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2022 11 09 FACt(4 V QW ( t(V - — GEM afnce, I)F-'SFKr Financial Advisory Commission agendas and staff reports are now available on the City s web page: www.iaauintaca.4ov FINANCIAL ADVISORY COMMISSION AGENDA CITY HALL COUNCIL CHAMBER 78495 Calle Tampico, La Quinta WEDNESDAY, NOVEMBER 9, 2022, AT 4:00 P.M. ****************************** Members of the public wanting to listen to this meeting may do so by tuning - in live via https://Iaguinta.12milesout.com/video/live. CALL TO ORDER Roll Call: Commissioners: Anderson, Way and Chair Mills PLEDGE OF ALLEGIANCE Batavick, Dorsey, Luettjohann, Mast, PUBLIC COMMENTS — INSTRUCTIONS Members of the public may address the Commission on any matter listed or not listed on the agenda as follows: WRITTEN PUBLIC COMMENTS can be provided either in -person during the meeting by submitting 15 copies to the Commission Secretary, it is requested that this takes place prior to the beginning of the meeting; or can be emailed in advance to ]Delgado@LaQuintaCA.gov, no later than 12:00 p.m., on the day of the meeting. Written public comments will be distributed to the Commission, made public, and will be incorporated into the public record of the meeting, but will not be read during the meeting unless, upon the request of the Chair, a brief summary of public comments is asked to be reported. FINANCIAL ADVISORY COMMISSION AGENDA Page 1 of 4 NOVEMBER 9, 2022 If written public comments are emailed, the email subject line must clearly state "Written Comments" and should include: 1) full name, 2) city of residence, and 3) subject matter. VERBAL PUBLIC COMMENTS can be provided in -person during the meeting by completing a 'Request to Speak" form and submitting it to the Commission Secretary; it is requested that this takes place prior to the beginning of the meeting. Please limit your comments to three (3) minutes (or approximately 350 words). Members of the public shall be called upon to speak by the Chair. In accordance with City Council Resolution No. 2022-028, a one-time additional speaker time donation of three (3) minutes per individual is permitted; please note that the member of the public donating time must: 1) submit this in writing to the Commission Secretary by completing a "Request to Speak" form noting the name of the person to whom time is being donated to, and 2) be present at the time the speaker provides verbal comments. Verbal public comments are defined as comments provided in the speakers' own voice and may not include video or sound recordings of the speaker or of other individuals or entities, unless permitted by the Chair. Public speakers may elect to use printed presentation materials to aid their comments; 15 copies of such printed materials shall be provided to the Commission Secretary to be disseminated to the Commission, made public, and incorporated into the public record of the meeting; it is requested that the printed materials are provided prior to the beginning of the meeting. There shall be no use of Chamber resources and technology to display visual or audible presentations during public comments, unless permitted by the Chair. All writings or documents, including but not limited to emails and attachments to emails, submitted to the City regarding any item(s) listed or not listed on this agenda are public records. All information in such writings and documents is subject to disclosure as being in the public domain and subject to search and review by electronic means, including but not limited to the City's Internet Web site and any other Internet Web -based platform or other Web -based form of communication. All information in such writings and documents similarly is subject to disclosure pursuant to the California Public Records Act [Government Code § 6250 et seq.]. PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA At this time, members of the public may address the Commission on any matter not listed on the agenda pursuant to the "Public Comments - Instructions" listed above. The Commission values your comments; however, in accordance with State law, no action shall be taken on any item not FINANCIAL ADVISORY COMMISSION AGENDA Page 2 of 4 NOVEMBER 9, 2022 appearing on the agenda unless it is an emergency item authorized by the Brown Act [Government Code § 54954.2(b)]. CONFIRMATION OF AGENDA ANNOUNCEMENTS, PRESENTATIONS AND WRITTEN COMMUNICATIONS - None CONSENT CALENDAR NOTE: Consent Calendar items are routine in nature and can be approved by one motion. 1. APPROVE MEETING MINUTES DATED OCTOBER 5, 2022 2. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED JULY 31, 2022 3. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED AUGUST 31, 2022 BUSINESS SESSION - None STUDY SESSION - None DEPARTMENTAL REPORTS 1. FINANCE DEPARTMENT CURRENT AND FUTURE INITIATIVES 2. SECOND QUARTER 2022 (APRIL-JUNE) SALES TAX UPDATE FOR THE CITY OF LA QUINTA COMMISSIONERS' ITEMS ADJOURNMENT The next regular quarterly meeting of the La Quinta Financial Advisory Commission will be held February 8, 2022, commencing at 4:00 p.m. at the La Quinta City Hall Council Chamber, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Jessica Delgado, Secretary of the Financial Advisory Commission of the City of La Quinta, do hereby declare that the foregoing Agenda for the Commission meeting of November 9, 2022, was posted on the City's website, near the entrance to the Council Chamber at 78-495 Calle Tampico, and the bulletin boards at 78-630 Highway 111, and 51-321 Avenida Bermudas, on November 3, 2022. FINANCIAL ADVISORY COMMISSION AGENDA Page 3 of 4 NOVEMBER 9, 2022 DATED: November 3, 2022 Jessica Delgado, Management Assistant City of La Quinta, California Public Notices • The La Quinta City Council Chamber is handicapped accessible. If special equipment is needed for the hearing impaired, please contact Commission Secretary at (760) 777-7150, 24-hours in advance of the meeting and accommodations will be made. • If background material is to be presented to the Commission during a Commission meeting, please be advised that 15 copies of all documents, exhibits, etc., must be supplied to the Commission Secretary for distribution. It is requested that this takes place prior to the beginning of the meeting. FINANCIAL ADVISORY COMMISSION AGENDA Page 4 of 4 NOVEMBER 9, 2022 CONSENT CALENDAR ITEM NO. 1 FINANCIAL ADVISORY COMMISSION SPECIAL MEETING MINUTES WEDNESDAY, OCTOBER 5, 2022 CALL TO ORDER A special meeting of the La Quinta Financial Advisory Commission (Commission) was called to order at 4:00 p.m. by Chair Mills. PRESENT: Commissioners Anderson, Batavick, Dorsey, Luettjohann, Mast, Way and Chair Mills ABSENT: None STAFF PRESENT: Finance Director Martinez, Financial Services Analyst Hallick, Account Technician Batuta, Management Assistant Delgado, City Clerk Radeva, City Manager McMillen