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2011 12 14 IABC' P, f"w/ , rV9,44,4', ,--;It ? -� P.O. Box 1504 LA QUINTA, CALIFORNIA 92247-1504 78-495 CALLE TAMPICO (7 6 0) 7 7 7 - 7 0 0 0 LA QUINTA, CALIFORNIA 92253 FAX (760) 777-7101 AGENDA INVESTMENT ADVISORY BOARD Caucus Room 78-495 Calls Tampico- La Quinta, CA 92253 December 14, 2011 - 4:00 P.M. I CALL TO ORDER a. Pledge of Allegiance b. Roll Call PUBLIC COMMENT- (This is the time set aside for public comment on any matter not scheduled on the agenda.I III CONFIRMATION OF AGENDA IV CONSENT CALENDAR Approval of - Adjourned Minutes of Meeting on November 9, 2011 for the Investment Advisory Board. V BUSINESS SESSION A. Transmittal of Treasury Report for October, 2011 VI CORRESPONDENCE AND WRITTEN MATERIAL A. City of La Quints FY 2010/2011 Audited Financial Statements B. Month End Cash Report — November, 2011 C. Pooled Money Investment Board Report — September, 2011 D. November 1, 2011 Joint Meeting Minutes with the City Council VII BOARD MEMBER ITEMS Vill ADJOURNMENT i PUBLIC NOTICES The, La Quinte Caucus Room is handicapped accessible. If special equipment is needed for the hearing impaired, please call the iinance Department at 777-7150, twenty-four (24) hours in advance of the meeting and accommodations will be made. Any! writings or documents provided to a majority of the Investment Advisory Board regarding any item on this agenda will be 'ailable for public inspection at the City Clerk counter at City Hall located at 78-495 Calls Tampico, La Quints, CA ads av 92M, during normal business hours. a INVESTMENT ADVISORY BOARD Meeting November 9, 2011 I CALL TO ORDER Regular meeting of the La Quinta Investment Advisory Board was balled to order at the hour of 4:00 p.m. by Chairperson Spirtos followed by the Pledge of Allegiance. PRESENT: Board Members Blum, Spirtos, Park and Donais ABSENT: Board Member Mortenson OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia, Senior Secretary 11 PUBLIC COMMENT - None III CONFIRMATION OF AGENDA - Confirmed IV CONSENT CALENDAR Approval of Minutes of Meeting on October 12, 2011 for the Investment Advisory Board. Staff advised the Board that the handout is a correction to page 2 of the meeting minutes, the correction was made under the Business Session, Item A ninth sentence, the sentence should read: U� slightly deceased 4fq_0' ending the month at $13 million. MOTION - It was moved by Board Members Blum/Donais to approve the Minutes of October 12, 2011 as amended. Motion carried unanimously. V BUSINESS SESSION A. Transmittal of Treasury Report for September 2011 Mr. Falconer presented and reviewed the staff report for the month of September advising the Board that page 2 reflects a decrease of the portfolio by $15.4 million, as well as the purchases made for the month of September. Mr. Falconer further advised that the details for the $15.4 million decrease were listed on page 3. The decrease was due to an $11.9 million in semi-annual debt service payment (which includes principal and interest) and $2.44 million in capital improvements ($640,830 towards the Adams Street Bridge and $1.37 million towards property in the Village). Mr. Falconer stated that the payments made towards the bridge are reimbursable and will be reimbursed from the Surface Transportation funds by 88% and the Coachella Valley Association of Governments by 12%. General discussion ensued amongst the Board and staff regarding the construction of the bridge. Mr. Falconer advised that the average maturity had increased by approximately 22 days from the prior month ending maturities at 124 days. Mr. Falconer also advised of the five purchases in bond funds were made for the month with three investment maturities. Mr. Falconer advised the Board that the State Supreme Court hearing has been scheduled for November 10, 2011 for the Redevelopment Agency. This hearing will determine the existence of the Redevelopment Agency, and whether or not the city will make the January payment of $18 million. Mr. Falconer further advised the Board that if the January payment is required, that the funds for payment will be derived from LAIF. Mr. Falconer commented on the upcoming maturities in January which staff is considering reinvesting in short-term commercial paper. Mr. Falconer summarized the investments listed on page 7 as follows: $15 million in Federal Home Loan Bank for six months at .06% yield; Treasury Bills for one year (Mr. Falconer noted that the investments were made with bond debt reserve funds); Project Funds from the Housing Account; increased the Rabobank investments by $39.5 million and advised of a slight decrease in LAW due to a withdrawal and the maturity of a Morgan Stanley FDIC TLGP Note. In response to Chairperson Spirtos, Mr. Falconer clarified for the Board U. S. Government Sponsored Enterprises; he also noted that page 4 of the report contained a small summary and a list of permissible securities. In response to Chairperson Spirtos, Mr. Falconer stated that loss of the Bob Hope Classic could be a possible increase in TOT due to upcoming scheduled events in lieu of the classic. Al MOTION - It was moved by Board Members Park/Blum to review, receive, and file the Treasurers Report for September 2011. Motion carried unanimously. VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - October 2011 Mr. Falconer presented and reviewed the report for October advising of maturing investments in addition to the transferring of funds reflected on page 2 of the report. Mr. Falconer advised that any maturing investments in December would be invested in LAIF and any other excess funds would temporally be invested in short-term commercial paper. Mr. Falconer noted that the yields on page 4 and page 5 reflect the recent Bill Auctions and Short -Term Note, which still remain at a historical low. In response to Board Member Donais, Mr. Falconer advised that his reason for investing in short-term commercial paper was due to the upcoming RDA payment in January and the fact that they are the highest yielding investment at this time. In response to Board Member Blum, Mr. Falconer advised that staff would email a copy of the investment policy. , Noted and Filed B. Pooled Money Investment Board Reports - August 2011 Mr. Falconer presented and reviewed the report for the month of August advising the Board that the pooled money portfolio had decreased by $4.1 billion and the life of the pool has increased by 227 days. Mr. Falconer further advised that the pooled loans in August were at 8.5% and ended at 14.23% one month later. Noted and Filed VII BOARD MEMBER ITEMS Mr. Falconer advised the Board that the City's Auditors will be in attendance to review the Financials at the December 14 1h Investment Advisory Board Meeting. 3 0 Staff will include the financials with the agenda for review in preparation for any questions or comments. Chairman Spirtos advised the Board of the upcoming City events as follows: November I 1th November 1 5th December 2 Id December 7"' Vill ADJOURNMENT Veterans Day Celebration Stan Sniff 25 Years on City Council Tree Lighting Ceremony City Hall Holiday Luncheon MOTION - It was moved by Board Members Park/Blum to adjourn the meeting at 4:30 p.m. Motion carried unanimously. Vianka Senior M INVESTMENT ADVISORY BOARD Business Session: A Meeting Date: December 14, 2011 ITFM TITI F- Transmittal of Treasury Report for October 31, 2011 BACKGROUND: Attached please find the Treasury Report October 31, 2011. RECOMMENDATION: Review, Receive and File the Treasury Report for October 31, 2011. John M. Falconer, Finance Director V? MW I IF =# ME MORAN D U M TO La Quinta City Council FROM: John M. Falconer, Finance Director[Treasurer SUBJECT: Treasurers Report for October 31. 2011 DATE: November 30, 2011 Attached is the Treasurer's Report for the month ending October. 2011. The report is submitted to the City Council each month after a reconciliation of accounts is accomplished by the Finance Department. The following table summarizes the changes in investment types for the month Investment Beginning Purchased Notes Sold/Matured Other Ending Change LAIF $ 17,278,745 $ 22,239 $ (2,100,000) 0 $ 15.200.984 (2,077.761) Interest bearing active bank deposit 39.514,615 13,205 39.527,820 13,205 Certificates of Deposit 724,000 724,000 0 US Treasuries US Govt Sponsored Enterprises 72,949.195 14,995,325 (2� (2) (12.000,000) 6,040 771 60.955,235 14,996,096 (11,993.960) 771 Commercial Paper - (2) 0 0 0 Corporate Notes 5,015,752 (2) (6,976) 5,008,776 (6.976) Mutual Funds 16.767,608 (1) � 361 0 16,130,247 6 Subtotal $ 167,245,240 , $ 35.44 1 �6' 3 (1475 ':ili '�j r 1 $ (14,702,082) -T- lCash 1 $ 49,7781-- Fol &(3)f 3 13,545,307 1 1 $ 13.795.085 $ 13,545,307 1 ITotal 1 $ 167,495,018 1 $ 35,444 f S (1,192,054)1 $ (165)1 $ 166,31 S 11.156775i I certify that this report accurately reflects all pooled investments and is in compliance with the California Government Code; and is in conformity with the City Investment Policy. As Treasurer of the City of La Quinta, I hereby certify that sufficient investment liquidity and anticipated revenues are available to meet the pools expenditure requirements for the next six months. The City of La Quinta used the Bureau of the Public Debt, U.S. Bank Monthly Statement and the Bank of New York Monthly Custodian Report to determine the fair market value of investments at month end. 12-1 ilzo I I John M. Falconer Date (-1/Finance Directorfrreasurer Footnote (1) The amount reported represents the net increase Idecrease) of deposits and withdrawals from the previous month (2) The amount reported in the other column represents the amortization of premiurriddiscount for the month on US Treasury, Commercial Paper and Agency investments. (3) The cash account may reflect a negative balance. This negative balance will be offset with transfem from other investments before warrants are presented for payment by the payee at the bank. FA Treasurer's Commentary For the Month of October 2011 Cash Balances - The portfolio size decreased by $1.16 million to end the month at $166.3 million. Major capital improvement expenditures were $913,000, including $403,000 spent on the "A" Street extension Project, $119,000 spent on the Coral Mountain Apartment Project, $111,000 spent on the Phase 2 Washington St Drainage Project, and $ 100,000 on the Adams Street Bridge Project. Investment Activity - The investment activity resulted in an average maturity decrease of seven (7) days from the prior month to end the month of October at 117 days. The Treasurer follows a buy and hold investment policy with the maturity of two (2) treasury investments totaling $12 million. This $12 million was reinvested in LAIF in November. The sweep account earned $7 in interest income for the month of October and the bank fees for the month were $ 1,492 which resulted in a net decrease of $1,485 in real savings. Portfolio Performance - The overall portfolio performance was four (4) basis point lower than the prior month ending at .35% for the month, with the pooled cash investments at .53%. The portfolio yield should continue to stay at these levels for the near future. At this time last year, the portfolio was yielding .51 % which reflects the current interest rate environment. Looking Ahead In the short term, the Treasurer will be investing in LAIF and may look at short term commercial paper with the understanding that an $18 million payment may be due to the State of California in mid January. 3 z 0 w a w w E E E z; 2 E 2 . a �i E 0 E E 0 c c z z a z 0 z 0 z c 0 z 0 0 -6 2 o W.- E > E > Eo .2 a a a cc E E E 0 0 . 0 0 0 0 N o 0 E ..0 —66' 0 15 15 Gla�a ... 00 a ss 00 65 000 a , 9 q q 0 _cDcl 0 S�! to 0 0 ��Ooo 00 00 0 0 000.0 0 .E .00" t�2 00 0 0 �100. C; 16 6 6 0 0. 0 E E E '6 0 E 3: 12 0 mo 0. 0.0 goo I 0 o Rv 0 0 0 z ,Z �c 'o 0 (9 0 z 0 0 cc 0 0-4 0 E Fn E E S? 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RECOMMENDATION: Information item only. CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30,2011 CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30,2011 Prepared By FINANCE DEPARTMENT JOHN M- FALCONER Director of Finance THIS PAGE INTENTIONALLY LEFT BLANK CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2011 TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal ........... _ .................................. .................... List of Principal Officials .... ...................... __ ....... .................. ................... ....................... viii OrganizationalChart ................................................... ......................................... ......... ................ ix Certificate of Achievement for Excellence in Financial Reporting (GFOA) ................................... ... x FINANCIAL SECTION Independent Auditors Report-.. ---- .................................................... .............. ...... ......................... 1 Management's Discussion and Analysis ................. .................................... ...... .......................... 3 Basic Financial Statements: Government -Wide Financial Statements: Statement of Net Assets ...... ................ ...... ............................................ ........... 17 Statement of Activities ................ ................. ..................... Fund Financial Statements, Balance Sheet — Governmental Funds .......... .......... .................... ....... .......... ........... 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets....... ................. ........................... ............................... _.23 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds .................. ....... ____ ........ ................ .......................... 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ... ..... 27 Budgetary Comparison Statement by Department — General Fund ................ ... ....... __ ............ _28 Budgetary Comparison Statement — Low and Moderate Income Housing PA No. 2 ..................... 29 Statement of Net Assets — Proprietary Funds..... .......... __ ... _ .... .................... ......................... 30 Statement of Revenues, Expenses and Changes in Fund Net Assets — ProprietaryFunds ..................................... ........ .................................................... 31 Statement of Cash Flows — Proprietary Funds ..................................... ...... __ ........ ...................... 32 Statement of Fiduciary Net Assets - Fiduciary Funds ................ ................................................ _34 Notes to Financial Statements .............................................................................. ............................... 35 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2011 TABLE OF CONTENTS Page Number COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Non -Major Governmental Funds ....................................................... 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non -Major Governmental Funds...... .................. ...................... .......... go Budgetary Comparison Schedules — Special Revenue Funds StateGas Tax .............................. ......... - ............................................................ __ ............. 98 Library.......... ........................................................................................................................... 99 FederalAssistance ........................................ _ ...... ............................................................... loo SUEBG............................... __ ...... - ............. ....................................... ................ __ ........ 101 Lighting and Landscaping..: ............................ __ ..... ....... _ ................................................. 102 Quimby.................................................. ........................................................... ................ 103 Congestion Management Air Quality Fund ............................ _ .......................... .............. 104 PublicSafety .............. ........................... ....................................................... ............. 105 ArtsIn Public Places ....................................... ................................. ................................ 106 SouthCoast Air Quality .......... ................................................................................. __ .... � 107 AB939 .... ...................................... ___ ......... .............................. ................................ 108 Proposition1B Fund .............. ............ ............................... _ ... .................... ..... __ ... - � 109 Justice Assistance Grant ............ - .... ... ........................................ ........................................ 110 Housing Authority PA No. 1 ............................ _ --- __ .......................... ........................... 111 Housing Authority PA No. 2 .......... __ ......... _ ......................................................................... 112 Low/Moderate Income Housing PA No. 1 .................................... ................... _ .... ......... 113 Budgetary Comparison Schedules — Capital Projects Funds Capital Improvement ................. ....................... ................ ........ CivicCenter ........................................................ ............. .......... 2011 Low/Mod Bond .................. ___ .... ........................... ............ Infrastructure ................................... - ....... ..... __ ............................. Transportation.......... _ .... ........................................... __ ........ ........ Parks and Recreation .......... .................... ........ ............................. Library Development ............................. - ..... .... ............................. Community Center ....... .............. .................................................... StreetFacility .................................................. __ .... ____ ... - ........... ParkFacility ....................................................... ........ - .... - ........... - FireFacility ...... __ ...... ....... ............................................................. 2004 LowlMod Bond ................. ...... ........................ - ...... _ .......... develonment Anencv PA No 1 — Capital Prnilects ................. ........................ Redevelopment Agency PA No. 2 — Capital Projects. ... _ .... .................................... Budgetary Comparison Schedules — Debt Service Funds Redevelopment Agency PA No. 1 — Debt Service ........ ................................................... 128 Redevelopment Agency PA No. 2 — Debt Service ........ ............... ___ .................... _ ............ 129 FinancingAuthority .................................................................................................. ............. 130 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2011 TABLE OF CONTENTS Page Number Combining Statement of Net Assets — Internal Service Funds .......... ...................................... _132 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets — Internal Service Funds .... ............ . ....... . ..... . .. ....... ............... 133 Combining Statement of Cash Flows — Internal Service Funds .. . .. ..... .. ............................ 134 Combining Balance Sheet — All Agency Funds .... ... . . .. ..... . . ...... . ................... ..... 136 Combining Statement of Changes in Assets and Liabilities — All Agency Funds .......... .............. 137 STATISTICAL SECTION NetAssets by Component .......... _ ................................... ........... . .. - .. ....................... 140 Changesin Net Assets ................ ................................. ................. ... ...... ............ ................. 141 Changes in Net Assets — Governmental Activities . . . ... . . . .. ... .... ................................ 142 Changes in Net Assets — Business -type Activities .... .. .. ..... . . . ... .............................. 143 Fund Balances of Governmental Funds ....... ...... .................................. . ..................... ........ 144 Changes in Fund Balances of Governmental Funds. .... . ........ . . ................. ................ 145 Assessed Value and Estimated Actual Value of Taxable Property .............................................. 146 Assessed Value and Estimated Actual Value of Taxable Property - RedevelopmentAgency ...................... ....... ................. ...... ........... .. ... .............. .............. 147 Direct and Overlapping Property Tax Rates.... . .................... ......... 148 Principal Property Taxpayers...... ............ ........... .............. . . .. ............. .................. 149 Property Tax Levies and Collections.. ................ _ ............ ............... ..... - ..... ------ ....... 150 Ratios of Outstanding Debt by Type ...... ................... ......... 151 Ratio of General Bonded Debt Outstanding... .... . . .. ..... ....... ....................... 152 Direct and Overlapping Debt.... ..................................................... ..... ___ -------- ... - .... _153 Legal Debt Margin Information.. ............. _ ................. __ ....................... _ ........................... ....... 1154 Pledged -Revenue Coverage ............ ................... __ ..................... .. . .. ................................. 155 Demographic and Economic Statistics ............. ................. _ --- ...... ....... ................................ 156 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2011 TABLE OF CONTENTS Page Number PrincipalEmployers .... __ ............................................... - ............................................................. 157 Full-time City Employees .................... - ........................................................................................ 158 OperatingIndicators ................................... ... _ ...................... ......................................... 159 Capital Asset Statistics ..................................................... ........ ....................................... 160 Schedule of Insurance in Force ...................... ...... _ ............... __ ....... ......... ............................... 161 guy J 9NEMM P.O. Box 1.7301 LA Q1 INIA, CA1.11:0RNi\ 92217-1501 78-195 (760) 777-7000 LA QVIN 1A. C.%t.ii oi�\ i x 92253 I-AX(760)777-710] October 18, 2011 To the Honorable Mayor, Members of the Governing Council, and Citizens of the City of La Quinta, California: Government Code 26909 (a) requires that the City, as a local agency of the County, contract with a certified public accountant to perform an annual audit of the accounts and records of the City and that the audit conform to generally accepted auditing standards. Further, Government Code 26909 (b) states that an audit report shall be filed with the State Controller and with the County Auditor of the County in which the district is located within 12 months of the end of the fiscal year. This report is published to fulfill these requirements for the fiscal year ended June 30, 2011. In addition, City Ordinance 2.12.040 requires an annual audit be performed by a certified public accountant. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of 'any material misstatements. Lance Soll & Lunghard LLP Certified Public Accountants have issued an unqualified opinion on the City of La Quinta financial statements for the year ended June 30, 2011. The independent auditor's report is located at the front of the financial section of this report. Management's discussion and analysis (MID&A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements the letter of transmittal and should be read in conjunction with it. &;4 1W1 J6 48,W] Profile of the Government The City of La Quinta is located 120 miles east of Los Angeles in the eastern portion of Riverside County known as the Coachella Valley. The City motto is "The Gem of the Desert." The City is governed by a five -member City Council under the Council/Manager form of government. The Mayor is directly elected by the citizens. The Mayor serves a two-year term and the four Council Members serve four-year terms, with two Council Members elected every two years. The Mayor and fOUF Council Members are elected at large. The City was originally incorporated in 1982 as a general law City and it became a charter City in November 1996. The Council appoints the City Manager, who in turn appoints the Assistant City Managers and the heads of the vadous departments. The City of La Quinta provides a range of services which include: construction and maintenance of streets and other infrastructure; community development and planning; construction and code compliance, various recreational and cultural activities; and general municipal services. Services are also provided to the City and its citizens by contract and by the direct services of other government agencies and organizations. These services include police and fire protection through the County of Riverside, library services through the County of Riverside, visitor and tourist information through Palm Springs Desert Resort Communities Convention and Visitors Authority, city promotion through the La Quinta Chamber of Commerce, water and sewer service through the Coachella Valley Water District, electricity service through the Imperial Irrigation District, refuse collection through Burrtec Waste Industries, public transit through Sunline Transit Agency, and cable service through Time Warner and Verizon. The City of La Quinta also is financially accountable for a legally separate Redevelopment Agency, Financing Authority, and Housing Authority. Additional information on these two legally separate entities can be found in the notes to the financial statements. Pursuant to City Ordinance 2.08.060 and 2.12.030, the City Manager and Finance Director are responsible for the preparation of the annual budget for City Council consideration prior to the start of the fiscal year. The annual budget serves as the foundation for the City of La Quinta's financial planning and control - The budget is prepared by fund, function, department and line item. Department heads may transfer line item resources within a division with the approval of the City Manager. Transfers between divisions and departments need approval from the City Council and the City Manager. Local economy According to the State of California Economic Development Department (EDD), as of June 2011, the total workforce for the City of La Quinta was 14600 of which 13,300 were employed for a 7.6% unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 14.4% and the statewide unemployment rate of 12.1%. During the last ten years, the City of La Quinta has been in a growth phase with net assessed values increasing from $3.77 billion in Fiscal Year 2001-2002 to $10.33 billion (over 274%). This major increase in assessed value consists primarily of residential development; however, in the last ten years major commercial development has occurred along the Highway 111 corridor - The City of La Quinta has transformed itself from a retirement community known as the "Gem of the Desert" and the western home of golf to a year-round full -service community. Major employers include the La Quinta Resort and Club, PGA West, Desert Sands Unified School District, Home Depot, Wal-Mart, Rancho La Quinta, and Lowe's. During the past ten years, the City of La Quinta general fund expenditures have increased 231 %. Two Departments that have exceeded the average include and Public Safety (261%) and Community Services (242%). In the case of Public Safety, much of the increase is reflected in increased police service personnel. In the case of Community Services, much of the increase can be attributed to adding library and museum services and park maintenance functions to the Department - During the same ten-year period, the City of La Quinta general fund revenues increased 187%. Sources that exceeded the average include intergovernmental (354%), and taxes (195%). In the case of intergovernmental revenues, most of the increase is attributable to the way the fire service contract is accounted for and an increase in motor vehicle fees. In the case of taxes, the increase is due greatly to the increase in sales tax revenues from the commercial development along Highway 111. While the City has experienced record setting growth in the past, the recession of Fiscal Year 2008-2011 has impacted the City of La Quinta. This downturn has resulted in our residents and businesses experiencing: (1) a higher level of unemployment, (2) lower property values; (3) more commercial store closings and (4) more home foreclosures than in previous years. In addition, the credit crisis has resulted in fewer new home starts and new businesses delaying their plans to open stores in the City- While the City is the home of large and small retailers and hotels, no significant store openings have occurred in Fiscal Year 2010-2011 and several large retailers have closed their doors in recent years. The City has experienced a modest increase in sales tax and transient occupancy tax in Fiscal Year 2010-2011 versus Fiscal Year 2009-2010, however property tax collections still continue to decline in Fiscal Year 2011-2012 from the historic highs of Fiscal Year 2006-2007. While economists may state that the recession is over, future revenue decline in Fiscal Year 2011-2012 and beyond may be on the horizon given the possible continued decline in property tax assessment. Since Fiscal Year 2008-2009, the City has tighten its fiscal belt at its mid year reviews and will have to continue to monitor and possibly further reduce expenditures in Fiscal Year 2011 - 2012 given the revenue shortfalls that may continue to occur. This is evidenced by the reduction in staff levels from 105 positions budgeted for in Fiscal Year 2008-2009 to 101 positions in Fiscal Year 2009-2010 and a further reduction to 99 positions in Fiscal Year 2010-2011. Long-term financial planning Each year the City embarks on a strategic planning process which begins in the spring with a discussion of the City Councilgoals and ends with adoption of the budget in June. The documents that are generated in this strategic planning process include a presentation of the financial achievements for the past fiscal year, a five-year cash flow projection for each City, Redevelopment Agency and Financing Authority fund, and a financial management strategies and recommendation report for the coming fiscal year. Within the financial strategies and recommendation report, a "build out" analysis is included which estimates the annual General Fund revenue (inflows) and expenditures (outflows) in thirty years. This build out analysis is updated every three years based upon future land use designations, existing land use and population projections. This build out report projects that in twenty (20) years, with an estimated population of 81,771 versus the current 44,421, the annual revenues into the General Fund will be $3,276,000 less than expenditures. With this information provided during the mid -year financial review, the City of La Quinta is attempting to attract revenue -producing businesses and hotels consistent with its land use planning, while at the same time providing current and future residents a level of service that makes them proud to call La Quinta their home. During Fiscal Year 2010-2011, the General Fund balance increased by $1,051,000 consisting of revenue increases from the prior year in most categories except for interest income, which decreased because of a historically low interest rate.environment and the repayment of the Redevelopment Agency loans. Most of the General Fund balance increase can be attributed to decreases in expenditures certain divisions — MaintenancelOperations — Streets, Police and Planning & Development Administration. The General Fund balance as of June 30, 2011 was $93.1 million of which $23.8 million versus $57.9 million in Fiscal Year 2009-2010 was nonspendable, $19.3 million versus $22.3 million in Fiscal Year 2009-2010 was committed, $1.5 million versus $1.5 in Fiscal Year 2009-2010 was assigned, and $48.4 million versus $10.3 million in Fiscal Year 2009-2010 was unassigned. The unassigned fund balances include a cash flow reserve of 8.25% of the annual budget and a $7.5 million future operational deficit reserve. Additional components of the strategic planning process include the Economic Development Plan, the Capital Improvement Program, the Annual Budget and the Five - Year Resource Allocation Plan. An explanation of each of these documents is provided below. iv Economic Development Plan This plan outlines a vision and direction for the City's economic development activities. It presents the mission statement, implementation policies, projected resources, and business plan the City and the La Quinta Redevelopment Agency will follow to sustain a comprehensive economic development effort. It is goal -oriented in that the economic development efforts specified in the plan are a key to generating the financial resources necessary to support both the Resource Allocation Plan and the Capital Improvement Plan. Capital Improvement Plan This plan is primarily a planning document that establishes five-year funding priorities for capital improvements. This plan also includes a listing of all the other desired capital improvements that cannot, or need not, be funded within the five-year horizon and totaled $84.5 million. Five -Year Resource Allocation Plan This plan is primarily a planning document that provides a five-year horizon for forecasted operational needs of each department, as well as the City as a whole. This plan is a cyclical review of all operations expenditures to reassess funding mechanisms behind personnel responsibilities and the various service levels of all programs - Annual budget This document is the annual implementation too] for the overall planning process. The budget will encompass each element of the strategic planning effort and will implement: the goals of the Economic Development Plan; the resource and demand allocation outlined in the Five -Year Resource Allocation Plan, and the capital improvement investment for a given year. Relevant Financial Policies The following outlines the actions by the State to take funds from the City and the La Quinta Redevelopment Agency to funds its activities: The State of California has mandated in the past that the City of La Quinta, pursuant to State of California Revenue and Taxation Code Section 97.70, contribute $332,000 from the General Fund in Fiscal Year 2005-2006 with a similar amount in Fiscal Year 2004-2005 ' to meet the State budget crisis. Again, in Fiscal Year 2009-2010 the State of California has mandated that $965,000 in General Fund property taxes be transferred to the State. Also, from Fiscal Year 2002-2003 through Fiscal Year 2005-2006, the La Quinta Redevelopment Agency has contributed $7.8 million to the State of California pursuant to State of California Health and Safety Code 33681.12 to meet its budget shortfalls. The $7.8 million of funds that have been diverted to the State will not be refunded and are not available for use within the City of La Quinta. While no State mandated contributions were required from Fiscal Year 2006-2007 through Fiscal Year 2008-2009, the State budget crisis of Fiscal Year 2009-2010 has resulted in an additional diversion of $23.69 million and $4.9 million in Fiscal Year 2010-2011 from the La Quinta Redevelopment Agency for a total take away of $36.3 million. U The latest takeaway involves the City approving a remittance agreement pursuant to Chapter 3 of Part 1 .9 of Division 24 of the Health and Safety Code totaling $18.3 million in Fiscal Year 2011-2012 to pay the State of California. The City has provided data to the State Department of Finance to seek to revise the remittance amount to $17.02 million. The purpose of this payment is to allow the La Quinta Redevelopment Agency to continue to operate as an independent entity. In addition, for every year thereafter, the City is obligated to make payments based upon property tax increment collections, which are estimated to be between $3.2 million and $8.4, through Fiscal Year 2030- 2040. Malor Initiatives The La Quinta Redevelopment Agency (Agency) has spent a considerable amount of effort to acquire sites in the Village Area of the City and facilitate the development of affordable housing units in the City. Toward this end, the Agency is working on the Washington Street Apartment Project to rehabilitate a 73-unit affordable rental housing project. In addition, the Agency has purchased land near the southeast corner of Highway 111 and Dune Palms Road to construct additional affordable Apartment units. The City has a major public facility that was completed with the rebuilding of Fire Station 32 at its new location at Avenue 52 and Desert Club. This facility, three times the size of the station it is replacing, will better serve the residents of the La Quinta Cove and surrounding areas. In addition, the City is starting construction on the Adams Street Bridge which will span the Whitewater Channel and provide an all-weather crossing at this location. The La Quinta Redevelopment Agency has acquired a 525-acre parcel at Avenue 52 and Jefferson Street for the development of two golf courses, a clubhouse, and future hotel resort development. The first golf course was dedicated in January 2005- The second course, permanent clubhouse, and infrastructure have not proceeded as planned and remain in the planning stages due to the slow down in the economy. The Agency continues to seek quality development opportunities for future hotel(s) on the property to generate additional General Fund revenues. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting- to the City of La Quinta for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2010. This was the fifteenth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAM continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Vi The preparation of this report would not have been possible without the efficient and dedicated service of the finance department staff. Credit also must be given to the Mayor and City Council for their support in maintaining the highest standards of professiofialism in the management of the City of La Quinta's finances. Respectfully submitted, AI aJohn M. Falconer Thomas P. Genovese City Manager Finance Director Vii City of La Quinta Directory of Officials June 30, 2011 CITY COUNCIL Don Adolph, Mayor Linda Evans, Mayor Pro Tern Kristy Franklin, Council Member Terry Henderson, Council Member Stanley Sniff, Council Member ADMINISTRATION Thomas P. Genovese, City Manager Doug Evans, Assistant City Manager — Development Services Bret Plumlee, Assistant City Manager — Management Services John M. Falconer, Finance Director Tom Hartung, Building & Safety Director Edie Hylton, Community Services Director Kathy Jenson, City Attorney Les Johnson, Planning Director Tim Jonasson, Public Works Director/City Engineer Veronica Montecino, City Clerk viii c c c EH E= E E c < SE -.p .0 d 52a WN Ht� zzb o. F E ..v ...z, Vw o o Im c'. -v2 Eln 0- o t. c o E c 0 o w c ix Certificate of Achievement for Excellence in Financial Reporting Presented to City of La Quinta Califomia For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2010 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finaace Officers Association of the United States and Canada to government units and public employee retirement system whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government acmunting and financial reporting. President Executive Director LSL CERTIFIED PUBLIC ACCOUNTANTS • Brandon W. BunrowS, CPA • David E. Hale, CPA, CFP A Pwfe�wd Corpmahm Donald G. Star. CPA Richard K. Kikuchi, CPA Susan F Mal:L CPA Shelly K. Jackley, CPA Bryan S. Gruber, CPA INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of City Council City of La Quinta, California We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of La Quinta, California, as of and for the year ended June 30, 2011, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of City of La Quinta'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 the 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, each major fund, and the aggregate remaining fund information of the City of La Quinta, as of June 30, 2011, and the respective changes in financial position, cash flows, where applicable, and the respective budgetary comparison for the General Fund and Low and Moderate Income Housing PA No. 2 Fund, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. We would like to draw the reader's attention to Note 22 — "California Redevelopment Agency Uncertainty". The note provides information on two bills passed, ABIX26 and 27 which dissolve redevelopment agencies effective October 1, 2011 and provide an option to avoid dissolution by making certain defined payments. In accordance with Government Auditing Standards, we have also issued our report dated September 27, 2011, on our consideration of the City of La Quinta's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison informationas listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic Lance, $all A Linighaurd, LLP 203 North Brea Boulevard � Suite 203 , Brea, CA 92821 � TEL: 714.672�0022 Fax: 714.672-0331 www.lslcpas.com 41185 Golden Gate Circle - Suite 103 - Murrieta, CA 92562 � TEL: 951304.2728 Fax 951.304.3940 W CIW0460 N %kM.*:3 LOU To the Honorable Mayor and Members of the City Council City of La Quinta, California financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of La Quinta's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Brea, California September 27, 2011 Management's Discussion and Analysis As management of the City of La Quinta, we offer readers of the City of La Quinta's financial statements this narrative, overview and analysis of the financial activities for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in an earlier section of this report. All amounts, unless otherwise indicated, are rounded to the nearest thousands of dollars. Financial Highlights - The assets of the City of La Quinta exceeded its liabilities at the close of the most recent fiscal year by $518,411,000 (net assets). Of this amount, $92,090,000 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. - The governmental activities total net assets decreased by $29,140,000 and the Business -Type total net assets decreased by $444,000 attributable to the SilverRock Golf Course. - As of the close of the current fiscal year, the City of La Quinta's governmental funds reported combined ending fund balances of $193,371,000, an increase of $32,239,000 in comparison with the prior year. e At the end of the current fiscal year, the unassigned General Fund Balance comprised $48,140,000 of the total $93,082,000 General Fund Balance or 52 percent and 120 percent of total General Fund budgeted expenditures. .. The City of La Quinta's total debt increased by $28,145,000 during the current fiscal year from $230,831,000 to $258,976,000 through the issue of two (2) new bond issues. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of La Quinta's basic financial statements. The City of La Quinta's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide financial statements The government -wide financial statements are designed to provide readers with a broad overview of the City of La Quinta's finances, in a manner similar to a private - sector business. 3 The statement of net assets presents information on all of the City of La Quinta's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of La Quinta is improving or deteriorating. The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related Gash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City of La Quinta that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of La Quinta include general government, public safety, community services, planning and development and public works. The business -type activities of the City of La Quinta include the SilverRock Golf course operations. The government -wide financial statements include not only the City of La Quinta itself (known as the primary government), but also the La Quinta Redevelopment Agency, the La Quinta Financing Authority, and the La Quinta Housing Authority. Although legally separate entities they function for all practical purposes as departments of the City of La Quinta, and therefore have been included as an integral part of the primary government. The government -wide financial statements can be found in the table of contents under the Financial Section of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of La Quinta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of La Quinta can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near - term financing requirements. 4 Because the focus of governmental funds is narrower than that of the government - wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of La Quinta maintains thirty seven (37) individual governmental funds, which are distinguished between major and non -major funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund bal- ances for the general fund, two (2) debt service funds and three (3) capital project funds, and one (1) special revenue fund. These seven (7) funds are considered to be major funds. Data from the other thirty (30) governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non - major governmental funds is provided in the form of combining statements elsewhere in this report The City of La Quinta adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been . provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found in the table of contents under the heading Basic Financial Statements. Proprietary funds Proprietary funds can be broken down into enterprise and internal service funds. The City of La Quinta maintains one (1) proprietary fund. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of La Quinta uses an enterprise fund to account for its SilverRock Golf Course operations, which is considered to be a major fund. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of La Quinta's various functions. The City of La Quinta has three (3) internal service funds to account for its major equipment replacement including vehicles, for its information technology systems, and for its park equipment and facility needs. Because these three services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the government -wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. 5 The basic proprietary fund financial statements can be found on the pages listed in the table of contents for Proprietary Funds: Statement of Net Assets, Statement of Revenues, Expenditures and Changes in Net Assets, and Statement of Cash Flows. Fiduciary funds Fiduciary funds, also called agency funds, are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statement because the resources of those funds are not available to support the City of La Quinta's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on the pages listed in the table of contents for Fiduciary Funds: Statement of Fiduciary Assets and Liabilities — Agency Funds. Notes to the financial statements The notes provide additional information that is essentia data provided in the government -wide and fund financia financial statements can be found on the pages listed in to the Basic Financial Statements. Other information I to a full understanding of the I statements. The notes to the the table of contents for Notes In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of La Quinta's General Fund and its budget appropriations. Required supplementary information can be found in the table of contents under the section Required Supplemental Information and includes Notes to the Required Supplementary Information and a General Fund Budgetary Comparison Schedule. The combining statements referred to earlier in connection with non -major govern- mental funds, internal service funds, and agency funds are presented immediately following the required supplementary. Combining and individual fund statements and schedules can be found in the table of contents under Supplementary Schedules. Government -wide financial analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of La Quinta, assets exceeded liabilities by $518,411,000 at the close of the most recent fiscal year, which is $29,584,000 less than the previous year. The largest portion of the City of La Quinta's net assets, which was 620io this year and 69% last year, reflects its investment in capital assets (e.g., land, buildings; machinery, and equipment), less any related debt used to acquire those assets . that is still outstanding- The City of La Quinta uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of La Quinta's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of La Quinta Net Assets C�ernrnenlal activilies Business -type actimbes . Total 2011 2010 2011 2010 2011 2010 Current and other assets $ 224,830,553 $ 207,301.319 (4,676,530) $ (4,606,437) $ 220,153.973 202,694.882 Capital assets 530,713,522 565,238M2 42,777,148 42,934,025 573,490.670 608.172,067 Total assets 755.5".075 772,539.361 38,100,568 38,327.588 793,644,643 810,866.949 Current liabilities ----T=!" 3Zb5Z,4J6 24Z311 251.411 1 t,j84.643 32.609,W— Non�uniant fiabilnes 257.562,497 230,DO7,350 286,097 54.543 257,848,594 230,061,893 Total habilifies 2-74,704,769 —262,559,786 -�MA8 311.954 275,233,237 262,871.740 hiet assets Invested in mpital awes. net of related debt 276.78T752 336,459,272 42,491�051 42.879,482 319.278A03 379.338.754 ReStrided 107.1342.126 96,332,870 - - 107.042,126 96,332,875— Unrestricted tt.l8t.4j3 (4,918,951) (4,863�11148) -07M, ?( IZ.JZJ�*Ob Total net assets S 4W839,306 $ 509,979,575 37.572.100 $ 38,015,634 $ 518.411,406 $ 547,995,279— An additional portion of the City of La Quinta's net assets (21 percent versus 18 percent in the prior year) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets - $92,090,000 (18 percent) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of La Quinta is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental activities; however, the business type unrestricted net assets had a deficit of $4,919,000. Governmental activities Governmental activities net assets decreased by $29,140,000 accounting for a 5 percent change in the net assets from the previous year. Key elements of these changes are as follows: City of La Quinta Changes in Net Assets Governmental Busines�type activities activities Total Reven.es 2ni I 7nin Inij nin �h— 'Al I 7nin Pfogiarn reventtes Operating grants and contnbutions 13152942 15363650 (2�210 7081 13 152,942 15363650 Capital giants and contnt,xitions 3,157,828 5,974,311 128164831 3.157�828 5W4,31l In,xease in net asiuns befom tninslem and restatenients (29,M.269) (15.642.529) (13,497,740) (443,534) (583,520) 139,986 (29,583.803) (16,226,049) Revenues decreased by $5,401,000 with the largest category decreases of $2,816,000 in capital grants and operating grants and contributions of $2,211,000. The major reason for the decrease in the capital grant contribution account is the decline in infrastructure developer dedications. The overall decrease in operating grants and contributions account can be attributed to three major reasons: 1) in Fiscal Year 2009- 2010 the City received major funding from the Riverside Transportation Commission (RCTC) for the Phase 3 Highway I 11 improvements, 2) in Fiscal Year 2009-2010 the City received major funding from the County of Riverside for the Fire Station 32 project; and, 3) the City received more funding in Fiscal Year 2010-2011 from the County of Riverside for Community Development Block Grant (CDBG) for the Village improvement project, Proposition 1 B funding for road improvements to Washington Street, and a one time developer funding payment from Lowes Development toward the SilverRock project. Expenses increased by $7,957,000 with the two largest category changes being a decrease in the General Government category of $23,004;000 and an increase in the Capital contributions category of $31,324,000. The decrease in the General Government category is primarily the result of the $23.5 million Supplemental Educational Augmentation Fund (SERAF) payment made to the County of Riverside as mandated by the State of California in Fiscal Year 2009-2010 which was less than the $4.86 million payment in Fiscal Year 2010-2011. The increase in the Capital Contributions costs is primarily the result of the dedication of the Wolff Waters Place Apartments project to the Coachella Valley Housing Coalition ($30,148,000). - There were no contributions in assets from the governmental activities to the business -type activities. Expenses and Pirogirarn Revenues - Govenrunent Aefivities; 35,".OM . ....... . ....... lop�... 31,324,IM4 M.Ow," 25."," 21.070�458 18.715.283 15,OW,000 K. 53,359 11.2M,358 10,757,279 10,�.000 F] 8.22l,U7 AIM7.874 3 6.112.63 1 47351%4 S. 000,� f,,,1262,817 129,W7 0 0 General Pulb]. �.fet, Planning and corrawanty Pubk �rks Capital Interest eapense l;,o�envnerd developrnent �aeas conrb�ns Expenses and Program Revenues - Busine"pe Activffies 0 Expens. 4.300,000 0 PWm revenues 4.M2,274 4.200." 4,000,000 3.900,000 3.756.615 3,700.000 1600.000 3.500,000 i GO# Business -type activities This was the sixth full year of operations for the SilverRock Golf fund since the golf course began early operation in 2005. Net assets decreased by $(444,000) from the effects of an operating loss Charges for services primarily consisted of green fees which totaled $3,759,000, and was $172,000 more than the previous year, with golf course expenses of $4,202,000, which was $32,000 more than the previous year. During the year the golf course entered into a three year capital lease to replace golf carts. During Fiscal Year 2010-2011 , an additional advance of $113,000 was required for the golf course operations ($88,600 in principal and $24,400 in interest)- This brings the total outstanding advance due to the General Fund from the inception of the Golf Course opening to $5,407,000. It is anticipated that these advances will be repaid from future income from SilverRock activities such as transient occupancy tax, sales tax and golf course net income generated on the site in future years. Financial Analysis of the Government's Funds As noted earlier, the City of La Quinta uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds - The focus of the City of La Quinta's governmental funds is to provide information on near -term inflows, outflows, and balances of fund balances- Such information is useful in assessing the City of La Quinta's financing requirements- In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of La Quinta's governmental funds reported combined ending fund balances of $193.37 million as follows: Fund Category General Fund Percent All I Other Funds Percent Total Funds Percent Nonspendable $23,726,331 25% $6,667,365 7% $30,393,696 16% Restricted 169,631 0% 106,872,085 107% 107,042,126 55% Committed 19,276,654 21% 0 0% 19,276,654 10% Assigned 1,768,494 2% 0 0% 1,768,494 1% Unassigned 48,140,444 52% (13,250,398) -12% 4,890,046 17% Total $93,081.554 $100,289,052 $ 93.371,016 Governmental fund balances ended the year totaling $193,371,000, an increase of $32,239,000 in comparison with the prior years ending balance of $161,132,000. Of this amount $30,394,000 or 16% constitutes nonspendable reserves, which means that these reserves must be maintained intact, $107,042,000 or 55% are restricted fund 10 balances which are the result of external limitations on spending, $19,277,000 or 10% are committed fund balances which has resulted in internally -imposed limitations placed upon the funds by the Governing Board responsible for adopting the fund budget, assigned reserves of $1,768,000 or 1 % consist of carryover appropriations which were budgeted for in Fiscal Year 2010-2011 but were unspent and will be budgeted again in the next budget year. The remainder of fund balance of $34,890,000 or 18% represents unassigned fund balances or the residual net resources after taking into consideration the other classifications. General Fund The general fund is the chief operating fund of the City of La Quinta. At the end of the current fiscal year, unassigned fund balance of the general fund was $48,140,000, while total fund balance reached $93,082,000. As a measure of the general fund's liquidity, it may be useful to compare the total general fund balance to budgeted expenditures (including transfers out). The total fund balance represents 232 percent of the total budgeted expenditures. The City of La Quinta's general fund balance increased by $1,051,000 in Fiscal Year 2010-2011. Key factors for this increase are as follows: Actual expenditures were $3,213,000 less than the final budget. Divisions that were under budget for the year were Street Maintenance ($1,001,000), Police ($703,000), Planning & Development Administration ($200,000), and Capital outlay ($181,000). In addition, actual transfers out were $298,000 less than budgeted- Of this amount, $151,000 was not spent on the "A" Street extension project. This construction project funding will be carried over for completion in Fiscal Year 2011-2012. Actual revenue collections were $484,000 more than the final adjusted budget. Overall, taxes were $478,000 more than budgeted for in Fiscal Year 2010-2011, and the actual taxes collected in Fiscal Year 2010-2011 ($20.32 million) was $590,000 more the prior year tax actual collections of $19.73 million. Actual transient occupancy tax collections in Fiscal Year 2010-2011 were $4,725,OGO or $550,000 more than prior year collections. Actual sales tax collections for Fiscal Year 2010-2011 were $7,324,000 or $397,000 more than the $6,927,000 collected in Fiscal Year 2009-2010. Actual property tax collections were $336,000 less than the prior year with $142,000 of the decrease from declining property tax values and $194,000 from a decrease in statutory property taxes. Low and Moderate income Housing PA No. 2 Fund The fund is used to account for the 20% property tax increment set aside for low and moderate income housing in the La Quinta Redevelopment Agency Project Area No. 2. During Fiscal Year 2010-2011, the fund balance increased by $1.1 million to end the year at $22.9 million- The Fund received less property tax revenues ($4.8 million) in Fiscal Year 2010-2011 versus the prior year ($5.2 million) due to falling property values. 11 Capital Improvement Fund The fund is primarily used to record the expenditure of funds for capital projects. The fund had eighty one (81) active Capital Improvement Projects budgeted for during Fiscal Year 2010-2011. The three most active projects during the year were the Village land acquisition ($8,200,000), well site mitigation payment to the Coachella Valley Water District ($1,267,000) and the Cove Fire Station Number 32 relocation ($1,110,000). Other major projects budgeted in the future include the Adams Street Bridge Improvements, Washington Street Apartments rehabilitation project, and the relocation of the Coachella canal. Civic Center Fund The fund is primarily used to collect developer impact fees for the construction of the Cit I y Hall expansion and the repayment of a portion of the debt service on the original City Hall construction. The City Hall expansion was completed in Fiscal Year 2007-2008 and the final repayment of the original City Hall construction bonds is scheduled in Fiscal Year 2018-2019. A $7.01 million advance from the General Fund is outstanding at the end of Fiscal Year 2010-2011. 2011 Low & Moderate Income Bond Fund The fund is primarily used to account for the construction of low and moderate income housing projects in the La Quinta Redevelopment Agency area from the proceeds of this bondissue. Redevelopment Agency Project Area I & 2 Debt Service Funds The Redevelopment Agency Project Area 1 & 2 Debt Service Funds are used to accumulate resources, primarily property taxes, to pay debt service. The Project Area 1 Debt Service Fund Balance increased by $13,933,000 in Fiscal Year 2010-2011 to end the year at a $745,000. This is primarily due to a $15,039,000 transfer from the Redevelopment Agency PA No. 1 Capital Projects Fund which was used to repay a $22 million advance from the General Fund and to pay a $4.86 million Supplemental Educational Revenue Augmentation Fund ("SERAF") payment. The Fund received less property tax revenues ($35.2 million) in Fiscal Year 2010-2011 versus the prior year ($38.5 million) due to failing property values. The Project Area 2 Debt Service Fund Balance increased by $5.48 million to leave a surplus of $560,200 at year end. This is primarily due to a $3.7 million transfer from the Redevelopment Agency PA No. 2 Capital Projects Fund- The Fund received less property tax revenues ($19.3 million) in Fiscal Year 2010-2011 than in the prior year ($20.8 million) due to falling property values. Proprietary funds The City of La Quinta's proprietary funds provide the same type of information found in the govemment-wide financial statements, but in more detail. 12 The financial activities of the City enterprise fund have already been addressed in the discussion of the-CitY of La Quinta's business -type activities. In addition, the City has three (3) internal service funds to accumulate resources for equipment and vehicle replacement, information technology activities, and for park equipment and facility replacement. As the City continued to experience declining revenues in Fiscal Year 2010-2011, limited charges for services were made to the General Fund from the Equipment Replacement Fund and the Information Technology Funds, and no charges were made to the Park Equipment and Facility Fund. General Fund Budgetary Highlights During the year there was a $6,006,000 increase in appropriations and transfers out between the original ($34,157,000) and final amended budget ($40,163,000). Following are the main components of the changes: • During the mid -year review, the General Fund budget for various divisions was reduced by $550,000 based upon an estimated decrease of revenues forecasted for Fiscal Year 2010-2011; • The FY 2010-2011 budget included $1,777,000 in carryover appropriations into from FY 2009-2010; • The Fiscal Year 2010-2011 budget included an appropriation of $2,990,000 to pay- off a portion of the outstanding principal on the Civic Center developer impact fee advance;and, • The Fiscal Year included an additional $1,474,000 in appropriations for Capital Projects funded by the General Fund during the year. The budget increases were possible because of additional anticipated revenues and unassigned reserves and the carryover encumbrances and appropriations were possible from available net changes in fund balances. Capital Asset and Debt Administration Capital assets The City of La Quinta's investment in capital assets for its -governmental and business - type activities as of June 30, 2011, amounts to $573,491,000 (net of accumulated depreciation). This investment in capital assets includes land, right of way, buildings and improvements, machinery and equipment, streets and bridges, and construction in progress. The investment in capital assets increased this fiscal year from the purchase of properties which exceeded the depreciation expenses. 13 The following chart lists the asset categories for governmental and business like activities net of depreciation. City of La Quinta Capital Assets (net of depreciation) Govennmental Business -type activities activities Total 2011 2010 2011 2010 2011 2010 Land -7-UTIJ9,0bi $ 16,383,500 $ 3U.640JI3Z IN 36,640,632 � 104.980,39T-7-7T.77= uunoings ana unprovments 52,688,147 44,736,121 5,129,267 5,363,822 57.817,414 50.099,943 Equipment and turniture M792 664,663 807,0411 IZ9,3tu 1,04U,b4U - 1,594,UJJ Vehicles 423,081 5/6J52 I — i 4ZJ,UUZ 57 I=, Infrastructure 396,78Z,262 3UU.2b3,ZZU - 396, 18Z,Zti2 399,25 Gonstnuction in progress 11,946.973 7TT73-M - - 11.946,973 43,423-IM- i otai Zk b3U,fI3,5ZZ $ 565.236,IJ4Z -� 42JI1.148 :� 42,934,UZ!, $ 51J,49U,b/U $ bU8,1 7ZI= Major capital asset events during the current fiscal year included the following: Governmental activities Recording infrastructure improvements, including developer dedications of $3,439,000, to street improvements, street right of way, street sidewalks and curbs and gutters, traffic signals, and street medians; Completed the Wolff Waters Place Apartments for $30,148,000, which were dedicated to the Coachella Valley Housing Coalition; Completed the Laguna de [a Paz sound wall for $980,000, which was dedicated to the homeowners association; Completed the construction of the Cove Fire Station 32 ($5,000,000) and the Phase 1 of the Maintenance Yard ($2,864,000); and, Purchased Village properties for $8,200,000. Business -type activities The Golf Course entered into a three year lease for golf cart equipment for $332,500 during Fiscal Year 2010-2011. Additional information on the City of La Quinta's capital assets can be found in Footnote 6 to the financial statements - Long -term debt At the end of the current fiscal year, the City of La Quinta had total bonded debt outstanding of $258,976,000. $138,480,000 of this debt amount represents bonds secured solely by specified revenue sources (i.e., tax allocation bonds); while, $114,340,000 of the debt represents revenue bonds that will be paid from pledged tax 14 increment property tax housing funds. In addition, $286,000 in capital equipment leases is outstanding in connection with SilverRock Golf Course and $78,000 in a copier lease is outstanding in the governmental funds. City of La Quinta Outstanding Debt Governmental Business -type activities activities Total Debttype: 2011 2010 2011 2010 2011 2010 Capital le�ases fd.zt)Z 11 ztlti'u97- S 04,04J 1, Jb4,349 4 169"IM Compensated absences 965,9ZI I.UUZ.fjul uot"qzi i,uuz,UUT- Post retirement healthcare liability 337,311 225,979 337,311 225,979 OfteloW agreement 114,564 174,5W Mass through agreement 1,255,2TT ---- =7z.965 I,Z55,242 2,072,= 1111�111.�V - - ]JO14ouluutr I Jb.Vj �'Uuu Revenue bonds 114,340,UUu U/,bbU,0UU 114,J4U,UUU is 1,6511,17W i Otal $ 258,b89,542 � ZJ0.//U,l5Z 4, ZOU,09 I $ b4l,5U 1 4, Wj0,lj;jU,= The total outstanding debt increased by $28,145,000 during Fiscal Year 2010-2011 with the issue of $6,000,000 in tax allocation bonds and $28,850,000 in revenue bonds. Additional inforrnation on the City of La Quinta's long4erm debt can be found in notes 7 and 8 of the financial statements. Economic Factors and Next Year's Budgets and Rates These factors were considered in preparing the City of La Quinta's budget for Fiscal Year 2011-2012: The City of La Quinta had a 7.6 versus 7.4 percent last year unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 14.4 versus 14.5 percent last year and the statewide unemployment rate of 12.1 versus 12.2 percent last year. During the last ten years, the City of La Quinta has been in a growth phase with assessed values increasing from $3.77 billion in Fiscal Year 2001-2002 to $10.33 billion or over 274 percent. It is important -to note however, that from Fiscal Year 2009-2010 to Fiscal Year 2010-2011 assessed values decreased by $1.53 billion or 12.90%. During the current fiscal year, the general fund net gain was $1,051,000 and $1,748,000 of General fund balance has been assigned for carry over appropriations. The State of California Fiscal Year 2010-2011 budget included a State-wide diversion of tax increment funding from Redevelopment Agencies. The La Quinta Redevelopment Agency portion of the Fiscal Year 2010-2011 takeaway was $4,851;000 and in Fiscal Year 2011-2012 $18,315,000 has been appropriated as an alternative voluntary redevelopment program remittance payment. 15 The Fiscal Year 2011-2012 General Fund advance toward golf course operations has been budgeted at $(8,500). The City of La Quinta adopted a balanced general fund budget for Fiscal Year 2011- 2012, after applying $3,112,000 in unassigned reserves. Reguests for Information This financial report is designed to provide a general overview of the City of La Quinta's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of La Quinta, John Falconer, Finance Director, P.O. Box 1504, La Quinta, CA, 92247 or by telephone at 760-777- 7150. 