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2024 11 13 FAC(Pea — GEM of the DESERT — Financial Advisory Commission agendas and staff reports are now available on the City's web page: www.laquintaca._gov FINANCIAL ADVISORY COMMISSION AGENDA CITY HALL COUNCIL CHAMBER 78495 Calle Tampico, La Quinta WEDNESDAY, NOVEMBER 13, 2024, AT 3:30 P.M. Members of the public may listen to this meeting by tuning -in live via www.laquintaca.gov/livemeetings. CALL TO ORDER ROLL CALL: Commissioners: Anderson, Batavick, Kiehl, Lee, Mast, Way, and Chair Dorsey PLEDGE OF ALLEGIANCE 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 at the end of the agenda. The Commission values your comments; however, in accordance with State law, no action shall be taken on any item not 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 1. ARTS AND MUSIC LINE PROJECT UPDATE — PRESENTATION BY COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS ASSISTANT DIRECTOR OF TRANSPORTATION RANDY BOWMAN FINANCIAL ADVISORY COMMISSION AGENDA Page 1 of 4 NOVEMBER 13, 2024 CONSENT CALENDAR NOTE: Consent Calendar items are routine in nature and can be approved by one motion. 1. RECEIVE AND FILE SPECIAL MEETING MINUTES DATED OCTOBER 2, 2024 2. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED AUGUST 31, 2024 3. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED SEPTEMBER 30, 2024 BUSINESS SESSION 1. APPROVE THE FINANCIAL ADVISORY COMMISSION SUBCOMMITTEE RECOMMENDATIONS ON FUNDING OUTSTANDING PENSION OBLIGATIONS AND REVISIONS TO THE GENERAL FUND BALANCE AND RESERVES POLICY FOR CITY COUNCIL CONSIDERATION STUDY SESSION — None DEPARTMENTAL REPORTS 1. FINANCE DEPARTMENT CURRENT AND FUTURE INITIATIVES 2. SECOND QUARTER 2024 (APRIL -JUNE) SALES TAX UPDATE COMMISSIONERS' ITEMS ADJOURNMENT The next regular quarterly meeting of the La Quinta Financial Advisory Commission will be held February 12, 2025, commencing at 3:30 p.m. at the La Quinta City Hall Council Chamber, 78495 Calle Tampico, La Quinta, CA 92253. The Commission will hold a special meeting on December 4, 2025. DECLARATION OF POSTING I, Claudia Martinez, Interim 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 13, 2024, was posted on the City's website, near the entrance to the Council Chamber at 78495 Calle Tampico and the bulletin board at 51321 Avenida Bermudas, on November 8, 2024. DATED: November 8, 2024 Claudia Martinez, Finance Director, Interim Commission Secretary City of La Quinta, California FINANCIAL ADVISORY COMMISSION AGENDA Page 2 of 4 NOVEMBER 13, 2024 PAGE PAGE PAGE Public Notices • Agenda packet materials are available for public inspection: 1) at the Clerk's Office at La Quinta City Hall, located at 78495 Calle Tampico, La Quinta, California 92253; and 2) on the City's website at https://www.laquintaca. gov/our-city/city-govern ment/boards-and- commissions/financial-advisory-commission, in accordance with the Brown Act [Government Code § 54957.5; AB 2647 (Stats. 2022, Ch. 971)]. • The La Quinta City Council Chamber is handicapped accessible. If special equipment is needed for the hearing impaired, please contact the Clerk's Office at (760) 777-7091, 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. 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 CMartinez(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. 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. FINANCIAL ADVISORY COMMISSION Page 3 of 4 NOVEMBER 13, 2024 AGENDA 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 § 7920.000 et seq.]. TELECONFERENCE ACCESSIBILITY — INSTRUCTIONS Teleconference accessibility may be triggered in accordance with AB 2449 (Stats. 2022, Ch. 285), codified in the Brown Act [Government Code § 54953], if a member of the Commission requests to attend and participate in this meeting remotely due to "just cause" or "emergency circumstances," as defined, and only if the request is approved by the Commission. In such instances, remote public accessibility and participation will be facilitated via Zoom Webinar as detailed below. *** TELECONFERENCE PROCEDURES — PURSUANT TO AB 2449*** APPLICABLE ONLY WHEN TELECONFERENCE ACCESSIBILITY IS IN EFFECT Verbal public comments via Teleconference — members of the public may attend and participate in this meeting by teleconference via Zoom and use the "raise your hand" feature when public comments are prompted by the Chair; the City will facilitate the ability for a member of the public to be audible to the Commission and general public and allow him/her/they to speak on the item(s) requested. Please note — members of the public must unmute themselves when prompted upon being recognized by the Chair, in order to become audible to the Commission and the public. Only one person at a time may speak by teleconference and only after being recognized by the Chair. ZOOM LINK: https://us06web.zoom.us/j/89839984651 Meeting ID: 898 3998 4651 Or join by phone: (253) 215 — 8782 Written public comments — can be provided in person during the meeting or emailed to CMartinez(LaQuintaCA.gov any time prior to the adjournment of the meeting, and will be distributed to the Commission, made public, incorporated into the public record of the meeting, and will not be read during the meeting unless, upon the request of the Chair, a brief summary of any public comment is asked to be read, to the extent the Committee can accommodate such request. FINANCIAL ADVISORY COMMISSION AGENDA Page 4 of 4 NOVEMBER 13, 2024 CALL TO ORDER CONSENT CALENDAR ITEM NO. 1 FINANCIAL ADVISORY COMMISSION SPECIAL MEETING MINUTES WEDNESDAY, OCTOBER 2, 2024 A special meeting of the La Quinta Financial Advisory Commission (Commission) was called to order at 3:30 p.m. by Chair Dorsey. PRESENT: Commissioners Anderson, Batavick, Kiehl, Lee, Mast, Way, and Chair Dorsey ABSENT: None PLEDGE OF ALLEGIANCE Commissioner Anderson 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 SPECIAL MEETING MINUTES DATED AUGUST 29, 2024 2. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED JULY 31, 2024 CONSENT CALENDAR — COMMENTS ITEM NO. 2: In response to Commissioner inquiries, Principal Financial Analyst Hallick explained the purpose of zoning change mitigation fees and how the timing of City billing invoices affected the year -over -year comparison of the amounts. Additionally, the significant increase in interest earnings was discussed, due mostly to the higher interest rate environment as well as the City's utilization of a money market sweep account that earns interest in the operational account. ITEM NO. 1: Commissioner Lee said the August 29, 2024, Commission minutes should be amended under Business Session Item No. 1 to read as follows: FINANCIAL ADVISORY COMMISSION SPECIAL MEETING — MINUTES Page 1 of 3 OCTOBER 2, 2024 5 "The Commission discussed effectiveness of adjuctmcnts in last year's audit the internal control over financial reporting and the audit adjustments that resulted in classification of a material weakness adjustment in the prior year; implementation of material weakness corrections; reoccurring material weaknesses, if any; reason for Housing Authority Fund classification change; and reason for the audit report completion date." MOTION — A motion was made and seconded by Commissioners Anderson/Lee to approve the Consent Calendar, amending the August 29, 2024, special Commission meeting minutes as noted above. Motion passed unanimously. BUSINESS SESSION 1. APPOINT TWO FINANCIAL ADVISORY COMMISSIONERS TO AUDIT AND FORMULATE THE ANNUAL MEASURE G SALES TAX OVERSIGHT COMPLIANCE REPORT FOR FISCAL YEAR 2023/24 Finance Director Martinez presented the staff report, which is on file in the Finance Department. Commissioners Way and Mast volunteered to serve on this sub -committee. The Commission discussed the importance of having Commissioners who served on the subcommittee in the prior year to serve again to provide continuity; and review of the Measure G Sales Tax Oversight Compliance Report will go hand-in-hand with the City's ongoing work on the Strategic Plan, particularly regarding making recommendations on the long-term use of the current Measure G reserve revenues. Commissioner Lee noted that if the Commission was to entertain appointing three members to serve on the subcommittee, he would be interested. MOTION — A motion was made and seconded by Commissioners Kiehl/Anderson to appoint Commissioners Mast, Lee, and Way to serve on the subcommittee to audit the annual Measure G Sales Tax Oversight Compliance Report for fiscal year 2023/24. Motion passed unanimously. 2. APPOINT TWO FINANCIAL ADVISORY COMMISSIONERS TO REVIEW THE CITY'S OUTSTANDING PENSION OBLIGATION Principal Financial Management Analyst Hallick presented the staff report, which is on file in the Finance Department. Commissioners Anderson and Kiehl volunteered to serve on this sub -committee. The Commission and Staff discussed the CaIPERS discount rate and the process for how that is determined by their Board, the City's budgeting process for unfunded liability FINANCIAL ADVISORY COMMISSION SPECIAL MEETING — MINUTES Page 2 of 3 OCTOBER 2, 2024 6 payments, how paying unfunded liabilities saves the City over the long term, and the use of reserves to pay down the unfunded liabilities. MOTION — A motion was made and seconded by Commissioners Lee/Way to appoint Commissioners Kiehl and Anderson to serve on the sub -committed to review the City's outstanding pension obligation. Motion passed unanimously. STUDY SESSION — None DEPARTMENTAL REPORTS 1. FINANCE DEPARTMENT CURRENT AND FUTURE INITIATIVES Finance Director Martinez provided an update on current and upcoming Finance Department projects and City events, with the report on file in the Finance Department. The Commission discussed the Travertine development is located south of Avenue 60, west of Madison Street, and north of Avenue 64; the Highway 111 Re -envisioning project expenses listed on the revenue and expenditure reports are true expenses related to the design of the project and feasibility studies related to possible implementation of a Form - Based code and an uniform Specific Plan for the entire corridor which will combine the currently 11 existing Specific Plans. COMMISSIONERS' ITEMS Commissioner Lee provided further commentary on the 2022/23 audit report that was presented at the August 29, 2024, meeting. Commissioner Lee emphasized that the City utilizes internal reports to assess its financial position until the ACFR is published. He clarified that the auditors' role is to test internal controls and agrees with the auditors that the City's reporting is reliable, in addition to the City not having significant control weaknesses and has trust in staff and the accuracy of financial reporting. Commissioner Way apologized for not being able to attend the August 29, 2024, special meeting of the Commission. ADJOURNMENT There being no further business, it was moved and seconded by Commissioners Anderson/Mast to adjourn this meeting at 5:15 p.m. Motion passed unanimously. Respectfully submitted, Claudia Martinez, Interim Commission Secretary City of La Quinta, California FINANCIAL ADVISORY COMMISSION SPECIAL MEETING — MINUTES Page 3 of 3 OCTOBER 2, 2024 8 CONSENT CALENDAR ITEM NO. 2 City of La Quinta FINANCIAL ADVISORY COMMISSION MEETING November 13, 2024 STAFF REPORT AGENDA TITLE: RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED AUGUST 31, 2024 RECOMMENDATION Receive and file revenue and expenditure report dated August 31, 2024. EXECUTIVE SUMMARY • The report summarizes the City's year-to-date (YTD) and month -to -date (MTD) revenues and expenditures for August 2024 (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 2024 for fiscal year 2024/25. Current Total Budget — represents original adopted budgets plus any Council approved budget amendments from throughout the year. The 2023/24 operating and Capital Improvement Project carryovers to 2024/25 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. 