PLEDGE OF ALLEGIANCE Commissioner Luettjohann led the audience in the Pledge of Allegiance. PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA - None CONFIRMATION OF AGENDA - Confirmed ANNOUNCEMENTS, PRESENTATIONS, AND WRITTEN COMMUNICATIONS - None CONSENT CALENDAR ITEMS 1. APPROVE MEETING MINUTES DATED AUGUST 24, 2022 Motion - A motion was made and seconded by Commissioners Way/Mast to approve the Consent Calendar as submitted. Motion passed unanimously. BUSINESS SESSION 1. APPOINT TWO FINANCIAL ADVISORY COMMISSIONERS TO AUDIT AND FORMULATE THE ANNUAL MEASURE G SALES TAX OVERSIGHT COMPLIANCE REPORT (Report) FOR FISCAL YEAR 2021/22 FINANCIAL ADVISORY COMMISSION MINUTES Page 1 of 4 OCTOBER 5, 2022 SPECIAL MEETING Finance Director Martinez presented the staff report, which is on file in the Finance Department. Staff provided the timeline for completing the Report. Commissioner Batavick and Luettjohann expressed their interest to serve on the subcommittee to audit and formulate the annual Measure G sales tax oversight compliance report for fiscal year 2021/22. Motion - A motion was made and seconded by Commissioners Way/Anderson to appoint Commissioners Batavick and Luettjohann to audit and formulate the annual measure G sales tax oversight compliance report for fiscal year 2021/22. Motion passed unanimously. 2. APPOINT TWO FINANCIAL ADVISORY COMMISSIONERS TO REVIEW THE CITY'S GENERAL FUND BALANCE AND RESERVES POLICY Finance Director Martinez and Financial Services Analyst Hallick presented the staff report, which is on file in the Finance Department. Commissioners Anderson, Dorsey, and Way expressed their interest to serve on the subcommittee to review the City's general fund balance and reserves policy. Motion - A motion was made and seconded by Commissioners Mast/Dorsey to appoint Commissioners Anderson, Dorsey, and Way to serve on the subcommittee to review the City's general fund balance and reserves policy. Motion passed unanimously. STUDY SESSION 1. DISCUSS THE CITY'S OUTSTANDING PENSION OBLIGATIONS AND THE FINANCIAL ADVISORY COMMISSION SUBCOMMITTEE RECOMMENDATIONS Financial Services Analyst Hallick presented the staff report, which is on file in the Finance Department. Financial Services Analyst Hallick thanked Commissioners Anderson and Dorsey for their participation on the subcommittee and shared the scope of work and findings. Commissioner Anderson shared his reasoning for recommending funding source Option 1 from the subcommittee's options listed in the staff report. FINANCIAL ADVISORY COMMISSION MINUTES Page 2 of 4 OCTOBER 5, 2022 SPECIAL MEETINr The Commission and staff discussed changes in pension funding percentages; terminated agencies; unfunded liability payments to California Public Employees Retirement System Agency (CalPERS); fluctuations of CalPERS annualized returns over the years; other possible pension liability funding sources; and the subcommittee's recommendations included in the staff report. Staff said the report would be updated with current discussion recommendations and brought forth for review by the Commission at the November 9, 2022, meeting before being presented to Council for discussion and direction as a study session item. DEPARTMENTAL REPORTS All reports are on file in the Finance Department. 1. FINANCE DEPARTMENT CURRENT AND FUTURE INITIATIVES COMMISSIONERS' ITEMS 1. Chair Mills said he distributed a handout to the Commission, which he prepared, that listed prior Commission projects, future Commission initiatives for staff consideration, and other follow up items by the Commission. 2. Commissioner Batavick reported on a meeting he attended on Monday, October 3, 2022, with City staff, Council Member Radi, and two citizens, in regards to the City's 10-year budget projections. The Commission asked what information would be included about Measure A on the November 8, 2022, ballot (Ballot). City Clerk Radeva said that the Ballot format is driven by California's elections code. City Manager McMillen mentioned that the October 3, 2022, meeting, was held at the request of the two citizens, and it was with regards to the methodology used to prepare the 10-year budget projections, as presented to Council at the 7/19/2022 meeting, as Scenarios 1 and 2, if Measure A is approved or not approved, respectively. 3. Chair Mills and staff announced the Chamber of Commerce candidate forum was being held in the Wellness Center today, October 5, from 5:00 p.m. to 7:00 p.m. FINANCIAL ADVISORY COMMISSION MINUTES Page 3 of 4 OCTOBER 5, 2022 SPECIAL MEETINr ADJOURNMENT There being no further business, it was moved by Commissioner Mast/Dorsey to adjourn this meeting at 5:33 p.m. Motion passed unanimously. Respectfully submitted, Jessica Delgado, Management Assistant City of La Quinta, California FINANCIAL ADVISORY COMMISSION MINUTES Page 4 of 4 OCTOBER 5, 2022 SPECIAL MEETING City of La Quinta CONSENT CALENDAR ITEM NO. 2 FINANCIAL ADVISORY COMMISSION MEETING: November 9, 2022 STAFF REPORT AGENDA TIT' : RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED JULY 31, 2022 RECOMMENDATION Receive and file revenue and expenditure report dated July 31, 2022. EXECUTIVE SUMMARY • The report summarizes the City's year-to-date (YTD) revenues and period expenditures for July 2022 (Attachment 1). These reports are also reviewed by the City Council. FISCAL IMPACT - None BACKGROUND/ANALYSIS Below is a summary of the column headers used on the Revenue and Expenditure Summary Reports: Original Total Budget - represents revenue and expenditure budgets the Council adopted in June 2022 for fiscal year 2022/23 Current Total Budget - represents original adopted budgets plus any Council approved budget amendments from throughout the year. The 2021/22 operating and Capital Improvement Project carryovers to 2022/23 will be processed after the year-end audit is completed. Period Activity - represents actual revenues received and expenditures outlaid in the reporting month. Fiscal Activity - represents actual revenues received and expenditures outlaid YTD. Variance Favorable/(Unfavorable) - represents the dollar difference between YTD collections/expenditures and the current budgeted amount. Percent Used - represents the percentage activity as compared to budget YTD. July Revenues Comparison to Last Year Percent of Percent of YTD Budget YTD Budget General Fund (GF) $ 403,605 $ 403,605 0.59% $ 525,729 0.89% All Funds $ 1,356,929 $ 1,356,929 1.28% $ 1,171,291 1.31% July Expenditures Comparison to Last Year Percent of Percent of YTD Budget YTD Budget General Fund $ 611,972 $ 611,972 0.95% $ 664,170 1.20% Payroll (GF) $ 358,965 $ 358,965 2.60% $ 356,098 3.14% All Funds $ 2,677,657 $ 2,677,657 2.60% $ 1,365,677 1.58% ToD Five Revenue Income Sources for Jul General Fund Non -General Fund Building Permits $ 74,986 Non -allocated Interest (Pension Trust) $ 376,894 STVR Registration Fee $ 