16 CITY OF LA QUINTA STATEMENT OF NET ASSETS JUNE 30,2011 Assets: Cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Internal balances Prepaid costs Deposits Due from other governments Inventories Deferred charges Land held for resale Restricted assets: Cash with fiscal agent Net pension asset Capital assets not being depreciated Capital assets, net of depreciation Total Assets Liabilities: Accounts payable Accrued liabilities Accrued interest Unearned revenue Deposits payable Due to other governments Noncurrent liabilities: Due within one year Due in more than one year Total Liabilities Net Assets: Invested in capital assets, net of related debt Restricted for., Planning and development projects Public safety Community services Public works Capital projects Debt service Unrestricted Total Net Assets Prima!y Government Governmental Business -Type Activities Activities Total $ 144,134,908 $ 367,665 $ 144,502,573 336.512 31,517 368,029 2,010,068 - 2,010.068 6,953,592 - 6,953,592 115,769 233 116,002 5,407,327 (5,407,327) - 33,823 1,865 35,688 15,967 250,000 265,967 6.510,463 - 6,510,463 - 79,467 79,467 4,441,840 - 4,441,840 8.320,0GO - 8,320,000 45,298,094 - 45,298,094 1,252,140 - 1,252,190 364,991,161 36,840,832 401,831,993 165,722,361 5,936,316 171.658,677 755,5",075 38,100,568 793,644,643 5,587,805 165,977 5,753,782 556,579 2,162 558,741 3,882,145 - 3,882,145 1,106,744 1,232 1,107,976 5,504,622 73,000 5,577,622 504,377 - 504,377 8,050,994 117,013 8,168,007 249,511,503 169,084 249,680,587 274,704,769 528,468 275,233,237 276,787,752 34,018,930 96,364 10,248,314 396,355 58,111,106 4,171,057 97,009,428 42,491,051 (4,918,951) 319,278,803 34,018,930 96,364 10,248.314 396,355 58,111,106 4,171,057 92,090,477 _.L480,839,306 $ 37,572,100 $ 518,411,406 See Notes to Financial Statements 17 CITY OF LA QUINTA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2011 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 11,283,358 $ 47,696 $ 82,191 $ - Public safety 21,070,458 1,044,399 7,158,785 17,863 Planning and development 18,715,283 74,471 3.874,309 99,094 Gommuntly services 4,735,964 210.151 52,666 - Public works 10,757,279 1,086,771 1,984,991 3,040.871 Capital contributions to other agencies 31,324,064 - - - Interest on long-term debt 14,353,359 - - - Total Governmental Activities 112,239,765 2,463,488 13,152,942 3,157,828 Business -Type Activities: Golf Course 4,202,274 3,756,615 - - Total Business -Type Activities 4,202,274 3,756,615 Total Primary Government $ 116,442,039 $ 6,220,103 13,152,942 $ 3,157,828 Generaf Revenues: Taxes: Property taxes, levied for general purpose Tax increment Transient occupancy taxes Sales taxes Franchise taxes Business licenses taxes Other taxes Motor vehicle in lieu - unrestricted Use of money and property Other Total General Revenues Change in Net Assets Net Assets at Beginning of Year Net Assets at End of Year See Notes to Financial Statements 18 Net (Expenses) Revenues and Changes in Net Assets Pffmafy Government Governmental Business -Type Activities Activities Total $ (11,153,471) $ - $ (11,153,471) (12,849,411) - (12,849,411) (14,667,409) - (14.667,409) (4,473,147) - (4,473,147) (4,644,646) - (4,644,646) (31,324,064) - (31,324,064) (14,353,359) - (14,353,359) (93,465,507) (93,465,50 (445,659) (445,659) (445,659) (445,659) (93,465,507) (445,659) (93,911,166) 5,942,353 - 5,942,353 32,569,795 - 32,569,795 4,737,968 - 4,737,968 7,323,835 - 7,323,835 1,607,829 - 1,607,829 285,270 - 285,270 437,235 - 437,235 3,515,395 - 3,515,395 4,693,974 2,125 4.696,099 3,211,584 - 3,211,584 64,325,238 2,125 64,327,363 (29,140,269) (443,534) (29,583,803) 509,979,575 38,015,634 547,995,209 $ 480,839,306 $ 37,572,100 $ 518,411,406 See Notes to Financial Statements 19 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTALFUNDS JUNE 30,20111 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Land held for resale Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Land held for resale Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Committed to: Emergency reserve Post retirement health benefits Assigned to: Continuing appropriations Unassigned Total Fund Balances Total Liabilities and Fund Balances See Notes to Financial Statements Special Revenue Funds Capital Projects Funds Low[Moderate Income Housing General PA No. 2 $ 76,033,303 $ 22,939,847 83,771 1,969,322 23,260 9,967 4,976,509 256,852 15.373,104 8.320,000 Capital Improvement Civic Center $ 2,852,560 $ - 1,417 1,278 - 641,486 15.926 - 353,413 24,760 - $ 107,116,172 $ 23,623,297 $ 3,207,390 $ $ 4,232,310 40,465 $ 1,044,545 $ 550,462 - - 4,484,223 641.486 - 74,363 - 413,850 4,663,624 594,135 29,636 - - - - 7,012,033 14,034,618 681,951 2,052,530 7,012,033 23,260 8,320,000 15,373,104 9,967 - - 22,941,346 - 1,154,860 169,631 - 18,018,595 1,258,059 1,768,494 48,140,444 - (7,012,033) 93,081,554 22,941,346 1,154,860 (7,012,033) $ 107,116,172 $ 23,623,297 $ 3,207,390 $ 20 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTALFUNDS JUNE 30,2011 (Continued) Capital Projects Funds Debt Service Funds Other 2011 Low/Mod Redevelopment Redevelopment Governmental Bond Agency PA No. 1 Agency PA No. 2 Funds Assets: Pooled cash and investments $ - $ 1,132,207 $ 15,101 $ 37,931,285 Receivables: Accounts 3,500 - - 247,824 Taxes - 27,485 5,112 6,871 Notes and loans - - 6,312,106 Accrued interest - 379 - 27,066 Prepaid costs - - - 10,563 Deposits - - - 6,000 Due from other governments - - - 1,180,541 Due from other funds - - - 641,254 Advances to other funds - - - 4,569,188 Land held for resale - - Restricted assets: Cash and investments with fiscal agents 25,535,470 - 600.000 19,162,624 Total Assets $ 25,538,970 $ 1,160,071 $ 620,213 $ 70,095,322 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ $ - $ 190,599 Accrued liabilities - - 2,263 Deferred revenues - - 4,230,492 Unearned revenues - 618,531 Deposits payable - 246,863 Due to other governments - 414,728 60,013 - Due to other funds 3,500 - - 919,366 Advances from other funds - - - 7,522,932 Total Liabilities 3,500 414,728 60,013 13,731,046 Fund Balances: Nonspendable: Prepaid costs - - - 10,563 Land held for resale - - - - Notes and loans - - - 2,081,614 Advances to other funds - - - 4,569,188 Deposits - - - 6,000 Restricted for., Planning and development projects - - - 11,077,584 Public safety - - - 96,364 Community services - - - 10,248,314 Public works - - - 396,355 Capital Projects 25,535,470 - - 31,420,776 Debt service - 745,343 560,200 2,695,883 Committed to: Emergency reserve - - - Post retirement health benefits - - - Assigned to: Continuing appropriations - - - Unassigned - - - (6,238,365) Total Fund Balances 25,535,470 745,343 560,200 56,364,276 Total Liabilities and Fund Balances $ 25,538,970 1,160,071 $ 620,213 $ 70,095,322 See Notes to Financial Statements 21 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTALFUNDS JUNE 30,2011 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Land held for resale Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspenclable: Prepaid costs Land held for resale Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Committed to: Emergency reserve Post retirement health benefits Assigned to: Continuing appropriations Unassigned Total Fund Balances Total Liabilities and Fund Balances Total Governmental Funds $ 140,904,303 336,512 2,010,068 6,953,592 113,455 33,823 15,967 6,510,463 922,866 19,942,292 8,320,000 45,298,094 $ 231,361,435 $ 5,507,919 552.725 9,356,201 1,106,744 5,504,622 504,377 922,866 14,534.965 37,990,419 33,823 8,320,000 2,081,614 19,942,292 15,967 34,018,930 96,364 10,248,314 396,355 58,111,106 4.171,057 18,018,595 1,258,059 1,768,494 34,890,046 193,371,016 $ 231,361,435 See Notes to Financial Statements 22 CITY OF LA QUINTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30,2011 Fund balances of governmental funds $ 193,371,016 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity� Infrastructure and right-of-way 474,383,418 Other capital assets 129,513,919 Accumulated depreciation (90,211,797) Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable (252,820,000) Unamortized bond premium/discount 1,127,046 Unamortized cost of issuance 4,441,840 Other long-term liabilities (4,566,311) Compensated absences (956,506) Governmental funds report all OPEB contributions as expenditures, however in the Statement of Net Assets any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as a liability. (337,311) Governmental funds report all pen.01 WIMIMMM .. expenditures, however in the Statement of Net Assets any excesses or deficiencies in contributions in relation to the ann , ual contribution are recorded as an asset 1 1,252,190 Accrued interest payable for the curr I ent portion of interest due on Bonds has not been reported in the 6overnmental funds- (3,882,145) Revenues reported as deferred revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity. 9,356,201 Internal service funds are used by management to charge the costs of certain activities, such as equipment manag 6ent and self-insurance, to individual funds. The assets and liabilities of the intem6l service funds must be added to the Statement of Net Assets. j i 20,167,746 Met assets of governmental activities. $ 480,839,306 See Notes to Financial Statements 23 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2011 General Revenues: Taxes $ 20321 573 Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Pass -through agreement payments Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds— Capital Projects Funds Low/Moderate Income Housing Capital PA No. 2 Improvement Civic Center $ 4837259 C 547,071 - 13,034,944 1,021,859 494,611 - - 2,998,856 143,643 327,751 - - - - - 159,298 82,191 162.400 8,719 - - 37,887,206 4,989,621 1,181,157 82,191 5,215,632 203,798 19,826,372 - - 1.543,188 1,002,756 2,455,551 - 2,839,580 - - 32,927 - 21,180.979 36,331 - 302,895 - - 23,870 46,71 31,949,581 1,002,756 21,607,744 250,610 5,937,625 3,986,865 (20,326,587) (168,319) 115,136 (5,001,325) (2,870,839) 21,481,447 2,990,000 (4,886,189) (2,870,839) 21,481,447 2,990,000 1,051,436 1,116,026 1,154,860 2,821,681 92,030,118 21.825,320 - (9,833 714) $ 93,081 �654 22,941,346 j 1,154,860 _L 12,033L See Notes to Financial Statements 24 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30,20111 (Continued) Capital Projects Funds Debt Service Funds Other 2011 Low/Mod Redevelopment Redevelopment Governmental Bond Agency PA No. I Agency PA No. 2 Funds Revenues: Taxes $ - $ 35.192,471 $ 19,349,036 $ 8,798,118 Assessments - - - 956,048 Licenses and permits - - Intergovernmental - 4,948,840 Charges for services - - - 6,807 Use of money and property 12,065 12,802 47,887 1,455,479 Fines and forfeitures - - - - Developer participation 704,316 Miscellaneous - - - 148,644 Total Revenues 12,066 35,205,273 19,396,923 17,018,252 Expenditures: Current General government - 5,241,338 215,555 9,196 Public safety - - - Planning and development - - - 5,914,476 Community services - - - 1,692,207 Public works - - - 1,968,480 Capital outlay - - - 73,869 Debt service: Principal retirement - 4,147,722 325,000 2,199.313 Interest and fiscal charges - 8,088,102 1,387.803 4,664,511 Pass -through agreement payments - 19,309,866 16,297,223 Total Expenditures - 36,787,028 18,225,581 16,622,052 Excess (Deficiency) of Revenues Over (Under) Expenditures , 12,065 (1,581,755) 1,171,342 496,200 Other Financing Sources (Uses) Transfers in 19,478,126 6,255,653 11,336,672 Transfers out (2,694,381) (3,963,138) (1,951,993) (45,170,803) Long-term debt issued 28,850,000 - 6,000,000 Proceeds from sale of capital asset - - 8,683,850 Bond discount (308,839) - (86,207) Bond issuance costs (323,375) - (108,500) Total Other Financing Sources (Uses) 26,523,406 16,514,988 4,303,660 (19,344,988) Net Change in Fund Balances 25,535,470 13,933,233 5.475,002 (18,848,788) Fund Balances, Beginning of Year - (13,187,890) (4,914,802) 75,213,064 Fund Balances, End of Year $ �25635,470 $ 746,343 $ _____N0,200 _I 66,364,276 See Notes to Financial Statements 25 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 Revenues: Taxes Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal rebrement Interest and fiscal charges Pass -through agreement payments Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Total Governmental Funds $ 88,498,457 956,048 547,071 19,005,643 501,418 4,670,732 327,751 945.805 319,763 115,772,688 10,885,519 19,826,372 8,460,420 4,147.758 4,808,060 21,287,775 7,011,261 14,210,998 35,607,089 126,245,252 (10,472,564) 61,657,034 (61,652,479) 34,850,000 8.683,850 (395,046) (431,875) 42,711,484 32,238,920 161,132,096 $ 193,371,016 See Notes to Financial Statements 26 CITY OF LA QUINTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2011 Net change in fund balances - total governmental funds 32,238,920 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 is allocated over their estimated useful lives as depredation expense. This is the amount by which capital outlays exceeded depreciation in the current period: Contributions to other governments (31,324,064) Capital contributions 3,477,897 Loss on disposal of capital assets (18,722,513) Capital outlay 18,303,985 Depreciation expense (7,731,851) The,issuance of long-term liabilities provides current financial resources in the governmental funds, but issuing debt increases the long-term liabilities in the Statement of Net Assets. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets - New debt issued (34,850.000) Repayment of principal 7,011.261 Amortization of issuance costs, premiums and discounts 603,712 Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 80,848 Compensated absences 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- 37,672 Governmental funds report all contributions in relation to the annual required contribution (ARC) for OPEB as expenditures, however in the Statement of Activities only the ARC is an expense. (111.332) Governmental funds report all contributions in excess to the required contribution for PERS as expenditures. however in the Statement of Activities only the current contribution is an expense. (86,573) Revenues reported as deferred revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity. 1,103.609 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds - The net revenues (expenses) of the internal service funds is reported with governmental activities. 828,160 Change in net assets of governmental activities $ (29,140,269) See Notes to Financial Statements 27 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT BY DEPARTMENT GENERALFUND YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 92,030,118 $92,030,118 $ 92,030,118 $ - Resources (inflows): Taxes 19,524,800 19,843,241 20,321,573 478,332 Licenses and permits 569,600 519,600 547,071 27,471 Intergovernmental 8,953,088 13,046,201 13,034,944 (11,257) Charges for services 490,200 491,900 494,611 2,711 Use of money and property 4,045,950 2.955,748 2,998,856 43,108 Fines and forfeitures 326,100 326,100 327,751 1,651 Miscellaneous 89,000 57,241 162,400 105,159 Transfers in 158,800 278,341 115,136 (163,205) Amounts Available for Appropriation 126,187,656 12-9,548,490 130,032,460 483,970 Charges to Appropriation (Outflow): General government Legislative 939,468 662,048 651,060 10,988 City Manager 320,350 266.717 289,712 (22,995) Development Services 1,241,029 1,261,329 1,077,975 183,354 Management Services 1,192,741 1,949,506 1,806,542 142,964 City Clerk 563,097 525,954 480,096 45,858 Fiscal Services 802,931 740,556 732,250 8,306 Central Services 274,300 264,150 177,997 86.153 Public safety Police 12,712,089 12,733,306 12,030,307 702,999 Building & Safety Admin- 277,818 156,311 275,158 (118,847) Building 806,676 810,976 815,230 (4,254) Code Compliance 940,750 945,750 911,462 34,288 Animal Control 368,990 370,790 356,727 14,063 Civic Center Bldg 524,417 485,517 416,980 68,537 Fire 4,911,481 4,765,448 4,907,844 (142,396) Emergency Services 155,950 156,650 112,664 43,886 Planning and development Administration 531,300 1,320,130 1,119,878 200.252 Current Planning 548,300 554,700 423,310 131,390 Community services Community Services Admin 980,935 1,019,572 891,745 127,827 Senior Center 377,425 376,725 352,552 24,173 Parks & Recreation 192,925 193,525 194,087 (562) Park Maintenance 932,568 1,137,975 1,017,167 120,808 Public works Administration 475,100 504,471 477,731 26,740 Development Services 669,135 672,335 647,772 24,563 Maintenanre/Operations - Street 689,041 1,107,747 107,084 1,000,663 Maintenance/Operations - Lighting 755,130 775,877 642,180 133,697 Construction Management 1,147,690 891,611 964,813 (73,202) Capital outlay 40,300 214,286 32,927 181,359 Debt service: Principal retirement - - 36.331 (36,331) Transfers out 785,454 5,299,564 5,001,325 298,239 Total Chargesto Appropriations 34,157,390 40,163,426 36,950,906 3,212,520 Budgetary Fund Balance, June 30 $ 92,030,266 $89,385,064 $ 93,081,554 $ 3,696,490 See Notes to Financial Statements 28 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT LOWIMODERATE INCOME HOUSING PA NO. 2 YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Intergovernmental Use of money and property Miscellaneous Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Debt service: Principal retirement Interest and fiscal charges Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 21,825,320 $21,825,320 $ 21,825,320 $ - 5,573,400 4,800,480 4,837,259 36,779 498,200 - - - 220,200 54,200 143,643 89,443 4,200 8,719 8,719 - 28,121,320 26,688,719 26,814,941 126,222 1,865,134 2,022,434 1,002,756 1,019.678 39,313 39,313 - 39,313 200,443 200,443 - 200,443 1,951,993 12,785,865 2,870,839 9,915,026 4,056,883 15,048,055 3,873,595 11,174,460 $ 24,064,437 $11,640,664 $ 22,941,346 $ 11,300,682 See Notes to Financial Statements 29 CITY OF LA QUINTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2011 Assets: Current: Cash and investments Receivables Accounts Accrued interest Prepaid costs Deposits Inventories Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Assets: Liabilities: Current Accounts payable Accrued liabilities Unearned revenues Deposits payable Capital leases payable Total Current Liabilities Noncurrent Advances from other funds Accrued compensated absences Bonds, notes, and capital leases Total Noncurrent Liabilities Total Liabilities Net Assets: Invested in capital assets, net of related debt Unrestricted Total Not Assets Total Liabilities and Net Assets Business -Type Activities - Governmental Enterprise Activities - Funds Internal $ 367,665 $ 3,230,605 31,517 - 233 2,314 1,865 - 250,000 79,467 730,747 3,232,919 42,777,148 17,027,982 42,777,148 17,027,982 $ 43,507,895 $ 20,260,901 $ 165,977 $ 79,886 2,162 3,854 1,232 - 73,000 117.013_ 359,384 83,740 5,407,327 - - 9,415 169,084 6,576,411 9,416 5,935,796 93,155 42,491,051 17,027,982 (4.918,951) 31139,764 37,672,100 20,167,746 $ 43,507,895 $ 20,260,901 See Notes to Financial Statements 30 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2011 Business -Type Activities - Governmental Enterprise Activities - Funds Internal Golf Course Service Funds Operating Revenues: Sales and service charges Total Operating Revenues Operating Expenses: Salaries and benefits Fuel and oil Maintenance and parts Contract services Software and supplies Depredation expense Other Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Interest expense Total Nonoperating Revenues(Expenses) Income (Loss) Before Contributions and Transfers Capital contributions Transfers out Changes in Net Assets Net Assets: Beginning of Year End of Fiscal Year $ 3,756,615 $ 30,071 3,756,616 30,071 60,647 110,790 - 102,113 - 141,828 3,547,431 111,653 - 135,315 489,403 792,209 64,923 16,317 4,162,404 1,410,225 (405,789) (1,380,154) 2,125 23,242 (39,870) (37,745) 23,242 (443,534) (1,356,912) 2,189,627 (4,555) (443,534) 828,160 38,015,634 19,339,586 $ 37,572,100 $ 20,167,746 See Notes to Financial Statements 31 C17Y OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2011 Cash Flows from Operating Activities: Cash received from customers and users Cash received fromt(paid to) interfund service provided Cash paid to suppliers for goods and services Cash paid to employees for services Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers out Advance from other funds Not Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Pdncipal paid on capital debt Interest paid on capital debt Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Business -Type Activities - Governmental Enterprise Activities - Funds Internal Golf Course Service Funds $ 3,733,702 $ 30,071 (1,390) - (3.580,198) (531,391) (60,379) (109,798) 91,735 (611,118) (4,555) 112,755 112,755 (4,555) (332,526) (74,608) 231,554 (39,870) (140,842) (74,608) 2,094 23,928 2,094 23,928 65,742 (666,353) 301,923 3,896,958 $ 367,665 $ 3,230,605 See Notes to Financial Statements 32 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2011 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (increase) decrease in accounts receivable (Increase) decrease in inventories (increase) decrease in prepaid expense Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in deposits payable Increase (decrease) in unearned revenue Increase (decrease) in compensated absences Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Capital assets contributed by other funds Business -Type Activities - Governmental Enterprise Activities - Funds Internal Golf Course Service Funds $ (405,789) $ (1,380,154) 489,403 792,209 (19,813) - 42,974 - - 240 (24,208) (24,855) 268 450 12,000 - (3,100) - - 992 497,524 769,036 $ 91,735 _L__Jt1 1,1181 $ 2,189,627 See Notes to Financial Statements 33 CITY OF LA QUINTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30,2011 Assets: Pooled cash and investments Receivables: Taxes Accrued interest Total Assets Liabilities: Deposits payable Total Liabilities Agency Funds $ 521.192 13.363 354 $ 534,909 $ 534,909 $ 534,909 See Notes to Financial Statements 34 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1: Summary of Significant Accounting Policies a. Reporting Entity The City of La Quinta (City) was incorporated May 1, 1982, under the general laws of the State of California. In November 1996, the City became a charter City. The City operates under the Council — Manager form of government. The City provides many community services including public safety, highway and street maintenance, health and social services, cultural and leisure services, public improvements, planning and zoning services, and community development services. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. As required by generally accepted accounting principles, these financial statements present the government and its component units, which are entities for which the government is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majodty of that organization's governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e-, it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. All of the Citys component units are considered to be blended component units. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are reported with the interfund data of the primary government. The following organizations are considered to be component units of the City: La Quinta Redevelopment Agency The La Quinta Redevelopment Agency (Agency) has established two redevelopment project areas pursuant to the State of California Health & Safety Code, Section 33000 entitled "Community Redevelopment Law". On November 29, 1983 and May 16, 1989, the City, Council approved and adopted the Redevelopment Plans for the La Quinta Redevelopment Project Areas No. 1 and No. 2, respectively. These plans provide for the elimination of blight and deterioration, which was found to exist in the project areas. Although the Agency is legally separate, it is reported as if it were part of the City because the City Council also serves as the goveming board of the Agency. Separate financial statements of the Agency can be obtained at City Hall. 35 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Summary of Significant Accounting Policies (Continued) City of La Quinta Public Financing Authority The La Quinta Public Financing Authority (Financing Authority) was established pursuant to a Joint Exercise of Powers Agreement dated November 19, 1991, between the City and the Agency. The purpose of the Financing Authority is to provide financing necessary for the construction of various public improvements through the issuance of debt. Although the Financing Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Financing Authority. Separate financial statements of the Financing Authority are not prepared. City of La Quinta Housing Authority The La Quinta Housing Authority (Housing Authority) was established pursuant to California Housing Authorities Law (Health and Safety Code Sections 34200 at seq.) on September 15, 2009. The purpose of the Housing Authority is to provide safe and sanitary housing opportunities for La Quinta residents. Although the Housing Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Housing Authority. Separate financial statements of the Housing Authority are not prepared. b. Government -Wide and Fund Financial Statements The basic financial statements of the City are composed of the following • Government -wide financial statements • Fund financial statements • Notes to the financial statements Financial reporting is based upon all GASB pronouncements, as well - as the FASB Statements and Interpretations, APB Opinions, and Accounting Research Bulletins that were issued on or before November 30, 1989, that does not conflict with or contradict GASB pronouncements. 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 business4ype activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government's citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not properly included among program revenues are reported instead as general revenues- 36 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Summary of Significant Accounting Policies (Continued) Amounts paid to acquire capital assets are capitalized as assets in the government -wide financial statements, rather than reported as expenditure. Proceeds of long-term debt are recorded as a liability in the government -wide financial statements, rather than as other financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditure - Fund Financial Statements The underlying 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. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the governmental, proprietary, and fiduciary funds are presented after the government-wride financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial information for fiduciary funds and similar component units. Fiduciary funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation Government -wide Financial Statements The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements- Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows- Property taxes are recognized as revenues in the year for which they are levied- Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental Funds In the fund financial statements, governmental funds are presented using the modified -accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined- Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses a 60 day availability period. 37 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30.2011 Note 1: Summary of Significant Accounting Policies (Continued) Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed delivered tax revenues are recognized as revenues in the period in which the underlying exchange transaction on which they are based takes place. Imposed non -exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government -mandated and voluntary non -exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of "available spendable resources". Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period - Non -current portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources", since they do not represent net current assets- Recognition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables. Noncurrent portions of other long-term receivables are offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. When both restricted and unrestricted resources are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources. 38 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Summary of Significant Accounting Policies (Continued) Proprietary Funds The City's enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net assets. Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness of the propdetary funds are reported as a reduction of the related liability, rather than as expenditures. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Enterprise Funds are charges to customers for sales and services. Operating expenses for Enterprises Funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Private -sector standards of 'accounting and financial reporting issued prior to December 1989, generally are followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Govemmental 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 govemment has elected not to follow subsequent private -sector guidance. Fiduciary Funds The City's fiduciary funds are agency funds. Agency funds are custodial in nature. Assets equal liabilities. Agency funds are presented using the accrual basis of accounting. d. Major Funds, Internal Service Funds and Fiduciary Fund Types The City's major govemmental funds are as follows: General Fund — This fund is the primary fund of the City and is used to account for all revenue and expenditures of the City not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Manager, City Attorney, Finance, City Clerk, Community Development, Police Services, Public Works, Building and Safety, and Community Services. 39 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS.(CONTINUED) JUNE 30, 2011 Note 1: Summary of Significant Accounting Policies (Continued) Low/Moderate Income Housing — Pro act Area No. 2 Fund — This fund is used to account for the required 20% set aside of property tax increments that is legally restricted for increasing and improving housing for low and moderate income households. Capital Improvement Fund — This capital projects fund is used to account for the planning, design and construction of various capital projects throughout the City and the Agency. Civic Center Fund — To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the Civic Center 2011 Low/Mod Bond Fund — To account for the 2011 Tax Allocation bond proceeds that will be used to benefit low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and Project Area No. 2. Redevelopment Agency Proqect Area No. 1 - Debt Service Fund — This debt service fund is used to account for the accumulation of resources for the payment of debt service for bond principal and interest and trustee fees for Project Area No. 1. Redevelopment Agency Proiect Area No. 2 - Debt Service Fund — This Debt service fund is used to account for the accumulation of resources for the payment of debt service for bond principal, interest and trustee fees for Project Area No. 2. The City's major proprietary fund is as follows: Golf Course — To account for the activities of the SilverRock Golf Resort. Other fund types of the City are as follows: Internal Service Funds: Equipment Replacement Fund — This fund accounts for equipment and vehicle maintenance and replacement services provided to other departments on a cost -reimbursement basis. Information Technology Fund — This fund is used to account for the acquisition for computer equipment, maintenance, and services to support information systems within the City- Costs are reimbursed by the benefiting departments. Park Equipment and Facilities Fund — This fund is used to account for the purchase and replacement of City owned park facility infrastructure. Costs are reimbursed by the benefiting departments. Agency Funds: These funds account for assets held by the City as an agency for assessment district bondholders. 40 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Summary of Significant Accounting Policies (Continued) e. Assets, Liabilities and Net Assets or Equity Investments For financial reporting purposes, investments are adjusted to their fair value. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. Some investments are valued on an unamortized cost basis. For these investments, there is no material difference from fair value. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance. Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary fund's share in the cash and investment pool of the City of La Quinta. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the staternent of cash flows, the entire balance of cash and investments on the combined balance sheet for the proprietary funds is considered cash and cash equivalents. Inventory Inventory is valued at cost using the first in/first out (FIFO) method. The City uses the consumption method of accounting for inventories. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. Capital Assets Capital assets (including infrastructure) are recorded at cost where historical records are available and at an estimated historical cost where no historical records exist. Contributed capital assets are valued at their estimated fair market value at the date of the contribution. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of three years or more. Capital Assets include public domain (infrastructure) consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains. 41 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Summary of Significant Accounting Policies (Continued) Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government -wide financial statements and in the fund financial statements of the proprietary funds. Depreciation is charged as an expense against operations and accumulated depreciations is reported on the respective balance sheet. The following schedule summarizes capital asset useful lives Buildings and improvements 10-30 years Equipment and furniture 3-20 years Vehicles 5-10 years Infrastructure 10-50 years Software 5-10 years Compensated Absences Sick time is vested on a percentage based on number of years employed at the City� Maximum accumulation of sick and vacation is 30 and 40 days, respectively. Upon termination or retirement, permanent employees are entitled to receive compensation at their current base salary for all unused vacation leave. If an employee terminates with a minimum of two years service, the employee is entitled to receive 25% of the value of his unused sick leave- The percentage increases by 25% for each five-year period until the employee is entitled to 75% of the value of his unused sick leave. This will occur upon the completion of ten years of continuous employment. Fund Balance In the fund financial statements, governmental funds report the following fund balance classification: Nonspendable include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation. Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest authority, the City Council- The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is by resolution. Assigned include amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted not committed. City Council is authorized to assign amounts to a specific purpose. Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes. 42 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30. 2011 Note 1: Note 2: Summary of Significant Accounting Policies (Continued) The City Council adopts and amends committed fund balance amounts through a resolution. The City Council authorizes assigned amounts for specific purposes pursuant to the policy -making powers granted through a resolution. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted amounts to be used first, then unrestricted. When an expenditure is incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, they are considered to be spent in the order as follows: committed, assigned and then unassigned. If. STEWARDSHIP Stewardship, Compliance and Accountability a. Budgetary Data General Budget Policies The City adopts an annual budget prepared on the modified accrual basis of accounting for its governmental funds and on the accrual basis of accounting for its proprietary funds. The City manager or his designee is authorized to transfer budgeted amounts between the accounts of any department or funds that are approved by City Council. Prior year appropriations lapse unless they are approved for carryover into the following fiscal year. Expenditures may not legally exceed appropriations at the department level. Budgets were not adopted for the Indian Gaming and Development Agreement funds. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue, and similar governmental funds. Encumbrances outstanding at year-end are reported as a reservation of fund balance. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year end are completed. They do not constitute expenditures or estimated liabilities. Budget Basis of Accounting Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP)- b. At June 30, 2011, the following funds had deficit fund balances: Major Capital Projects Funds Civic Center $ (7,012,033) Nonmajor Capital Projects Funds Parks and Recreation (1,360,842) Library Development (1,923,779) Street Facility (2,029,181) Fire Facility (924,563) 43 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 2: Note 3: Stewardship, Compliance and Accountability (Continued) c. Excess of expenditures over appropriations are as follows: Expenditures for the year ended June 30, 2011, exceeded the appropriations of the General Fund as follows: General Fund General Government City Manager Public Safety Building & safety admin Building Fire Community Services Parks & Recreation Public Works Construction management Budget Actual Variance $ 266,717 $ 289,712 $ (22,995) 156,311 275,158 (118,847) 810,976 815,230 (4,254) 4,765,448 4,907,844 (142,396) 193,525 194,087 (562) 891,611 964,813 (73,202) Ill. DETAILED NOTES ON ALL FUNDS Cash and Investments Cash and investments as of June 30, 2011, are classified in the accompanying financial statements as follows: Statement of Net Assets: Cash and investments Cash with fiscal agent Statement of Fiduciary Net Assets Cash and investments Total cash and investments Cash and investments as of June 30, 2011, consist of the following: Cash on hand Deposits with financial institutions Investments Total cash and investments 44 $ 144,502,573 45,298,094 521,192 $ 190,321,859 $ 1,550 275,679 190,044,630 $ 190,321,859 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 3: Cash and Investments (Continued) Investments Authorized by the California Government Code and the Entity's Investment Rgm The table below identifies the investment types that are authorized by the California Government Code and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. *Maximum Waximum Investment Investment Types Authorized by State Law Waximum Maturity Percentage of Portfolio In One Issuer U.S. Treasury Obligations 10 years None $30 million U.S. Agency Securities 3 years None $30 million Local Agency Bonds 10 years 30% $30 million California Local Agency Obligations 10 years 30% $30 million Commercial Paper 90 days 15% $5 million Certificates of Deposit 3 years 60% None Medium -Term Notes 3 years 10% $5 million Money Market Mutual Funds 60 days 20% 10% Local Agency Investment Fund (LAIF) N/A 30% $40 million Investment Agreements NIA N/A N/A * Based on state law requirements or investment policy requirements Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Maximum Maximum Percentage Authorized Investment Type Maturity Allowed U.S. Treasury Obligations None None U.S. Agency Securities None None Bankees Acceptance 360 days None Commercial Paper 270 days None Money Market Mutual Funds N/A None Negotiable Certificates of Deposit 360 days None 45 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS I[CONTINUED) JUNE 30, 2011 Note 3: Cash and Investments (Continued) Disclosures Relatinq to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of short term and long term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Remaining Maturity (in Months) 6 Months 6 Months to I Investment Type Total or Less Year 1 to 3 Years U.S. Treasury notes $ 12,036,600 $ 12,036,600 $ - $ , - U.S. Treasury bills 47,067,510 16,993,710 30,073,800 Certificates of Deposit 724,000 480,000 244,000 - Federal agency serurities: Federal Home Loan Bank 19,998,600 19,998,600 - - Commerdal paper 25,015,593 25,015,593 - - Medium term notes 5,061,200 5,061,200 - - State investment pool 34,843,033 34.843,033 - - Held by bond trustee: Money market funds 45,298,094 45,298,094 - - Total $ 190,044,630 $ 159,726,830 $ 244,000 $ 30,073,800 Disclosures Relating to 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. The City's investment policy limits investments in commercial paper to those rated A-1 and P-1 or higher from Standard and Poor's (S&P) and Moody's, respectively; medium term notes that are rated "AA" or higher by S&P; and money market mutual funds that are rated "AAA". The quality of U.S. Treasury securities is not analyzed since they are not deemed to have credit risk. As of June 30, 2011, the City had investments with a variety of issuers, all of which were "investment grade' and were legal under state and municipal law. The City's investment in medium term notes were all insured under the U.S Treasury Temporary Loan Guarantee Program (TLGP) and were all rated AA or better by S&P. The City's investments in money market mutual funds were all rated "AAA" by S&P and Moodys. As of June 30, 2011, the City's investments inlexternal investment pools were unrated. 46 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 - Note 3: Cash and Investments (Continued) On Aug. 5, 2011, Standard & Poors Ratings Services lowered its long-term sovereign credit rating on the United States of America to AA+ Rom AAA, As a result, on Aug. 8, 2011, Standard & Poor's Ratings Services lowered its issuer credit ratings and related issue ratings on various Federal Home Loan Bank, Federal Farm Credit Bank, Fannie Mae and Freddie Mac to AA+ from AAA. In addition, the ratings on 126 Federal Deposit Insurance Corp. —guaranteed debt issues from 30 financial institutions under the Temporary Liquidity Guarantee Program (TLGP), and four National Credit Union Association -guaranteed debt issues from two corporate credit unions under the Temporary Corporate Credit Union Guarantee Program (TCCUGP) have also been downgraded to AA+ from AAA. The City also invests in LAIF which invests in various underlying securities, including the federal agency securities listed above. While LAIF is not rated, the federal agency securities are, and these have been affected by this rating change as well. Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code, except for U.S. Agency Securities (limited to a face value of $20 million) and Commercial Paper and Medium -Term Notes (limited to a face value of $5 million). As of June 30, 2011, the City had investments in Federal Home Loan Banks that represent 5% or more of total investments. Custodial Credit Risk 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 its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker -dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies- California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code 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 relations 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. 47 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 3: Cash and Investments (Continued) 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. GASS Statement No. 31 establishes fair value standards (e.g. mark to market) 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. Accordingly, the City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Note 4: Property Taxes 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 are recorded initially in a pool, and are then allocated to the cities based on complex formulas - Accordingly, the City of La Quinta accrues only those taxes that are received from the County within ninety days after year-end. Lien date January I Levy date July 1 Due dates November I and February I Collection dates December 10 and April 10 The Agency's primary source of revenue comes from property taxes. Property taxes allocated to the Agency are computed in the following manner: a) The assessed valuation of all property within the project area is determined on the date of adoption of the Redevelopment Plan.. b) Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are allocated to the Agency; all taxes on the "frozen" assessed valuation of the property are allocated to the City and other districts. The Agency has no power to levy and collect taxes and any legislative property tax shift might reduce the amount of tax revenues that would otherwise be available to pay the principal of, and interest on, debt. Broadened property tax exemptions could have a similar effect. Conversely, an increase in the tax rate or assessed valuation, or any reduction or elimination of present exemptions would increase the amount of tax revenues that would be available to pay principal and interest on debt. Note 6: Notes Receivable In September 1994, the Agency sold certain real property to LINC Housing for $2,112,847. The property was used to construct single-family homes and rental units to increase the City's supply of low and moderate income housing. The note bears interest at 6% per annum and is due in full on June 15, 2029. The balance at June 30, 2011, including matured, unpaid interest of $1,930,492 is $3,965,880. 48 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 5: Notes Receivable (Continued) In July 2010, the Agency entered into an Owner Participation Agreement (OPA) with an Garff Properties -La Quinta, LLC CGarff") that provides for the Agency to provide a rehabilitation loan to Garff of up to $2,300,000 for the construction of a new auto dealership facility and rehabilitation of an existing dealership facility. In connection with the OPA, Garff has executed a promissory note which is secured by a deed of trust, and an operating covenant. The loan will be repaid by crediting future sales and property tax increment taxes generated on the site until the cumulative taxes collected equals the loan amount. At that time, the note will be cancelled and the operating covenant will terminate. If, after ten years of operation, a shortfall exists between the revenues collected and the outstanding loan amount, the note will be cancelled and the operating covenant will terminate. Further, if at any time through no fault of the dealership certain future events outside of the dealership control occur the note will be cancelled and the operating covenant will terminate. The balance at June 30, 2011, is $2,300,000. In February 2011, the Agency entered into Disposition and Development Agreement with Coral Mountain Partners L.P. ("Coral Mountain") to fund up to $29,000,000 for the construction of a low and moderate income apartment complex with an estimated completion date of the apartment complex of March 2015. The Agency's $29,000,000 loan is evidenced by a Promissory Note executed by Coral Mountain ("Note"). Interest on the outstanding note amount will bear simple interest of 1%. Principal and interest will be repaid on or before May 1� of each year from annual residual receipts as defined in the Note once the project is completed and may be repaid early if the property is refinanced, or if the property is transferred to another entity. As of June 30, 2011, the outstanding principal portion on the Note is $640,090 and the outstanding interest portion is $1,396. Other notes receivable totaled $46,226 at June 30, 2011. E1811 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 6: Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2011, is as follows, Beginning Ending Balance at Balance at July 1, 2010 Additions Transfers June 30, 2011 Governmental Activities: —Deletions Capital assets, not being depreciated: Land $ 76,383,500 $ 604,073 $ 17,243,312 $ 8,395,306 $ 68,139,567 Right of way 283,990.003 914.618 - - 2B4,904,621 Construction -in -progress 43,423,786 21,507,743 32,438,118 (20,546,438) 11,946,973 Total Capital Assets, Not Being Depreciated 403,797,289 23,026,434 49.681,430 (12,151,132) 364,991,161 Capital assets, being depreciated: Buildings and improvements 59,363,601 5,200 605,109 10,519,010 69,282,702 Equipment and furniture 2,227,432 69,408 36,492 - 2,260,348 Vehicles 1,656,948 - - - 1,656,948 Infrastructure 186,921,922 966,300 41�546 1,632,122 189,478,798 Total Capital Assets, Being Depreciated 250,169,903 1,040,908 683,147 12,151,132 262,678,796 Less accumulated depreciation: Buildings and improvements 14,627,480 2,185,812 218,737 - 16,594,555 Equipment and furniture 1,362,769 200,579 36,492 - 1,526,856 Vehicles 1,080,196 153,671 - - 1,233,867 Infrastructure 71,658,705 5,983,998 41.546 - 77,601,157 Total Accumulated Depreciation 88,729,150 8,524,060 296,775 - 96,956,435 Total Capital Assets, Being Depreciated, Net 161,440,753 (7,483,152) 386,372 12,151,132 165,722,361 Governmental Activities Capital Assets, Net $ 565,238,042 $ 15,543,282 $ 50,067,802 $ - $ 530,713,522 50 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 6: Capital Assets (Continued) Depreciation expense was charged to the following functions in the Statement of Activities: General government Public safety Planning and development Community services Public works Total governmental aclivifies $ 137.968 1,117.370 162,660 501,939 6.6G4,123 $ 8,524,060 Capital asset activity for business -type activities for the year ended June 30, 2011, is as follows: Beginning Ending Balance at Balance at Julyl,2010 Additions Deletions June 30, 2011 Business -Type Activities: Capital assets, not being depreciated: Land $ 36,840,832 $ - $ - $ 36,840,832 Total Capital Assets, Not Being Depreciated Capital assets, being depreciated: Buildings and improvements Equipment and furniture Vehicles Software Total Capital Assets, Being Depreciated Less accumulated depreciation: Buildings and improvements Equipment and furniture Vehicles Software Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Governmental Activities Capital Assets, Net 36,840,832 36,840,832 6,636,465 - - 6.636,465 2,438,676 332,526 697,724 2,073,478 20,348 - - 20,348 20,255 20,255 9,115,744 332,526 697.724 8,750,546 1,272,643 234.555 - 1,507,198 1,709,306 254,848 697,724 1,266,430 20,347 - - 20,347 20,255 20,255 3,022,551 489,403 697,724 2,814,230 6,093,193 (156,877) - 5,936,316 $ 42,934,025 $ (156,877) $ - $ 42,777,148 Depreciation expense was charged to the following function in the Statement of Activities: Golf Course $ 489,403 51 CITY OF LA QUINTA NOTESTO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities a. Changes in Long -Tenn Debt The following is a summary of changes in governmental long-term liabilities of the City for the fiscal year ended June 30, 2011: Balance at Balance at Due within one July 1, 2010 Additions Deletions June 30, 2011 year, City. Compensated absences payable $ 1,002,601 $ 1,083,324 $ 1,120,004 $ 965,921 $ 965,921 Due to the Coachella Valley Association of Governments 128,311 - 128,311 - - Developer Agreement Payable 174,584 174,584 - - Copier Lease Payable 114,583 - 36,331 78,252 38,164 OPEB Liability 225,979 119,105 - 337,311 - Redevelopment Agency: RDA Project Area No. 1: Tax allocation bonds 130,255,000 3,330,000 126,925,000 3,540,000 Pass -through agreements: Coachella Valley Unified School District 2,072,964 817,722 1,255,242 834,076 RDA Project Area No. 2 Tax allocation bonds 5,680,000 6,000,000 125,000 11,555,000 Due to County of Riverside 1,200,000 - 200,000 1,000,000 250,000 Provident Loan 1,530.958 27,525 1,503,433 29,918 US Department of Agriculture 741,171 - 11,788 729,383 12,915 Financing Authority: Revenue bonds 87,650,000 28,850,000 2,160,000 114,340,000 2,250,000 Total $ 230,776,151 $ 36,052,429 $ 8,131,265 258,689.542 $ 8,050,994 Less: Unamortized premiums/discounts (1,127,045) Net Long -Term Debt $257,562,497 For the governmental activities, accrued employee benefits are generally liquidated by the general fund. b. A description of individual issues of debt (excluding defeased bonds) outstanding as of June 30, 2011, is as follows: Due to the Coachella Valley Association of the Governments The City of La Quinta entered into an Interchange Reimbursement Agreement with the Coachella Valley Association of Governments (CVAG) to finance capital improvements at the Washington Street 1-10 interchange. The, City has agreed to reimburse CVAG $828,311 over a period of seventeen years beginning July 31, 1996. The annual payments to CVAG range from $28,311 to $50,000. At June 30, 2011, the balance was paid off. 52 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) Developer Agreement Payable In December 1998, the City entered into a tax sharing agreement with Stamko Development Co. in relation to the development of an auto mall located within the City. For a period of ten years, the agreement requires the City to make quarterly payments to the developer in the amount of 33% of the sales and use tax revenues generated by the site up to a maximum amount of $122,250 in any twelve month period. Additionally, if the sales and use tax revenues generated exceed $530,000, adjusted annually by the CP1 index, the City is required to pay $76,204 for that year for a maximum of ten years, based upon a $500,000 note at an interest rate of 8.5%. For the year ended June 30, 2011, the City paid the developer $122,250 in sales tax reimbursement and $76,204 since the sales tax generated exceeded the required amount. At June 30, 2011, the balance was paid off. Copier Lease Payable In June 2008, the City entered into a 5-year lease agreement for photocopiers for $182,094 maturing in monthly increments ranging from $2,682 in July 2008 to $3,417 in June 2013, with interest payable monthly at 4.93%. This lease agreement qualifies as a capital lease for accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments at the inception date. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2011, are as follows: Year Ending June 30, Total 2012 $ 44,358 2013 44,358 Total Payments 88,716 Less amount representing sales tax (6,381) Less amount represenfing interest (4,083) Outstanding Principal $ 78,252 Tax Allocation Bonds As of June 30, 2011, the following issuances of Tax Allocation Bonds were outstanding: Series 1994, Proiect Area No. 1 Tax Allocation Refunding Bonds, Series 1994, were issued by the Agency on May 5. 1994, in the amount of $26,665,000 to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1989 and 1990. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. 53 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) Interest rates on the bonds range from 3.80% to 8% and are payable semi-annually on March I and September 1 of each year until maturity. The interest on and principal of the bonds are payable solely from pledged tax increment revenues. The bonds are not just subject to redemption prior to maturity- There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2011, is $4,775,000. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Pdncipal Interest 2011-2012 $, 2,305.000 $ 264,443 2012-2013 2,470,000 90,155 Totals $ 4,775.000 $ 354,598 Series 1998. Proiect Area No. 1 Tax allocation refunding bonds, Series 1998, in the amount of $15,760,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1991 - The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. Interest rates on the bonds range from 5.20% to 5.25% and are payable semi-annually on March 1 and September I of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 1 Term Bonds maturing September 1, 2028, are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2013, and on each September 1 thereafter, through September 1, 2028, at a price equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2011, is $15,760,000. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ $ 819,520 2012-2013 819,520 2013-2014 655,000 802,490 2014-2015 690,000 767,520 2015-2016 725,000 730,730 2016-2021 41235,000 3,631,210 2021-2026 5,460,000 1,777,100 2026-2031 3,995,000 318,630 Totals $ 15,760,000 $ 9,066.720 54 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) Series 1998. Proiect Area No. 2 Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax Aflocation Bonds, Series 1992. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 2. Interest rates on the bonds range from 3.75% to 5.28% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 2- Term Bonds maturing September 1, 2028 and September 1, 2033, are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2009 and September 1, 2019, respectively, and on each September 1 thereafter at a price equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2011, is $5,555,000. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ 130,000 $ 286,738 2012-2013 140,000 279,819 2013-2014 145,000 272,516 2014-2015 150,000 264,956 2015-2016 160,000 257,013 2016-2021 930,000 1,149,525 2021-2026 1,205,000 872,156 2026-2031 1,555,000 511,744 2031-2036 1,140,000 91,875 Totals $ 5,555,000 $ 3,986,342 Series 200 1, Pro4ect Area No. 1 On August 15, 2001, the Agency issued tax allocation bonds in the amount of $48,000,000 to finance capital projects benefiting the La Quinta Redevelopment. Project Area No- 1. The 2001 tax allocation bonds were issued at a discount of $422,400 and issuance costs of $1,517,325. The bonds consist of $17,280,000 of term bonds that accrue interest at 5.00% and mature on September 1, 2021, and $30,720,000 of term bonds that accrue interest at 5.18% and mature on September 1, 2031. The interest and principal on the bonds are payable from pledged tax increment revenues. 55 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 20`11 Note 7: Changes in Long -Tenn Liabilities — Govemmental Activities (Continued) A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2011, is $48,000,000 with an unamortized discount of $349,541. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ $ 2,430,720 2012-2013 2,430,720 2013-2014 1,565,000 2,391,595 2014-2015 1,645,000 2,311,345 2015-2016 1,730,000 2,226,970 2016-2021 10,025,000 9,714,225 2021-2026 12,805,000 6,854,645 2026-2031 16,425,000 3,147,848 2031-2036 3,805,000 97,028 Totals $ 48,000,000 $ 31,605,096 Series 2002, Proiect Area No. I On June 12, 2002, the Agency issued tax allocation bonds in the amount of $40,000,000 to finance capital projects benefiting the La Quinta redevelopment Project Area No. I . The 2002 tax allocation bonds were issued at a discount of $360,000 and issuance costs of $1,250,096 The bonds consist of $6,355,000 of serial bonds and $33,645,000 of term bonds. Interest Rates on serial bonds range from 1.75% and 4.00% and are payable semi-annually on March 1 and September 1 of each year until maturity. Term bonds accrue interest at 5.00% and 5.125% and mature on September 1, 2022 and September 1, 2023 The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2011, is $35,085,000 with an unamortized discount of $309,481. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ 705.000 $ 1,756.429 2012-2013 735,000 1,727,981 2013-2014 705,000 1,695,656 2014-2015 735,000 1,659,656 2015-2016 770,000 1,622,031 2016-2021 4,485,00q 7.475,031 2021-2026 5.730,000 6,198,303 2026-2031 10,380,000 4,379,313 2031-2036 10,840,000 662,406 Totals $ 35,085,000 $ 27,176,806 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 7: Changes in Long -Term Liabilities - Governmental Activities (Continued) Series 2003, Prodect Area No. I On September 1, 2003, the Agency issued tax allocation bonds in the amount of $26,400;000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1- The 2003 tax allocation bonds were issued at a discount of $277,200 and issuance costs of $629,191, Interest is payable semi-annually on March 1 and� September I of each year, commencing March 1, 2004. Interest payments range from 4.24% to 6.44% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues - Term bonds maturing on September 1, 2013 through September 1, 2032, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2004, September 1, 2014, and September 1, 2024, respectively and on each September 1 thereafter at a redemption price! equal to the principal a�ount thereof plus accrued interest to the redemption date. The principal balance of outstanding bonds at June 3012011, is $23,305,000 with an unamortized discount of $202,975. 1 The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows- Pdncipal Inte 2011-2012 $ 530,000 $ 1,4 2012-2013 560,000 1,4 2013-2014 590,000 1,3 2014-2015 620,000 1,3 2015-2016 660,000 1,3 2016-2021 3,970,000 5,8 2021-2026 5,390,000 4,4 2026-2031 7,340.000 2,4 3,645,000 2 Totals $ 23,305,000 $ 19,9 Series 2011. Pro ect Area No. 2 On June 6, 2011, the Agency issued subordinate taxable tax allocation bonds in the amount of $6,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 2. The 2001 tax allocation bonds were issued at a discount of $86,207 and issuance costs of $108,500. The bonds consist of $190,000 of term bonds that z mature on September 1, 2016, $280,000 of term 1 7-125% and mature on September 1, 2021, $380,0( interest at 7,600% and mature on September,1, 2026, that accrue interest at 8.150% and mature on Septem principal an the bonds are payable from pledged tax inq 'ue interest at 5.375% and ds that accrue. interest at of term bonds that accrue J $5,150,000 of term bonds . 1, 2031. The interest and rnent revenues. 57 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities —Governmental Activities (Continued) A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2011, is $6,000,000 with an unamortized discount of $86,080- The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2021 2021-2026 2026-2031 2031-2036 2036-2041 Principal Interest $ - $ 107.723 35,000 35,000 40,000 40,000 255,000 355,000 515,000 1,635,000 3,090,000 478,768 476,886 475,005 472,855 2,323,194 2,216,496 2,056,974 1,776,702 654,033 Totals $ 6,000,000 $ 11,038,636 Pass -through Agreements Payable - Coachella Valley Unified School District An agreement was entered into in 1991 between the Agency, the City of La Quinta and the Coachella Valley Unified School District (District), which provides for the payment to the District a portion of tax increment revenue associated with properties within District confines. Such payments are subordinate to other indebtedness of the Agency incurred in furtherance of the Redevelopment Plan for Project Area No. 1- This tax increment is paid to the District over a payment schedule through August 1, 2012, in amounts ranging from $421,168 to $834,076, for a total amount of $15,284,042. Tax increment payments outstanding at June 30, 2011, totaled $1,255,242. The District agrees to use such funds to provide classroom and other construction costs, site acquisition, school busses, and expansion or rehabilitation of current facilities. The minimum annual requirements to amortize payable to Coachella Valley Unified School District as of June 30, 2011, are as follows: — Principal 2011-2012 $ 834,076 2012-2013 421,166 Totals $ 1,255,242 58 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: . Changes in Long -Term Liabilities — Governmental Activities (Continued) Due to County of Riverside - Proiect Area No. 2 Based on an agreement dated July 5, 1989, between the Agency and the County of Riverside, until the tax increment reaches $5,000,000 annually in Project Area No. 2, the Agency will pay to the County 50% of the County portion of tax increment. At the County's option, the County's pass -through portion can be retained by the Agency to finance new County facilities or land costs that benefit the County and serve the La Quinta population. Per the agreement, the Agency must repay all amounts withheld from the County. The tax increment is to be paid to the County in amounts ranging from $100,000 to $250,000 over a payment schedule through June 30, 2015. Interest does not accrue on this obligation. The balance at June 30, 2011, is $1,000.000. The minimum annual requirements to amortize amounts due to the County of Riverside as of June 30, 2011, are as follows: Principal 2011-2012 $ 250,000 2012-2013 250,000 2013-2014 250,000 2014-2015 250,000 Totals $ 1,000,000 1996 Lease Revenue Refundina Bonds On.November 15, 1996, the Authority issued $8,790,000 of 1996 Lease Revenue Refunding Bonds to defease the remaining 1991 Local Agency Revenue Bonds in the amount of $8,200,000 and to provide funds for construction of remaining improvements to the La Quinta Civic Center site. The bonds consist of $3,630,000 of serial bonds and $5,150,000 of term bonds. The serial bonds will accrue interest at rates between 3.70% and 5.30% and principal amounts mature between October 1, 1997 and October 1, 2008, in amounts ranging from $285,000 to $380,000. The term bonds accrue interest at a rate of 5.55% and mature on October 1, 2018. A surety agreement has been purchased to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The amount of principal outstanding at June 30, 2011, is $4,340,000. 59 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 20111 Note 7: Changes in Long -Tenn Liabilities — Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ 445,000 $ 228,521 2012-2013 470,000 203,130 2013-2014 495,000 176.351 2014-2015 525,000 148.046 2015-2016 555,000 118,076 2016-2021 1,850,000 157.620 Totals $ 4,340,000 $ 1,031,744 2004 Series A Local Acencv Revenue Bonds On June 29, 2004, the La Quinta Financing Authority issued revenue bonds in the amount of $90,000,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2 and to advance refund the Agency's Redevelopment Project Areas No. 1 and 2, 1995 Housing Tax Allocation Bonds. The 2004 local agency revenue bonds were issued with issuance costs of $2,600,229 and a premium of $476,496. Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2005. Interest payments range from 3% to 5.25% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2024, September 1, 2029 and September 1, 2034, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2017, September 1, 2025, and September 1, 2030, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. There are certain limitafions regarding the issuance of parity debt as further described in the official statement- The principal balance of outstanding bonds at June 30, 2011, is $85,150,000 with an unamortized premium of $129,340� ffil CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ 1,805,000 $ 4,099,719 2012-2013 1.890,000 4,016,581 2013-2014 1,975,000 3,924,681 2014-2015 2,075,000 3,823,431 2015-2016 2,175,000 3,714,463 2016-2021 12,715,000 16,686,250 2021-2026 16,430.000 12,885,194 2026-2031 21,055,000 8,149,884 2031-2036 21,030,000 2,222,969 Totals $ 81,150,000 $ 59,523,172 2011 Series A Local Agency Subo inate Taxable Revenue Bonds On June 9, 2011, the La Quinta Financing Authority issued revenue bonds in the amount of $28,850.000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2. The 2011 local agency subordinate taxable revenue bonds were issued with issuance costs of $323,375 and a discount of $308,839. Interest is payable semi-annually on March I and September 1 of each year, commencing September 1, 2011. Interest payments range from 3-750% to 8.185% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2026, September 1, 2031 and September 1, 2036, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2022, September 1, 2027, and September 1, 2032, respectively, and on each September I thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. A portion of the proceeds was used to fund the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The principal balance of outstanding bonds at June 30, 2011, is $28,850,000 with an unamortized discount of $308,308. 61 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities —Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ $ 488,648 2012-2013 2.1171,767 2013-2014 520,000 2,171,767 2014-2015 540.000 2,152,267 2015-2016 565,000 2,127,967 2016-2021 3,340,000 10,117,192 2021-2026 4,685,000 8,774,045 2026-2031 6,780,000 6,681,460 2031-2036 9,930,000 3,530,174 2036-2041 2,490,000 200,943 Totals $ 28,850,000 $ 38,416,230 Washington Street Apartments In October 2008, the Agency acquired the Washington Street Apartments for cash and the assumption of the following debt: Provident Bank Loan This loan was originally entered into with the previous owner of the Washington Street Apartments and Provident Bank for $1,696,000 in August 2001 at an 8.36% interest rate. The loan is amortized on a thirty year basis with the outstanding balance due in twenty years or August 2021. The outstanding principal balance in October 2008 when the property was acquired by the Agency was $1,572,031. The loan is secured by a deed of trust on the property and is senior to the United States Department of Agriculture (USDA) loan which is also secured by a deed of trust on the property. Repayment of the monthly loan amount of $12,873 is made from tenant rent receipts. The source for the final principal payment due in August 2021 of $1,050,109 will be determined at a future date. The principal balance of this loan at June 30, 2011 is $1,503,433. The minimum annual requirements to amortize the loan payable as of June 30, 2011, are as follows: 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2021 2021-2026 Principal Interest $ 29,918 $ 124,558 32,515 121,959 35,341 119,134 38,411 116,064 41,748 112,726 269,873 502,499 1,055,627 14,670 Totals $ 1,503,433 $ 1,111,610 62 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) United States Department of fticulture (USDA) Rural Development Promissory Note This promissory note was originally entered into with the previous owner of the Washington Street Apartments and USDA — Rural Development for $1,500,000 in November 1980 at a 10.00% interest rate. The note is amortized on a fifty year basis with the outstanding balance due in October 2030. The outstanding principal balance, in October 2008, when the property was acquired by the Agency was $760,721. The loan is secured by a deed of trust on the property and is subordinated to the Provident loan which is also secured by a deed of trust on the property. Repayment of the monthly loan amount of $7,107 is made from tenant rent receipts and a rental subsidy from the USDA. Rural Development has agreed to a 9% interest rate subsidy on the Promissory Note as long as the Apartment renters meet certain program eligibility requirements. The principal balance of this note at June 30. 2011 is $729,383. Principal Interest 2011-2012 $ 12,915 $ 72,367 2012-2013 14,267 71,014 2013-2014 15,761 69,520 2014-2015 17,412 67,870 2015-2016 19,235 66,047 2016-2021 130,952 295,458 2021-2026 215,456 210,953 2026-2031 303,385 73,179 Totals $ 729,383 $ 926,408 Note 8: Changes in Long -Term Liabilities — Business -type Activities Changes in business -type long-term liabilities for the year ended June 30, 2011, were as follows: Balance at Balance at Due within Golf Course: July 1, 2010 Additions Deletions June 30, 2011 one year Capital leases payable $ 54,543 $ 332,526 $ 100,972 $ 286,097 $ 117.013 The City of La Quinta entered into several capital lease agreements for the operation of the Silver Rock Golf Resort. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. 63 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 8: Changes in Long -Tenn Liabilities — Business -type Activities (Continued) Obligations under capital leases are as follows: National City Golf Finance The present value of the minimum lease payments on golf carts was capitalized using an incremental borrowing rate of 6.50% at the inception of the lease. The lease is payable in 36 monthly installments of $7,962 which began February 1, 2008. The lease was paid in full as of June 30, 2011. Wells Fargo Financial Leasing, Inc. The present value of the minimum lease payments on golf carts was capitalized using an incremental borrowing rate of 6.90% at the inception of the lease. The lease is payable in 33 monthly installments of $11,166 which began February 1, 2011. 286,097 Total capital leases payable as of June 30, 2011 $ 286,097 The following schedule summarizes the debt to maturity payments for capital leases: Year Ending June 30, Total 2012 $ 133,100 2013 133,100 2014 44,366 Total Payments 310,566 Less Amount Representing Interest (24,469) Outstanding Principal $ 286,097 Note 9: Pledge Tax Revenues As previously discussed, the Agency has pledged, as security for bonds it has issued, either directly or through the Financing Authority, a portion of the tax increment revenue (including Low and Moderate Income Housing set -aside) that it receives. These bonds were to provide financing for various capital projects and accomplish Low and Moderate Income Housing projects. The Agency has committed to appropriate each year, from these resources amounts sufficient to cover the principal and interest requirements on the debt. Total principal and interest remaining on the debt is $449,572,555 with annual debt service requirements as indicated above. For the current year, the total tax increment revenue, net of pass through payments, recognized by the City was $32,569,795 and the debt service obligation on the bonds was $16,604,838. Z CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note10: Debt Without Governmental Commitment The City of La Quinta sold Improvement Bonds issued pursuant to the California State Improvement Act of 1915. The Bonds are payable from the annual installments collected on the regular property tax bills sent to owners of property having unpaid assessments levied against land benefited by the projects- The bonds are neither general obligations of the City nor any other political subdivision and the full faith and credit of the City is not pledged for repayment thereof, therefore, they are not included in the long-term liabilities in the accompanying financial statements- The City is not liable for repayment of the debt, but is only acting as agent for the property owners in collecting the assessments and forwarding the collections to bondholders. The following is a summary of Improvement Bonds outstanding at June 30, 2011: Amount Outstanding at Proceeds MatuOty Date Interest Rate June 30, 2011 Assessment Distnct No. 97-1 $ 705,262 9/2/2018 4.10% - 5.60% $ 325,000 Assessment District No. 2001-1 2,285,000 9/2/2015 5.00% - 6.60% 625,000 Note 11: Conduit Debt Financing 2002 Series B Multifamily Housing Revenue Bonds In April 2002, the Agency issued $3,000,000 of 2002 Series B Multifamily Housing Revenue Bonds to provide financing for the acquisition, construction and equipping of a multifamily senior rental housing project known as Miraflores Apartments located in the City of La Quinta. The bonds mature on June 1, 2035, and bear interest at 5.5% per annum- Outstanding bonds at June 30, 2011, are $2,750,000. The bond is secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bond is not an obligation of the issue, but payable solely from the security. Note 12: Interfund Receivables and Payables The composition of current interfund receivable and payable as of June 30, 2011, are as follows: Due to Other Funds Non -Major Governmental Total Due From Other Funds General Fund $ 256,852 $ 256,852 Special Revenue - Low/Moderate Income Housing PA No. 2 24,760 - 24,760 Capital Projects - Redevelopment Agency PA No. 1 637,754 637,754 Non -Major 3,500 3,500 Total: $ 922,866. $ 922,866 The due to the General Fund, Low/Moderate Income Housing PA No. 2 Fund and the Redevelopment Agency PA No. I Fund and Non -major funds were the results of routine interfund transactions not cleared prior to year-end. 65 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 12: Interfund Receivables and Payabies (Continued) The composition of non -current interfund receivable and payable as of June 30, 2011, are as follows: Advances From Other Funds Non -Major Civic Center Golf Course Governmental Total Advances to Other Funds General Fund $ 7,012.033 $ 5,407,327 $ 2,953,744 $ 15,373,104 Redevelopment Agency PA No. I Capital Projects - - 3,284,621 3,284,621 Non -Major Governmental - - 1,284,567 1,284,567 Total $ 7,012,033 $ 5,407,327 $ 7,522,932 $ 19,942,292 a) As of June 30, 2011, the General Fund has advanced to the Golf Course fund $5,407,327. The advances accrue interest at the City's investment pool rate and are to be repaid by the golf course out of future profits- b) In July 2002, an advance of $4,167,912 was made from the RDA PA No. I Capital Projects Fund to provide funding for the development of the publicly owned improvements to the La Quinta Community Park. The advance accrues interest at the earnings rate of the City's investment pool fund. As of June 30, 2011, the remaining balance of the advance for the La Quinta Community Park is $1,360,842. c) In April 2005, another advance of $2,490,273 was made from the RDA PA No. I Capital Projects Fund to provide funding for the construction of the public library. The advance accrues interest at the earnings rate of the City's investment pool fund. The remaining balance of this advance at June 30, 2011, is $1.923,779. d) In September 2006, an advance up to $9,615,094 for the City Hall expansion from the General Fund to the Civic Center Developer Impact Fee Fund was approved. As of June 30, 2011, the Civic Center expansion was completed and the amount of the advance was $7,012,033 outstanding. The advance accrues interest that would have been earned by the Local Agency Investment Fund. e) In October 2009, an advance up to $2,033,687 for the Phase I of the Corporate Yard from the General Fund to the Street and Park Maintenance Facility Funds was approved. As of June 30, 2011 the amount of the outstanding advance was $2,029,181. The advance accrues interest at the earnings rate of the City's investment pool fund. f) In October 2009, the La Quinta Housing Authority was created to promote affordable housing in the City. Since the Housing Authority had no funds to carry out its purposes, advances between the Housing Authority and the City or the Agency were anticipated. As of June 30, 2011 the outstanding advance between the Housing Authority and the Agency was $4,328. The advance accrues interest at the earnings rate of the City's investment pool fund. g) In June 2011, an advance of $1,276,516 was made from the RDA PA No. 2 Capital Projects Fund to the Transportation Development Fund to provide funding for the Highway 111 median public improvements. The advance accrues interest at 7%. As of June 30, 2011, the remaining balance of the advance is $1,280,239. Z.! CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 12: Interfund Receivables and Payables (Continued) h) In February 2003, the Redevelopment Agency Capital Projects PA No. 2 Fund advanced $1,350,131 to the Fire Facility Fund to provide funding for development of the City's north Fire Station. On March 1, 2011 the outstanding advance of $925,192 was transferred from the Agency to the General Fund with the Agency receiving $925,192 in cash for the outstanding balance. The advance accrues interest equal to the earnings rate of the City's Investment Pool Funds. As of June 30, 2011, the remaining balance of the advance is $924,563. Note 13: Interfund Transfers 1..� 2011 RDAPA41 RDAPA#1 RDA PA 02 No�aj� Immmal S�� H., PA 92 L�Nad DoM Cap�l Projeds �t S.� �bt S� G..�� F�� Total G.�d F.d $ - S $ - $ $ $ 115.1W S S 115,1� Cap� 1�m�m[ 1,959,325 10,3�.708 8.749,126 4,555 21,481,447 C�� C�� 2,9W.� 2 M.� RDA PA #1 C�� P,�� - IM,831 1W.831 RDA PA 01 D� S.. 15,039,191 4.435,935 19.478,1n RDA PA #2 D� S�� - 4,303,659 6.255,653 Nw4aq�G�mental 52.� �,112 2,6�.381 3,%3,138 1,951,W3 2.059,217 11.229,�l T�� S 5.W1,325 S 2,870�09 S 2.6" W1 S 25397,899 S 3,�JW S 1,951,�3 $ 1%772.9U S 4.555 S 61,657.OU a) $1,959,325 was transferred from the General Fund to the Capital Improvement Fund to transfer various capital projects and sales rebate agreements. The largest capital projects were for the Village Cove Fire Station Phase 1 and the Landscape Green Project for Fire Station 70. The sales and transient occupancy tax rebate agreements were the Costco, Kohl's, the Auto Mail developer, Embassy Suites and the Homewood Suites hotel. b) $2,990,000 was transferred from the General Fund to the Civic Center Capital Project Fund for the costs pertaining to the Emergency Operations Center from the recent Civic Center expansion. The funds were received from taxes collected by the County of Riverside for the City of La Quinta. c) $52,000 was transferred to the La Quinta Public Safety Officer Fund from the General Fund for public safety officers disabled or killed in the line of duty. d) $15,039,191 was transferred from the RDA PA No. 1 Capital Projects Funds into the Debt Service PA No. 1 Fund to repay in part the $22,000,000 advance to the City General Fund and the $4,855,193 Supplemental Education Relief Augmentation Fund payment. e) $10,358,708 was transferrb-d to the Capital Improvement Fund from the RDA Capital Projects — PA No. 1 Fund to fund various capital projects throughout the City. $9,500,071 of this amount was for land purchases within the Village area. $3,963,138 and $1,951,993 were transferred from the RDA Project Area No.1 and No-2 Debt Service Funds, respectively, to the Financing Authority Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. g) $1,951,994 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the RDA Project Area No. 2 Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service and $ 409,733 was transferred to the Capital Improvement Fund for various capital projects within the project area, including $320,045 for the Coral Mountain Apartment Project. 67 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 13: Interfund Transfers (Continued) h) $509,112 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the Housing Authority Project Area No. 2 Special Revenue Fund for the net assets of the Washington Street Apartments pursuant to direction from the State of California. $2,694,381 was transferred from the 2011 Financing Authority Capital Projects Fund to the Financing Authority Debt Service Fund to maintain the necessary Reserve Cash account balance pursuant to the 2011 Financing Authority bond issue. j) $8,749,126 was transferred to Capital Improvement Fund from various non -major funds to fund various capital projects within the City. IV. OTHER INFORMATION Note 14: Defined Benefit Pension Plan Plan Description The City of La Quinta contributes to the California Public Employees Retirement System (PERS), a cost sharing multiple -employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost -of -living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of PERS' annual financial report may be obtained from their executive office: 400 P Street, Sacramento, CA 95814� Funding Policv Participants are required to contribute 8% of their annual covered salary- The City makes the contributions required of City employees on their behalf and for their account. The City is required to contribute at an actuarially determined rate; the current rate is 10-263% of annual covered payroll. The contribution requirements of plan members and the City are established and may be amended by PERS. In September 2009, the City contributed $1,338,763 to CalPERS to pay off the side fund for the Past Service Cost. This amount will be amortized over the next twelve years. The contribution requirement of plan member and the City are established and may be amended by CalPERS. Annual Pension Cost and Net Pension Asset For 2011, the City's annual pension cost and change in net pension asset for the year ending June 30, 2011, was as follows: Annual required contribution $ 801,171 Interest on net pension asset 60,244 Adjustment to annual required contribution (146,817) Annual pension cost 714,598 Contributions made 801,171 Increase �decrease) in net pension asset (86,573) Net pension obligation (asset) beginning of the year (1,338,763) Net pension obligation (asset) end of the year $ (1,252,190) M CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 14: Defined Benefit Pension Plan (Continued) Three -Year Trend Information for PERS Annual Pension Percentage Net Pension Fiscal Year Cost (APC) Contributed Obligation (asset) 6130/2009 $ 973,515 6/30/2010 953,728 6/30/2011 714.598 Note IS: Post -Employment Health Benefits Plan Description 100% 240% (1,338,763) 89% (1,252,190) The City provides other postemployment benefits (OPEB) through a single -employer defined benefit healthcare plan by contributing on behalf of all eligible retirees' $105/month for calendar 2010 and $108/month for calendar 2011, increased in all future years according to the rate of medical inflation. These benefits are provided per contract between the City and the employee associations. A separate financial report is not available for the plan. Fundina Polic The contribution requirements of plan members and the City are established and may be amended by the City, City Council and/or the employee association. Currently, contributions are not required from plan members. There was no contribution made during the 2010-2011 fiscal year to cover current plan premiums. As a result, the City calculated and recorded a net OPEB obligation, representing the difference between the annual required contribution (ARC) and actual contributions, as presented below: Annual required contribution (ARC) $ 116,821 Interest on net OPEB obligation 11,299 Adjustment to ARC (9,015) Annual OPEB cost 119,105 Contributions made (4,260) (Decrease) increase in net OPEB obligation 114,845 Net OPEB obligation (asset) - beginning of year 222,466 Net OPEB obligation (asset) - end of year $ 337,311 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2010-2011 and the two preceding years were as follows: Actual Fiscal Annual Contribution Year OPEB (Net of End Cost Adjustments) 6/30/2009 $ 116,821 $ 8,877 6/3W01 0 116,821 3,513 6130/2011 116,821 4,260 Percentage of Annual Net OPEB OPEB Cost Obligation Contributed (Asset) 7.60% $ 107,944 3.01% 222,466 3.65% 337,311 mo CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note IS: Post -Employment Health Benefits (Continued) Funded Status and Funding Progress 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 below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits- The information is as of the latest actuarial valuation. Unfunded UAALasa Actuarial Actuarial Actuarial Actuarial Percent of fype of Valuation Value of Accrued Accrued Funded Covered Covered Interest Valuation Date Assets Liability Liability Ratio Payroll Payroll Rate Actual 7/l/2008 $ - $590,676 $590,676 0.00/0 $7,821,474 7.6% 5.00% Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in the actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations - In the July 1, 2008, actuarial valuation, the projected unit credit cost method was used. The actuarial assumptions include a 5.0% investment rate of return, which is a blended rate of the expected long-term investment return on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date, and annual healthcare cost trend rate of 4%. The actuarial value of assets is set equal to the reported market value of assets. The UAAL is being amortized as a level dollar on an open basis. The remaining amortization period at June 30, 2011, was twenty-eight years. The number of active participants is 4- Note 16: Self Insurance The City is a member of the California Joint Powers Insurance Authority (Insurance Authority). The Insurance Authority is composed of 121 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Insurance 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 coverages. The Insurance Authority's pool began covering claims of its members in 1978. Each member government has an elected officiall as its representative on the Board of Directors. The Board operates through a 9-member Executive Committee 70 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 16: Self Insurance (Continued) Self -Insurance Programs of the Authority A revised cost allocation methodology was introduced in 2010-11, however it retains many elements of the previous cost allocation methodology- Each member pays an annual contribution (formerly called the primary deposit) to cover estimated losses for the coverage period. This initial funding is paid at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A retrospective deposit computation is then conducted annually thereafter until all cJaims incurred during the coverage period are closed on a pool -wide basis. This subsequent cost re -allocation among members based on actual claim development can result in adjustments of either refunds or additional deposits required. The total funding requirement for self-insurance programs is estimated using actuarial models and pre -funded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk -sharing pool. Additional information regarding the cost allocation methodology is provided below. General Liability In the liability program claims are pooled separately between police and non -police exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer., (4) Incurred costs in excess of $750,000 up to the reinsurance attachment point of $5 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to $10 million are paid under a reinsurance contract subject to a $2-5 million annual aggregate deductible. Costs of covered claims from $10 million to $15 million are paid under two reinsurance contracts subject to a combined $3 million annual aggregate deductible. On a cumulative basis for all 2010-11 reinsurance contracts the annual aggregate deductible is $5.5 million. (6) Costs of covered claims from $15 million up to $50 million are covered through excess insurance policies. The overall coverage limit for each member including all layers of coverage is $50 million per occurrence. Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a pooled sub -limit of $35 million per occurrence. This $35 million subsidence sub -limit is composed of (a) $5 million retained within the pool's SIR, (b) $10 million in reinsurance and (c) $20 million in excess insurance. The excess insurance layer has a $20 million annual aggregate. 71 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 16: Self Insurance (Continued) Workers Compensation In the workers' compensation program claims are pooled separately between public safety (police and fire) and non-public safety exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $100,000 up to the reinsurance attachment point of $2 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $2 million up to statutory limits are paid under a reinsurance policy - Protection is provided per statutory liability under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $4 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $4 million to $10 million are pooled among members. During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2010-11 Additional Coveraae In addition to coverage with the Authority, the City also carries additional coverage for earthquake & flood and real and personal property with Pacific Insurance Co. Coverage is $5,000,000 with a 10% deductible subject to a minimum of $25,000. The total insured value of real and personal property is $20,000,000. An excess earthquake & flood and real and personal property policy is held with Endurance American Specialty Insurance Company. Coverage is $2,500,000 in excess of the $5,000,000 covered by the primary policy. Employee dishonesty, forgery and computer fraud insurance is held with Hartford Insurance Company. Coverage is $1,000,000 with a $5,000 deductible. AJI risk property insurance, including auto physical damage is held with Lexington Insurance Company. Coverage is up to $10,000,000 per occurrence with various sublimits depending on the property. The total insured value of real and personal property is $65,426,900. During the past three fiscal years none of the above programs of protection have had settlements or judgments that exceed pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. V&A CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 17: Construction Commitments The following material construction commitments existed at June 30, 2011: Expenditures Contract to date as of Remaining Project Name Amount June 30, 2011 Commitments Adams Street Bridge Improvements $ 13,088,120 $ 1,933,180 $ 11,154,940 Relocation of Coachella Canal at Silver Rock 11,042,164 56,503 10,985,661 Washington St. Apartment Rehabilitation 10,391,972 76,099 '10,315,873 Silver Rock Resort Club House 8,804,1110 2,092,239 6,711,871 Community Park Land Acquisition 8,000,000 16,562 7,983,438 Silver Rock Resort Infrastructure. 2,732,150 1,521,403 1,210,747 Coral Mountain Apartments 2,421.978 640,090 1,781,888 Dune Palms Road Street Improvements 1,812.199 107,626 1,704,573 A St Extension & Dune Palms & Retail Ctr Traffic Signal 1,431,670 194,422 1,237,248 Union Home Loans Land Purchase 1,378,380 946 1,377,434 Hwy 11 Median Island Landscape Improvements 1,321,624 124,592 1,197,032 Note 18: Fund Balances The City has the following committed fund balance shown on the balance sheet: Committed to emergency reserve - the City established the amount of 35% of the Fiscal Year 2011-2012 budget plus $4,000,000 which totals $18,018,595 in the General Fund for the year ended June 30, 2011. The funds would be drawn upon pursuant to the Municipal Code Section 2-20 which defines an emergency or disaster to mean the actual or threatened existence of conditions of disaster or of extreme peril to the safety of persons and property within this city caused by such conditions as air pollution, fire, flood, storm, epidemic, riot, earthquake or other conditions, including conditions resulting from war or imminent threat of war but other than conditions resulting from a labor controversy, which conditions are or are likely to be beyond the control of the services, regular personnel, equipment and facilities of the city and which may require the combined forces of other political jurisdictions to combat - Committed to post retirement health benefits - the City has committed a portion of their Unassigned Fund balance for the payment in future years of their Post retirement health benefits. For the year ended June 30, 2011 the City has committed $1,258,059 for this purpose. These committed amounts have been approved by Council based on certain percentages and will be used only in the event of Council approval. Additionally the City has included the following amounts in the unassigned fund balance amount shown on the balance sheet: Cash Flow Reserve - the City established the amount of 825% of the Fiscal Year 2011-2012 budget which totals $3,304,383 in the General Fund for the year ended June 30, 2011. Future Operational Deficit - For the future operational deficit, the City has set aside $7,500,000 for the year ended June 30, 2011. CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Notel9: Golf Course Management Agreement The City entered into an agreement with Landmark Golf Management LLC (operator) to manage the golf operations at the city -owned SilverRock Golf Course. The Agreement entered into on April 6, 2004, sets forth a five year term commencing upon the completion of the golf course. On January 14, 2005, the golf course was deemed to be complete and management was turned over to the operator. The contract provides that the operator will manage the day to day operations, hire employees, provide golf pro shop and food services, manage all marketing and promotional activities, prepare the annual budget report for Council consideration, and manage accounting and payroll functions. In addition to the annual payment for management services, the City has advanced the operator $250,000 to pay for golf course expenses. Twice a month the operator submits a request for reimbursement to the City to replenish the Citys advance. In addition, the agreement sets forth the establishment of a capital reserve fund of 2% of green fees. For the fiscal year ending June 30, 2011, the Golf Course had an operating loss before contributions and transfers of $443,534. Note 20: Reimbursement Agreements The City entered into a transient occupancy tax (TOT) revenue reimbursement agreement on August 31, 2006, with Village Resort LLC, the owner of an Embassy Suites Hotel. The hotel owner is required to remit on a monthly basis any TOT collected to the City, thirty days after each month. Under terms of the agreement, the City shall make quarterly payments of 40% of any TOT generated from the Hotel in an amount not to exceed $ 1,000,000 over a five year period. The agreement terminates when either the $1,000,000 limit is reached or in 5 years whichever comes first. In addition, the hotel may not assign or transfer this agreement without the Citys prior written consent, which it may withhold at its discretion. The hotel opened in November 2006. As of June 30, 2011, the City made $163,098 in reimbursement payments to the owner leaving an outstanding balance of $237,004. The City entered into a sales tax sharing agreement on January 30, 2006, with Costco Wholesale Corporation. Under the terms of the agreement the City shall make quarterly payments of 40% of any sales tax generated from Costco in an amount not to exceed $4,000,000 over a ten year period. Due to the reporting of sales tax information by the State Board of Equalization to the City, the reimbursement payments by the City will lag by one quarter. The agreement terminates when either the $4,000,000 limit is reached or in 10 years whichever comes first. The Costco business opened in November 2006. As of June 30, 2011, the City made $343,074 in reimbursement payments to the owner leaving an outstanding balance of $2,667,270. The City entered into a transient occupancy tax (TOT) revenue reimbursement agreement on March I st, 2010, with LO Hospitality, LLC. the owner of a Homewood Suites Hotel. The hotel owner is required to remit on a monthly basis any TOT collected to the City, thirty days after each month. Under terms of the agreement, the City shall make quarterly payments of 40% of any TOT generated from the Hotel in an amount not to exceed $300,000 over a two year period. The agreement terminates when either the $300,000 limit is reached or in 2 years whichever comes first. In addition, the hotel may not assign or transfer this agreement without the City's prior written consent, which it may withhold at its discretion. As of June 30, 2011, the City made $136,852 in reimbursement payments to the owner leaving an outstanding balance of $116,806- 74 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 21: Transactions with the State of California SERAF Shift for fiscal year 2010-2011 On July 23, 2009, the State adopted legislation, requiring a shift of monies during fiscal years 2009-2010 and 2010-2011 to be deposited into the County "Supplemental" Educational Revenue Augmentation Fund (SERAF). These monies were to be distributed to meet the State's Prop 98 obligations to schools. The California Redevelopment Association (CRA) and its member agencies filed a legal action in an attempt to stop these amounts from having to be paid; however, in May 2010 the Sacramento Superior Court upheld the legislation. The payment of the SERAF was due on May 10, 2011 for fiscal year 2010-2011 and it was made in the amount of $4,855,193. The legislation allowed this payment to be made from any available monies present in any project area(s). To accomplish the payment, the Agency utilized $4,855,193 from its available resources. Note22: California Redevelopment Agency Uncertainty On July 18, 2011, the California Redevelopment Association ("CRA") and the League of California Cities ("League") filed a petition for writ of mandate with the California Supreme Court, requesting the Court to declare unconstitutional two bills that were passed as part of the 2011-12 State Budget, AB1X 26 and 27. AB1X 26 dissolves redevelopment agencies effective October 1, 2011. ABIX 27, give redevelopment agencies an option to avoid dissolution if it commits to making defined payments for the benefit of the State, school districts and certain special districts- In 2011-12, these payments amount to a state-wide total of $1.7 billion. In 2012-13 and subsequent years, the payments total $400 million, annually. Each city or county's share of these payments is determined based on its proportionate share of state-wide tax increment CRA and the League contend that AB I X 26 and 27 are unconstitutional because they violate Proposition 22 which was passed by the voters in November, 2010. The effect of the legislation is to achieve a possible unconstitutional result, the use of redevelopment agencies' tax increment funds to benefit the State and other units of local government, by way of threatening of the dissolution of redevelopment agencies. Therefore, the CRA and the League have requested that the Court issue a stay, suspending the effectiveness of A61X 26 and 27 until the Court can rule on its constitutionality. CRA and the League also asked the Court to expedite the briefing and hearing of the case so that a decision can be rendered by the Court before January 15, 2012, when the first payments are due. On August 1 I'h, the California Supreme Court agreed to hear the case and granted a partial stay which was subsequently clarified. As of the time of the issuance of this report, the outcome of AB1X 26 and 27 upon the Agency is unknown and consequently the status and even future existence of the Agency is uncertain as such. In accordance with ABIX 27, the Agency has passed a resolution of intent to continue and will be required to make a payment to the State by January 15, 2012 to avoid dissolution. The Department of Finance issued their estimated payment amounts and the Agency filed an appeal regarding the calculation. The estimated payment amount based on the revised calculation is $17,018,721. 75 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 23: Subsequent Events a. Fiscally Responsible Reduction Plan In April 2011, the City Council approved a Fiscally Responsible Reduction Plan (FRRP) in response to the economic downturn and declining revenues. This allowed employees who were be eligible to receive retirement benefits under this plan to retire if they meet the requirements under one of the following tiers: Tier I a) Is classified as a full-time General Employee by the City as of February 15, 2011 b) Has attained sixty (60) years of age as of December 31, 2011 c) Has completed at least ten (10) years of public service as of June 30, 2011 d) Has completed at least five (5) years of service with the City as of June 30, 2011 e) Has terminated employment with the City on or before June 30, 2011 I]i Has applied for benefits under this plan g) Has retired under CalPERS effective no later than July 1, 2011 Tier 11 a) Is classified as a full-time Director by the City (excluding the City Manager) as of February 15, 2011 b) Has attained fifty-five (55) years of age as of December 31, 2011 c) Has completed at least ten (10) years of public service as of June 30, 2011 d) Has completed at least five (5) years of service with the City as of June 30, 2011 e) Has terminated employment with the City on or before June 30, 2011 f) Has applied for benefits under this plan g) Has retired under CalPERS effective no later than July 1, 2011 A total of 9 people participated in the FRRP and were approved by Council for the retirement incentive program through the Public Agency Retirement Systems (PARS). The participants of this program selected from a number of benefit options, the basic program in which one -twelfth (1/12) of six percent (6%) of the individual employee's final pay would be paid over the lifetime of the participant commencing on July 1, 2011- Implementation of the FRRP plan required a one-time payment of $557,315 was made in July 2011 and is classified as a payable as of June 30, 2011 � b. Owners Participation Agreement In June 2011. the La Quinta Redevelopment Agency entered into an Owner Participation Agreement (OPA) with an autodealer, Mega Dealer, LLC ("Torre Nissan') that provides for the Agency to provide a rehabilitation loan to Torre Nissan of up to $1,500,000 for the remodeling of the existing dealership and an expansion of the dealership facility to accommodate a new line of electric and commercial -vehicles. The new expansion will also include service and parts sales facilitates. In connection with the OPA, Torre Nissan has executed a promissory note, which is secured by a subordinated deed of trust and an operating covenant. Interest on the note shall accrue on the outstanding principal balance at the I -year LIBOR Rate, adjusted annually on each June 30"'. The loan will be repaid by crediting future sales and property tax increment takes generated on the site until the cumulative taxes collected equals the outstanding loan amount. At that time, the note will be cancelled and the operating covenant will terminate. If at any time during the 76 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 23: Subsequent Events (Continued) term of the note Nissan Motor Company ceases to exist, the note will be cancelled and the operating covenant will terminate. At the end of the ten-year operating covenant, the operating covenant will terminate and the note will be cancelled, and any outstanding loan balance will be forgiven. As of June 30, 2011, no payments have been made under this agreement. 