9 August 2024 Revenues Comparison to 2023 General Fund (GF) All Funds MTD YTD $ 794,749 $ 1,650,618 $ 1,913,235 $ 3,928,010 August 2024 Expenditures Budget 2.00% 2.50% YTD Budget $ 2,178,268 $ 3,956,540 2.78% 3.20% Comparison to 2023 General Fund Payroll (GF) All Funds Percent of MTD YTD Budget $ 1,978,768 $ 2,681,243 $ 1,163,621 $ 1,655,959 $ 4,955,569 $ 7,284,396 3.22% 11.72% 4.99% Percent of YTD Budget $ 2,141,585 $ 1,148,020 $ 6,355,580 2.94% 8.57% 5.38% Top Five Revenue/Income Sources for August General Fund Non -General Fund Transient Occupancy (Hotel) Tax $ 354,318 Allocated Interest $ 532,231 Misc. Revenue(1) $ 212,276 Gas Tax $ 195,181 STVR Registration Fees $ 76,500 Coachella Valley Water District (CVWD)(3) $ 117,646 Misc. Reimbursements(2) $ 66,471 Non -Allocated Interest (Pension Fund) $ 92,829 Franchise Taxes - Burrtec $ 51,178 SilverRock Green Fees $ 88,358 Top Five Expenditures/Outlays for August General Fund Non -General Fund Parks Landscape Maintenance Contract $ 107,663 Capital Improvement Program (CIP) - Construction(5) $ 908,161 Membership Dues(4) $ 77,863 Developer Reimbursements $ 400,000 Professional Services (Clerk) $ 56,441 Software Licenses(6) $ 276,221 Marketing and Tourism Promotions $ 54,291 Machinery and Equipment(7) $ 273,065 Electricity(Buildings) $ 48,783 SilverRock Maintenance $ 200,237 (')Misc. Revenue: National Opioids Settlement payments (2)Misc. Reimbursements: SB90 recovered costs from state -mandated programs (3) CVWD:Turf conversion rebates related to north La Quinta landscape project (4)Membership: Coachellla Valley Assoc. of Governments and CoStar (5)CIP Construction: Dune Palms bridge (6)Software: Tyler ERP 10, Tyler EnerGov, Tracker, Granicus (')Machinery: Audio -Visual upgrades for council chambers and other City Hall meeting rooms 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. 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, Principal Management Analyst Approved by: Claudia Martinez, Finance Director Attachment: 1. Revenue and Expenditure Report for August 31, 2024 10 Za4idCv CALIFORNIA Fund ATTACHMENT 1 For Fiscal: 2024/25 Period Ending: 08/31/2024 Revenue Summary Variance Original Current Period Fiscal Favorable Percent Total Budget Total Budget Activity Activity (Unfavorable) Used 101- GENERAL FUND 82,714,300 82,714,300 794,749 1,650,618 -81,063,682 2.00% 105 - DISASTER RECOVERY FUND 30,000 30,000 0 0 -30,000 0.00% 201- GAS TAX FUND 2,589,000 2,589,000 195,181 195,181 -2,393,819 7.54% 202 - LIBRARY & MUSEUM FUND 3,143,000 3,143,000 477 958 -3,142,042 0.03% 203 - PUBLIC SAFETY FUND (MEASURE G) 5,000 5,000 0 0 -5,000 0.00% 210 - FEDERAL ASSISTANCE FUND 190,000 190,000 0 0 -190,000 0.00% 212 - SLESA (COPS) FUND 103,000 103,000 0 0 -103,000 0.00% 215 - LIGHTING & LANDSCAPING FUND 4,000,500 4,000,500 0 0 -4,000,500 0.00% 221- AB 939 - CALRECYCLE FUND 80,000 80,000 3,656 3,656 -76,344 4.57% 223 - MEASURE A FUND 2,025,000 2,025,000 0 0 -2,025,000 0.00% 225 - INFRASTRUCTURE FUND 1,000 1,000 0 0 -1,000 0.00% 226 - EMERGENCY MANAGEMENT PERFORMAi 013BANT (EMPG)13,000 0 0 -13,000 0.00% 227 - STATE HOMELAND SECURITY PROGRAMS (51-193t) 5,500 0 0 -5,500 0.00% 230 - CASp FUND, AB 1379 21,000 21,000 1,460 2,824 -18,176 13.45% 231- SUCCESSOR AGCY PA 1 RORF 20,260,000 20,260,000 7 13 -20,259,987 0.00% 235 - SO COAST AIR QUALITY FUND 54,500 54,500 0 0 -54,500 0.00% 237 - SUCCESSOR AGCY PA 1 ADMIN 13,820 13,820 0 0 -13,820 0.00% 241- HOUSING AUTHORITY 1,452,000 1,452,000 28,294 109,347 -1,342,653 7.53% 243 - RDA LOW -MOD HOUSING FUND 60,000 60,000 0 0 -60,000 0.00% 247 - ECONOMIC DEVELOPMENT FUND 40,000 40,000 1,625 2,250 -37,750 5.63% 249 - SA 2011 LOW/MOD BOND FUND (Refinan12 002016) 18,000 0 0 -18,000 0.00% 250 -TRANSPORTATION DIF FUND 540,000 540,000 31,499 79,523 -460,478 14.73% 251- PARKS & REC DIF FUND 253,000 253,000 4,212 21,372 -231,628 8.45% 252 - CIVIC CENTER DIF FUND 103,000 103,000 4,116 15,044 -87,956 14.61% 253 - LIBRARY DEVELOPMENT DIF 50,000 50,000 794 4,029 -45,971 8.06% 254 - COMMUNITY & CULTURAL CENTERS DIF105,000 105,000 1,912 9,702 -95,298 9.24% 255 - STREET FACILITY DIF FUND 1,000 1,000 0 0 -1,000 0.00% 256 - PARK FACILITY DIF FUND 100 100 0 0 -100 0.00% 257 - FIRE PROTECTION DIF 53,000 53,000 1,217 4,484 -48,516 8.46% 259 - MAINTENANCE FACILITIES DIF FUND 47,000 47,000 2,003 5,433 -41,567 11.56% 270 - ART IN PUBLIC PLACES FUND 158,000 158,000 1,918 12,243 -145,757 7.75% 275 - LQ PUBLIC SAFETY OFFICER 3,000 3,000 0 0 -3,000 0.00% 299 - INTEREST ALLOCATION FUND 0 0 532,231 1,247,359 1,247,359 0.00% 310 - LQ FINANCE AUTHORITY DEBT SERVICE 1,500 1,500 0 0 -1,500 0.00% 401- CAPITAL IMPROVEMENT PROGRAMS27,218,109 27,218,109 117,646 117,646 -27,100,463 0.43% 405 - SA PA 1 CAPITAL IMPRV FUND 500 500 0 0 -500 0.00% 501- FACILITY & FLEET REPLACEMENT 1,705,000 1,705,000 0 0 -1,705,000 0.00% 502 - INFORMATION TECHNOLOGY 2,276,708 2,276,708 2,824 6,032 -2,270,676 0.26% 503 - PARK EQUIP & FACILITY FUND 500,000 500,000 0 0 -500,000 0.00% 504 - INSURANCE FUND 1,363,230 1,363,230 0 0 -1,363,230 0.00% 601- SILVERROCK RESORT 5,484,500 5,484,500 94,586 199,032 -5,285,468 3.63% 602 - SILVERROCK GOLF RESERVE 98,000 98,000 0 0 -98,000 0.00% 760 - SUPPLEMENTAL PENSION PLAN 7,000 7,000 0 0 -7,000 0.00% 761- CERBT OPEB TRUST 40,000 40,000 0 0 -40,000 0.00% 762 - PARS PENSION TRUST 200,000 200,000 92,829 241,264 41,264 120.63% Report Total: 157,026,267 157,026,267 1,913,235 3,928,010 -153,098,257 2.50% Accounts are subject