66,000 Developer Impact Fees- Transportation $ 129,103 Building Plan Check Fees $ 59,739 Allocated Interest $ 93,479 Misc. Permits $ 32,382 SilverRock Green Fees $ 88,836 Business Licenses 24,892 Housing Authority Rent Revenue 87,654 Top Five Expenditures/Outlays for July General Fund Non -General Fund Parks Landscape Maintenance $ 60,804 Liability Insurance $ 418,878 Parks Landscape Materials/Supplies $ 28,926 Software Licenses(2) $ 246,247 Membership Dues(l) $ 23,235 Homelessness Assistance $ 200,000 Marketing and Tourism Promotions $ 19,695 Workers Comp Insurance $ 185,353 Credit Card Fees $ 17,815 Property Insurance $ 159,738 (')League of California Cities, Southern California Association of Governments (SCAG), CoStar commercial real estate analytics. (z)Annual subscription fees for Tyler (Finance/HR Depts.), Granicus (City website), Office 365 licenses, GovInvest (pension software),GoRe nest and Laserfiche. The revenue report includes revenues and transfers into funds from other funds (income items). Revenues are not received uniformly throughout the year, resulting in peaks and valleys. For example, large property tax payments are usually received in December and May. Similarly, Redevelopment Property Tax Trust Fund payments are typically received in January and June. Any timing imbalance of revenue receipts versus expenditures is funded from the City's cash flow reserve. The expenditure report includes expenditures and transfers out to other funds. Unlike revenues, expenditures are more likely to be consistent from month to month. However, large debt service payments or CIP expenditures can cause swings. Prepared by: Rosemary Hallick, Financial Services Analyst Approved by: Claudia Martinez, Finance Director Attachment 1: Revenue and Expenditure Report for July 31, 2022 ta Qaiota FINANCE Fund 101 - GENERAL FUND 201 - GAS TAX FUND 202 - LIBRARY & MUSEUM FUND 203 - PUBLIC SAFETY FUND (MEASU 210 - FEDERAL ASSISTANCE FUND 212 - SLESA (COPS) FUND 215 - LIGHTING & LANDSCAPING FU 220 - QUIMBY FUND 221 - AB 939 - CALRECYCLE FUND 223 - MEASURE A FUND 226-EMERGENCY MANAGEMENT 227 - STATE HOMELAND SECURITY I 230 - CASp FUND, AB 1379 235 - SO COAST AIR QUALITY FUND 241 - HOUSING AUTHORITY 243 - RDA LOW -MOD HOUSING FUI` 247 - ECONOMIC DEVELOPMENT FL 249 - SA 2011 LOW/MOD BOND FUI 250 - TRANSPORTATION DIF FUND 251 - PARKS & REC DIF FUND 252 - CIVIC CENTER DIF FUND 253 - LIBRARY DEVELOPMENT DIF 254 - COMMUNITY & CULTURAL CEI 255 - STREET FACILITY DIF FUND 257 - FIRE PROTECTION DIF 259 - MAINTENANCE FACILITIES DIF 270 - ART IN PUBLIC PLACES FUND 275 - LQ PUBLIC SAFETY OFFICER 299 - INTEREST ALLOCATION FUND 310 - LQ FINANCE AUTHORITY DEBT 401 - CAPITAL IMPROVEMENT PRO( 405 - SA PA 1 CAPITAL IMPRV FUND 501 - FACILITY & FLEET REPLACEMEI 502 - INFORMATION TECHNOLOGY 503 - PARK EQUIP & FACILITY FUND 504 - INSURANCE FUND 601 - SILVERROCK RESORT 602 - SILVERROCK GOLF RESERVE 760 - SUPPLEMENTAL PENSION PLA 761 - CERBT OPEB TRUST 762 - PARS PENSION TRUST Report Total: ATTACHMENT 1 For Fiscal: 2022/23 Period Ending: 07/31/2022 Revenue Summary Variance Original Current Period Fiscal Favorable Percent Total Budget Total Budget Activity Activity (Unfavorable) Used 68,321,100 68,321,100 403,605 403,605 -67,917,495 0.59% 2,691,011 2,691,011 0 0 -2,691,011 0.00% 2,867,000 2,867,000 106 106 -2,866,894 0.00% 2,000 2,000 0 0 -2,000 0.00% 156,000 156,000 0 0 -156,000 0.00% 101,000 101,000 0 0 -101,000 0.00% 2,483,300 2,483,300 0 0 -2,483,300 0.00% 25,000 25,000 0 0 -25,000 0.00% 64,000 64,000 0 0 -64,000 0.00% 1,875,000 1,875,000 0 0 -1,875,000 0.00% 12,100 12,100 0 0 -12,100 0.00% 5,000 5,000 0 0 -5,000 0.00% 20,200 20,200 1,340 1,340 -18,860 6.63% 54,400 54,400 0 0 -54,400 0.00% 1,451,500 1,451,500 87,654 87,654 -1,363,846 6.04% 20,000 20,000 0 0 -20,000 0.00% 15,000 15,000 0 0 -15,000 0.00% 25,000 25,000 0 0 -25,000 0.00% 1,020,000 1,020,000 129,103 129,103 -890,897 12.66% 501,000 501,000 61,074 61,074 -439,926 12.19% 301,000 301,000 36,754 36,754 -264,246 12.21% 75,000 75,000 11,513 11,513 -63,487 15.35% 152,000 152,000 27,724 27,724 -124,276 18.24% 10,000 10,000 0 0 -10,000 0.00% 101,000 101,000 10,997 10,997 -90,003 10.89% 75,500 75,500 9,811 9,811 -65,689 12.99% 153,000 153,000 4,143 4,143 -148,857 2.71% 2,200 2,200 0 0 -2,200 0.00% 0 0 93,479 93,479 93,479 0.00% 1,100 1,100 0 0 -1,100 0.00% 13,136,811 13,136,811 0 0 -13,136,811 0.00% 1,000 1,000 0 0 -1,000 0.00% 1,685,000 1,685,000 0 0 -1,685,000 0.00% 2,256,708 2,256,708 2,130 2,130 -2,254,578 0.09% 470,000 470,000 0 0 -470,000 0.00% 1,020,400 1,020,400 0 0 -1,020,400 0.00% 4,865,453 4,865,453 100,602 100,602 -4,764,851 2.07% 79,000 79,000 0 0 -79,000 0.00% 5,500 5,500 0 0 -5,500 0.00% 10,000 10,000 0 0 -10,000 0.00% 100,000 100,000 376,894 376,894 276,894 376.89% 106,210,283 106,210,283 1,356,929 1,356,929 -104,853,354 1.28% Accounts are subject to adjusting entries and audit. The City's Annual Comprehensive Financial Report published annually in December, is the best resource for all final audited numbers. Page 1 of 3 For Fiscal: 2022/23 Period Ending: 07/31/2022 Expenditure Summary Variance Original Current Period Fiscal Favorable Percent Fund Total Budget Total Budget Activity Activity (Unfavorable) Used 101 - GENERAL FUND 64,651,274 64,651,274 611,972 611,972 64,039,302 0.95% 201 - GAS TAX FUND 2,687,351 2,687,351 28,950 28,950 2,658,401 1.08% 202 - LIBRARY & MUSEUM FUND 1,909,146 1,909,146 6,723 6,723 1,902,423 0.35% 210 - FEDERAL ASSISTANCE FUND 152,600 152,600 0 0 152,600 0.00% 212 - SLESA (COPS) FUND 100,000 100,000 0 0 100,000 0.00% 215 - LIGHTING & LANDSCAPING FU 2,465,376 2,465,376 89,887 89,887 2,375,489 3.65% 221 - AB 939 - CALRECYCLE FUND 150,000 150,000 0 0 150,000 0.00% 223 - MEASURE A FUND 3,882,000 3,882,000 0 0 3,882,000 0.00% 226 - EMERGENCY MANAGEMENT F 12,000 12,000 0 0 12,000 0.00% 227 -STATE HOMELAND SECURITY 1 5,000 5,000 0 0 5,000 0.00% 230 - CASp FUND, AB 1379 5,500 5,500 0 0 5,500 0.00% 235 - SO COAST AIR QUALITY FUND 46,500 46,500 0 0 46,500 0.00% 237 - SUCCESSOR AGCY PA 1 ADMII` 0 0 1,600 1,600 -1,600 0.00% 241 - HOUSING AUTHORITY 1,712,670 1,712,670 69,712 69,712 1,642,958 4.07% 243 - RDA LOW -MOD HOUSING FUG 250,000 250,000 200,000 200,000 50,000 80.00% 244 - HOUSING GRANTS (Multiple) 0 0 96,157 96,157 -96,157 0.00% 247 - ECONOMIC DEVELOPMENT FL 21,500 21,500 0 0 21,500 0.00% 249 - SA 2011 LOW/MOD BOND FUI 20,000 20,000 0 0 20,000 0.00% 250-TRANSPORTATION DIF FUND 500,000 500,000 0 0 500,000 0.00% 251 - PARKS & REC DIF FUND 500,000 500,000 0 0 500,000 0.00% 252 - CIVIC CENTER DIF FUND 250,000 250,000 0 0 250,000 0.00% 253 - LIBRARY DEVELOPMENT DIF 15,000 15,000 0 0 15,000 0.00% 270 - ART IN PUBLIC PLACES FUND 177,000 177,000 0 0 177,000 0.00% 310 - LQ FINANCE AUTHORITY DEBT 1,100 1,100 0 0 1,100 0.00% 401 - CAPITAL IMPROVEMENT PRO( 13,136,811 13,136,811 35,509 35,509 13,101,302 0.27% 501 - FACILITY & FLEET