032,800) Less B Inv. Value 0 Total Net Assessed Taxable Secured Value 1,915,334,633 1,773,592,947 1,607,782,216 1,466,171,386 1,371,002,021 Unsecured: Land 0 0 0 0 0 Improvements 1,372,786 1,581,231 1,606,970 2,043,627 1,172,618 Personal Property 6,712,170 7,973,923 10,276,814 4,639,732 3,438,910 Penalty (2) 0 0 0 0 0 Total Net Assessed Taxable Unsecured Value 8,084,956 9,555,154 11,883,784 6,683,359 4,611,528
Total Net Assessed Taxable Value $ 1,923,419,589 $ 1,783,148,101 $ 1,619,666,000 $ 1,472,854,745 $ 1,375,613,549
FY 2003 2002 2001 2000 1999 Secured: (1) Land $ 363,532,124 $ 336,601,532 $ 295,636,937 $ 266,431,690 $ 241,556,658 Improvements 943,610,707 861,691,896 742,772,488 639,902,284 543,450,593 Personal Property 1,176,104 1,269,934 1,085,189 1,130,254 3,312,159 Penalty (2) 0 91,675 32,666 52,911 Less Other Exempt (2,005,855) (1,924,780) (1,240,153) (1,125,349) (945,874) Less Home Owner Value (15,162,000) (14,604,800) (14,263,200) (13,610,800) (13,367,200) Less B Inv. Value 0 0 0 0 0 Total Net Assessed Taxable Secured Value 1,291,151,080 1,183,125,457 1,024,023,927 892,728,079 774,059,247 Unsecured: Land 0 0 0 0 0 Improvements 1,610,760 1,878,576 2,018,343 1,874,135 624,979 Personal Property 6,790,656 8,053,034 8,071,994 8,292,670 1,673,026 Penalty (2) 0 70,495 31,283 28,376 28,741 Total Net Assessed Taxable Unsecured Value 8,401,416 10,002,105 10,121,620 10,195,181 2,326,746 Total Net Assessed Taxable Value $ 1,299,552,496 $ 1,193,127,562 $ 1,034,145,547 $ 902,923,260 $ 776,385,993
(1) Secured values include State assessed data.
214 City of Palm Desert Change in Taxable Values Redevelopment Project Area # 4 2008 versus 2007
FY 2008 2007 % Change Secured: (1) Land $ 589,549,492 $ 538,079,392 9.6% Improvements $ 1,340,102,309 $ 1,253,230,590 6.9% Personal Property $ 4,306,781 $ 895,558 380.9% Penalty $ 0 $ 0 0.0% Less Other Exempt $ (3,046,149) $ (2,814,993) 8.2% Less Home Owner Value $ (15,577,800) $ (15,797,600) -1.4% Less B Inv. Value $ 0 $ 0 0.0% Total Net Assessed Taxable Secured Value 1,915,334,633 1,773,592,947 8.0% Unsecured: Land $ 0 $ 0 0.0% Improvements $ 1,372,786 $ 1,581,231 -13.2% Personal Property $ 6,712,170 $ 7,973,923 -15.8% Penalty $ 0 $ 0 0.0% Total Net Assessed Taxable Unsecured Value 8,084,956 9,555,154 -15.4%
Total Net Assessed Taxable Value $ 1,923,419,589 $ 1,783,148,101 7.9%
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