to adjusting entries and audit. The City's Annual Comprehensive Financial Report, published annually, is the best resource for all final audited numbers. Page 1 of 3 11 Fund For Fiscal: 2024/25 Period Ending: 08/31/2024 Expenditure Summary Variance Original Current Period Fiscal Favorable Percent Total Budget Total Budget Activity Activity (Unfavorable) Used 101- GENERAL FUND 83,331,665 83,331,665 1,978,768 2,681,243 80,650,422 3.22% 201- GAS TAX FUND 3,443,100 3,443,100 72,820 93,946 3,349,154 2.73% 202 - LIBRARY & MUSEUM FUND 2,555,615 2,555,615 49,770 54,814 2,500,801 2.14% 210 - FEDERAL ASSISTANCE FUND 198,500 198,500 0 0 198,500 0.00% 212 - SLESA (COPS) FUND 100,000 100,000 0 0 100,000 0.00% 215 - LIGHTING & LANDSCAPING FUND 3,957,700 3,957,700 306,180 336,772 3,620,928 8.51% 221- AB 939 - CALRECYCLE FUND 200,000 200,000 9,000 9,000 191,000 4.50% 223 - MEASURE A FUND 2,335,000 2,335,000 0 0 2,335,000 0.00% 226 - EMERGENCY MANAGEMENT PERFORMANQ0308ANT (EMPG)12,000 0 9,750 2,250 81.25% 227 - STATE HOMELAND SECURITY PROGRAMS (5 5,000 0 0 5,000 0.00% 230 - CASp FUND, AB 1379 5,500 5,500 0 0 5,500 0.00% 231- SUCCESSOR AGCY PA 1 RORF 4,452,755 4,452,755 0 0 4,452,755 0.00% 235 - SO COAST AIR QUALITY FUND 40,000 40,000 1,819 1,819 38,181 4.55% 237 - SUCCESSOR AGCY PA 1 ADMIN 10,000 10,000 0 0 10,000 0.00% 241- HOUSING AUTHORITY 1,715,440 1,715,440 71,451 149,810 1,565,630 8.73% 243 - RDA LOW -MOD HOUSING FUND 250,000 250,000 0 0 250,000 0.00% 247 - ECONOMIC DEVELOPMENT FUND 31,500 31,500 0 2,450 29,050 7.78% 249 - SA 2011 LOW/MOD BOND FUND (Refina2E „®11002016) 250,000 0 0 250,000 0.00% 250 -TRANSPORTATION DIF FUND 1,579,109 1,579,109 400,000 400,000 1,179,109 25.33% 253 - LIBRARY DEVELOPMENT DIF 15,000 15,000 0 0 15,000 0.00% 254 - COMMUNITY & CULTURAL CENTERS DIF500,000 500,000 0 0 500,000 0.00% 259 - MAINTENANCE FACILITIES DIF FUND 100,000 100,000 0 0 100,000 0.00% 270 - ART IN PUBLIC PLACES FUND 233,000 233,000 16,031 16,031 216,969 6.88% 310 - LQ FINANCE AUTHORITY DEBT SERVICE 1,500 1,500 0 0 1,500 0.00% 401- CAPITAL IMPROVEMENT PROGRAMS27,218,109 27,218,109 919,934 922,818 26,295,291 3.39% 501- FACILITY & FLEET REPLACEMENT 1,628,750 1,628,750 37,897 39,531 1,589,219 2.43% 502 - INFORMATION TECHNOLOGY 3,217,945 3,217,945 569,694 693,408 2,524,537 21.55% 503 - PARK EQUIP & FACILITY FUND 2,000,000 2,000,000 143,832 143,833 1,856,167 7.19% 504 - INSURANCE FUND 1,058,000 1,058,000 1,777 1,037,822 20,178 98.09% 601- SILVERROCK RESORT 5,365,000 5,365,000 373,804 672,988 4,692,012 12.54% 760 - SUPPLEMENTAL PENSION PLAN 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 30,000 30,000 2,793 5,528 24,472 18.43% Report Total: 145,854,538 145,854,538 4,955,569 7,284,396 138,570,142 4.99% Accounts are subject to adjusting entries and audit. The City's Annual Comprehensive Financial Report, published annually, is the best resource for all final audited numbers. Page 2 of 3 12 Fund Descriptions Fund # Name Notes 101 General Fund The primary fund of the City used to account for all revenue and expenditures of the City; a broad range of municipal activities are provided through this fund. 105 Disaster Recovery Fund Accounts for use of one-time federal funding designed to deliver relief to American workers and aid in the economic recovery iin the wake of COVID-19. The American Rescue Plan Act (ARPA) was passed by Congress in 2021 to provide fiscal recovery funds to state and local governments. 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 Safety (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 recycling 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 County. 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. Assembly Bill (AB) 1379 and Senate Bill (SB) 1186. 231 Successor Agency PA 1 RORF Fund Successor Agency (SA) Project Area (PA) 1 Redevelopment Obligation Retirement Fund (RORF) for Redevelopment Property Tax Trust Fund (RPTTF) taxes received for debt service payments on recognized obligations of the former Redevelopment Agency (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. Assembly 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 Agency (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% for Housing) 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 and transfers 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. 259 Maintenance Facilities DIF Fund Developer impact fees collected for specific public improvements - maintenance facilities. 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 dut . 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 fully 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) For all pension-related benefits and unfunded liabilities. 13 Page 3 of 3 14 CONSENT CALENDAR ITEM NO. 3 City of La Quinta FINANCIAL ADVISORY COMMISSION MEETING November 13, 2024 STAFF REPORT AGENDA TITLE: RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED SEPTEMBER 30, 2024 RECOMMENDATION Receive and file revenue and expenditure report dated September 30, 2024. EXECUTIVE SUMMARY • The report summarizes the City's year-to-date (YTD) and month -to -date (MTD) revenues and expenditures for September 2024 (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 2024 for fiscal year 2024/25. Current Total Budget — represents original adopted budgets plus any Council approved budget amendments from throughout the year. The 2023/24 operating and Capital Improvement Project carryovers to 2024/25 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. 