REPLACEMEI 1,608,750 1,608,750 128,210 128,210 1,480,540 7.97% 502 - INFORMATION TECHNOLOGY 2,258,054 2,258,054 319,272 319,272 1,938,782 14.14% 503 - PARK EQUIP & FACILITY FUND 545,000 545,000 0 0 545,000 0.00% 504 - INSURANCE FUND 984,100 984,100 890,357 890,357 93,743 90.47% 601 - SILVERROCK RESORT 4,782,135 4,782,135 181,959 181,959 4,600,176 3.80% 760 - SUPPLEMENTAL PENSION PLA 12,850 12,850 12,833 12,833 17 99.87% 761 - CERBT OPEB TRUST 1,500 1,500 0 0 1,500 0.00% 762 - PARS PENSION TRUST 55,000 55,000 4,515 4,515 50,485 8.21% Report Total: 102,898,217 102,898,217 2,677,657 2,677,657 100,220,560 2.60% Accounts are subject to adjusting entries and audit. The City's Annual Comprehensive Financial Report published annually in December, is the best resource for all final audited numbers. Page 2 of 3 Fund Descriptions Fund # Name Notes The primary fund o the City used to account or all revenue and expenditures of the City; a broad 101 General Fund range of municipal activities are provided through this fund. 201 Gas Tax Fund Gasoline sales tax allocations received from the State which are restricted to street -related expenditures. 202 Library and Museum Fund Revenues from property taxes and related expenditures for library and museum services. 203 Public Safety Fund General Fund Measure G sales tax revenue set aside for public safety expenditures. 210 Federal Assistance Fund Community Development Block Grant (CDBG) received from the federal government and the expenditures of those resources. 212 SLESF (COPS) Fund Supplemental Law Enforcement Services Funds (SLESF) received from the State for law enforcement activities. Also known as Citizen's Option for Public Safetv (COPS). 215 Lighting & Landscaping Fund Special assessments levied on real property for city-wide lighting and landscape maintenance/improvements and the expenditures of those resources. 220 Quimby Fund Developer fees received under the provisions of the Quimby Act for park development and improvements. 221 AB939 Fund/Cal Recycle Franchise fees collected from the city waste hauler that are used to reduce waste sent to landfills through recvclina efforts. Assembly Bill (AB) 939. 223 Measure A Fund County sales tax allocations which are restricted to street -related expenditures. 224 TUMF Fund Developer -paid Transportation Uniform Mitigation Fees (TUMF) utilized for traffic projects in Riverside Countv. 225 Infrastructure Fund Developer fees for the acquisition, construction or improvement of the City's infrastructure as defined by Resolution 226 Emergency Mgmt. Performance Grant (EMPG) Federal Emergency Management Agency (FEMA) grant for emergency preparedness. 227 State Homeland Security Programs (SHSP) Federal Emergency Management Agency (FEMA) grant for emergency preparedness. 230 CASP Fund, AB1379 / SB1186 Certified Access Specialist (CASp) program fees for ADA Accessibility Improvements; derived from Business License renewals. Assemblv Bill (AB) 1379 and Senate Bill (SB) 1186. Successor Agency (SA) Project Area (PA) 1 Redevelopment Obligation Retirement Fund (RORF) for 231 Successor Agency PA 1 RORF Fund Redevelopment Property Tax Trust Fund (RPTTF) taxes received for debt service payments on recognized obligations of the former Redevelopment Aaencv (RDA). 235 SO Coast Air Quality Fund (AB2766, PM10) Contributions from the South Coast Air Quality Management District. Uses are limited to the reduction and control of airborne pollutants. Assemblv Bill (AB) 2766. 237 Successor Agency PA 1 Admin Fund Successor Agency (SA) Project Area (PA) 1 for administration of the Recognized Obligation Payment Schedule (ROPS) associated with the former Redevelopment Aqencv (RDA). 241 Housing Authority Activities of the Housing Authority which is to promote and provide quality affordable housing. 243 RDA Low -Moderate Housing Fund Activities of the Housing Authority which is to promote and provide quality affordable housing. Accounts for RDA loan repayments (20 /o for Housinq) and housing programs,. 244 Housing Grants Activites related Local Early Action Planning (LEAP) and SB2 grants for housing planning and development. 247 Economic Development Fund Proceeds from sale of City -owned land; transferred from General Fund for future economic development. 249 SA 2011 Low/Mod Bond Fund Successor Agency (SA) low/moderate housing fund; 2011 bonds refinanced in 2016. 250 Transportation DIF Fund Developer impact fees collected for specific public improvements - transportation related. 251 Parks & Rec. DIF Fund Developer impact fees collected for specific public improvements - parks and recreation. 252 Civic Center DIF Fund Developer impact fees collected for specific public improvements - Civic Center. 253 Library Development DIF Fund Developer impact fees collected for specific public improvements - library. 254 Community Center DIF Fund Developer impact fees collected for specific public improvements - community center. 255 Street Facility DIF Fund Developer impact fees collected for specific public improvements - streets. 256 Park Facility DIF Fund Developer impact fees collected for specific public improvements - parks. 257 Fire Protection DIF Fund Developer impact fees collected for specific public improvements - fire protection. 270 Art In Public Places Fund Developer fees collected in lieu of art placement; utilized for acquisition, installation and maintenance of public artworks. 275 LQ Public Safety Officer Fund Annual transfer in from General Fund; distributed to public safety officers disabled or killed in the line of dutv. 299 Interest Allocation Fund Interest earned on investments. 310 LQ Finance Authority Debt Service Fund Accounted for the debt service the Financing Authority's outstanding debt and any related reporting requirements. This bond was fullv paid in October 2018. 401 Capital Improvement Program Fund Planning, design, and construction of various capital projects throughout the City. 405 SA PA 1 Capital Improvement Fund Successor Agency (SA) Project Area (PA) 1 bond proceeds restricted by the bond indenture covenants. Used for SilverRock infrastructure improvements. 501 Equipment Replacement Fund Internal Service Fund for vehicles, heavy equipment, and related facilities. 502 Information Technology Fund Internal Service Fund for computer hardware and software and phone systems. 503 Park Equipment & Facility Fund Internal Service Fund for park equipment and facilities. 504 Insurance Fund Internal Service Fund for city-wide insurance coverages. 601 SilverRock Resort Fund Enterprise Fund for activities of the city -owned golf course. 602 SilverRock Golf Reserve Fund Enterprise Fund for golf course reserves for capital improvements. 760 Supplemental Pension Plan (PARS Account) Supplemental pension savings plan for excess retiree benefits to general employees of the City. 761 Other Post Benefit Obligation Trust (OPEB) For retiree medical benefits and unfunded liabilities. 