77 THIS PAGE INTENTIONALLY LEFT BLANK 78 OTHER GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues (other than expendable trusts and major capital projects) and the related expenditures that are legally required to be accounted for in a separate fund. The City of La Quinta has the following Special Revenue Funds: State Gas Tax Fund — To account for gasoline allocations made by the State of California- These revenues are restricted by the State to expenditures for street -related purposes only. Library Fund — To account for revenues from property tax increment dedicated library services. Federal Assistance Fund — To account for revenues from the Community Development Block Grants received from the Federal Government and the expenditures of those resources. State Law Enforcements Block Grant (SLEBG) Fund — To account for state funded "Citizens for Public Safetr (COPS) program activities, as per Assembly Bill 3229, which supplements frontline police services such as anti -gang community crime prevention. Indian Gaming Fund — To account for contributions for public safety activities to reduce crime and increase public safety. Lighting and Landscape Special Assessment District 89-1 Fund — To account for special assessments levied on real property and the expenditure thereof from City-wide lighting and landscape maintenance and improvements. Quimby Fund — To account for the accumulation of developer fees received under the provisions of the Quimby Act for park development and improvements. Capital projects to be funded from this source will be budgeted and expended in a separate capital projects fund. Congestion Management Air Quality Fund — o account for grant funds related to improving air quality. La Quinta Public Safety Officer Fund — To account for contributions to be distributed to public safety officers disabled or killed in the line of duty. Arts in Public Places — To account for development fees paid in lieu of acquisition and installation of approved artworks in a development with expenditures restricted to acquisition, installation, maintenance and repair of artworks at approved sites. South Coast Air Quality Fund — To account for contributions from the South Coast Air Quality Management District- Use is limited to reduction and control of airborne pollutants. AB 939 Fund — To account for the State mandated program to reduce waste sent to the landfills through recycling efforts. Development Agreement Fund — To account for the proceeds of development agreement revenues collected and the related expenditures in accordance with State requirements. Proposition 1 B Fund - To account for the revenues and expenditures related to Proposition I B monies. WE Justice Assistance Grant — To account for Federal Bureau of Justice Block Grant program grant funds, which are used to reduce crime and improve public safety. Housing Authority PA No. 1 — To account for the housing activities of the Housing Authority in Project Area I which is to promote and provide for quality housing. Housing Authority PA No.2 — To account for the housing activities of the Housing Authority in Project Area 2 which is to promote and provide for quality housing. Low/Moderate Income Housing — Prodect Area No. 1 Fund — This fund is used to account for the required 206/6 set aside of property tax increments that is legally restricted for increasing and improving housing for low and moderate income households. CAPITAL PROJECT FUNDS Capital projects funds account for the financial resources to be used for the acquisition, construction or improvements of major capital facilities and infrastructure. Infrastructure Fund - To account for the accumulation of resources provided through developer fees for the acquisition, construction or improvement of the City's infrastructure, prior to adoption of the new Developer Impact Fee Structure on August 16, 1999. This fund accounts for all developer resources received prior to this date, and is budgeted by the Council through adoption of the annual capital improvement program budget. Transportation Fund, Parks and Recreations Fund, Library Development Fund, Community Center Fund, Street Facility Fund, Park Facility Fund, Fire Facility Fund — To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the City's infrastructure. The Developer Impact Fee was adopted by the City Council on August 16, 1999. Eight new funds have been established to account for the specific impact areas of these fees, and are budgeted by the Council through adoption of the annual Capital Improvement Program budget. 2004 Low/Mod Bond Fund — To account for the 2004 revenue bond proceeds that will be used to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and Project Area No. 2. Redevelopment Agency Pro ect Area No. 1 — To account for the bond proceeds, interest and other funding that will be used for development, planning, construction and land acquisition. Redevelopment Agency Pro ect Area No. 2 - To account for the bond proceeds, interest and other funding that will be used for development, planning, construction and land acquisition. DEBT SERVICE FUNDS Debt Service Funds are used to account for the accumulation of resources for, and the payment of, governmental long-term debt principal and interest. La Quinta Financing Authority Fund — To account for rental activity for the Civic Center and rental income used to pay the Financing Authority Civic Center and 2004 Local Agency Revenue Bond debt obligations. all THIS PAGE INTENTIONALLY LEFT BLANK CITY OF LA QUINTA COMBINING BALANCE SHEET NOWMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 Assets: Pooled rash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspenclable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances Special Revenue Funds Federal State Gas Tax Library Assistance SLEBG $ 240,125 $ 221,422 $ - $ 46,068 286 19 132,348 742,231 6,944 25.228 $ 372,473 $ 963,939 $ 6,944 $ 71,315 6,944 6,944 - 71,315 - 963,939 - 372.473 - — 372,473 963,939 - 71,315 $ 372,473 $ 963,939 $ 6,944 $ 71,315 82 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 (Continued) Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspenclable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Special Revenue Funds Congestion Lighting and Management Air Indian Gaming Landscaping Quimby Quality Fund $ 106,005 $ - $ 8,416,866 $ 55 5,970 23,882 247,974 106,060 $ 23,882 $ 8,422,836 $ 247,974 106,060 106,060 - 8,422,836 23,882 - Total Fund Balances - 23,882 8,422,836 Total Liabilities and Fund Balances $ 106,060 $ 23,882 $ 8,422,836 247,974 247,974 247,974 83 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2011 Special Revenue Funds Art in Public South Coast Public Safety Places Air Quality AB 939 Assets: Pooled cash and investments $ 25,031 $ 871,021 $ 64,253 $ 1,077,205 Receivables: Accounts - - 12,700 - Taxes - Notes and loans - - - Accrued interest 18 618 43 771 Prepaid costs - Deposits - Due from other governments - Due from other funds - Advances to other funds Restricted assets: Cash and investments with fiscal agents - Total Assets 25,049 $ 871,639 $ 76,996 $ 1,077,976 Liabilities and Fund Balances Liabilities: Accounts payable 10,100 $ 12,700 $ 2,735 Accrued liabilities - - Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities 10,100 12,700 2,735 Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits - - Restricted for: Planning and development projects - 64,296 1,075,241 Public safety 25,049 - - - Community services - 861,539 Public works - - - Capital Projects - - - Debt service - - - Unassigned - - - Total Fund Balances 25,049 861,539 64,296 1,075,241 Total Liabilities and Fund Balances 25,049 $ 871,639 $ 76,996 1,077,976 M1 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 (Continue I d) Special Revenue Funds Justice Housing Development Assistance Authority PA Agreement Proposition 1B Grant No. 1 Assets: Pooled cash and investments $ 200,334 $ 352,184 $ $ 934,767 Receivables Accounts - - 13,542 Taxes - Notes and loans - Accrued interest 143 287 616 Prepaid costs - - - Deposits - - Due from other governments - - 1,934 Due from other funds - - Advances to other funds - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 200,477 $ 352,471 $ 1,934 $ 948,925 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Accrued liabilities - Deferred revenues - - Unearned revenues - 352,471 - Deposits payable 200,477 - - 19,967 Due to other funds - 1,934 - Advances from other funds - Total Liabilities 200,477 352,471 1,934 19,967 Fund Balances: Nonspendable: Prepaid costs Notes and loans - - - Advances to other funds - - - Deposits - - - - Restricted for: Planning and development projects - - - 928,958 Public safety - - - - Community services - Public works - - - - Capital Projects - - - - Debt service - - - - Unassigned - - - - Total Fund Balances - - 928,958 Total Liabilities and Fund Balances $ 200,477 $ 352,471 $ 1,934 $ 948,925 85 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 Special Revenue Funds Capital Projects Funds Housing Low/Moderate Authority PA Income Housing No. 2 PA No. I Infrastructure Transportation Assets: Pooled cash and investments $ 597,765 $ 8,474,291 $ 407,512 $ 4,770,929 Receivables: Accounts 37,082 - - 160,000 Taxes - 6,871 Notes and loans 4,012,106 Accrued interest - 5,414 290 2,841 Prepaid costs 10,563 - - - Deposits 6,000 Due from other governments - - Due from other hinds 3,500 Advances to other funds 4,328 Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 651,410 $ 12,506,510 $ 407,802 $ 4,933,770 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ 82,824 $ Accrued liabilities 2,263 - Deferred revenues - 1,930,492 - Unearned revenues - - 160,000 Deposits payable 26,419 - Due to other funds - - Advances from other funds 4,328 1,280,239 Total Liabilities 33,010 2,013,316 1,440,239 Fund Balances: Nonspendable: Prepaid costs 10,563 - - Notes and loans - 2,081,614 Advances to other funds - 4,328 Deposits 6,000 - Restricted for: Planning and development projects 601,837 8,407.252 Public safety - - Community services - - Public works - - - - Capital Projects - - 407,802 3,493,531 Debt service - - - - Unassigned - - - Total Fund Balances 618,400 10,493,194 407,802 3,493,531 Total Liabilities and Fund Balances $ 651,410 $ 12,506,510 $ 407,802 $ 4,933,770 86 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 20111 (Continued) Capital Projects Funds Parks and Library Community Recreation Development Center Street Facility Assets: Pooled cash and investments $ - $ - $ 1,180,203 $ Receivables: Accounts - - - Taxes - - Notes and loans - - - Accrued interest - - 839 Prepaid costs - - - - Deposits - - - - Due from other governments - - - - Due from other funds - - - - Advances to other funds - - - Restricted assets: Cash and investments with fiscal agents - - - Total Assets $ $ 1,181,042 Liabilities and Fund Balances: Liabilities: Accounts payable $ $ Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other hinds - Advances from other funds 1,360,842 1,923,779 2,029,181 Total Liabilities 1,360,842 11,923,779 2,029,181 Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety - - Community services - - Public works - - - Capital Projects - - 1,181,042 Debt service - - - Unassigned (1,360,842) (1,923,779) - (2,029,181) Total Fund Balances (1,360,842) (1,923,779) 1,181,042 (2,029,181) Total Liabilities and Fund Balances $ - $ - $ 1,181,042 $ 87 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances Capital Projects Funds Redevelopment 2004 Low/Mod Agency PA No. Park Facility Fire Facility Bond I $ 9,943,802 8.549 637,754 3,284,621 3,331,915 9,204,891 $ 3,331,915 $ 23,079,617 53,296 24,760 924,563 - - 924,563 24,760 53,296 3,284,621 3,307,155 19,741,700 (924,563) (924,563) 3,307,1155 23,026,321 $ - $ 3,331,915 $ 23,079,617 [04 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances Capital Projects Debt Semice Funds Funds Total Redevelopment Financing Governmental Agency PA No. 2 Authority Funds 24,500 2,300,000 307 1,280,239 1,502 $ 37,931,285 - 247.824 - 6,871 - 6,312,106 - 27,066 - 10,563 - 6,000 - 1.180,541 - 641,254 - 4,569,188 3,931,437 2,694,381 19,162,624 7,536,483 $ 2,695,883 $ 70,095,322 28,944 $ 190,599 - 2,263 2,300,000 4,230.492 - 618,531 - 246,863 637,754 919,366 - 7,522,932 2,966,698 13,731, 10,563 2,081,614 1,280,239 4,569,188 - 6,000 - 11,077,584 - 96,364 - 10,248,314 - - 396,355 3,289,546 - 31,420,776 - 2,695,883 2,695,883 - (6,238,365) 4,569,785 2,695,883 56,364,276 7,536,483 $ 2,695,883 $ 70,095,322 LIE CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds State Gas Tax Library 1.101,963 (154) 2,230,083 657 Federal Assistanc a SLEBG 438,031 100,000 404 1,101,809 2,230,740 438,031 100,404 - 1,676,226 1,016,184 - 1,016,184 1,676,226 85,625 554,514 438,031 10G,404 (141,753) (438,031) (55,061) (141,763) (438,031) (56,061) (56,128) 554,514 45,343 428,601 409,425 25,972 $ 372,473 $ 963,939 $ $ 71,315 go CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 (Continued) Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures - Current: General government Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Congestion Management Lighting and Air Quality Indian Gaming Landscaping Quimby Fund 956,048 269,079 61,353 956,048 61,353 269,079 952,296 962,296 3,752 61,353 269,079 (2,011,105) (269,079) (2,011,1051 (269,079) 3.752 (1,949,752) 20,130 10,372,588 $ 23,882 $ 8,422,836 $ 91 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current General government Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Art in Public South Coast Public Safety Places AlrQuality 169 5,909 52,076 72,352 569 8,027 169 57,985 72,921 8,027 - 56,802 192,221 15,981 - 73,869 89,850 66,802 192,221 169 (31,865) 16,119 (184,194) 2,000 50,000 - (239,956) (125,623) 2,000 (239,956) (75,623) 2,169 (31,865) (223,837) (259,817) 22,880 893,404 288,133 1,335,058 26,049 $ 861,639 �$64 296 $ 1,075,241 WA CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 (Continued) Special Revenue Funds Justice Housing Development Assistance Authority PA Agreement Proposition 1B Grant No. 1 Revenues: Taxes $ - $ $ $ Assessments - Intergovernmental - 224,162 20,523 Charges for services - - - - Use of money and property - 2,105 251,940 Developer participation - - - Miscellaneous - 1,302 Total Revenues 226,267 20,623 253,242 Expenditures: Current: General government - - - - Planning and development - - - 224,592 Community services - - - - Public works - - - Capital outlay - - - Debt service: Principal retirement - Interest and fiscal charges - - Total Expenditures 224,692 Excess (Deficiency) of Revenues Over (Under) Expenditures 226,267 20,523 28,650 Other Financing Sources (Uses): Transfers in - - - 781,094 Transfers out - (226,267) (20,523) - Long-term debt issued - - - - Proceeds from sale of capital asset - - - 120,628 Bond discount - - - - Bond issuance costs - - - Total Other Financing Sources (Uses) (226,267) (20,623) 901,722 Net Change in Fund Balances 930,372 Fund Balances, Beginning of Year (1,414) Fund Balances, End of Year $ $ $ $ 928,958 93 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 Special Revenue Funds Capital Projects Funds Low/Moderate Housing Income Authority PA Housing PA No. 2 No. I Infrastructure Transportation Revenues: Taxes $ - $ 8,798,118 $ $ Assessments - - Intergovernmental 492,647 Charges for services - - - Use of money and property 173,512 42,092 2,763 27,682 Developer participation - - - 225,362 Miscellaneous 3,185 54,157 90.000 Total Revenues 669,344 8,894,367 2,763 343,044 Expenditures: Current: General government Planning and development Community services Public works Capitalouttay Debt service, Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund.Balances, End of Year 318,923 1,628,034 39,313 - 200,443 - 3,723 658,679 1,628,034 3,723 110,665 7,266,333 2,763 339,321 509.112 - (6,698,698) (1,401,427) 243,222 509,112 (6,455,476) (1,401,427) 619,777 810,857 2,763 (1,062,106) (1,377) 9,682,337 405,039 4,555,637 618,400 $ 10,493,194 407,802 $ �3,493 631 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 (Continued) Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Capital Projects Funds Parks and Library Community Recreation Development Center Street Facility 64,235 25,915 64,235 25,915 7,988 - 5,402 8,661 13,390 8,661 7,307 12,383 8,126 7,307 12,383 8,126 56,928 13,532 13,390 535 1,606 (640,903) - - (639,297) 56,928 13,532 13,390 (638,762) (1,417,770) (1,937,311) 1,167,652 (1,390,419) $ 1,181,042 95 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 Capital Projects Funds Redevelopment 2004 Low/Mod Agency PA No. Park F acility Fire Facility Bond I Revenues: . Taxes $ $ $ $ Assessments Intergovernmental Charges for services Use of money and property - 6,429 170,584 Developer participation 1,606 15,604 - 305,455 Miscellaneous Total Revenues 1,606 15,604 6,429 476,039 Expenditures: Current: General government Planning and development 911,302 Community services Public works Capital outlay Debt service - Principal retirement Interest and fiscal charges 4,873 - Total Expenditures - 4,873 - 911,302 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,606 10,731 6,429 (435,263) Other Financing Sources (Uses): Transfers in - - - 106,831 Transfers out (1,606) (125,124) (25,397,899) Long-term debt issued Proceeds from sale of capital asset 4,875,000 Bond discount Bond issuance costs Total Other Financing Sources (Uses) (1,606) (125,124) (20,416,068) Net Change in Fund Balances 10,731 (118,695) (20,851,331) Fund Balances, Beginning of Year (935,294) 3,425,850 43,877,652 Fund Balances, End of Year 3,307,155 $ 23,026,321 Em CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDEDJUNE 30, 2011 Capital Projects Debt Service Funds Funds Total Redevelopment Financing Governmental Agency PA No. 2 Authority Funds Revenues: Taxes $ - $ - $ 8,798,118 Assessments - - 956,048 Intergovernmental - - 4,948,840 Charges for services - 6,807 6,807 Use of money and property 20,925 672,525 1,455,479 Developer participation - - 704.316 Miscellaneous - - 148,644 Total Revenues 20,925 679,332 17,018,252 Expenditures: Current: General government - 9,196 9,196 Planning and development 2,582,602 - 5,914,476 Community services - - 1,692,207 Public works - - 1,968,480 Capital outlay - - 73,869 Debt service: Principal retirement - 2,160,000 2,199,313 Interest and fiscal charges - 4,427,656 4,664,511 Total Expenditures 2,582,602 6,596,852 16,522,052 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,561,677) (5,917,520) 496,200 Other Financing Sources (Uses): Transfers in 1,276,516 8,609,513 11,336,672 Transfers out (7,377,748) (45,170,803) Long-term debt issued 6,000,000 - 6,000.000 Proceeds from sale of capital asset 3,445,000 - 8,683,850 Bond discount (86,207) - (86,207) Bond issuance costs (108,500) - (108,5GO) Total Other Financing Sources (Uses) 3,149,061 8,609,513 (19,344,988) Net Change in Fund Balances 587,384 2,691,993 (18,848,788) Fund Balances, Beginning of Year 3,982,401 3,890 75,213,064 Fund Balances, End of Year $ 4,569,785 66,364,276 97 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STATE GAS TAX YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July I Resources (inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Public works Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 428,601 $ 428,601 $ 428,601 $ 1,103,900 1,103,900 1,101,963 (1,937) 100 100 (154) (254) 1,532,601 1,532,601 1,530,410 (2,191) 1,016,184 1,016,184 1,016,184 - - 474,518 141.753 332,765 1,016,184 1,490,702 1,157,937 332,765 $ 516,417 $ 41,899 $ 372,473 $ 330,574 M. CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Community services Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 409,425 $ 409,425 $ 409,425 $ 2,585,500 2,588,848 2,230,083 (358,765) 5,700 - 657 657 3,000,625 2,998,273 2,640,165 (358,108) 1,703,490 1,803,838 1,676,226 127,612 1,703,490 1,803,838 1,676,226 127,612 $ 1,297,135 $ 1,194,435 $ 963,939 $ (230,496) 014� CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FEDERAL ASSISTANCE YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 190,000 431,087 438,031 6,944 190,000 431,087 438,031 6,944 30,000 431,087 438,031 l6,944) 30,000 431,087 438,031 (6,944) Budgetary Fund Balance, June 30 $ 160,000 $ - $ - $ 100 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SLEBG YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July I Resources (inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 25,972 $ 25,972 $ 25,972 $ 100,000 125,972 100,000 100.000 90 404 126,062 126,376 314 21 A 100,000 100,090 55,061 45,029 100,000 100,090 55,061 45,029 Budgetary Fund Balance, June 30 $ 25,972 $ 25,972 $ 71,315 $ 45,343 101 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIGHTING AND LANDSCAPING YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July I Resources (inflows): Assessments Amounts Available for Appropriation Charges to Appropriation (Oufflow): Public works Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 20,130 $ 20,130 $ 20,130 $ 965,300 965,300 956,048 (9,252) 985,430 985,430 976,178 (9,252) 965,300 965,300 952,296 13,004 965,300 965,300 952,296 13,004 Budgetary, Fund Balance, June 30 $ 20,130 $ 20,130 $ 23,882 $ 3,752 1111A CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE QUIMBY YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance. July 1 Resources (inflows): Use of money and property Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with . Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 10,372,588 $10,372,588 $ 10,372,588 $ 4,400 35,000 61,353 26,353 60,000 60,000 - (60,000) 10,436,988 10,467,588 10,433,941 (33,647) 118,511 10,284,761 2,011,105 8,273,656 118,511 10,284,761 2,011,105 8,273,656 $ 10,318,477 $ 182,827 $ 8,422,836 $ 8,240,009 103 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CONGESTION MANAGEMENT AIR QUALITY FUND YEAR ENDED JUNE 30,2011 Budgetary Fund Balanre, July I Resources (inflows): Intergovernmental Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final Variance with Final Budget Actual Positive Amounts (Negative) 1,007,105 269,079 (738,026) 1,007,105 269,079 (738,026) 1,007,105 269,079 738,026 .,007,105 269,079 738,026 104 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July I Resources (inflows): Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Public safety I Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 22,880 $ 22,880 $ 22,880 $ 100 100 169 69 2,000 2,000 2,000 24,980 24,980 25,049 69 2,000 2,000 2.000 2,000 2,000 2,000 $ 22,980 $ 22,980 $ 25,049 $ 2,069 105 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE ART IN PUBLIC PLACES YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July I Resources (inflows): Use of money and property Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Community services Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 893,404 $ 893,404 $ 893,404 $ - 500 3,100 5,909 2,809 30,825 30,825 52,076 21,251 924,729 927,329 951,389 24,060 24,700 24,700 15,981 8,719 251,500 251,500 73,869 177,631 - - 200,000 - 200,000 276,200 476,200 89,850 386,350 $ 648,529 $ 451,129 $ 861,539 106 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SOUTH COAST AIR QUALITY YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance With Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 288,133 $ 288,133 $ 288,133 $ - 53,200 57,124 72,352 15,228 200 300 1 569 269 341,533 345,557 361,054 15,497 48,900 48,900 56,802 (7,902) 4,300 259,206 239,956 19,250 53,200 308,106 296,758 11,348 $ 288,333 $ 37,451 $ 64,296 $ 26,945 i 111YA CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE AS 939 YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows); Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Capital outlay Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,335,058 $ 1,335,058 $1.335.058 $ - 5,500 4,600 8,027 3,427 - 50,000 50,000 - 1,340,558 1,389,658 1,393,085 3,427 187,709 260,209 192,221 67,988 32,100 32,100 - 32,100 194,279 125,623 68,656 219,809 486,588 317,844 168,744 Budgetary Fund Balance, June 30 $ 1,120,749 $ 903,070 $1,075,241 $ 172,171 108 ClTi OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PROPOSITION IS YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July I Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive $ Original Final Amounts (Negative) 576,220 224,162 (352,058) 1,670 2,105 435 577,890 226,267 (351,623) 577,890 226,267 351,623 577,890 226,267 351,623 109 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE JUSTICE ASSISTANCE GRANT YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July I Resources (inflows): Intergovernmental Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 24.500 20,523 20.523 24,500 20,523 20,523 24,500 20.643 20,523 120 24,500 20,643 20,523 120 Budgetary Fund Balance, June 30 (120) $ - $ 120 110 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. I YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July I Resources (inflows): Use of money and property Miscellaneous Transfers in Proceeds from sale of capital asset Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (1,414) $ (1,414) $ (1,414) $ 216,000 216,000 251,940 35,940 - - 1,302 1,302 167,075 979,075 781,094 (197,981) - 120,628 120,628 381,661 1,314,289 11,1153,550 (160,739) 378,600 395,850 224,592 171,258 - 40,000 - 40,000 378,600 435,850 224,592 211,258 $ 3,061 $ 878,439 $ 928,958 $ 50,519 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 2 YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Use of money and property Miscellaneous Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ (1,377) $ (1,377) Variance with Final Budget Actual Positive Amounts (Negative) $ (1,377) $ 498,200 492,647 (5,553) 166,900 173,512 6,612 - 4,200 3,185 (1,015) 25,675 534,787 509,112 (25,675) 24,298 1,202,710 1,177,079 (25,631) 23,500 452,800 318,923 133,877 - 39,313 39,313 - - 200,443 200,443 - 23,500 692,556 558,679 133,877 $ 798 $ 510,154 $ 618,400 $ 108,246 112 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LOW/MODERATE INCOME HOUSING PA NO. I YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Miscellaneous Transfers in Proceeds from sale of capital asset Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 9,682,337 $ 9.682,337 $ 9.682,337 $ 9,912,200 8,802.408 8,798,118 (4,290) 46,800 46,800 42,092 (4,708) - 23,029 54,157 31128 - 40,000 - (40,000) 150,000 243,222 243,222 19,791,337 18,837,796 18,819,926 (17,870) 2,671,705 1,839,329 1,628,034 211,295 4,631,684 8,205,277 6,698,698 1,506,579 7,303,389 10,044,606 8,326,732 1,717,874 Budgetary Fund Balance, June 30 $ 12,487,948 $ 8,793,190 $ 10,493,194 $ 1,700,004 113 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July I Resources (inflows): Intergovernmental Developer participation Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) - 11,849.626 1,021,859 (10,827,767) 111,255 578,077 159,298 (418,779) (6,939,757) 73,048.514 21,481,447 (51,567,067) (6,828,502) 85,476,217 22,662,604 (62,813,613) 85,149,452 21,180,979 63,968,473 326,765 302,895 23,870 - 23,870 (23,870) - 85,476,217 21,507,744 63,968,473 _Lj� �828502 $ - $1,154,860 $ 1,164,860 114 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CIVIC CENTER YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July I Resources (inflows): Developer participation Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Interest and fiscal charges Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (9,833,714) $ (9,833,714) $ (9,833,714) $ 127,600 127,600 82,191 (45,409) - 2,990,000 2,990,000 (9,706,114) (6,716,114) (6,761,523) (45,409) 201,758 201,758 203,798 (2,040) 60,100 60.100 13,388 261,858 261,858 250,510 11,348 Budgetary Fund Balancet June 30 _LJ11967,9721 $ (6,977,972) 2,033L 34,061L _LjL2L___ 115 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE 2011 LOWIMOD BOND YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July I Resources (inflows): Use of money and property Other debts issued Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Bond discount Other uses I Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget BudgetAmounts Actual Positive Original Final Amounts (Negative) - 12,065 12,065 - 28,850,000 26,850,000 - 28,862,065 28,862,065 - 2,694,381 2,694,381 - 308,839 (308,839) - 643,214 323,375 319,839 - 3,337,595 3,326,595 11,000 $ - $ 25,524,470 $ 25,535,470 $ 11,000 116 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INFRASTRUCTURE YEAR ENDED JUNE 30,2011 Variance with Final Budget BudgetAmounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 405,039 $ 405,039 $ 405.039 $ Resources (inflows): Use of money and property 100 1,450 2,763 1,313 Amounts Available for Appropriation 405,139 406,489 407,802 1,313 Charges to Appropriation (Outflow): Transfers out - 393,074 - 393,074 Total Charges to Appropriations 393,074 393,074 Budgetary Fund Balance, June 30 $ 405,139 $ 13,415 $ 407,802 $ 394,387 117 CITY OF LA QUiNTA BUDGETARY COMPARISON SCHEDULE TRANSPORTATION YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July I Resources (inflows): Use of money and property Developer participation Miscellaneous Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negatlye) $4,555,637 555,637 $4,555,637 $ 1,700 14,800 27,682 12,882 441,500 341,500 225,362 (116,138) - 90,000 90,000 4,998,837 5,001,937 4,898,681 (103,256) - - 3,723 (3,723) 430,000 4,645,436 1,401,427 3.244,009 430,000 4,645,436 1,405,150 3,240,286 $ 4,568,W $ 356,501 $ 3,493,531 $ 3,137,030 118 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATION YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual 'Positive Original Final Amounts (Negative) $ (1,417,770) $ (1,417,770) $ (1.417,770) $ 89,200 89,200 64,235 (24,965) (1,328,570) (1,328,570) (1,353,535) (24,965) 9,800 9,800 7,307 2,493 9,800 9,800 7,307 2,493 �,338370 370 _L(j,�338 _Ljj,�360,842 _L__C22,472L 119 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY DEVELOPMENT YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges . Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ (1,937,311) $ (1,937,311) Variance with Final Budget Actual Positive Amounts (Negative) $ (1,937,311) $ 35,500 35,500 25.915 (9,585) (1,901,811) (1,901,811) (1,911,396) (9,585) 12,700 12,700 12,383 317 12,700 12,700 12,383 317 $ (1,914,511) $ (1,914,511) 120 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE COMMUNITY CENTER YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $1,167,652 $ 1,167.652 $ 1,167,652 $ Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Total Charges to Appropriations Budgetary Fund Balance, June 30 5,800 4,200 7,988 3,788 7,400 7,400 5,402 (1,998) 1,180,852 1,179,252 1,181,042 1,790 $1,180,852 $ 1,179,252 $ 1,181,042 $ 1,790 121 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STREET FACILITY YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Developer participation Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Finaf Budget Budget Amounts Actual Positive 0 Final Amounts (Negative) $ F 1109) $ (1.390,419) $ (1,390,419) $ 17,800 12,800 8,661 (4,139) 2,917 2,917 1,606 (1,311) (1,369,702) (1,374,702) (1,380,152) (5,450) 13,100 13,100 8,126 4,974 - 641,403 640,903 500 13,100 654,503 649,029 5,474 $ (1,382,802) _� �029,205 � __!_(2,029,181L $ 24 122 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARK FACILITY YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Budgetary Fund Balance, July 1 $ Original - $ Final $ Amounts $ (Negative) Resources (inflows): Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations 2,200 2,200 1.606 (594) 2,200 2,200 1,606 (594) 2,917 2,917 1,606 1,311 2,917 2,917 1,606 1,311 Budgetary Fund Balance, June 30 717 $ $ 717 123 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FIRE FACILITY YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Budget Amounts Original Final 5 (935,294) $ (935,294) Variance with Final Budget Actual Positive Amounts (Negative) $ (935,294) $ 29,800 20,800 15,604 (5,196) (905,494) (914,494) (919,690) (5,196) 6,000 6,000 4,873 1,127 6,000 6,000 4,873 1,127 Budgetary Fund Balance, June 30 _LJ211�,494 $ (924,563) 4,069 124 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE 2004 LOWIMOD BOND YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflowl: Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $3,425,850 —f-3,425,850 Variance with Final Budget Actual Positive Amounts (Negative) $3,425,850 $ 8,700 8,700 6.429 (2,271) 3,434,550 — 3,434,550 3,432,279 (2,271) 3,437,765 125,124 3,312,641 — 3,437,765 125,124 3,312,641 $3,434,550 $ . (3,215) $3,307,155 125 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVLOPMENT AGENCY PA NO. I - CAPITAL PROJECT YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Use of money and property Developer participation Transfers in Proceeds from sale of capital asset Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 43,877,652 $43,877,652 $ 43,877,652 $ - 38,600 138,600 170,584 31,984 - 250.000 305,455 55,455 5,000,000 - 106,831 106,831 - 4,875,000 4,875,000 48,916,252 49,141,252 49,335,522 194,270 1,088,693 1,027,136 911,302 115,834 4,147,638 47,858.699 25,397,899 22,460,800 5,236,331 48,885,835 26,309,201 22,576,634 Budgetary Fund Balance, June 30 $ 43,679,921 $ 255,417 $ 23,026,321 $ 22,770,904 126 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVLOPMENT AGENCY PA NO. 2 - CAPITAL PROJECT YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Use of money and property Transfers in Other debts issued Proceeds from sale of capital asset Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Bond discount Other uses 1 Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 3,982,401 $ 3,982,401 $3,982,401 $ - 11,100 17.660 20,925 3,265 2.000,000 1.276,516 1,276,516 - - 6,000.000 6,000,000 3,445.000 3,445,000 - 5,993,501 14,721,577 14,724,842 3,265 209,461 4,124,661 2,582,602 1,542,059 1,460,154 7,995,408 7,377,748 617,660 - 86,207 (86,207) 206,207 108,500 97,707 1,669,615 12,326,276 110,1155,057 2,171,219 $ 4,323,886 $ 2,395,301 $4,569,785 $ 2,174,484 127 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. I - DEBT SERVICE YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July I Resources (inflows): Taxes Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Prindpal retirement Interest and fiscal charges Pass -through agreement payments Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (13,187,890) $ (13,187,890) $ (13,187,890) $ 39.648,800 35,209,626 35.192,471 (17,155) - 6,600 12,802 6,202 4,438,934 19,478,126 19,478,126 - 30,899,844 41,506,462 41,495,509 (10,953) 484,400 5,341,793 5,241,338 4,147,722 4,147,722 8,661,435 8,088,102 21,920.827 19,372,337 8,963,138 3,963,138 44,177,522 40,913,092 $ (13,277,678) $ 593,370 4,147,722 8,088,102 19,309,866 3,963,138 40,750,166 $ 745,343 100,455 62,471 162,926 $ 151,973 128 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 2 - DEBT SERVICE YEAR ENDED JUNE 30,2011 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Principal retirement Interest and fiscal charges Pass4hrough agreement payments Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (4,914,802) $ (4,914,802) $ (4,914,802) $ 17,443,113 14.351,237 19,349,036 4,997.799 - 49,600 47,887 (1,713) 1,951,993 6,235,134 6,255,653 20,519 14,480,304 15,721,169 20,737,774 5,016,605 255,100 274,000 215,555 58,445 125,000 325,000 325,000 1,949,772 1,387,803 1,387,803 18,935.710 15,999,408 16,297,223 (297,815) 3,951.993 1,951,993 1,951,993 25,217,575 19,938,204 20,177,574 (239,370) �217,035 560,200 $ 4,777,235 129 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FINANCING AUTHORITY YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 3,890 $ 3,890 $ 3,1390 $ Resources (inflows): Charges for services 15,800 15,800 6,807 (8,993) Use of money and property 672,525 672,525 672,525 Transfers in 5,915,131 8,609,513 8,609,513 Amounts Available for Appropriation 6,607,346 9,301,728 9,292,735 (8,993) Charges to Appropriation (Outflow): General government 12,800 12,800 9.196 3.604 Debt service: Principal retirement 2,160,000 2,160,000 2,160,000 - Interest and fiscal charges 4.427,656 4,427,656 4,427,656 - Total Charges to Appropriations 6,600,456 6,600,456 6,N6,852 3,604 Budgetary Fund Balance, June 30 $ 6,890 $ 2,701,272 $2,695,883 130 INTERNAL SERVICE FUNDS Internal service funds are used to account for activities involved in rendering services to departments within the City. Costs of materials and services used are accumulated in this fund and charged to the user departments as such goods are delivered or services rendered. The City of La Quinta has the following Internal Service Funds Equipment Replacement Fund — used to account for the ultimate replacement of City owned and operated vehicles and equipment Information Technology Fund — used to account for the purchase and replacement of information systems. Park Equipment and Facilities Fund — used to account for the purchase and replacement of City owned park facility infrastructure. 