15 September 2024 Revenues Comparison to 2023 MTD YTD Percent of Budget General Fund (GF) $ 2,679,138 $ All Funds $ 5,966,418 $ 4,330,089 9,731,696 September 2024 Expenditures 5.23% 6.20% YTD Percent of Budget 5,070,875 8,030,238 Comparison to 2023 6.46% 6.50% General Fund Payroll (GF) All Funds MTD YTD Percent of Budget YTD Percent of Budget $ 3,701,924 $ 6,553,744 7.86% $ $ 830,371 $ 2,486,330 17.60% $ $ 22,555,328 $ 30,129,814 20.66% $ 4,080,203 2,244,215 27,088,716 5.60% 16.76% 22.94% To • Five Revenue/Income Sources for Se •tember General Fund Measure G Sales Tax Sales Tax Transient Occupancy (Hotel) Tax Document Transfer Tax STVR Registration Fees $ 1,103,397 $ 852,312 $ 217,844 $ 137,873 $ 54,000 Non -General Fund Coachella Valley Assoc. of Gov'ts - Dune Palms Bridge Allocated Interest Gas Tax SilverRock Green Fees County Sales Tax (Measure A) $ 1,510,206 $ 873,307 $ 186,582 $ 151,066 $ 146,046 To • Five Ex • enditures/Outla s for Se • tember General Fund Sheriff Contract (July and August) Parks Landscape Maintenance X -Park Programming (July -Sept) Fritz Burns Pool Programming Contract Legal Services $ 2,178,953 $ 172,782 $ 106,071 $ 80,611 $ 52,768 Non -General Fund Debt Service Payments- Successor Agency Bonds (I) Capital Improvement Program (CIP) - Construction(2) Parks - New Playground Equipment SilverRock Maintenance Homelessness Assistance $ 15,050,680 $ 1,168,202 $ 411,688 $ 306,420 $ 300,800 "Interest and principal payments for former revenue received from the County. (2)CIP Construction: Pavement rehabilitation redevelopment agency bonds, funded by dedicated Redevelopment Property Tax Trust Fund (RPTTF) on Dune Palms Rd.; Pavement Management Plan slurry seal; landscape renovations. 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. 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, Principal Management Analyst Approved by: Claudia Martinez, Finance Director Attachment: 1. Revenue and Expenditure Report for September 30, 2024 16 awe/ hi CALIFORNIA Fund Original Total Budget 101- GENERAL FUND 82,714,300 105 - DISASTER RECOVERY FUND 30,000 201- GAS TAX FUND 2,589,000 202 - LIBRARY & MUSEUM FUND 3,143,000 203 - PUBLIC SAFETY FUND (MEASURE G) 5,000 210 - FEDERAL ASSISTANCE FUND 190,000 212 - SLESA (COPS) FUND 103,000 215 - LIGHTING & LANDSCAPING FUND 4,000,500 221- AB 939 - CALRECYCLE FUND 80,000 223 - MEASURE A FUND 2,025,000 225 - INFRASTRUCTURE FUND 1,000 226 - EMERGENCY MANAGEMENT PERFORMAN.3 J08ANT (EMPG)13,000 227 - STATE HOMELAND SECURITY PROGRAMS (5J'.61A 5,500 ATTACHMENT 1 For Fiscal: 2024/25 Period Ending: 09/30/2024 Revenue Summary Variance Current Period Fiscal Favorable Percent Total Budget Activity Activity (Unfavorable) Used 82,714,300 2,679,138 4,330,089 -78,384,211 5.23% 30,000 0 0 -30,000 0.00% 2,589,000 186,582 290,013 -2,298,987 11.20% 3,143,000 560 1,517 -3,141,483 0.05% 5,000 0 0 -5,000 0.00% 190,000 0 0 -190,000 0.00% 103,000 0 0 -103,000 0.00% 4,000,500 11,910 11,910 -3,988,590 0.30% 80,000 3,916 7,571 -72,429 9.46% 2,025,000 146,046 146,046 -1,878,954 7.21% 1,000 0 0 -1,000 0.00% 0 0 -13,000 0.00% 0 0 -5,500 0.00% 21,000 1,188 4,012 -16,988 19.10% 20,260,000 17,654 17,668 -20,242,332 0.09% 54,500 12,777 12,777 -41,723 23.44% 13,820 0 0 -13,820 0.00% 1,452,000 27,401 136,748 -1,315,252 9.42% 60,000 0 0 -60,000 0.00% 40,000 1,893 4,143 -35,857 10.36% 18,000 25,522 25,522 7,522 141.79% 540,000 16,036 95,559 -444,442 17.70% 253,000 8,424 29,796 -223,204 11.78% 103,000 4,920 19,964 -83,036 19.38% 50,000 1,588 5,617 -44,383 11.23% 105,000 3,824 13,526 -91,474 12.88% 1,000 0 0 -1,000 0.00% 100 0 0 -100 0.00% 53,000 1,476 5,960 -47,040 11.25% 47,000 1,252 6,685 -40,315 14.22% 158,000 6,307 18,549 -139,451 11.74% 3,000 0 0 -3,000 0.00% 0 873,307 2,049,352 2,049,352 0.00% 1,500 0 0 -1,500 0.00% 27,218,109 1,510,206 1,627,852 -25,590,257 5.98% 500 0 0 -500 0.00% 1,705,000 0 0 -1,705,000 0.00% 2,276,708 3,341 9,373 -2,267,335 0.41% 500,000 0 0 -500,000 0.00% 1,363,230 0 0 -1,363,230 0.00% 5,484,500 170,516 369,548 -5,114,952 6.74% 98,000 0 0 -98,000 0.00% 7,000 0 0 -7,000 0.00% 40,000 156,928 156,928 116,928 392.32% 200,000 93,707 334,972 134,972 167.49% 157,026,267 5,966,418 9,731,696 -147,294,571 6.20% 230 - CASp FUND, AB 1379 231- SUCCESSOR AGCY PA 1 RORF 235 - 50 COAST AIR QUALITY FUND 237 - SUCCESSOR AGCY PA 1 ADMIN 241- HOUSING AUTHORITY 243 - RDA LOW -MOD HOUSING FUND 247 - ECONOMIC DEVELOPMENT FUND 21,000 20,260,000 54,500 13,820 1,452,000 60,000 40,000 249 - SA 2011 LOW/MOD BOND FUND (Refinan12,®11002016) 250 - TRANSPORTATION DIF FUND 251- PARKS & REC DIF FUND 252 - CIVIC CENTER DIF FUND 540,000 253,000 103,000 253 - LIBRARY DEVELOPMENT DIF 50,000 254 - COMMUNITY & CULTURAL CENTERS DIF105,000 255 - STREET FACILITY DIF FUND 256 - PARK FACILITY DIF FUND 257 - FIRE PROTECTION DIF 259 - MAINTENANCE FACILITIES DIF FUND 270 - ART IN PUBLIC PLACES FUND 275 - LQ PUBLIC SAFETY OFFICER 299 - INTEREST ALLOCATION FUND 1,000 100 53,000 47,000 158,000 3,000 0 310 - LQ FINANCE AUTHORITY DEBT SERVICE 1,500 401- CAPITAL IMPROVEMENT PROGRAMS27,218,109 405 - SA PA 1 CAPITAL IMPRV FUND 500 501- FACILITY & FLEET REPLACEMENT 1,705,000 502 - INFORMATION TECHNOLOGY 2,276,708 503 - PARK EQUIP & FACILITY FUND 500,000 504 - INSURANCE FUND 1,363,230 601- SILVERROCK RESORT 5,484,500 602 - SILVERROCK GOLF RESERVE 98,000 760 - SUPPLEMENTAL PENSION PLAN 7,000 761- CERBT OPEB TRUST 40,000 762 - PARS PENSION TRUST 200,000 Report Total: 157,026,267 Accounts are subject to adjusting entries and audit. The City's Annual Comprehensive Financial Report, published annually, is the best resource for all final audited numbers. Page 1 of 3 17 Fund For Fiscal: 2024/25 Period Ending: 09/30/2024 E xpenditure Summary Variance Original Current Period Fiscal Favorable Percent Total Budget Total Budget Activity Activity (Unfavorable) Used 101- GENERAL FUND 83,331,665 83,331,665 3,701,924 6,553,744 76,777,921 7.86% 201- GAS TAX FUND 3,443,100 3,443,100 59,765 153,711 3,289,389 4.46% 202 - LIBRARY & MUSEUM FUND 2,555,615 2,555,615 110,362 165,676 2,389,939 6.48% 210 - FEDERAL ASSISTANCE FUND 198,500 198,500 0 0 198,500 0.00% 212 - SLESA (COPS) FUND 100,000 100,000 33,927 33,927 66,073 33.93% 215 - LIGHTING & LANDSCAPING FUND 3,957,700 3,957,700 465,223 801,995 3,155,705 20.26% 221- AB 939 - CALRECYCLE FUND 200,000 200,000 5,000 14,000 186,000 7.00% 223 - MEASURE A FUND 2,335,000 2,335,000 0 0 2,335,000 0.00% 226 - EMERGENCY MANAGEMENT PERFORMANQVJOBANT (EMPG)L2,000 0 9,750 2,250 81.25% 227 - STATE HOMELAND SECURITY PROGRAMS (5J1&M 5,000 0 0 5,000 0.00% 230 - CASp FUND, AB 1379 5,500 5,500 0 0 5,500 0.00% 231- SUCCESSOR AGCY PA 1 RORF 4,452,755 4,452,755 15,050,680 15,050,680 -10,597,925 338.01% 235 - SO COAST AIR QUALITY FUND 40,000 40,000 0 1,819 38,181 4.55% 237 - SUCCESSOR AGCY PA 1 ADMIN 10,000 10,000 0 1,600 8,400 16.00% 241- HOUSING AUTHORITY 1,715,440 1,715,440 71,709 221,519 1,493,921 12.91% 243 - RDA LOW -MOD HOUSING FUND 250,000 250,000 300,800 300,800 -50,800 120.32% 247 - ECONOMIC DEVELOPMENT FUND 31,500 31,500 534 2,984 28,516 9.47% 249 - SA 2011 LOW/MOD BOND FUND (Refina211101002016) 250,000 0 0 250,000 0.00% 250 -TRANSPORTATION DIF FUND 1,579,109 1,579,109 0 400,000 1,179,109 25.33% 253 - LIBRARY DEVELOPMENT DIF 15,000 15,000 0 0 15,000 0.00% 254 - COMMUNITY & CULTURAL CENTERS DIF500,000 500,000 0 0 500,000 0.00% 259 - MAINTENANCE FACILITIES DIF FUND 100,000 100,000 0 0 100,000 0.00% 270 - ART IN PUBLIC PLACES FUND 233,000 233,000 12,053 28,084 204,916 12.05% 310 - LQ FINANCE AUTHORITY DEBT SERVICE 1,500 1,500 0 0 1,500 0.00% 401- CAPITAL IMPROVEMENT PROGRAMS27,218,109 27,218,109 1,297,372 2,220,191 24,997,918 8.16% 501- FACILITY & FLEET REPLACEMENT 1,628,750 1,628,750 260,198 299,729 1,329,021 18.40% 502 - INFORMATION TECHNOLOGY 3,217,945 3,217,945 244,344 1,055,164 2,162,781 32.79% 503 - PARK EQUIP & FACILITY FUND 2,000,000 2,000,000 411,688 555,521 1,444,479 27.78% 504 - INSURANCE FUND 1,058,000 1,058,000 706 1,038,527 19,473 98.16% 601- SILVERROCK RESORT 5,365,000 5,365,000 525,769 1,198,757 4,166,243 22.34% 760 - SUPPLEMENTAL PENSION PLAN 12,850 12,850 0 12,833 17 99.87% 761- CERBT OPEB TRUST 1,500 1,500 446 446 1,054 29.71% 762 - PARS PENSION TRUST 30,000 30,000 2,828 8,356 21,644 27.85% Report Total: 145,854,538 145,854,538 22,555,328 30,129,814 115,724,724 20.66% Accounts are subject to adjusting entries and audit. The City's Annual Comprehensive Financial Report, published annually, is the best resource for all final audited numbers. Page 2 of 3 18 Fund Descriptions Fund # ' Name Notes 101 General Fund The primary fund of the City used to account for all revenue and expenditures of the City; a broad range of municipal activities are provided through this fund. 105 Disaster Recovery Fund Accounts for use of one-time federal funding designed to deliver relief to American workers and aid in the economic recovery iin the wake of COVID-19. The American Rescue Plan Act (ARPA) was passed by Congress in 2021 to provide fiscal recovery funds to state and local governments. 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 Safety (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 A6939 Fund/Cal Recycle Franchise fees collected from the city waste hauler that are used to reduce waste sent to landfills through recycling 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 County. 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. Assembly Bit (AB) 1379 and Senate Bill (SB) 1186. 231 Successor Agency PA 1 RORF Fund Successor Agency (SA) Project Area (PA) 1 Redevelopment Obligation Retirement Fund (RORF) for Redevelopment Property Tax Trust Fund (RPTTF) taxes received for debt service payments on recognized obligations of the former Redevelopment Agency (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. Assembly 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 Agency (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% for Housing) 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 and transfers 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. 259 Maintenance Facilities DIF Fund Developer impact fees collected for specific public improvements - maintenance facilities. 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 duty. 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 fully 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) For all pension-related benefits and unfunded liabilities. Page 3 of 3 19 20 BUSINESS SESSION ITEM NO. 1 City of La Quinta FINANCIAL ADVISORY COMMISSION MEETING November 13, 2024 STAFF REPORT AGENDA` APPROVE THE FINANCIAL ADVISORY COMMISSION SUBCOMMITTEE RECOMMENDATIONS ON FUNDING OUTSTANDING PENSION OBLIGATIONS AND REVISIONS TO THE GENERAL FUND BALANCE AND RESERVES POLICY FOR CITY COUNCIL CONSIDERATION RECOMMENDATION Approve the Financial Advisory Commission Subcommittee recommendations on funding outstanding pension obligations and revisions to the General Fund Balance and Reserves Policy for City Council consideration. EXECUTIVE SUMMARY • As of June 30, 2023, the City's CaIPERS Actuarial Reports show unfunded liabilities of $4,574,774. • CaIPERS reported a 9.3% return on investments for the year ending June 30, 2024, which would likely reduce the liability. • As of September 30, 2024, the City's pension trust had a balance of $5,993,190. • Financial Advisory Commission (FAC) formed a subcommittee to review the City's outstanding pension obligations and provide recommendations for City Council's consideration. FISCAL IMPACT Accelerating payments to California Public Employees' Retirement System (CaIPERS) could impact the General Fund budget, reserves, and/or pension trust balances, while saving the City considerable amounts of interest that would be paid over the long term. BACKGROUND/ANALYSIS In 2020, the FAC appointed two Commissioners to review the City's outstanding pension obligations. As a result of their findings, the FAC recommended, and City Council agreed, to continue to pay down the City's unfunded liability as fiscal conditions allowed. The City made Additional Discretionary Payments (ADPs) toward the unfunded liability of just over $1.0 million in fiscal 2020/21, $2.5 million in fiscal 2021/22, and $1.0 million in fiscal 2022/23. 