762 Pension Trust Benefit (PARS Account) I For all pension -related benefits and unfunded liabilities. Page 3 of 3 City of La Quinta CONSENT CALENDAR ITEM NO. 3 FINANCIAL ADVISORY COMMISSION MEETING: November 9, 2022 STAFF REPORT AGENDA TITLE: RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED AUGUST 31, 2022 RECOMMENDATION Receive and file revenue and expenditure report dated August 31, 2022. EXECUTIVE SUMMARY • The report summarizes the City's year-to-date (YTD) revenues and period expenditures for August 2022 (Attachment 1). These reports are also reviewed by the City Council. FISCAL IMPACT - None BACKGROUND/ANALYSIS Below is a summary of the column headers used on the Revenue and Expenditure Summary Reports: Original Total Budget - represents revenue and expenditure budgets the Council adopted in June 2022 for fiscal year 2022/23. Current Total Budget - represents original adopted budgets plus any Council approved budget amendments from throughout the year. The 2021/22 operating and Capital Improvement Project carryovers to 2022/23 will be processed after the year-end audit is completed. Period Activity - represents actual revenues received and expenditures outlaid in the reporting month. Fiscal Activity - represents actual revenues received and expenditures outlaid YTD. Variance Favorable/(Unfavorable) - represents the dollar difference between YTD collections/expenditures and the current budgeted amount. Percent Used - represents the percentage activity as compared to budget YTD. August Revenues Comparison to Last Year Percent of Percent of YTD Budget YTD Budget General Fund (GF) $ 1,585,611 $ 1,989,216 2.91% $ 2,169,783 3.69% All Funds $ 2,036,529 $ 3,381,548 3.18% $ 3,999,605 4.46% August Expenditures Comparison to Last Year Percent of Percent of YTD Budget YTD Budget General Fund $ 2,493,925 $ 3,105,897 4.80% $ 2,775,342 5.03% Payroll (GF) $ 1,964,518 $ 2,323,483 16.84% $ 2,079,960 18.36% All Funds $ 4,107,514 $ 6,785,170 6.59% $ 5,181,848 5.99% To Five Revenue Income Sources for Au ust General Fund Non -General Fund Transient Occupancy (Hotel) Tax $ 495,819 Allocated Interest $ 209,784 Mitigation Fees $ 493,930 Developer Impact Fees- Transportation $ 140,315 Building Plan Check Fees $ 85,239 SilverRock Green Fees $ 96,934 Building Permits $ 82,418 Gas Tax $ 89,209 STVR Registration Fees 78 000 Housing Authority Rent Revenue 87,654 Too Five Expenditures/Outlays for August General Fund Non -General Fund X-Park Programming July -Sept. $ 71,347 Capital Improvement Program (CIP) - Construction(3) $ 590,522 Membership Dues(l) $ 62,039 SilverRock Maintenance $ 181,398 Sheriff - Other(2) $ 41,247 Software Licenses(4) $ 81,509 Parks Maintenance/Services $ 31,568 Purchased Vehicles $ 71,370 Water Utilities 26,300 Information Technology Management Services 54,433 (')Coachella Valley Association of Governments (CVAG) (Z)Annual fees for Cal -ID Bureau (3)Jefferson/Avenue 53 roundabout; parkway landscape renovation (Topaz); traffic signal equipment (4)Trak-It permitting and business license software The revenue report includes revenues and transfers into funds from other funds (income items). Revenues are not received uniformly throughout the year, resulting in peaks and valleys. For example, large property tax payments are usually received in December and May. Similarly, Redevelopment Property Tax Trust Fund payments are typically received in January and June. Any timing imbalance of revenue receipts versus expenditures is funded from the City's cash flow reserve. The expenditure report includes expenditures and transfers out to other funds. Unlike revenues, expenditures are more likely to be consistent from month to month. However, large debt service payments or CIP expenditures can cause swings. Prepared by: Rosemary Hallick, Financial Services Analyst Approved by: Claudia Martinez, Finance Director Attachment 1: Revenue and Expenditure Report for August 31, 2022 taQaigra FINANCE ATTACHMENT 1 For Fiscal: 2022/23 Period Ending: 08/31/2022 Revenue Summary Variance Original Current Period Fiscal Favorable Percent Fund Total Budget Total Budget Activity Activity (Unfavorable) Used 101 - GENERAL FUND 68,321,100 68,321,100 1,585,611 1,989,216 -66,331,884 2.91% 201 - GAS TAX FUND 2,691,011 2,691,011 89,209 89,209 -2,601,802 3.32% 202 - LIBRARY & MUSEUM FUND 2,867,000 2,867,000 310 416 -2,866,584 0.01% 203 - PUBLIC SAFETY FUND (MEASU 2,000 2,000 0 0 -2,000 0.00% 210 - FEDERAL ASSISTANCE FUND 156,000 156,000 0 0 -156,000 0.00% 212 - SLESA (COPS) FUND 101,000 101,000 0 0 -101,000 0.00% 215 - LIGHTING & LANDSCAPING FU 2,483,300 2,483,300 0 0 -2,483,300 0.00% 220 - QUIMBY FUND 25,000 25,000 0 0 -25,000 0.00% 221 - AB 939 - CALRECYCLE FUND 64,000 64,000 3,204 3,204 -60,796 5.01% 223 - MEASURE A FUND 1,875,000 1,875,000 0 0 -1,875,000 0.00% 226 - EMERGENCY MANAGEMENT F 12,100 12,100 0 0 -12,100 0.00% 227 - STATE HOMELAND SECURITY I 5,000 5,000 0 0 -5,000 0.00% 230 - CASp FUND, AB 1379 20,200 20,200 1,472 2,812 -17,388 13.92% 231 - SUCCESSOR AGCY PA 1 RORF 0 0 0 0 0 0.00% 235 - SO COAST AIR QUALITY FUND 54,400 54,400 0 0 -54,400 0.00% 241 - HOUSING AUTHORITY 1,451,500 1,451,500 0 87,654 -1,363,846 6.04% 243 - RDA LOW -MOD HOUSING FUI` 20,000 20,000 0 0 -20,000 0.00% 247 - ECONOMIC DEVELOPMENT FL 15,000 15,000 0 0 -15,000 0.00% 249 - SA 2011 LOW/MOD BOND FUI 25,000 25,000 0 0 -25,000 0.00% 250- TRANSPORTATION DIF FUND 1,020,000 1,020,000 140,315 269,418 -750,582 26.41% 251 - PARKS & REC DIF FUND 501,000 501,000 73,710 134,784 -366,216 26.90% 252 - CIVIC CENTER DIF FUND 301,000 301,000 43,050 79,804 -221,196 26.51% 253 - LIBRARY DEVELOPMENT DIF 75,000 75,000 13,895 25,408 -49,592 33.88% 254 - COMMUNITY & CULTURAL CEI 152,000 152,000 33,460 61,184 -90,816 40.25% 255 - STREET FACILITY DIF FUND 10,000 10,000 0 0 -10,000 0.00% 257 - FIRE PROTECTION DIF 101,000 101,000 12,915 23,912 -77,088 23.68% 259 - MAINTENANCE FACILITIES DIF 75,500 75,500 10,955 20,766 -54,734 27.50% 270 - ART IN PUBLIC PLACES FUND 153,000 153,000 5,500 9,644 -143,356 6.30% 275 - LQ PUBLIC SAFETY OFFICER 2,200 2,200 0 0 -2,200 0.00% 299 - INTEREST ALLOCATION FUND 0 0 209,784 291,353 291,353 0.00% 310 - LQ FINANCE AUTHORITY DEBT 1,100 1,100 0 0 -1,100 0.00% 401 - CAPITAL IMPROVEMENT PRO( 13,136,811 13,136,811 0 0 -13,136,811 0.00% 405 - SA PA 1 CAPITAL IMPRV FUND 1,000 1,000 0 0 -1,000 0.00% 501 - FACILITY & FLEET REPLACEMEI 1,685,000 1,685,000 0 0 -1,685,000 0.00% 502 - INFORMATION TECHNOLOGY 2,256,708 2,256,708 2,295 4,425 -2,252,283 0.20% 503 - PARK EQUIP & FACILITY FUND 470,000 470,000 0 0 -470,000 0.00% 504 - INSURANCE FUND 1,020,400 1,020,400 0 0 -1,020,400 0.00% 601 - SILVERROCK RESORT 4,865,453 4,865,453 108,724 209,327 -4,656,126 4.30% 602 - SILVERROCK GOLF RESERVE 79,000 79,000 0 0 -79,000 0.00% 760 - SUPPLEMENTAL PENSION PLA 5,500 5,500 0 0 -5,500 0.00% 761 - CERBT OPEB TRUST 10,000 10,000 0 0 -10,000 0.00% 762 - PARS PENSION TRUST 100,000 100,000 -297,880 79,014 -20,986 79.01% Report Total: 106,210,283 106,210,283 2,036,529 3,381,548 -102,828,735 3.18% Accounts are subject to adjusting entries and audit. The City's Annual Comprehensive Financial Report published annually in December, is the best resource for all final audited numbers. Page 1 of 3 For Fiscal: 2022/23 Period Ending: 08/31/2022 Expenditure Summary Variance Original Current Period Fiscal Favorable Percent Fund Total Budget Total Budget Activity Activity (Unfavorable) Used 101 - GENERAL FUND 64,651,274 64,651,274 2,493,925 3,105,897 61,545,377 4.80% 201 - GAS TAX FUND 2,687,351 2,687,351 56,201 85,150 2,602,201 3.17% 202 - LIBRARY & MUSEUM FUND 1,909,146 1,909,146 38,255 44,978 1,864,168 2.36% 210 - FEDERAL ASSISTANCE FUND 152,600 152,600 0 0 152,600 0.00% 212 - SLESA (COPS) FUND 100,000 100,000 0 0 100,000 0.00% 215 - LIGHTING & LANDSCAPING FU 2,465,376 2,465,376 75,690 165,577 2,299,799 6.72% 221 - AB 939 - CALRECYCLE FUND 150,000 150,000 22,297 22,297 127,703 14.86% 223 - MEASURE A FUND 3,882,000 3,882,000 33,703 33,703 3,848,297 0.87% 226 - EMERGENCY MANAGEMENT F 12,000 12,000 9,750 9,750 2,250 81.25% 227 -STATE HOMELAND SECURITY 1 5,000 5,000 0 0 5,000 0.00% 230 - CASp FUND, AB 1379 5,500 5,500 0 0 5,500 0.00% 235 - SO COAST AIR QUALITY FUND 46,500 46,500 766 766 45,734 1.65% 237 - SUCCESSOR AGCY PA 1 ADMII` 0 0 0 1,600 -1,600 0.00% 241 - HOUSING AUTHORITY 1,712,670 1,712,670 31,416 101,128 1,611,542 5.90% 243 - RDA LOW -MOD HOUSING FUG 250,000 250,000 50,000 250,000 0 100.00% 244 - HOUSING GRANTS (Multiple) 0 0 0 96,157 -96,157 0.00% 247 - ECONOMIC DEVELOPMENT FL 21,500 21,500 0 0 21,500 0.00% 249 - SA 2011 LOW/MOD BOND FUI 20,000 20,000 0 0 20,000 0.00% 250-TRANSPORTATION DIF FUND 500,000 500,000 0 0 500,000 0.00% 251 - PARKS & REC DIF FUND 500,000 500,000 0 0 500,000 0.00% 252 - CIVIC CENTER DIF FUND 250,000 250,000 0 0 250,000 0.00% 253 - LIBRARY DEVELOPMENT DIF 15,000 15,000 0 0 15,000 0.00% 270 - ART IN PUBLIC PLACES FUND 177,000 177,000 12,666 12,666 164,334 7.16% 310 - LQ FINANCE AUTHORITY DEBT 1,100 1,100 0 0 1,100 0.00% 401 - CAPITAL IMPROVEMENT PRO( 13,136,811 13,136,811 628,039 663,548 12,473,263 5.05% 501 - FACILITY & FLEET REPLACEMEI 1,608,750 1,608,750 134,588 262,799 1,345,951 16.34% 502 - INFORMATION TECHNOLOGY 2,258,054 2,258,054 157,552 476,824 1,781,230 21.12% 503 - PARK EQUIP & FACILITY FUND 545,000 545,000 275 275 544,725 0.05% 504 - INSURANCE FUND 984,100 984,100 254 890,612 93,488 90.50% 601 - SILVERROCK RESORT 4,782,135 4,782,135 357,478 539,438 4,242,697 11.28% 760 - SUPPLEMENTAL PENSION PLA 12,850 12,850 0 12,833 17 99.87% 761 - CERBT OPEB TRUST 1,500 1,500 0 0 1,500 0.00% 762 - PARS PENSION TRUST 55,000 55,000 4,658 9,173 45,827 16.68% Report Total: 102,898,217 102,898,217 4,107,514 6,785,170 96,113,047 6.59% Accounts are subject to adjusting entries and audit. The City's Annual Comprehensive Financial Report published annually in December, is the best resource for all final audited numbers. Page 2 of 3 Fund Descriptions Fund # Name Notes The primary fund o the City used to account or all revenue and expenditures of the City; a broad 101 General Fund range of municipal activities are provided through this fund. 201 Gas Tax Fund Gasoline sales tax allocations received from the State which are restricted to street -related expenditures. 202 Library and Museum Fund Revenues from property taxes and related expenditures for library and museum services. 203 Public Safety Fund General Fund Measure G sales tax revenue set aside for public safety expenditures. 210 Federal Assistance Fund Community Development Block Grant (CDBG) received from the federal government and the expenditures of those resources. 212 SLESF (COPS) Fund Supplemental Law Enforcement Services Funds (SLESF) received from the State for law enforcement activities. Also known as Citizen's Option for Public Safetv (COPS). 215 Lighting & Landscaping Fund Special assessments levied on real property for city-wide lighting and landscape maintenance/improvements and the expenditures of those resources. 220 Quimby Fund Developer fees received under the provisions of the Quimby Act for park development and improvements. 221 AB939 Fund/Cal Recycle Franchise fees collected from the city waste hauler that are used to reduce waste sent to landfills through recvclina efforts. Assembly Bill (AB) 939. 223 Measure A Fund County sales tax allocations which are restricted to street -related expenditures. 224 TUMF Fund Developer -paid Transportation Uniform Mitigation Fees (TUMF) utilized for traffic projects in Riverside Countv. 225 Infrastructure Fund Developer fees for the acquisition, construction or improvement of the City's infrastructure as defined by Resolution 226 Emergency Mgmt. Performance Grant (EMPG) Federal Emergency Management Agency (FEMA) grant for emergency preparedness. 227 State Homeland Security Programs (SHSP) Federal Emergency Management Agency (FEMA) grant for emergency preparedness. 230 CASP Fund, AB1379 / SB1186 Certified Access Specialist (CASp) program fees for ADA Accessibility Improvements; derived from Business License renewals. Assemblv Bill (AB) 1379 and Senate Bill (SB) 1186. Successor Agency (SA) Project Area (PA) 1 Redevelopment Obligation Retirement Fund (RORF) for 231 Successor Agency PA 1 RORF Fund Redevelopment Property Tax Trust Fund (RPTTF) taxes received for debt service payments on recognized obligations of the former Redevelopment Aaencv (RDA). 235 SO Coast Air Quality Fund (AB2766, PM10) Contributions from the South Coast Air Quality Management District. Uses are limited to the reduction and control of airborne pollutants. Assemblv Bill (AB) 2766. 237 Successor Agency PA 1 Admin Fund Successor Agency (SA) Project Area (PA) 1 for administration of the Recognized Obligation Payment Schedule (ROPS) associated with the former Redevelopment Aqencv (RDA). 241 Housing Authority Activities of the Housing Authority which is to promote and provide quality affordable housing. 243 RDA Low -Moderate Housing Fund Activities of the Housing Authority which is to promote and provide quality affordable housing. Accounts for RDA loan repayments (20 /o for Housinq) and housing programs,. 244 Housing Grants Activites related Local Early Action Planning (LEAP) and SB2 grants for housing planning and development. 247 Economic Development Fund Proceeds from sale of City -owned land; transferred from General Fund for future economic development. 249 SA 2011 Low/Mod Bond Fund Successor Agency (SA) low/moderate housing fund; 2011 bonds refinanced in 2016. 250 Transportation DIF Fund Developer impact fees collected for specific public improvements - transportation related. 251 Parks & Rec. DIF Fund Developer impact fees collected for specific public improvements - parks and recreation. 