131 CITY OF LA QUINTA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30,2011 Governmental Activities - Internal Service Funds Park Equipment Information Equipment and Replacement Technology Facilities Totals Assets: Current: Cash and investments $ 1,612,086 $ 918,0654 $ 700,455 $ 3,230,605 Receivables: Accrued interest 1,151 667 496 2,314 Total Current Assets 1,613,237 918,731 700,951 3,232,919 Noncurrent: Capital assets - net of accumulated depreciation 930,374 344,180 15,753,428 17,027,982 Total Noncurrent Assets 930,374 344,180 15,753,428 17,027,982 Total Assets $ 2,543,611 $ 1,262,911 $ 16,454,379 $ 20,260,901 Liabilities and Not Assets: Liabilities: Current: Accounts payable $ 60,074 $ 12,843 $ 6,969 $ 79,886 Accrued liabilities - 3,854 - 3.854 Total Current Liabilities 60.074 16,697 6,969 83,740 Noncurrent: Accrued compensated absences - 9,415 - 9,415 Total Noncurrent Liabilities 9,415 9,415 Total Liabilities 60,074 26,112 6,969 93,155 Net Assets: Invested in capital assets, net of related debt 930,374 344,180 15,753,428 17,027,982 Unrestricted 1,553,163 892,619 693,982 3,139,764 Total Net Assets 2,483,537 1,236,799 16,447,410 20,167,746 Total Liabilities and Net Assets $ 2,543,611 $ 1,262,911 $ 16,454,379 $ 20,260,901 132 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2011 Governmental Activities - Internal Service Funds Park Equipment Information Equipment and Replacement Technology Facilities Totals Operating Revenues: Sales and service charges $ 27,776 $ 2,295 $ - $ 30,071 Total Operating Revenues 27,776 2,296 - 30,071 Operating Expenses: Salaries and benefits - 110,790 - 110.790 Fuel and oil 102,113 - - 102,113 Maintenance and parts 141,828 - - 141,828 Contract services 14,058 41.047 56,548 111,653 Software and supplies - 135,315 - 135,315 Other - 16,317 - 16,317 Depreciation expense 209,142 110,879 472.188 792,209 Total Operating Expenses 467,141 414,348 528,736 1,410,225 Operating Income (Loss) (439,365) (412,053) (528,736) (1,380,154) Nonoperating Revenues (Expenses): Interest revenue 11,383 6,934 4,925 23,242 Total Nonoperating Revenues(Expenses) 11,383 6,934 4,925 23,242 Income (Loss) Before Contributions and Transfers (427,982) (405,119) (523.811) (1,356,912) Capital contributions 45,000 2,144,627 2,189,627 Transfers out - (4,555) (4,555) Changes in Net Assets (382,982) (405,119) 1,616,261 828.160 Net Assets: Beginning of Year 2,866,519 1,641,918 14,831,149 19,339.586 End of Fiscal Year $ 2,483,537 1,236,799 $ 16,447,410 $ 20,167,746 133 CITY OF LA QUINTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30,2011 Governmental Activities - Internal Service Funds Park Equipment Information Equipment Replacement Technology and Facilities Totals Cash Flows from Operating Activities: Cash received from customers and users $ 27,776 $ 2,295 $ $ 30,071 Cash paid to suppliers for goods and services (207,166) (259,012) (65,213) (531,391) Cash paid to employees for services (109,798) (109.798) Net Cash Provided (Used) by Operating Activities (179,390) (366,515) (65,213) (611,118) Cash Flows from Non -Capital Financing Activities: Cash transfers out (4,555) (4,555) Net Cash Provided (Used) by Non -Capital Financing Activities (4,555) (4,555) Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets (5,200) (69,408) (74,608) Net Cash Provided (Used) by Capital and Related Financing Activities (5,200) (69,408) (74,608) Cash Flows from Investing Activities: Interest received 11,564 7,304 5,060 23,928 Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in compensated absences Total Adjustments Not Cash Provided (Used) by Operating Activities 11,564 7,304 5,060 23,928 (173,026) (428,619) (64,708) (666,353) 1,785,112 1,346,683 765,163 3,896,958 $ 1,612,086 $ 918,064 $ 700,455 $ 3,230,605 $ (439,365) $ (412,053) $ (528.736) $ (1,380.154) 209,142 110,879 - 240 50,833 (67,023) - 450 992 259,975 45,538 Non -Cash investing, Capital, and Financing Activities: Capital assets contributed by other funds $ 45,000 3 472.188 792,209 - 240 (8.665) (24,855) 450 463,523 769,036 I �11 8 $ 2.144,627 $ 2,189,627 134 AGENCYFUNDS Agency funds are used to account for assets held by the City as; an agent for individual, private organizations and other governmental units. The agency funds and their purposes are as follows: The City of La Quinta has the following agency funds: Assessment District No. 97-1 and 2001-1 — To account for assessments paid to the City for debt service payments on bond issues used to finance sewer improvements. 135 CITY OF LA QUINTA COMBINING BALANCE SHEET ALLAGENCYFUNDS JUNE 30,2011 Assessment Assessment District No. District No. 97-1 2001-1 Totals Assets: Pooled cash and investments $ 135.326 $ 385,866 $ 521,192 Receivables: Taxes 1,210 12,153 13.363 Accrued interest 92 - 262 354 Total Assets 136,628 $ 398,281 $ 534,909 Liabilities: Deposits payable $ 136,628 $ 398,281 $ 534,909 Total Liabilities $ 136,628 $ 398,281 $ 534,909 136 CITY OF LA QUINTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2011 Balance Balance July 1, 2010 Additions Deductions June 30, 2011 Assessment District No. 97-1 Assets: Pooled cash and investments $ 149,321 $ 63,765 $ 77,760 $ 135,326 Receivables: Taxes 1,419 1,210 1,419 1,210 Accrued interest 109 92 109 92 Total Assets $ 150,949 $ 65,067 $ 79,288 $ 136,628 Liabilities: Deposits payable $ 150,849 $ 63,539 $ 77,760 $ 136.628 Total Liabilities $ 150,849 $ 63,539 $ 77,760 $ 136,628 Assessment District No. 2001-1 Assets: Pooled cash and investments $ 402,387 $ 203,920 $ 220,441 $ 385,866 Receivables: Taxes 12,371 12,153 12,371 12,153 Accrued interest 297 262 297 262 Total Assets $ �15,055 $ 216,335 $ 233,109 $ 398,281 Liabilities: Deposits payable $ 415,055 $ 203,668 $ 220,442 $ 398,281 Total Liabilities $ 415,055 $ 203,668 $ 220,442 $ 398,281 Totals - All Agency Fund Assets: Pooled rash and investments $ 551,708 $ 267,685 $ 298.201 $ 521,192 Receivables, Taxes 13,790 13,363 13,790 13.363 Accrued interest 406 354 406 354 Total Assets $ 565,904 281,402 $ 312,397 $ 534,909 Liabilities: Deposits payable $ 565,904 $ 267,207 $ 298,202 $ 534,909 Total Liabilities $ 565,904 $ 267,207 $ 298,202 $ 534,909 137 THIS PAGE INTENTIONALLY LEFT BLANK 138 STATISTICAL SECTION This part of the City of La Quinta'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 says about the government's overall financial health - Contents Financial Trends Page These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. 140 Revenue Capacity These schedules obtain information to help the reader assess the government's most significant local revenue source, the property tax. 146 Debt Capacity These schedules present information to help the reader assess the ability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. 151 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities that take place. 156 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it perfof ms. 159 139 U� T� P� a�, U� T�... �.: r�auw. 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Rscal Years (accrual basis of accounting) TABLE 4 Fiscal Year 2005 2006 2007 2008 2009 Mo 2011 Expenses: Golf Course 1,877,291 4,523,146 4,520.173 4,761.581 4,440.546 4,169.768 4.202,274 Total business -type activities expenses 1.877.291 4.523.146 4,520.173 T761,581 �.440,546 4,169,768 4.202.274 Program revenues Charges for seraces Golf Course 1.091.836 3,120,728 3.540,748 3,814.233 3,368,135 3,584.9% 3,756.615 Capital grimts, and contributions; 352,687 - Total business4ype activities program revenues 1,091.836 3,120�726 3.540J48 4,166.920 3.368,135 3,584,996 3,756,615 Net revenues (eVerses) (785.455) 1,402.418) (979425) (594.661) 11,072.411) (584,772) (445.659) Cieneral revenues and other changes in act assets trivestment income 553 1,617 4,310 3.074 1,252 2,125 Gain (loss) on sale of capital assets (47.721) - Traftfe's - 164,190 874,645 Capital contributions 41,459,643 973,013 979,425 - - Total business -type activities 41.459.643 1.137.756 1.855.887 —T4 — 3411) — 3074 1,252 2,125 Changes in net assets - business -type activities 40.674,188 (264,662 876.462 (638,072 (1,069.337 (583.520 (443,534 7he City of La Quinta implemented the business type activities in FY The transfer was for land & golf course impm�emerrts transferred to the Enterprise Fund. 2 This was the first full year of operations for the Golf Course Source: City of La Quirre 143 C��A TMLE 5 F� I —a Y— (—Mad . . . N? F� �ar s M.m 5 Moos s 17315 S MAN S WT.wl S MM2 S 11,11. 5 1..., s 12,21 $ 9.030 S 23260 11.41ZUI IZ521.8. 21.081.l� M671M3 n"WN, 21,597.329 45.�.— ..WA2 57.827.67; 15.373.104 149.518 1.0" 2.A. 5.903 4.825 9... 9" 9�., 1.8W.000 16..631 9.119.M 9".,m IMS.OW IS.OGU77 16,90l3ft lvn.u� 19..�IA2. I."IM. 17.774.648 I.A1.5. I�SA59 WlSTS 10477.M 2.IW.W0 2.1�,M I.M.. MON WOM 250.M ta� JIMI E.� *67A72 4.961012 2,327.4. 1,911,131 - C� .Mgm, 1.319,787 2257.M 2.835 "1 IMS,747 11565�17o 1,765,494 u—,. IZ958.494 I..M. 16.061.573 13,SN,41. 13.��S 18.2..315 32.741.W 20.�3.315 3'.IWWI 13.SM7. 44.140,�4 T� g� a-i -�4 470 'T " _—SnW3 U —702M - 0 S _-76-124 W 4 �52 0 1. —3 1-27 - 9 �ZOM I 18 3,515 S I s 5 7,987 s 5,353 S lo.1.1 s 3 10.563 Z061.382 2.117�86 4123.425 Z111.613 2,114.7 2,081.645 2,076..3 2.061.028 2.050.709 2.081,614 551.0m 1280.� 3.811,574 S.M.158 7XI.027 S.MR97 4,021543 4..2,213 4.121.119 �293.166 4.%g.IM - ISS." - 1.110 - 4.540 6.ow FU. �-p G.Dw= 6.150,707 7.903.405 7,518.862 MA..4.5 26.1n.191 21,906.749 26.807.752 31.W2.124 MPIS.930 7�49 Wss "208 8.413 15'.115 143� 153.818 INM3 245.� 40.852 os� c ... 505277 1�1757 A�4 1.359.723 2M9.24� 9XIM.885 IU14375 11.�Ma 11.307.631 11.o7l411 102".3$4 4m� 314.7W 2MA61 M2.171 I.A. 309.956 I.Mia, "a'", 396�55 2U59jWR SZ.S�M W.673.Q� 99,186.105 92,112.917 66225.066 69.626275 W.556.6m W.123.856 slimm 9.90 4.M.M 2273,Ma IMAD 4.U6JOI 10.288AU 24�2. 5.�.635 SAMON low 4MA.426 2.M 0,118,3511 (10.403.405) (7,133.2.) (1,8U.868) (19.653AN) (1%3..M) PIW6,907) 03�0.396) Totiafl��fto� 3 31J45,523 S 64,416.4W S 57.973.112 5125.M,4U S lll6�4.611 S 139�81% $ 111,363.435 $ W3730146 5 MADILW S SM289.462 � — — ��. � & ft co F—� &, F� Y.. �W,O. ft 0 MI I F� 144 �T�F,. Y.- (�MW�Wmsaaowun�q) M3 2� =5 m 2M7 2m Mo Mil T. S 43.011.Ml S 0,M.811 S W.Ml,W2 3 M.M.Ul S W.7N.W 1 1%103�24 $ M.810,9M S N,816.072 S 93.Ml.918 S "AW'57 7VA19 7W�M OWNS 82SM2 sls� 877.191 M.M W7,816 M.Sm 1.857,691 I.M.127 3.M.145 3�.167 5A45.4M 2r?".M 2.107"S 571,167 472,� U7071 W4�� 9.%3AI 7.IM521 . ll.mw7 10.24ZB76 18.�AN KW3�971 15=.135 18.6m= 19,473A76 19.m5.u3 1,?V.7" 2,=.759 2.619�78 3.W2.W2 IM7.9" I.M.7" 1.3M.M 673.779 �M3 WIAIS 5,IM.398 4.��lg 4,aU,M 9jW.3% 12,671.W 14,�.� 12.674.M 7M3.� S.M.6" 4.6M."2 37,�.IW 20.Ml 3M.023 V7.751 2.2%.U7 3.MI245 SJ18.0n 12.473,.G 5,310,� 6,537.Nl 2,243.nS 2".M WS.ws W,197 �jn 1.3%.SN U8.03 07.� 412.3U 6H,471 MAM ",M2 319J63 T�. U.NT.679 mAn.817 . IU.M,� 143,�,516 14a.W2,M3 IU�,970 131216,� 121�W 115.PZW 3.161.5W 3�.Q7 4.M�76 3,970,921 4.W,� OWA" 7,M7.1" 7.M.� W=� IOAM.SI9 T.610= G�AM 9,V2.70 fz�,w 13.ON.187 15,GMA93 17,101,775 la.�,� M,11G.M 19.8M,372 pw� IOM3.374 7,�.M 7.W.421 5,719,373 5�7.%3 M�.177 15.374.1W 1"� O�M.4W 8.�AW I.WAV M.W 110nX7 I.W� 1,2M" 4.07.M2 5.�.757 4,698M5 4�.M 4.147,?W 2.07,312 3.M,= 4.�,M &�.769 5.987,014 6,755.W7 6�.4W fi.�,Ms 6.M."7 4.�.= CapU pmj� 57.U2,9T8 16.M7.578 43.331.919 �,012.W 25."S.M W.4W.417 UM�317 n.M.M 14,514.910 21.287,775 P� 2,93t.M 3.610.� 3.793.� 4."7,748 5�U?.M 5.%%311 6.319,M 6.616,412 7.011�1 7.017.016 9.�.314 t3.%I.nl K355,577 155�.612 15,M,977 15.424,70 is�STWB 15,037M9 - - 1,NI,107 - - P�Pa.AW..ghobb� 13."9 IN 17.%I,� 21.�,147 25,7M.Ul 35,W,�l W.490,575 42.W%M 42.4M,670 M.710,8� M.WW9 T�m C�w �: C�au�. 114A13,074 70,IW.Nl 110.757,W3 113.M.IW 113A93"7 155,M.M7 1W.Mg.ag IQ,M�m 142.�.W 127�072.173 (49.�.M W1,737 (AIMAW (10,M,Ql n.91 12" 414,317.7U ('SrTM.719 tg,�,Wj (M.789,339 23.W.� (65z5.Wj (MM7�) (1�.613.M2) lm,� (49�.Wlj (35.��) (60.�.576) (37.M2��) (�.W.Mj (MAS3.W5) (61.6U,4n) 2.3V.?U 8.w�s 8�,3% 124.M7 1W.Ml S."3MW 07.M�M - WM5�m el�� 8.W� 124.M7 1.�M9 2.M7,751 1.40.WT 43,�.� 9 37�1= S MI.737 i 74.310M S (2,�7.IW 5 (14.174.4% $ (7.M.M s 435% 67,� 5% 61 � 47.1% 59M 47,� W.M 145 CITY OF LA QUINTA Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in dollars) Entire City (including Redevelopment Agency) TABLE 7 Fiscal Year Taxable Ended Less: Assessed Direct June 30 Secured Unsecured_ Exemptions Value Perent Change 2002 3.162,945,116 30,599,753 (50,149,068) 3,143,395,801 18.87% 2003 3,789,678,041 32,607,713 (54,726,303) 3,767,559,451 19.86% 2004 5,412,382,710 40,940.877 (95,420,075) 5,357,903,512 42.21% 2005 6,289,493,552 44,014,548 (113.037,003) 6,220,471,097 16A0% 2006 7,856,383,375 72,554,357 (115.071,146) 7,813,866,586 25.62% 2007 9,986,151,525 88.740,840 (99,245,721) 9,975,646,644 27.67% 2008 11,854,669.637 101,433,002 (89,688,505) 11,866,414,134 18.95% 2009 12,410,626,893 113,185,065 (107,777,195) 12,416,034,763 4.63% 2010 11,742,665,902 121,272,880 (110,752,890) 11,753,185,892 -5.34% 2011 10,913,083,169 118,972,704 (161,265,140) 10,870,790,733 -7.51% NOTE: In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re- assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Source: County of Riverside Auditor -Controller M CITY OF LA QUINTA TABLE8 Assessed Value and Estimated Actual Value of Taxable Property - Redevelopment Agency Last Six Fiscal Years (in dollars) Redevelopment Agency Project Area I Fiscal Year Taxable Ended Less: Assessed Base Taxable June 30 Secured Unsecured Exemptions Value Year Increment 2006 $ 3,962,433,928 $ 29,248,534 $ (35,653,495) $ 3,956,028,967 $ 199,398,233 $ 3,756,630,734 2007 4,789,836,901 34,084,343 (36,081.051) 4,787,840,193 199,398,233 4,588,441.960 2008 5,223,508,114 34.250,061 (36,913.004) 5,220,845,171 199,398,233 5,021.446,938 2009 5,259,271,091 31,678,492 (36,844,457) 5,254.105,126 199,398,233 5,054.706,893 2010 4.925,639,242 36,169.030 (36,077,902) 4,925,730,370 199,398,233 4,726.332,137 2011 4,527,126.186 35,335,685 (35,822,516) 4,526,639,355 199,398,233 4.327,241,122 Redevelopment Agency Project Area 2 Fiscal Year Taxable Ended Less: Assessed Base Taxable June 30 Secured Unsecured Exemptions Value Year Increment 2006 $ 2,132,426,502 $ 32,999,788 $ (54.125,422) $ 2,111,300,868 $ 95,182,755 $ 2,016,118.113 2007 2,434,082,787 42,914,862 (53,144.959) 2,423.852,690 95,182,755 2,328,669.935 2008 2,764,306,278 50,616,017 (40,774,044) 2,774,148,251 95.182,755 2.678,965,496 2009 2,843.981,136 62,180,440 (57,076,727) 2,849,084,849 95,182,755 2,753,902,094 2010 2,641,339,455 66,270,232 (60,340,787) 2,647,268,900 95.182,755 2,552,086,145 2011 2,522,266,207 60,448,173 (110,797,044) 2,471,917,336 95,182,755 2,376,734,581 Source: County of Riverside Auditor -Controller Note: The information was first presented in Fiscal Year 2006 147 0 0. omm F" 0— a .—I OM7 0— OW10 G� 0. 0— ol 148 CITY OF LA QUINTA TABLE 10 P rincipall Property Taxpayers Cunrent.Year and Nine Years Ago (in dollars) 2011 2002 percentaf— Percent of Total City Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value KSL Desert Resort, Inc $ 1",680,362 1 1.33% $ 222,149,917 1 7.07% TO Desert Development 105,099.843 2 0.97% 29,836,141 2 0.95% MSR Resort Golf Course 71.369,895 3 0.66% - - East of Madison LLC 63,614,331 4 0�59% - Coral Option I LLC; 42.259,153 5 0.39% - - Inland American La Quinta Pavilion 42,230,554 6 0.39% - - WRM La Quinta 37,689,411 7 0.32% - - Griffin Ranch 36,725.785 8 0.34% - - Village Resort 34,403,510 9 0.32% - - IND La Quinta Partners 31,884,196 10 0.29% - - Quarry at La Quinta - - 20,974,081 3 0.67% Eagle Hardware and Garden Inc. - - 20,207,818 4 0.64% RJT Homes - - 16,212,028 5 0.520/6 M & H Reatty, Partnership 11 - - 13,766,889 6 0.44% Mew Griffin Living Trust - - 13,301,949 7 0.42% Walmart Stores - - 13,126,931 8 0.42% Landaqlnc. - - 12.831,133 9 0.41% Capstone Golf West - - 12,107,513 10 0-39% $ 609,957,040 5.600/0 $ 374,514,400 11.54% NOTE :The amounts shotvn above include assessed value data f" both the City and the Redevelopment Agency. Source: HdL Coren & Cone 149 CITY OF LA QUINTA TABLE 11 Property Tax Levies and Collections Last Six Fiscal Years (in dollars) Collected within the Fiscal Taxes Levied Fiscal Year of Levy Collections in Total Collections to Date Year Ended for the Percent Subsequent Percent June 30 Fiscal Year Amount of Levy Years Amount ofLevy 2006 $ 61,420,601 $ 73,097.362 119.01% $ 2,092,062 $ 75,189,424 122.42% 2007 74,170,170 83,797,365 112.98% 1,802,076 85,599,441 115-41% 2008 83,018,429 87,804,912 105-77% 3,216,547 91,021,459 109.64% 2009 83,934,188 86,721,572 103.32% 1,471,940 88.193,512 105.07% 2010 78,621,410 80,651,874 102.58% 434,643 81,086,517 103.14% 2011 72,735,079 74,047,640 101.80% 259,209 74,306,649 102.16% NOTE: The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed -through to other agencies. Note: The information was first presented in Fiscal Year 2006. Source: County of Riverside Auditor Controllers Office 150 M. 12 & Y�� F�Yw� n�y—� � Y—� � y_� MQ MQ .1 RUll S I.J1, s i �,X. s lm�ll $ 11.31, s .31� s �.Xl 5 ..X 1 W. ..221 .11.1. I.M.W, I.V. 'K.3 '.�3 n'j. .."ll la,� m UM., ;,"o. M. :..3.433 Zl�.m 2.OM.M 11�1� ��k. I.... I.... I M. Im. .3.. 1".. U1.14 MMIO I.M. 1.Z.1. U&M. I'M.. .2 10,921,12. MWM SIM. a7.Wow 07.M� W"'.. �,24� �mo.w Mm.. 0.. N V14..� 23%M Ml 2X(N�— 21!23 9242; r. i ®R Z S "Q,Md" 1 5 �'U'Mll 3 ..3.1,. $ 2��Mt S 2Q.M,2M S 2M,MjW7 S MAS.M s �11.. U. xll� M., Q1 $ U.. WQ M� s 41.. 61.7. $ .2.M A.3 3 13.1. 21.Ml M221 3 ..12' 21.1 W... s 3.. 2;,. ..A'. (21 $ (2) �..Q 3 (2) IJQ. s 1. W� ... 3 .,41% C.3 S 1. .� ..., s �..2 1�.3% 1.. 3 1. �% S.". s I.,. C. 2�� ..Y—� 151 CITY OF LA QUINTA TABLE 13 Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years (in Dollars) Outstanding General Bonded Debt Fiscal Year City Hall Lease Tax Percent of Per Ended Lease LocalAgency Allocation Assessed Median June 30 Obligation Revenue Bonds Bonds Total Value ' Household Income 2002 $ 7,475,000 $ $ 147,199,836 $ 154,674,836 4.92% 2 2003 7,190,000 145,578,164 152,768,164 4.05% 2 2004 6,890,000 87,924,343 148,832,628 243,646,971 4.55% 2 2005 6,575,000 87,947,058 146,493,659 241,015,717 3.87% 2 2006 6,245,000 89,265,000 147,915,000 243,425,000 3.12% 3,694 2007 5,900,000 87,745,000 145,170,000 238,815,000 2.39% 3,525 2008 5,540,000 86,175,000 142,265,000 233,980,000 1.97% 3,133 2009 5,160,000 84,560,000 139,190,000 228,910,000 1.84% 3,003 2010 4,760,000 82,890,000 135,935,000 223,585,000 1.90% 2,481 2011 4,340,000 110,000,000 138,480,000 252.820,000 2.33% 2,421 General bonded debt is debt payable With governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). Assessed value has been used because the actual value of taxable property is not readily available in the State of California. 2 Information not collected prior to Fiscal Year 2006 Source: City of La Quinta 152 CITY OF LA QUINTA TABLE 14 Direct and Overlapping Debt June 30, 2011 City Assessed Valuation $ 4,166,815,030 Redevelopment Agency Incremental Valuation 6,703,975,703 Total Assessed Valuation -10,870.790.733 Source: Riverside County Auditor Controller Ovedapping Debt Repaid with Property Taxes And Assessments: Desert Community College District Coachella Valley Unified School District Desert Sands Unified School District (DSUSD) Coachella Valley County Water District I.D. No. 55 Coachella Valley County Water District I.D. No. 58 DSUSD Community Facilities District No. I City of La Quinta 1915 Act Bonds Coachella Valley Water District Assessment District No. 68 Total overlapping debt repaid with property taxes Overlapping Other Debt including Certifications of Participation (COP) Riverside County General Fund Obligations Riverside County Pension Obligations Riverside County Board of Education COP Coachella Valley Unified School District COP DSUSD COP Coachella Valley County Water District I.D. No- 71 COP Coachella Valley Recreation and Park District COP Total overlapping other debt Total overlapping debt City direct debt Total direct and overlapping debt Estimated Share of Percentage Outstanding Overlapping Applicable' Debt 6130/11 Debt 8-075% . $ 322,389,659 $ 26,032,965 35.254% 112,854,786 39,785,826 7.547% 260,875,460 19,688,271 85.889% 3,270,000 2,808,570 6.396% 1,540,000 98.498 100.000% 1,750,000 1,750,000 100.000% 950,000 950.000 86.247% 1,975,000 1,703,378 705,604,905 92,817,508 1.790% $ 696,634,853 $ 12,469,764 1.790% 366,945,000 6,568,316 1.790% 6,170,000 110,443 35.254% 50,320,000 17.739,813 7.547% 62,005,000 4,679,517 11-706% 2,750,000 321,915 13.342% 2,340,000 312,203 1,187,164,853 42,201,971 1,892,769,758 135,019,479 257,522,628 $ 392,542,107 Notes: For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unirs taxable assessed value that is within the citys boundaries and dividing it by each unirs total taxable assessed value. Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account- However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. Source: California Municipal Statistics, Inc.- overlapping debt Source: City of La Quinta - City Direct debt 153 T.�Y— F.. T� Is ml M, nio A.. 3.141M.Wl S IMT.�.451 S 5.W7.W3.512 6=471,MT S 7AT3.W.W S 9.975,WW S I I.M.414JU S IZA16,OU.M S I 1.M.$�OW $ IOAMMJ� !S" Ls. �% 15% 11% 15% 471.W3M �Mgls W3,685.521 W�07QM5 1.172.079,W t..�.' 6 471.�.= S �133qg!G 9 003.465527 S OILMNS $ IJ12dOMM S !�W4W S IJM.�.IM S 1��.�.214 S IdM2,977.W $ l.6Mq6l$GIG o" 0� 0." O.M om GlM O'� Cm 0. S. 154 CIW OF LA QUINTA TABLE 16 Fledged-fleverve Coverage Last Ten Fiscal Years (in Detours) Tax Allacalion Bonds - Projeall Area I Fiscal Y. Ended Tax Less Otier Net Tax OebI Service June 30 Incemert Debt Payments Incearent' principal interest C.verage, 2002 S 17.953.949 $ 10,078.789 $ 7,875,160 1.195." 3,662,7� 1.62 2M 21,086.099 12.121,344 8,964.755 1,260,000 6,044,172 123 2004 23,966.954 14,581.305 9,385,649 1AW000 7,235.893 1.03 2005 27,093,693 16,M,190 10.9D8,503 2.395.OW 7.929,969 1.06 20DO 36,5D6.201 20,638,731 15.867,470 2,SM.000 7,805,905 154 2007 42.029.503 X),820.149 21,2D9,354 2.640,000 7,658.9DO 2,06 2008 43.476.312 25,383.713 18.092,599 2.795,000 7.5DO,553 I'M 20(G 40,519,380 25,046,356 15,473,024 Z960,0M 7,3M.lN 1.50 2010 38,517.789 47,006,738 (8,488.949) 3.135.000 7,144.062 (0.83) 2011 35.192.471 26.129.448 9,063,023 3.33Q000 6,941,435 OM Tax Aflocad. Boxeds - Project Area 2 Fiscal Yew Ended Tax Less: Oliver W Tax Debt Servu;e J. 30 Increment Debt Payinerts, !naremera Rincipal Interest M02 $ 8,100.647 $ 7.289,603 $ 811.2" $ 85,000 3 3M.249 1.93 2DD3 9,916.962 9.212.788 704.174 90,000 330.748 1.67 2OD4 12.126.671 11.076.008 1,050.663 9D." 327.M 2.52 2M 14.036,962 12.894,804 1,142,158 95,WO 323.264 213 2DD6 19.849.893 17.325,411 2,524.482 100,000 319.168 &02 2007 20.777.15B 18.553,875 2.223.283 105,DOD 314.785 5.3a 2008 23,087.750 20.929,512 2,158,238 IM000 310,1215 5.14 Mg 22,783.74 21.042,814 1.740,900 115,000 305,184 4.14 2010 20,763,180 19.373,073 1,390,107 120" 299,550 3,31 2011 19,349.036 17.591,754 1.757,282 125.WO 293,272 4 20 2DD4 Local Agency Revenue, Bonds Fiscal Yew Ended Tax Less: Oliver Net Tax Dew Service Am 30 jrcrerw, 3 DW payments i� PMWWW internal C�age 2OD5 $ 10.282,664 S 10,282,664 $ - S 2.M.049 3,14 20D6 14,WS,024 14,089,024 735.000 4,436.981 2,72 2007 15.701.664 15,701.664 I.S20.000 4,402,909 265 20M 16.641,016 W641.016 1.570,000 4,356,806 2.81 15.825.773 15,825,773 1,615,000 4,3D4,994 2.67 2010 I,L820,242 14,820,242 1470.000 4,243,331 2.51 2011 13.635,377 13.635.3n I'MOOO 4.175,131 2,31 Local Agency Revenue Bards (City Hag "ect) Fiscal Yew Ended Lease Less: 011ner WI Lease Debt Service J. 30 Revenue 2 OW Payments Revenue Prim"I Interest Coverage 2W2 $ 682,178 S S M2,178 3 275.000 5 407,178 IM 2003 679,435 679,435 285." 394,435 IM 2004 680,&10 680,830 300,000 380,830 IDO 2005 681.220 681,220 315.M 366,220 IM 2OD6 W.5T5 680.575 330,000 35D.575 IM 2007 678,865 678,865 345,000 333.865 1.00 2008 675,880 675,880 360,000 315.883 1.00 2OG9 676,450 676.450 390.000 296.450 1.00 2010 675,280 675,280 400,000 275,280 1 DO 2011 672.525 672,5� 420.000 252,525 IDO NoW Details regarding ft city's outstanding debt can be found in the notes to Ov, financial statements. ' Tax increment bas been reduced by odw debt payments, �cti may or may not be subordinsted 0 Tax Allocation Bonds 2 Lease revenues consist of payments from ft City General Fund, � ranter Dwelopment Irnpact Fas Fund and it* Redevelopment Age," Capital Prowls Ford 3 Tax increment . from both Project Area I and Project Am 2 Lovv & Modena. leourne Foricls we used in tiny the annual debt service parnwx�. 4 The State of CaN.Ja ac,sm,sed ft La Ccinfla Redevelopment Agency a applemerdad educational read fund payment of $23.582.367 in FY 2001�Ml 0 wtkh %vas paid from Project Area I tax inCreareet revenues Ttis payment Was funded by a $10 million lose from the General Furd! 0 line Agency. 3 10 million from the Debl service Ford and $3,582,367 from five RDA PrqW Area I Capital Projects Fund. If ths, payment viculd nat have been made the coverage ratio would have bew IAT 5 The State ofCafifwna awes,,didna Le Quints Redevelefment Agency a supplemental eckjoational MW augmentation lord payment of $4AW193 in FY 201012011 �ich was paid1ron, PeciectAnsi I law ViCRunced revencies 155 O� � � WINTA TMLE 17 L. T- Y. Y. Y.r Y. Y., Y. Y. Year Y— V. M3 M7 MI-0 Nil (3) 35.1 35A 3610 �.lo W 31 W31 M,31 �31 (1) 26715 �52 mm x10 M.Mo 41.02 42,� 43,778 ".Ql 37.W6 (4) (41 J4) (4) (4) U5.� ur.y� $74� SM227 W.124 SIN.410 131 14,127 14RU 15.W2 17.U9 IR.M M.176 21.� 2t.3M 23.� 21�8 (3) 2,Ml IM 2� 2,3T8 2 M 2 � Iss, 2851 2.M 2M9 (6) (6) (6) (6) (6) S23.M sawl M.M M131 WIA7 "0.0, �F. (2) 1� I � 13M 14= W� 15,M 15� 14,M KM 14.� E� (2) 121M 1� lum 13W 14.1W 14,M 14.W 13.M 13.� 13.� R) 3.M 3 M% 10% 2 S� 2.7" 2.61% 3%% 7,4� 7M% Tu% (4) 14) (4) (4) 4 WA 36A 422 41.5 S. a (3) C� � u W� Bu" & Sxf� C� (4) M� W�s �� Cly �� Wh & � C� �W ..�e W� (5) W� U� � �10 U� S� (6) 156 CITY OF LA QUINTA Principal Employers Current Year and Nine Years Ago Employer Activity flank La Quinta Resort & Club Hotel & Golf Resort I Desert Sands Unified School Distict Government 2 WaWart Super Center Retailer 3 HorneDepot Retailer 4 Hideamy Golf Resort 5 Lowe!s Home Improvement Retailer 6 Tradition Golf Club Grocery Store 7 NO La Quinta Partners LLC Real estate Development 8 CityofLaQuinta Government 9 Ralphs Grocery Store 10 Stater Brothers Grocery Store VMS Grocery Store Total employment listed Total City Employment - July I TABLE 18 2010-2011 2001-2002 Percent of Number of Total Number of Employees Employment Employees Rank 1,171 8.80% 1,500 1 921 6.92% 550 2 358 2.69% 250 3 170 1.28% 180 4 114 0.86% 145 1.09% ISO 5 101 0.76% 90 0-68% 90 10 94 071% 73 # 9 67 0.50% 100 8 - 126 6 - 103 7 3,231 24.291/6 3,122 13,300 12,100 'Total Employmenr as used above represants, the total employment of all employers located vithin City limits with over 100 employees, Source: City of La Quinta 157 C"�IAMIWA T� Q Ful,dv-cftc�� WF.- 1,W T- r� Y—� Fl. Y.� C-a" F.� Y— Y— F� Y. F." Y— F—s! YWr F.. Y— Fi. Y. R" Y. F� Y— 30 30 Emm, M EW., endin Ew,, EM, E.&`9 E., E� 2W3 M 30 � 3D M� MW � 30 � 3D . M J— . oWT 2008 2W9 201. 2011 DO a W a 00 am 9M law 12M 12,00 13,00 14,00 cft� 5 w 5 00 5.00 S. �M 5.00 am 6.00 6 w fim F. 7M 7.00 a. a 00 am am 9M 2 W 9 w am C�� 700 1. 70D am lo� 1.25 1115 11.25 1025 1025 (Iumiwav�y law l9w 19'. 2100 MOO 24,00 M 00 � m z oo 24W PL.�Mn . ��. 9 w 9 w am 9M 12M 12M 12M UOD low am Pmk WWU 21'00 21m UAM 23w W�5 M25 2825 29 25 27.2o M25 0. 0 SO 0 SO 0 SO 0 ToW 76 W ----& low M w —2L-= —91M 104.00 105M 10100 99 w � Qvdu� 158 Finance: Number of Active Business Licenses Number of AA" Licewises Processed Number of Accounts Payable Checks Processed Number of invesbrient Purchases Par value of investments Number of cleared checks Number of outgoing bank wires Public Works: Encroachment permits issued Request for services Building & SafeW. Permits: Single family Detached Single family Attached Residential Pool Wall/Fence Total Permits Code Compliance: Animal Control Incidents Handled Vehicle abatements Garage Sale Permits Weed abatements Nuisance statements Community Services: Library activities: Library Volumne Library books checked out Library Cards Issued Number of School Chikiren Visiting Library Library Volunteer Hours Senior Center. Numberofvisfts Senior Center Volunteer Hours Recreation activities: Participants: Leisure Classes Special events Adult Sports Golf course: Gaff rounds played Average $ Green fee Planning and Development: Number of residential units approved Commercial square footage approved Source: City of La Quinta Note- Infawynation not collected before 2006 CITY OF LA QUINTA Opera" Indicators by Function Last Six Fiscal Years TABLE 20 2006 2007 2008 2009 2010 2011 3.208 3.424 3,690 3,523 3.428 3183 892 1,022 1,272 1,609 1,768 1619 4,696 4,722 4,840 4,819 4.393 4530 39 73 64 36 32 20 $327,417,000 $392.729,000 $424,500,000 $229,969.000 $267,213,000 $186.480,000 5,081 4.837 5,501 5.269 4.984 4912 202 158 136 91 75 87 304 218 110 132 78 104 618 419 1152 1931 1306 746 1,044 526 297 129 56 85 227 38 0 6 12 0 866 612 331 207 152 148 1.502 963 583 299 178 218 1,607 1,404 1,121 908 790 1033 5,246 3,543 2,332 1,549 1,188 1,484 1,901 687 2,920 3,630 3,984 4392 909 296 351 346 214 263 1.190 1,444 1.519 1.535 1,663 1805 141 76 117 97 125 143 1,611 2,032 2,142 3,130 2,340 2252 42,050 44.981 66,124 81,124 89,060 92484 55,002 99,659 117,738 215,843 259,711 263064 5,550 5,325 3,675 3,684 3,547 3822 745 260 841 1,036 772 1881 1.891 1.583 1,951 2,342 2.723 4280 14.305 12,955 14,013 15,739 20.326 1M3 3,481 4.192 3,332 2.583 3,131 3099 1,373 1,192 990 1,140 1.437 1512 4,668 7,809 8,109 11.053 8,795 8933 3.402 6,827 8.550 10.806 13,364 13092 38,934 40,548 40,516 39,150 43,779 45269 71.12 76�97 81-09 76.13 71.59 7070 1.063 534 338 100 255 208 533,726 124.821 342,502 390,097 6,200 27,526 CITY � LA (XJNTA TABLE 21 t;apW Aaact sta� by Furcuon Last Ten Fiscal Years Fncal Year Fiscal Yaw Fiscal Yea, Fiscal Y.. Fiscal Year Fiscal Y. F.CW Year l'iscal Year Fiscal Yam fescal Year Ending Ervfng Enfing Encling FM-V E.*g En,Jing Encting Ending Ending "a W Jurw 30 jurem junem 1" 30 June 30 June 30 J. 30 J�ne W June 30 2002 2003 2004 2005 2006 —2ml M18 2009 2010 2011 Public works: Streets (Mae.) 118.40 1 18M 118.40 118.40 118AO im 127 127 127 127 Bdwpaft 22 22 22 22 22 22 22 22 22 22 Streedights' 73 85 85 261 M M5 Tralk signals 44 45.25 4525 49 so Traft'igm� 2 2.799 2,M5 2.895 2,899 2.909 2.919 addge$2 2 12 12 12 12 12 12 Parka Mal iscroadion. Paft 9 9 12 12 12 12 13 13 13 13 Park Acreage 40 40 207 207 207 207 2M 209 2118 218 Unclaveloped Park Acreage 40 40 40 40 40 40 Savior Center 1 1 1 1 1 1 M.. Loirmy GotfCounw: M..Qw go coursas Source: City of La Quinta In Fimal Year endM ZM sireart lights at wave incilluded for the ling turna. In Fiscal Yewencing 2oos t-afric signals, traffic signs, anci unclevetoped pa& acreage were includecl forthe firsttxne� 160 41111'so 000 LSE 040 CERTIFIED PUBM -ACCOUNTANTS • Brandon W Burrows, CPA • David E. Hale, CPA, CFF` A Protessimal CoToration • Donald G Slater. CPA • Richard K. Kikuchi, CPA • Susan F Matz, CPA • Shelly K. Jackley, CPA • Bryan S. Gruber, CPA September 27, 2011 To the Honorable Mayor and Members of the City Council City of La Quinta, California We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta (the City) for the year ended June 30, 2011, and have issued our report thereon dated September 27, M11. Professional standards require that we provide you with the following information related to our audit. Our Responsibilities Lin er U.S. Generally Accepted Auditing Standards and Govemment Auditing Stan Our responsibility, as described by professional standards, is to express opinions about whether the financial statements are fairly presented, in aft material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide assurance on the internal control over financial reporting. Significant deficiencies in such controls, if any, have been communicated to you by a separate letter. As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit. While our audit provides a reasonable basis for our opinion, it does not provide a legal determination on the City's compliance with those requirements. Again, instances of non-compliance with provisions of laws, regulation I s, contracts and grants noted by us, if any, have been communicated to you by a separate letter. Planned Scope and Timing of the Audit We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we obtain reasonable father than absolute assurance about whetherlthe financial statements are free of material misstatement, whether caused by error or fraud. Accordingly, a material misstatement may remain undetected. Also, an audit is not designed to detect error or fraud that is immaterial to the financial statements. Lance, Soil & Longhard, LLP 203 North Brea Boulevard -Stute 203 - Brea, CA 92821 -TEL: 714 672�0022 Taxi 714,672,0331 www.lslcpas.com 41185 Golden Gate Circle - Suite 103 - Murriela, CA 92562 - TEL: 951 304.2728 Fax: 951.304.3940 IF "W000n ct-R—wito -Put,., Honorable Mayor and Members of City Council City of La Quinta Page 2 During the audit, we obtained an understanding of the entity and its environment, including its internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. An audit is not designed to provide assurance on internal control or to identify significaint deficiencies. Significant deficiencies in such controls, if any, have been communicated to you by a separate letter. Our audit has been performed in phases which consisted of interim contact(s) during the fiscal year and a year-end contact which occurred after the fiscal year-end. Had we noted any significant matters related to the financial statement audit that were, in our professional judgment, relevant to the responsibilities of those charged with governance in overseeing the financial reporting process, we would have communicated those in a separate letter. We did not note any such matters. Generally accepted auditing standards do not require us to design procedures for the purpose of identifying other matters to communicate with those charged with governance. Significant Accounting Policies Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the City are described in the notes to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended June 30, 2011. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period - Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. Where applicable, the City utilized accounting estimates for depreciation on City assets, amortization of bond related issuance costs, premiums/discounts and gains/losses on bond clefeasance and for reporting incurred but not reported amounts relating to the liability for claims and judgments. The methodology used during this audit is consistent with that of prior years. We evaluated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole. Financial Statements Disclosure Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The disclosures in the financial statements are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. V ACIEVOQ CERF11-ED FURIC ACCOUNTAMT-1 Honorable Mayor and Members of City Council City of La Quinta Page 3 Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identifi ed during the audit. other than those that are trivial, and communicate them to the appropriate level of management. These differences are described below in the audit difference evaluation form. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. Disagreements; with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are plea . disagreements arose during the course of our audit. sed to report that no such Management Representations We have requested certain representations from management that are included in the management representation letter dated September 27, 2011. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Communications Redevelopment Agency Compliance In July, 2011, the State Controller's Office released Guidelines for Compliance Audits of California Redevelopment Agencies, 2011. In accordance with Health and Safety Code Section 33080. 1, the Agency is required to submit an annual report to the governing body and the State Controller's Office by December 31 of each year. The annual report is required to contain the following information* a. Independent financial audit report b. Fiscal statement c. Blight report d- Loan report 06� 000 LSE 00 iERY-11ED IMUC ACCDU-NtAOIS Honorable Mayor and Members of City Council City of La Quinta Page 4 e. Property report f- List of the year the Agency expects various time limits to expire g. Other information the Agency believes is useful, including, but not limited to, the number of jobs created and lost in the previous fiscal year h. Housing and Community Development Report The only reports that have a prescribed format are the independent financial audit report and the Housing and Community Development Report, Based on our test of compliance, we believe the remaining components of the annual report have been satisfied through the submission of a combination of other reports. However, as a result of a recent audit of 18 redevelopment agencies by the State Controller's Office, findings were cited under this section of the Health & Safety Code. As a result, we recommend the Agency complete separate reports to more thoroughly document compliance with this section of the Health & Safety Code. This information is intended solely for the use of the members of the City Council or individual(s) charged with governance and management of the City, and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, Audit Difference Evaluation Form Name of Governmental Unit: City of La Quinta Date of Combined Balance Sheet: June 30, 2011 Opinion Unit, Fund Type or Fund: All Funds Instructions This form should be used to accumulate known audit differences by opinion unit, fund type or fund detected by non -sampling substantive tests (including differences in accounting estimates) and projected audit differences from substantive tests that used sampling. The current year effect of prior year uncorrected audit differences should also be summarized at the bottom of the form. This form should not include normal closing entries. At the end of the audit, the auditor should evaluate all uncorrected audit differences individually and in the aggregate, in the context of individual opinion and conclude whether they materially misstate the financial statement of an opinion unit. Thus, a separate Audit Difference Evaluation Form should be maintained for each opinion unit, fund type or fund. Description (Nature) of Audit Difference City GASB 31 Adjustment for LAI F and Bank of New York investments Total Workpaper Cause Ref. Amount The journal entry to make this adjustment goes across all funds and the client has D.2 decided to make the entry. $ (269,103) (269,103) Less Audit Adjustments Subsequently Booked Net Unadjusted Audit Differences - this year Effect of Net Unadjusted Audit Difference - prior year Net Audit Differences 269,103 CERTIFIED PUBLIC ACCOUNTANTS Brandon W. Burrows. CPA David E Hate, CPA, CFF A Protessimal Comorgion Donald G Slater. CPA Richard K. Kikuchi, CPA Susan F Matz, CPA • Shelly K Jackley, CPA • Bryan S Gruber, CPA REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDlTING STANDARDS To the Honorable Mayor and Members of the City Council City of La Quinta, California We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta, California, (the City) as of and for the year ended June 30, 2011, which collectively comprise the City's basic financial statements and have issued our report thereon dated September 27, 2011. 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 Gouernment Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting- Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the -normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis- A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Lances SoR & Lunghard, LLP 203 North Brea Boulevard - Suite 203 , Brea. CA 92821 - TEL: 714.672 0022 Fax 714 672.0331 larew.lslcpas.com 41185 Golden Gate Circle - Suite 103 - Murrieta. CA 92562 - TEL: 951,304 2728 Fax 951.304,3940 IF Clwss*- CWTIFIFU PUBLIC -ACCOUNTAnt-I To the Honorable Mayor and Members of the City Council City of La Quinta, California Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management, the audit committee, the City Council, federal awarding agencies and pass -through entities, and is not intended to be and should not be used by anyone other than these specified parties. Brea, California September 27, 2011 INVESTMENT ADVISORY BOARD Correspondence & Written Material Item B Meeting Date: December 14, 2011 ITEM TITLE: Month End Cash Report - November, 2011 BACKGROUND: This cash report is not a complete Treasury Report (exclude petty cash, deferred compensation and fiscal agent balances), but would report in a timely fashion selected cash balances. RECOMMENDATION: Information item only. Jso--h—nM. �Falconer, Finance Director 9 Ct ,0 0 Ci 10 M 2. Co a N 14 — — — 82 .0 W ol 0 V7 0 C6 m IQ 0 0 0 LM 0 L6 cm; 0 N 0 0 N N o ,q FZ -OR cq w 0 C6 CP f�4 E E 2 2 o o 0 z a a, 0 E I 16 ma 3: 0 20 0 SE 16 F, 0 E 0 00 a t� 0 0 gs Bill Lockyer, State Treasurer Inside the State Treasurer's Office 14 Local Agency Investment Fund (LAIF) PMIA Performance Report 11/16/2011 0.38 0.40 .4i 219 11/17/2011 0.38 0.40 235 11/18/2011 0.38 0.40 236 11/19/2011 0.38 0.40 238 11120/2011 0.381 0.40 2381 11/21/2011 0.38 0.40 233 11/22/2011 0.38 0.40 233 11/2312011 0.38 0.40 235 11/24/2011 0.38 0.39 239 11/25/2011 0.38 0.39 235 11/26/2011 0.38 0.39 235 11/27120111 038 0 39! 235 011 "/kj 0!381 H9 236 �11/28 1-1/291111 0.381 0.391 Taily yield does not reflect capital gains or losses Corporate Bonc 0.00% Commercial Paper 5.93% Time Deposits 6.17% CDs/BlN 9.96% LAIF Performance Report Quarter ending 09/3012011 Apportionment Rate: Earnings Ratio: Fair Value Factor: Daily: Quarter To Date: Average Life: 0.38% .00001042339247730 1.001847592 0.37% 0.39% 236 PMIA Average Monthly Effective Yields OCT 2011 0,385% SEP 2011 0.378% AUG 2011 0.408% Pooled Money Investment Account Portfolio Composition $67.9 Billion 10/31/11 Loans Agencies 8.27% Mortgages 0.62% Treasuries 51.06% 3 r"LUUMIL D111 AUCUun r,,gesuits Page I ot I TreasuryDirect 11bat' � I—Iaralia,' � Arra—clenilral-, U-11 & R1�111 1-arel IP"'c" nPla - "Iblit b,11 Arvie" V11.1t, Recent Bill Auction Results Se ... ray Iia, . Melittle, ol.,a ... I royearob, Price leren otbe D.re R.I. ev, fury, , Per $100 CUSEP t WEEK 12 01 2011 12 29 2011 0.020 0,020 99.S984�4 91?7953Z2 13 WEEK 12 01-2011 Co-.L 21312 0,030 0,031 99,992417 912795Z46 26 WEEK 22� 05-3� NO 0.070 0 071 99 96,611 9127953SS a WEEK �2 201 1- 5-20 12-2 2011 0 on 0 020 99,996500 9127953YS 13 WEE I LI-25-211 02-23-2012 0,015 0,015 99,996250 91279SZ38 i 2E WEE K 1 -25-2 0:; 05-2,1-2012 0,050 0 35L 99 974861 912795SP2 1 4 WEEK It 17 2011 12-15-2011 0,005 0.005 99,999611 9127952T7 i 13-WEEK 201� 02 0,00100 0,010 99 "7472 9127ieMil i 26 WEEK 11-17 1 7 201 �6-20�2 a S- 7-20 2 0 4 0,041 99 979778 91279bSKI '2 W EEK I 1 1 7 20 11 11-15-2012 a too 0,102 99898869 9IMS511 4 _W ELK I L _L P _ 2011 12-06-2011 0 000 0,000 100.000001, 9121953X? 13-WEEK 11 to 2011 02 09 2012 0 005 01005 99.998736 9127ai 26-WEEK 11-10-2011 05 10 2012 0 035 01036 99.982306 9127955M9 j 4-WEEK 11-03 2011 LZ-01-201L 0 005 0,005 99.999611 9127953VI I 13-WEEK 11-C3-20II 02-02-2012 0 010 0.010 99.997472 912795YSS i 26-atEEK 11-03 2011 05 03 2012 0 055 0�056 99,972194 �1279531,9 I 4-WEEK 10-27 2011 11-25-2011 0 005 0 005 99.99959, 4127953U3 13 WEEK 10 2y 201t 01-26-2012 0,020 c U20 99.994a44 91279SY70 26 WEEK 10-27 2011 re 26 1012 t 061 99 969667 �127"IKI 4 WEEK 10-20 2011 11 17 2.11 0 015 0 015 bo "PK13 iii?,952ts 13 WEEK 10-20 2011 01 19 2012 c 030 0,031 99 992417 917795Y62 2r-.EFK 10 20 201, 01-19-2"2 0 065 0 ra,, aq,967139 912M516 52 WEEK 10-20 2011 10-18-2017 0 120 0 122 94 Mite 9127v551,2 4 WEEK 10-13-2011 11-10-2011 0,010 O�no 9127953T6 13-WEEK 10 13 2011 01 12-2012 0,015 0 015 99A96208 9127952Y6 26-WEEK 10 13 2011 04-12-2012 0 045 0 046 99A77250 q127155HO 5 DAY 10 12 2GlL 10 17-2011 0,000 c 000 100,000000 912796AP4 4-WEEK 10-06-2011 11 03 2011 yoroo a 000 100.000000 9127953RO 13-WEEK to 06-2011 01-OS-2012 0 020 0,020 99 994944 9127954A6 26-MIKC 10-06-2011 04 05 2012 0 060 01061 99,969667 9127953112 4 WEEK 09-29-2011 10 27-2011 0 000 0.000 100,000000 9127953Q2 13-WEEK 09 29 2011 12-29-2011 0,020 o020 99A9494cI 9127953Z2 26-WEEK 09-29-2011 03 29 20t2 0.035 0 036 99.982306 9127955F4 4-WEEK 09 22-2011 10-20-201L 0.000 0 000 100,000000 9127952K6 13 WEEK 09-22-2011 12-22-2011 0,010 0 ate 99AM12 9127953Y5 26-MEK 09 22 2011 03-22-2012 0.030 0 031 99 9MB33 912195517 52-WEE� 09-22-2011 09-20 2012 0,090 0,092 99 909000 91?7a5511 4-WEEK 09 15 2011 ID-13-201 1 0 con 01000 100.000000 9121953Pa 13 WEEK 09-15 20il 12-15-2011 0 111 0,010 99 997472 912711 26-WEEK 09-15 2011 03-15 2012 0 050 0,051 99,974722 912n55D9 Effective with the 11/2/98 auction, all bills are auctioned using the single-poced oraethod. Frorday, of Art I law & Cuidance I Privacy $ Legal NOAL05 I Wetere lerrie & C(laotions I tcreSM1,11ity I Dat,) QPaly 11 It, Deparryeat bytte Tba��ari SUItai Pf the VabfiC Debt http://www.treasurydirect.gov/RI/OFBills 12/1/2011 4 JUVvls,�IIL INV Ili "VIIUq CUIUL I 1Y C ui1tUfsLIUI1 �Cbli Fage i ot i TreasuryDirect lato � III'llo".111 I A511111,11111olf1c, T.ty & coluft, � Lalull au-11 0,1[. , Rect,fut Nota, urd 1: '�, Accition H,su It, Recent Note, Bond, and TIPS Auction Results Interest Yield Prite Be, rof T.— Type Paul III % % Per $100 main,, I Des OUSID 2 YEAR NOTE 11 30-2011 II-W 7013 0 250 0 280 99RII0209 91282SRSI 5 WAR NOTE 11 30-2011 11-30-2016 0 875 0 937 99,6978uC 91282BRU6 7-YEAR NOTE 11 30-2011 11-30-2018 1,175 1 �15 99,734313 912828RTR 9 YEAR 8 MONTH TIES 11-30-2011 07 15 2021 0 625 0,099 105,733646 912828QV5 3 YEAR NOTE 11-15 2011 11-15-2014 0,375 0.379 99,988079 9I2B28RQ5 To-W&M NOTE 11 15-2011 11-15-2021 2,000 2,030 99,729725 912828RR3 30 WAR WIND 11-15-2011 11 15 2041 3.125 3�199 98 579514 91281ai 2 WAR NOTE 10 31 2011 10-31-2013 1 0 281 99,938217 A21Y?.NN2 5 WAR NOTE 10 31 2011 10 31 2016 1,000 1 055 9A 732913 912626RM4 7 YEAR NOTE 10-31-2011 10-31 2018 1.750 1,791 99 7313w 912828RIT '29 YEAR 4-MONTH TIES 10-31-2011 02 15-2041 2,125 0999 11 gol 3-YEAR NOTE 10 17-2011 YG-I� 2014 0.500 0,544 99869416 912828RL6 9-WAR 10-MDNTII NOTE TO 17 2011 08-1�-2021 2 125 2,271 98,717572 91282ORC6 29 YEAR 10-YONTH BOND 10 17 2011 08-IN-2041 �'7�0 3,120 tL12 166894 912610QSG 2-W.N NOTI, 09-30-2011 09-30 2013 0 125 0,2d) t9.15217n 912328RAR 5 YEAR NOIE 09-30 2011 09 30 2016 1.000 1015 19,927052 91282SR11 �-Wnli NOIE 09-30 2011 09-30-2018 1.315 1496 99J98680 912828RH9 9 YEAR 10 MONTH Ins 09 30 2011 07 15-2021 0.625 0 078 105.582684 912826TV5 3-YFAR NOTE 09 15 2011 09 15 2014 0,250 0 334 99 749466 91281 9-YEAR 11 MONTH NOTE 09 15 2011 08 15 2021 2,125 2 000 101 117812 a17828RC6 2�IEAN 11 MONTH BOND 09-15-2011 08 15 2041 3 750 3,310 108 310327 qlmlicl�ff 2-YBAN NOTE 08-31-2011 08-31 �013 0 125 0,222 90 D)i 912828RDa ii YEAR 8-MONTH Q Fic 08 31 201T 04-15 2016 0 Us 0 625 106,852530 qla.I.Q05 i 5-YEAR NOTE 08 31-2011 111 1,000 1,029 99 8511 E12828RFI 7 YEAR NOTE 08 31 2011 08 31 2018 1500 L',80 99 471828 912flaRE2 3-YEAR 140TE 08 15 2011 08 15 2014 0,500 0 boo 100,000000 912828RBS I to -WAR NOTE 08 15 2011 08 15-2021 2,125 2,140 99 865607 912828RC6 t 30 YEAR WIND 09 15 2011 08 15 2041 3y5o 3 750 100 000000 912810QSD 2 YEAR NOTE 08 01 2011 0 31-2013 0 375 0417 99.91l 1262uQW? 5-YIOUR NOTE 01 07 31 2016 1 500 1 580 99 617012 912.28Q.1 7-YEAR NOTE 08-DI-2011 07-31-2018 2 250 2 280 99 606914 qI'8'8Q'q IN -YEAR TIES 07-29-2011 07-IS 2021 &1,25 0 639 100.076731 ol 3 YEAR NOTE 07 15 2011 D7-15-2014 0,625 0,670 99 666569 912828QU7 a -WAR 10-MONTH NOTE 07-15-2011 05-15-2021 3A25 2.918 101 753719 912828QN3 29 YEAR 10-Ml BOND 07 15 2011 05-15-2041 4,375 4.198 102 985551 912810QQ4 2 YEAR NOTE 06 30-2011 06-3n-2013 0 375 0,395 99.960191 912826RAO 5-WAR NOTE 06-10 �011 06 30 201A T 500 1 615 91 912828QR4 7 YEAR NOTE On-30-2011 06-30-2018 2 375 2 430 91 912828QTC '29 YEAR 8 MONTH ITYS 06-30-2011 02-15 2041 2 125 1 1EA 111 1198711 912810Qr6 3-YEAR NOTE 06-15-2011 06-IS-20ttt 0 750 0,765 9q,955596 91282BQ52 -Denotes TIPS bond; all other TIPS without asterisks are notes I'mirdano of Inforroulan Act I Law-& Gull I Privacy & Legal Nii I WIt,lit" I'loull S Courtions I Accessibility I Dat, Quality IJ S, Daii ofthe Trer,iilry, Bureau at He Public Daft http://www.treasurydirect.gov/RI/0FNtebnd 12/1/2011 5 rnmer version - ijoara oi uovemors or tne r eaerai Keserve �ystern Fage I ot J Commercial Paper Summary Rates Volume Statistics Outstanding Year-end Maturity Distribution About Announcements Commercial Paper Rates and Outstanding Summary Derived from data supplied by The Depository Trust & Clearing Gorporation ---------------------- ...... ...... ------ - Data as of November 30, 2011 Posted Decem ber 1, 2011 The commercial paper release will usually be posted daily at 9:45 a.m. However, the Federal Reserve Board makes no guarantee regarding the timing of the daily posting. This policy is subject to change at any time without notice. Rates AA nonfinancial A2/P2 nonfinancial Period 1- 1- 7- is- 30- 60- 90- 7- is- 30- 60- 90- day day day day day day day day day day day day Nov. 24 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 0.34 0.36 n.a. n.a. n.a. n.a. n.a. Nov. 25 0.06 0.05 0.08 n.a. n.a. n.a. 0.39 0.40 n.a. n.a. n.a. Nov. 0.07 0.06 0.08 n.a. n.a. n. a. 0.42 0.38 0.38 0.53 0.68 28 0.35 Nov. 0.06 0.06 0.08 0.08 0.12 n.a. 0.39 0.40 0.39 0.52 n.a. 29 0.35 Nov. 0.07 0.05 0.08 0.09 0.12 0.16 0.37 0.34 0.46 0.60 0.74 30 Note: n.a. indicates that trade data was insufficient to support calculation of the particular rate. AA financial AA asset -backed Period 1- 1- 7- is- 30- 60- 90- 7- is- 30- 60- 90- day day day day day day day day day day day day Nov. 24 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 0.66 n.a. n.a. n.a. n.a. n.a. Nov. 0.06 0.05 0.05 0.03 0.07 0.17 0.22 0.37 0.25 0.30 0.27 25 0.53 Nov. 0.05 0.12 0.06 0.05 0.23 0.24 0.67 0.65 0.30 0.32 0.37 28 0.53 1 Nov. 0.04 0.06 0.06 0.08 0.10 0.20 0.61 0.37 0.45 0.30 0.38 29 0.56 Nov. 0.03 0.05 0.05 0.08 0.12 0.18 0.72 0.63 0.56 0.34 0.28 30 http://www.federalreserve.gov/Releases/CP/ 12/1/2011 6 rnmer version - t3oara or uovernors oi UIC r CUUfal BCSCFVC OYSLUIR rage / 01 .3 Note: n.a. indicates that trade data was insufficient to support calculation of the particular rate. Outstanding Levels Seasonally adjusted Billions of dollars Period Total Nonfinancial Financial Asset- backed Other Total Domestic Foreign Total Domestic Foreign Monthly -end levels 2011-July 1,138.3 169.0 134.7 34.3 556.5 332.2 224.3 412.9 .0 Aug. 1,091.1 169.9 137.4 32.5 557.5 333.5 224.0 363.7 .0 Sept. 1,028.5 167.1 130.7 36.4 513.8 320.4 193.4 347.6 .0 Oct. 1,019.0 186.7 147.0 39.6 490.8 299.1 191.8 341.5 .0 Nov. 993.3 187.6 149.3 38.2 479.3 292.5 186.8 326.3 .0 Weekly (Wednesday) levels Nov. 2 979.7 195.6 153.0 42.7 468.7 285.9 182.8 315.4 .0 Nov. 9 967.7 196.4 155.0 41.5 450.2 271.0 179.2 321.1 .0 Nov. 16 999.6 198.7 156.9 41.8 475.1 299.8 175.3 325.9 .0 Nov. 23 999.7 204.1 162.7 41.3 476.8 303.7 173.1 318. Nov. 30 1 1,002.1 1 199.1 159.1 40.0 482.1 306.7 175.4 320.8 .0 Not seasonally adjusted Billions of dollars Period Total Nonfinancial Financial Asset- backed Other T Total otal om Domestic Foreign Total Domestic Foreign Monthly -end levels 2011-July 1,056.8 174.5 140.7 33.8 518.5 317.8 200.7 363.8 .0- Aug. 1,049.6 175.5 144.1 31.4 516.3 315.0 201.3 357.8 .0 Sept. 1,004.4 158.6 124.7 34.0 495.6 309.0 186.6 350.2 .0 Oct. 1,027.1 193.8 159.4 34.4 480.6 291.3 189.3 352.7 .0 Nov. 1 1,006.5 1 187.0 155.6 31.4 471.4 289.1 182.2 348.1 .0 Weekly (Wednesday) levels Nov.2 1,026.4 195.1 160.6 34.5 - 481.0 - 293.6 =187 4=350.4 .0 Nov. 9 1,016.9 190.2 157.4 32.8 478.1 294.0 184.1 348.7 .0 Nov.16 1,031.4 199.7 165.7 34.0 480.8 297.5 183.3 350.8 .0 Nov.23 1,025.8 203.2 170.9 32.3 480.1 295.9 184.2 342.5 .0 Nov.30 1,006.5 187.0 155.6 31.4 471.4 289.1 182.2 348.1 .0 7 http://www.federaireserve.gov/Releases/CP/ 12/1/2011 Filliccl rage � oij Retum to top 8 http://www.federaireserve.gov/Releases/CP/ 12/l/2011 rnmer version - Douruoi uovui11u1Nu1 uavruuvial --- oy-111 . Vv . �. , Selected Interest Rates (Daily) - H. 15 Current Release Release Dates Daily Update Historical Data About Announcements Daily date -------------------- - ------------------------ ------- _Vp._1 ---------------- -------------------- Release Date: November 30, 2011 The weekly release is posted on Monday. Daily updates of the weekly release are posted Tuesday through Friday on this site. If Monday is a holiday, the weekly release will be posted on Tuesday after the holiday and the daily update will not be posted on that Tuesday. November 30, 2011 Selected Interest Rates Yields in percentper annum Instruments 2011 Nov 28 2011 Nov 29 Federal funds (effective) 1 23 0.08 0.08 Commercia Paper 3456 Nonfinancial 1-month n.a. 0.08 2-month n.a. 0.12 3-month n.a. n.a. Financial 1-month 0.05 0.08 2-month 0.23 0.10 3-month 0.24 0.20 CDs (secondary market) 3 7 1-month 0.21 0.22 3-month 0.44 0.44 6-month 0.64 0.63 Eurodollar deposits (London) 38 1-month 0.35 0.35 3-month 0.49 0.49 6-month 0.71 0.71 Bank prime loan 239 3.25 3.25 9 http://www.federalreserve.gov/Releases/H I 5/update/ 12/1/2011 Y111ILVI V UlblUll - �UMU Ul "UVU111U1b V1 ULU FUUCIal �UbCIVU OYMCIR rage z 01,+ Discount window primary credit 2 10 0.75 0.75 U.S. government securities Treasury bills (secondary market) 34 4-week 0.02 0.02 3-month 0.03 0.02 6-month 0.07 0.05 1-year 0.12 0.13 Treasury constant maturities Nominal 11 1-month 0.02 0.02 3-month 0.03 0.02 6-month 0.07 0.05 1-year 0.13 0.14 2-year 0.26 0.27 3-year 0.39 0.40 5-year 0.91 0.93 7-year 1.44 1.48 10-year 1.97 2.00 20-year 2.63 2.66 30-year 2.93 2.96 Inflation indexed 12 5-year -0.75 -0.77 7-year -0.39 -0.41 10-year 0.02 0.01 20-year 0.55 0.54 30-year 0.75 0.75 Inflation -indexed long-term average 13 0.50 0.50 Interest rate swaps 14 1-year 0.76 0.74 2-year 0.80 0.79 3-year 0.92 0.90 4-year 1.14 1.12 5-year 1.39 1.38 7-year 1.82 1.82 10-year 2.21 2.22 10 http://www.federaireserve.gov/Releases/H I 5/update/ 12/1/2011 . ....... I - �. �. I..,. 1�1.. �� Oym�111 rage -1 01 30-year 2.70 2.70 Corporate bonds Moody's seasoned Aaa 3.89 3.96 Sea 5.16 5.22 State & local bonds 16 Conventional mortgages 17 n.a. Not available. Footnotes 1. The daily effective federal funds rate is a weighted average of rates on brokered trades. 2. Weekly figures are averages of 7 calendar days ending on Wednesday of the current week; monthly figures include. each calendar day in the month. 3. Annualized using a 360-day year or bank interest. 4. On a discount basis. 5. Interest rates interpolated from data on certain commercial paper trades settled by The Depository Trust Company. The trades represent sales of commercial paper by dealers or direct issuers to investors (that is, the offer side). The 1, 2, and 3-month rates are equivalent to the 30, 60, and 90-day dates reported on the Board's Commercial Paper Web page (www.feder,ilreserve.gov/rele�ises!lcp,'). 6. Financial paper that is insured by the FDIC's Temporary Liquidity Guarantee Program is not excluded from relevant indexes, nor is any financial or nonfinancial commercial paper that may be directly or indirectly affected by one or more of the Federal Reserve's liquidity facilities. Thus the rates published after September 19, 2008, likely reflect the direct or indirect effects of the new temporary programs and, accordingly, likely are not comparable for some purposes to rates published prior to that period. 7. An average of dealer bid rates on nationally traded certificates of deposit. 8. Source: Bloomberg and CTRB ICAP Fixed Income & Money Market Products. 9. Rate posted by a majority, of top 25 (by assets in domestic offices) insured U.S.-chartered commercial banks. Prime is one of several base rates used by banks to price short-term business loans. 10. The rate charged for discounts made and advances extended under the Federal Reserve's primary credit discount window program, which became effective January 9, 2003. This rate replaces that for adjustment credit, which was discontinued after January 8, 2003. For further information, see www,lederilresen e.gov/boar(idocs/press./bcreg/2002,,'20021 03 12/&I'lult.lum. The rate reported is that for the Federal Reserve Bank of New York. Historical series for the rate on adjustment credit as well as the rate on primary credit are available at wxviv.federaireserve.�,,Ovireleases/'Ii I 5idata.huti. 11 http://www.federalreserve.gov/Releases/111 5/update/ 12/1/2011 iiiuL�i rage + Or 4 11. Yields on actively traded non -inflation -indexed issues adjusted to constant maturities. The 30-year Treasury constant maturity series was discontinued on February 18, 2002, and reintroduced on February 9, 2006. From February 18, 2002, to February 9, 2006, the U.S. Treasury published a factor for adjusting the daily nominal 20-year constant maturity in order to estimate a 30-year nominal rate. The historical adjustment factor can be found at kvww.treastii�i.gQN,/resource-ceiiier,,(I�ita-ch�irt-ceiiter/interest-r,,ites,/. Source: U.S. Treasury. 12. Yields on Treasury inflation protected securities (TIPS) adjusted to constant maturities. Source: U.S. Treasury. Additional information on both nominal and inflation -indexed yields may be found at www.tre�tii�;.-,ov,�resotticc-ccnter,data-cliart- centerlinterest-rates/. 13. Based on the unweighted average bid yields for all TIPS with remaining terms to maturity of more than 10 years. 14. International Swaps and Derivatives Association (ISDA(K) mid -market par swap rates. Rates are for a Fixed Rate Payer in return for receiving three month LIBOR, and are based on rates collected at 11:00 a.m. Eastern time by Garban Intercapital Pic and published on Reuters Page ISDAFIX91. ISDAFIX is a registered service mark of ISDA. Source: Reuters Limited. 15. Moody's Am rates through December 6, 2001, are averages of Aaa utility and Aaa industrial bond rates. As of December 7, 2001, these rates are averages of Aaa industrial bonds only. 16. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Thursday quotations. 17. Contract interest rates on commitments for fixed-rate first mortgages. Source: Primary Mortgage Market SurveyS data provided by Freddie Mac. Note: Weekly and monthly figures on this release, as well as annual figures available on the Board's historical H. 15 web site (see below), are averages of business days unless otherwise noted. Current and historical H.15 data are available on the Federal Reserve Board's web site (www.1edei-�ili-eserve.gov/). For information about individual copies or subscriptions, contact Publications Services at the Federal Reserve Board (phone 202-452-3244, fax 202-728-5886). Description of the Treasury Nominal and Inflation -Indexed Constant Maturity Series Yields on Treasury nominal securities at"constant maturity" are interpolated by the U.S. Treasury from the daily yield curve for non -inflation -indexed Treasury securities. This curve, which relates the yield on a security to its time to maturity, is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. These market yields are calculated from composites of quotations obtained by the Federal Reserve Bank of New York. The constant maturity yield values are read from the yield curve at fixed maturities, currently 1, 3, and 6 months and 1, 2, 3, 5, 7, 10, 20, and 30 years. This method provides a yield for a I 0-year maturity, for example, even if no outstanding security has exactly 10 years remaining to maturity. Similarly, yields on inflation -indexed securities at "constant maturity" are interpolated from the daily yield curve for Treasury inflation protected securities in the over-the-counter market. The inflation -indexed constant maturity yields are read from this yield curve at fixed maturities, currently 5, 7, 10, and 20 years. 12 http://www.federalreserve.gov/Releases/H I 5/update/ 12/1/2011 City of La Quire Cash Fl. Budget to Actual October 31, 2011 Cash Basis Budget Actual Accrual I Adjusted! Total Variance Account 10111 10/11 Adjustment 10/11 Over(Under) Notes Property TaW Tax Increment - 248,644 248,644 248,644 Received Supplemental tax Transient Occupancy Tax 148,706 207,518 207,518 58,512 Sales Tax 318,444 274,800 274,800 (43,644) SilverRock Golf 115.038 45,939 45939 (69099) Library - - - Did nor receive $641, in Other re 4087.606 4,021,207 4,021,207 (65,399) Dri Fees Revenues 4,669,7N 4,798,108 4,71118,1108 1 12111,314 Expenditures Salaries & Fringe Benefits 828.Ni 727,114 727114 (101,827) Community Svm tied annual $1251, grant b Ans Other expenditures 3,694.578 3.792,844 _3.792,844 98,266 Foundemn 4,523.519 4,519,958 4,519,958 (3,561) Subtotal Did not spend $1253, for Economic Development in Redevelopment Agency 203.890 60.701 60,701 2011 PA 2 Box! Frnd Debt Service (Principallinteresi Through) 565,435 565.435 565,435 17 626,136 626,136 Sui i�2� 113 1 31 913,131 913.131 Capital Protects Total Expenditures 6,205,975 6,059,225 6,059,225 (146.71fil Not Revenues/Expenditures 41,531 J11,261,1111711 (1,211 (18,435)1 NOTE 1 Expenditures are budgeted at 8.34% per month Difference between actual and budget (Unders,pent) DEPARTMENT Overspent Notes GENERAL GOVERNMENT (131,353) Leislave underoudget $30k Ewromrc Development underoudget $16kManagerment Svcs underibudget Wk CITY CLERK (8,733) COMMUNITY SERVICES 33,562 FINANCE (29,535) BUILDING & SAFETY 458,407 Ammuni rent payment S56!k PUBLIC SAFETY (403,936) Fire underbudges $look; Police underoudges $229k PLANNING (38,499) PUBLIC WORKS: (105,518) Streen Manteramm underbudgei t225,585) SUBTOTAL - GENERAL FUND Library Gas Tax Federal Assistance JAG Grant $test (Cops) Revenue CMAQ Lighting & Landscaping RCTC Development Agreement AB 939 (3,112) Quimby Infrastructure Proposition I B South Coast Air Ousity, (3,354) Transportation Parts & Recreation Civic Center Library Development Community Center Street Facility Park Facility Fire Protection Arts in Public Places (10.008) Interest Allocation Equipment Replacement (34,283) Information Technology (18,765) Park Maintenani Facility (40.218) Silvei Golf i10,15D �eedlrg m..e SilverRoc, Reserve - LQ Public Safety Officer (167) Housing Authonty 18,720 Finance Authority (967) Supplemental Pension Plan Capital Improvement Total 19-0 7-5-9-01) 13 INVESTMENT ADVISORY BOARD Meeting Date: December 14, 2011 TITLE: Pooled Money Investment Board Report for September 2011 BACKGROUND: Correspondence & Written Material Item C The Pooled Money Investment Board Report for September 2011 is included in the agenda packet. RECOMMENDATION: Receive & File krk,m +d,,, (_ �John Director POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF OCTOBER 2011 WITH OCTOBER 2010 (DOLLARS IN THOUSANDS) I_OCTOBE L OCTOBER 20170 Average Daily Portfolio $ 63,739,140 $ 64,924,891 $ -1,185,761 Accrued Earnings $ 20,806 $ 26,468 $ -6,663 Effective Yield 0.386 % 0.480% -0.095% Average Life -Month End (in Days) 229 191 +38 Total Security Transactions Amount Number $ 17,336,997 $ 36,267,908 $ -17,920,911 348 720 -372 Total Time Deposit Transactions Amount $ 3,863,800 $ 3,770,000 $ +93,800 Number 163 ISO +3 Average Workday Investment Activity $ 1,060,040 $ 1,858,472 $ -798,432 Prescribed Demand Account Balances For Services $ 1,768,701 $ 1,643,886 $ +214,816 I BILL LOCKYER TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) TYPE OF SECURITY Government Bills Bonds Notes Strips Total Government Federal Agency Debentures Certificates of Deposit Bank Notes Bankers' Acceptances Repurchases Federal Agency Discount Notes Time Deposits GNMAs Commercial Paper FHLMC/RemIcs Corporate Bonds AB 55 Loans GF Loans NOW Accounts Other Reversed Repurchases Total (All Types) October 31, 2011 DIFFERENCE IN PERCENT OF PERCENT OF PORTFOLIO FROM AMOUN PORTFOLIO PRIOR MONTH $ 21,802,312 32.13 -2.32 0 0.00 12,845,889 18.93 +1.03 0 0.00 0 $ 34,648,201 51.06 -1.29 $ 1,417,680 2.09 -0.79 6,760,015 9.96 -0.55 0 0.00 0 0 0.00 0 0 0.00 0 3,892,817 5.74 -0.82 4,188,140 6.17 -0.01 33 0.00 0 4,023,312 5.93 -0.26 418,333 0.62 -0.03 0 0.00 0 409,568 0.60 -0.08 11,801,300 17.39 +3.84 0 0.00 0 300,000 0.44 -0.01 0 0.00 0 67,859,399 100.00 INVESTMENT ACTIVITY OCTOBER 2011 NUMBER AMOUN Pooled Money 348 $ 17,336,997 Other 4 32,382 Time Deposits 153 3,863,800 Totals 605 $ 21,233,179 PMIA Monthly Average Effective Yield 0.385 Year to Date Yield Last Day of Month 0.388 SEPTEMBER 2011 NUMBER AMOUNT 395 $ 19,653,209 17 $ 427,035 112 $ 2,488,000 624 $ 22,568,244 0.378 0.389 Pooled Money Investment Account Portfolio Composition $67.9 Billion 10/31/11 Corporate Bonc 0.00% Commercial Pape 5.93% Time Deposits 6.17% CDs/B 9.960, Loans Agencies 8.27% Mortgages 0.62% Treasuries 51,06% INVESTMENT ADVISORY BOARD Correspondence & Written Material Item D Meeting Date: December 14, 2011 ITEM TITLE: November 1, 2011 Joint Meeting Minutes with the City Council BACKGROUND: The minutes from the joint meeting with the City Council were approved at the November 15, 2011 City Council meeting. RECOMMENDATION: Information item only. John M. Falconer, Finance Director Joint Meeting Minutes 3 November 1, 2011 Council Member Evans. stated with the 30' Anniversary approaching, it would be beneficial to have the historical documents available on the website by that time. Mayor Adolph stated the City had established direct communication with the La Quinta Resort and Club regarding the Progress of the Morgan House clean-up, and asked if there has been any progress. Commission Member Radmon deferred the question to staff. Planning Director Johnson stated the La Quinta Resort and Club has done a better job of maintaining the property; explained staff has closed the files of the expansion project, but part of the effort in working with the developer was to address the Morgan House and a few additional locations and the significance to the City as a community to establish these properties has historical sites. Mayor Adolph recessed the City Council meeting and reconvened It to meet in joint session with the Investment Advisory Board. I-B. DISCUSSION OF MATTERS OF JOINT INTEREST TO THE MEMBERS OF THE CITY COUNCIL AND INVESTMENT ADVISORY BOARD. Chairperson Spirtos called the Investment Advisory Board meeting to order. PRESENT: Board Members Blum, Donais, Chairperson Spirtos ABSENT: Board Members Park, Mortenson In response to Mayor Adolph, Commission Member Donais stated that she has enjoyed the first few months serving on the commission. Commission Member Blum stated that he feels very comfortable with the information provided by staff and the Commission has a complete and thorough understanding of it. Council Member Henderson asked the commissioners if this experience is what they expected. The commissioners confirmed. COMndsdon Afwnbw Afortenson affivod. Chairperson Spirtos stated that Commission is what she expected, is learning the technical terms, and is thoroughly enjoying the commission; she further stated that she is proud of the financial stability of the City. Joint Meeting Minutes 4 November 1, 2011 Commission Member ' Mortenson. stated he enjoys his service on the Commission;, and, commended Finance' Director Falconer for his thorough presentation of information' ind:'pationce with the commission members. 'Council Member Evans asked Commission Member Donais if she finds lack of opportunities to invest City funds because of the current economy. Commission Member Blum replied by stating that those cities without finance commissions are in terrible financial status, and those with commissions are very smart to have them. Commission Member Mortensen stated the Commission's duty is to carry out the Investment Policy with the objectives of the Council and to focus on financial liquidity -and safety. Chairperson Spirtos stated the Commission has a fiduciary obligation to the citizens of La Quints. Council Member Franklin stated it is wonderful to have financial back- up; and further stated that in communicating with Finance Director Falconer, he does not make you. feel Inept with the questions asked. Council Member Evans asked Commission Member Donals if she has .been able to inform the residents as a result of serving on. the Commission. Commission Member Donals confirmed and stated that the recent corruption conducted by local agencies is a topic discussed, and is able to enlighten them on the financial stability of the City. Mayor Adolph asked if the commissioners often disagree when discussing topics. Chairperson Spirtos stated there are clarifications made during discussions, but no major disagreements. Commission Member Blum stated the leadership of Finance Director Falconer provides guidance and direction, and at times promotes questions for further clarification of the discussion held by the commissioners. Commission Member Mortenson added that a well -written investment policy statement eliminates disagreements. Chairperson SpIrtoe adjourned the Investment Advisory Board mesting. Mayor Adolph recessed the Cfty.Councg meeting and reconvened It to meet In joint session with the Community Services Commission.