21 In August 2022, the FAC appointed two Commissioners to complete an updated study of the pension obligations. They reviewed the CaIPERS system overall, current market value and plan funded status, benefit tiers available at the City, PARS Pension Trust balance and fund performance, and options to pay down the unfunded pension liability. While the FAC agreed that continuing to pay down the unfunded liability was preferred, it was recommended that the full Reserves Analysis study be completed first, in order to assess the City's fiscal health and measure the ability to pay down the pension liability in the context of other reserve category needs. In February 2023, the City Council approved both the revised General Fund Balance and Reserves Policy (Policy) and an ADP of $10.2 million, to be paid from General Fund reserves and the pension trust. In October 2024, the FAC appointed Commissioners Kiehl and Anderson to study the June 30, 2023 actuarial reports (published in August 2024) to make possible recommendations for further ADPs. The subcommittee also reviewed potential Policy revisions that would clarify the City's intentions regarding pension funding and allow for an established process to budget for the liabilities going forward. A full report of the subcommittee findings, which includes current pension funded status, as well as recommended policy revisions, is attached. The subcommittee recommends the following: • Send an ADP to CaIPERS utilizing unassigned reserves (Fiscal 2023/24 surplus) in the amount of $3.9 million. • Revise the Policy to set a funded status target for the pension fund, a target balance for the trust, and to allow for annual budgeting of ongoing ADPs as fiscal conditions allow, based on market conditions and future actuarial reports' funded status. Prepared by: Approved by: Rosemary Ha!lick, Financial Services Analyst Claudia Martinez, Finance Director Attachment: 1. Fiscal Year 2024/25 Pension Subcommittee Findings 22 ATTACHMENT 1 (Pea CALIFORNIA - Fiscal Year 2024/25 Pension Subcommittee Findings *ummary of Financial Advisory Commission (FAC) Subcommittee On October 2024, the FAC appointed Commissioners Anderson and Kiehl to review the City's outstanding pension obligations. This report summarizes the current funded status of the CaIPERS plans, previous contributions and effects on the plans and recommendations of the subcommittee, including proposed revisions to the General Fund Balance and Reserves Policy with regard to pension funding going forward. The subcommittee met twice with City staff, and also heard a presentation from our consultants at Govinvest, a firm the City contracts with to provide actuarial analysis and software solutions to assist with pension decisions. The following topics were reviewed: • Total Public Employee Retirement Fund (PERF) market value and annualized returns • Review of the Actuarial Reports for benefit tiers available and current funding status of each • Current funded status with and without the 115 Trust • Factors that affect funded status other than investment returns • Options to make the City's policy for funding pensions clearly defined and easier for staff to execute CaIPERS Public Employees' Retirement Fund (PERF) As of June 30, 2023, the funded status of the CaIPERS PERF is approximately 72%, with total assets of $464.6 billion. Annual investment returns for the 10 years ending 2014 to 2023 have been as high as 21.3% and as low as (6.1%). CaIPERS published preliminary numbers for June 30, 2024, reporting a 9.3% return, raising the fund balance to $502.9 billion and the funded status to 75%. Along with other factors, CaIPERS uses long-term investment returns to assist in their determination of the discount rate, which is currently 6.8% Status of the Fund Funded Status lune 30, 2023 estimate' 70.9% lune 30, 2022 Funded Status by Employer June 302 State School Public Agency Total Fund 2022 70.3% 67.9% 72.7% 70.9% 2021 80.7% 78.3% 82.6% 81,2% 2020 70.6% 68.6% 71.1% 70.6% 2019 70.0% 68.5% 70_8% 70.2% 2018 69.5% 70.4% 704% 70,2% 23 Total Fund Total Fund Highlights (FY2022-23) Investment Returns' & Market Value of Assets2 $464.6 bil Total fund market value; tS.7%change from previous FY 5.8% 6.8% Total fund annual investment rate of return The discount rate (assumed investment rate of return) - what CaIPERS expects its investments to eam on average FY Investment Market Value of Retums Assets (inbillrorrs) 2022-23 5.8% $464.6 242122 (61%) $439.4 2420-21 21.3% $477.3 2419-20 4.7% $392.5 2018-19 6.7% $372.6 2017-18 8.6% $354.0 2016-17 11.2% $326.5 2015-16 0.6% $298.7 2014-15 2.4% $302,8 2013-14 18.4% $301.8 City of La Quinta Pension Plans The City of La Quinta has three active pension plans with CaIPERS. • Classic: This plan covers members who were first employed at the City prior to January 1, 2013. • Tier 2: Covers members who were Classic at another participating agency, but have since transferred to the City. • PEPRA: The Public Employees' Pension Reform Act that went into effect January 1, 2013 covers members who first joined CaIPERS after that date. Hire Date Benefit Formula Benefit Vesting Schedule Benefit Payments Retirement Age Required employee contribution rate Required employer contribution rate Number of Active Members* Number of Retired Members* Classic Tier Tier 2 PEPRA Tier On and Before 12/31/2012 2.5% at age 55 5 years of service monthly for life 50 and up 8.000% 14.180% 18 124 * As of June 30, 2023 from CaIPERS valuation reports. On and after 12/17/2012 