252 Civic Center DIF Fund Developer impact fees collected for specific public improvements - Civic Center. 253 Library Development DIF Fund Developer impact fees collected for specific public improvements - library. 254 Community Center DIF Fund Developer impact fees collected for specific public improvements - community center. 255 Street Facility DIF Fund Developer impact fees collected for specific public improvements - streets. 256 Park Facility DIF Fund Developer impact fees collected for specific public improvements - parks. 257 Fire Protection DIF Fund Developer impact fees collected for specific public improvements - fire protection. 270 Art In Public Places Fund Developer fees collected in lieu of art placement; utilized for acquisition, installation and maintenance of public artworks. 275 LQ Public Safety Officer Fund Annual transfer in from General Fund; distributed to public safety officers disabled or killed in the line of dutv. 299 Interest Allocation Fund Interest earned on investments. 310 LQ Finance Authority Debt Service Fund Accounted for the debt service the Financing Authority's outstanding debt and any related reporting requirements. This bond was fullv paid in October 2018. 401 Capital Improvement Program Fund Planning, design, and construction of various capital projects throughout the City. 405 SA PA 1 Capital Improvement Fund Successor Agency (SA) Project Area (PA) 1 bond proceeds restricted by the bond indenture covenants. Used for SilverRock infrastructure improvements. 501 Equipment Replacement Fund Internal Service Fund for vehicles, heavy equipment, and related facilities. 502 Information Technology Fund Internal Service Fund for computer hardware and software and phone systems. 503 Park Equipment & Facility Fund Internal Service Fund for park equipment and facilities. 504 Insurance Fund Internal Service Fund for city-wide insurance coverages. 601 SilverRock Resort Fund Enterprise Fund for activities of the city -owned golf course. 602 SilverRock Golf Reserve Fund Enterprise Fund for golf course reserves for capital improvements. 760 Supplemental Pension Plan (PARS Account) Supplemental pension savings plan for excess retiree benefits to general employees of the City. 761 Other Post Benefit Obligation Trust (OPEB) For retiree medical benefits and unfunded liabilities. 762 Pension Trust Benefit (PARS Account) I For all pension -related benefits and unfunded liabilities. Page 3 of 3 DEPARTMENTAL REPORT ITEM NO. 1 City of La Quinta FINANCIAL ADVISORY COMMISSION MEETING DEPARTMENT REPORT TO: Members of the Financial Advisory Commission FROM. Claudia Martinez, Finance Director DATE: November 9, 2022 SUBJECT: FINANCE DEPARTMENT CURRENT AND FUTURE INITIATIVES In addition to items presented as staff reports, the Finance Department would like to provide updates on the following matters. AUDIT & FINANCIAL REPORTING • Citywide Comprehensive fiscal year 2021/22 audit will take place from November 7t" through November 18tn • Annual Street and Road Improvement Audit, to be filed with the State Controller's Office- In process • Annual Measure A Local Streets and Roads Audit, to be filed with the Riverside County Transportation Commission- In process COMMITTEE UPDATES • Annual Measure G Sales Tax Oversight Compliance Report for FY 2021/22 • Reserve Policy Update • Pension Obligation Study • Future Committee Projects may include: City policies review, financial statement supplemental report, and auditing RFP UAIL MAIL 2.0 • "Quail Mail" is the City's email notification system and has been upgraded to allow text message notifications and gives new topic options. • Current subscribers will have to re -subscribe to continue to receive notifications as the old system will phase out soon. • Get started by taking a picture of the QR Code and setting up your subscription choices. It is important to note the items mentioned in this update are in addition to the daily functions of the Finance Department, which include, but are not limited to, staff report writing/review, payroll, accounts payable, accounts receivable, revenue processing, journal entries, capital accounting, project accounting, purchasing, investing, cash/treasury management, bank reconciliations, budgeting, research and analysis, staff training and development, and general financial support for all City departments. DEPARTMENTAL REPORT ITEM NO. 2 City of La Quinta FINANCIAL ADVISORY COMMISSION MEETING DEPARTMENT REPORT TO: Members of the Financial Advisory Commission FROM: Rosemary Hallick, Financial Services Analyst DATE: November 9, 2022 SUBJECT: SECOND QUARTER 2022 (APRIL-JUNE) SALES TAX UPDATE FOR THE CITY OF LA QUINTA The attached report was prepared by consultants HdL Companies as an update of sales tax receipts for second quarter sales from April to June 2022. • La Quinta's overall adjusted sales tax receipts for major industry groups increased 6.3%, which compares to Riverside County at 12.3% and the state at 10.1%. The large increases are in part driven by tourism -related spending, continued strength in the e-commerce sector, rising gas prices, demand in the automotive sector, and inflation overall. Details may be found in the attached Sales Tax Update prepared by HdL. • The City's sales -per -capita remains higher than both the county and state averages. Per Capita Sales La 4uinta Riverside County Southem Califamia caliFomia 2Q 3Q 4Q 10 2Q 3Q 4Q 1Q 20 3Q 4Q 1Q 19 19 19 20 20 20 20 21 21 21 21 22 Periods shown inflect the period in which the sales occurred - Paint d Sale $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 2Q 22 • General consumer goods (such as department stores) made up 34% of sales tax revenue and 38% of Measure G revenue. • Autos and transportation made up 9% of sales tax revenue and 14% of Measure G revenue. • The City continues to benefit from online purchasing in the form of an increase in the County pool share, which was 14% of our sales tax revenue. 2022 Percent of Total Sales Tax Food Fueland and Service Drugs Stations I F Autos and — Transportation Building and Construction Business and I ndustry Autos and Transportation Business and Industry Restaurants and Hotels 2022 Percent of Total Fuel and Service Stations Food and Drug s and Hotels General Consurner Goads Measure G General Consurrer Goods The City continuously monitors local development, economic conditions, impacts on travel and trade, and legislative and judicial news for any potential changes to sales tax collections. The City's fiscal year 2022/23 budget was conservatively forecast based on known information as of Spring 2022. Fiscal year 2021/22 budget and fiscal year-to-date sales tax collections are shown in the chart below. Quarter Payment Bradley Burns 33060 Measure G 520 3 July 2021 Advance $ 855,803 $ 996,605 3 August 2021 advance $ 1,054,672 $ 1,288,136 3 September 2021 3rd Qtr payment $ 613,938 $ 914,607 3 Total 2021 $ 2,524,413 $ 3,199,348 4 October 2021 advance $ 983,637 $ 1,216,772 4 November 2021 advance $ 930,977 $ 1,160,715 4 December 2021 4th Qtr payment $ 1,531,305 $ 1,817,959 4 Total 2021 $ 3,445,920 $ 4,195,447 1 January 2022 advance $ 1,002,774 $ 1,192,335 1 February 2022 advance $ 959,345 $ 1,177,728 1 March 2022 1st Qtr payment $ 1,532,619 $ 1,784,000 1 Total 2022 $ 3,494,738 $ 4,154,062 2 April 2022 advance $ 1,074,866 $ 1,239,383 2 May 2022 advance $ 1,413,945 $ 1,615,436 2 June 2022 2nd Qtr payment $ 635,221 $ 1,211,734 2 Total 2022 -$ 3,124,033 $ 4,066,553 FY 2021/22 Total YTD $ 12,589,104 $ 15,615,410 Attachment 1: HdL Q2 2022 Sales Tax Update MG % of BB from LY 116.45% 24.39% 122.14% 17.72% 148.97% 31.20% 126.74% 23.24% 123.70% 12.16% 124.68% -7.82% 118.72% 82.96% 121.75% 26.06% 118.90% 15.55% 122.76% -16.17% 116.40% 108.27% 118.87% 26.60% 115.31% 32.22% 114.25% 10.18% 190.76% -11.04% 130.17% 9.35% 124.04% 32.74% ATTACHMENT 1 CITY OF LA QU I NTA SALES TAX UPDATE ta 2Q 2022 (APRIL - JUNE) TOTAL:.0 • 1 T COUNTYT STATET *Allocation aberrations have been adjusted to reflect sales activity SALES TAX BY MAJOR BUSINESS GROUP $1,200,000 $1,000,000 $800,000 $600,000 $400,000 Legend Q2 2021 * $200,000 $0 ■ • Q2 2022* General Restaurants County Building Autos Fuel and Food Business Consumer and and State and and Service and and Goods Hotels Pools Construction Transportation Stations Drugs Industry CITY OF LA QUINTA HIGHLIGHTS ( D TOP 25 PRODUCERS La Quinta's receipts from April through June were flat compared to the second sales period in 2021. Excluding reporting aberrations, actual sales were up 6.3%. Receipts from restaurants -hotels increased as the appetite for in -person dining remained strong in Q2. Consumer spending held up during 2Q22's inflation surge, with retail sales rising slightly more than expected for the quarter amid rising prices across most categories. In 2Q22, gas prices were, on average, up $1.89 a gallon when compared to the year-ago period, driving up revenue from fuel -service stations. New projects resulting from the Infrastructure Investment and Jobs Act began to ramp up, expecting increased revenue from building -construction. The manufacturing industry is building back fast, undeterred by significant labor and supply chain challenges. The City's share of the countywide use tax pool increased 0.6% when compared to the same period in the prior year. The City's voter -approved transactions and use tax, Measure G, generated $4,006,711 in revenue led by sales from general consumer goods and restaurants -hotels. Net of aberrations, taxable sales for the Southern California region grew 11.1% over the comparable time period. Arco AM PM Best Buy Circle K Costco Floor & Decor G&MOil Genesis/Hyundai of La Quinta Home Depot In N Out Burger Kohls La Quinta Chevrolet & Cadillac La Quinta Resort & Club La Quinta Shell Lowes Marshalls McDonald's PGA West Private Clubhouse & Golf Courses Ross Target TJ Maxx Torre Nissan Tower Mart Ulta Beauty Vons Walmart Supercenter HdL° Companies Published by HdL Companies in Fall 2022 www.hdlcompanies.com 1888.861.0220 (S) STATEWIDE RESULTS Local one cent sales and use tax for sales occurring April through June was 10% higher than the same quarter one year ago after adjusting for accounting anomalies and back payments from previous quarters. These returns mark the sixth consecutive quarter of double- digit growth since the pandemic periods in 2020, with the July -June 2022 fiscal year up 15%. Commuters returningto offices combined with the Russia -Ukraine conflict continuing to put upward pressure on oil prices and left Californians facing the highest average price per gallon on record resulting in fuel and service station receipts 42% higher than last year. While statewide fuel consumption still trails 2019 levels, local gas prices are expected to remain high until after the summer blend period. Led by consumer's desire to dine out, a steady rise in tourism and business travel, higher menu prices and great weather, the restaurant sector continues to flourish. Theme parks, entertainment venues and hotels showed the strongest growth with casual dining establishments remaining solid, a trend likely to remain through 2022. The automobile sector experienced modest gains for new car dealers and rental car vendors, however sales of used autos and leasing activity has begun to cool. Brands prioritizing full electric and hybrid models still appear to be the most attractive with consumers, however increased financing rates may cause even their activity to dampen. Tight inventories that contributed to dramatic price increases over the last 18 months are also showing signs of loosening as newer models are released in greater numbers. General consumer goods categories saw steady returns largely propped up by retailers also selling fuel. In comparison with the prior year when consumers were buying merchandise at a record pace, the current returns from apparel and jewelry stores grew moderately with home furnishings showing a slight decrease. With new housing starts accelerating and residential and commercial property values rising, construction contractors remain busy. Lumber prices have softened from prior year highs leaving material suppliers with modest gains, however electrical, plumbing and energy suppliers Cons.Goods boosted building sector results. Increased investment in capital equipment remains an important area of growth for county pool allocations, especially as online spending for general consumer goods begins to flatten as consumers return to in-store shopping. Overall, higher priced goods through periods of consistent demand have led to economic inflation. The Federal Reserve Board's recent actions to curb inflation are anticipated to put downward pressure on sales of autos, building materials and financed general consumer goods, resulting in slower growth by year end and into 2023. Pools 15% :taurants 6 os/Trans. *ADJUSTED FOR ECONOMIC DATA La Quinta County HdL State Business Type Q2'22* Change Change Change Casual Dining 236.6 5.5%0 12.1%0 17.3%0 Service Stations 158.2 28.9%0 33.4%0 36.4%0 Leisure/Entertainment 121.0 10.9%0 45.7%0 70.4%0 Electronics/Appliance Stores 109.8 -2.7%© -3.1%© -0.8%40 Quick -Service Restaurants 90.1 8.0%0 1.4%0 5.2%0 Family Apparel 78.4 -2.4%© -3.5%40 0.6%0 Grocery Stores 77.6 8.1%0 8.2%0 5.3%0 Specialty Stores 69.5 2.8%0 -0.9%40 4.2%0 Fine Dining 61.8 -1.8%40 -6.1%0 17.9%0 Home Furnishings 50.0 -23.5%4) 0.1%0 -4.6%4) *Allocation aberrations have been adiusted to reflect sales activity *In thousands of dollars POWER POINTS FINANCIAL ADVISORY COMMISSION MEETING NOVEMBER 9, 2022 Financial Advisory Commissio Meeting 11/9/2022 f ;�ff i�� c The Financial Advisory Commission's Next Regular Quarterly Meeting is on February 8,, 2023 CALIF �I 4k A jl �14