2% at age 60 5 years of service monthly for life 50 and up 7.000% 10.190% 8 2 On and after 1/1/2013 2% at age 62 5 years of service monthly for life 52 and up 7.750% 7.960% 69 1 CaIPERS Actuarial Reports Actuarial reports are provided each year around August to each member agency. The most recent reports, issued in August 2024 are for fiscal year ending June 30, 2023. The City receives three reports, one for each pension plan tier. 24 CaIPERS actuarial reports include the following information: • Employer unfunded accrued liability payment projections for five years • Employer normal cost rates for bi-weekly payroll calculations • Employee bi-weekly payroll contribution rate for the next two years • Funded ratio of each pension tier • Summarized amortization schedule for each tier's unfunded liability • Amortization schedule alternatives when applicable • Funding history • Discount rate sensitivity analysis • Hypothetical plan termination liability calculations The most current reports reflect the plans' funded status as follows: Classic Tier Tier 2 PEPRA Tier Entry Age Normal Accrued Liability $ 58,124,122 $ 1,425,777 $ 4,854,435 Plan's Market Value of Assets $ 54,216,782 $ 1,276,825 $ 4,335,953 Unfunded Accrued Liability Funded Ratio $ 3,907,340 $ 148,952 $ 518,482 93.3% 89.6% 89.3% Pension Trust Performance and Uses The City established a Section 115 pension trust in August 2019 to set aside money for the City's pension obligation, with an initial contribution of $6,540,000. An additional contribution of $3,640,000 was made in fiscal year 2019/20. A withdrawal of $5.0 million was made in 2023 to send directly to CaIPERS. The pension trust balance as of September 30, 2024, was $5,993,190. $12,000,000 $11,000,000 $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 0� O O O O O � f9 fl. O 3 3O E E< l Q .0 Q a LL Df N v 0 0 Trust Balance History December -20 N N 0. 3 Q v LL N 01 C N tao3 7 N v 0 0 0 December -21 N N nit -4N N t» m m m m N N N N N N N N N N (-2 N N N N N A O. 3 .0 .0 is 0. O R fl. 3 Q O E Q O E Q ° v Q 0 Q 0 Q v Q LL 4/ LL 4/ LL D D 25 The Section 115 Trust addresses the City's pension obligations by accumulating assets to reduce the net pension liability. However, in accordance with generally accepted accounting principles, the assets in the Section 115 Trust are not considered to have present service capacity as plan assets and are therefore considered restricted assets of the City in the General Fund. The assets held in trust will be considered pension plan assets at the time they are transferred out of the Trust into the pension plan with CaIPERS. Investments are in a moderately conservative investment strategy which has dual goals of current income and capital appreciation. Total rates of return are shown in the chart below. The City also pays management fees for the Trust, which total $240,319 inception - to -date as of September 30, 2024. June 30, 2024 PARS OPEB and Pension Trust Program Strategy Asset Class Strategic Policy Tactical Range pfml asset management Gross Annualized Total Rate of Return Portfolio 2Q24- YTD 1 -Yr 3 -Yr 5 -Yr ITD Moderately Conservative Equity 20-40% 30% 30% Fixed Income 50-80% 65% 67% Cash 0-20% 5% 4% Strategic Blend 0.91 3.25 8.76 0.29 3.82 4.18 Benchmark 0.77 2.94 7.86 0.49 3.76 4.26 Index 0.55 2.48 7.01 -0.12 3.37 3.84 Benchmark 0.77 2.94 7.86 0.49 3.76 4.22 Additional Discretionary Payments to CaIPERS Additional contributions made directly to CaIPERS can be applied to specific tiers and amortization bases within tiers. The greatest interest rate savings are derived from the agency choosing to apply additional payments to the highest balance with the longest amortization period. For the past several years, the City has been sending additional payments directly to CaIPERS as follows: Additional Discretionary Payments to CaIPERS Fiscal Year Classic Tier Tier 2 PEPRA Tier Total 2018/19 $ - $ 15,353 $ 22,060 $ 37,413 2019/20 $ $ 20,000 $ 10,000 $ 30,000 2020/21 $ 1,000,000 $ 6,419 $ 57,345 $ 1,063,764 2021/22 $ 2,500,000 $ 2,500,000 2022/23 $ 11, 200, 000 $ 11, 200, 000 2023/24 $ 350,000 $ 130,000 $ 470,000 $ 950,000 TOTAL $ 15,050,000 $ 171,772 $ 559,405 $ 15,781,177 26 According to data from Govinvest, the early payments have saved the City millions of dollars in interest costs as compared to the 20 -year schedule of amortization from CaIPERS. History of Making ADPs Have Eliminated UAL and Drove Significant Interest Savings Additional Discretionary Fiscal Payments Year (ADPs) 2019-20 2020-21 2021-22 2022-23 2023-24 30,000 1,063,764 2,500,000 11,200,000 950,000 15,743,764 Conservatively estimated, interest savings as a result of these ADPs, will likely approach $17 to $19 million. If the City chooses to make annual payments on the current unfunded liability, total costs for all three plans would total just under $7.2 million. By sending an ADP for the full amount, the City could save over $3 million in interest payments. CaIPERS Actuarial Valuation - June 30, 2023 Amortization Schedule Date Current Amortization Schedule Classic Current Amortization Schedule PEPRA Current Amortization Schedule Tier 2 Balance Payment Balance Payment Balance Payment 6/30/2025 6/30/2026 6/30/2027 6/30/2028 3,939,824 336,556 3,859,921 3,766,911 3,659,903 343,981 351,407 358,833 69,800 7,344 66,957 64,266 61,740 7,009 6,673 6,338 25,628 2,267 25,028 24,375 23,666 2,279 2,290 2,303 6/30/2029 3,537,943 366,258 59,389 6,003 22,896 2,314 6/30/2030 3,400,017 366,260 57,223 6,003 22,062 2,315 6/30/2031 3,252,710 366,259 54,910 6,003 21,170 2,315 6/30/2032 3,095,388 366,259 52,440 6,003 20,218 2,315 6/30/2033 2,927,368 366,260 49,802 6,003 19,200 2,314 6/30/2034 2,747,921 366,258 46,985 6,002 18,114 2,314 6/30/2035 2,556,274 366,259 43,978 6,003 16,954 2,315 6/30/2036 2,351 ,594 366,260 40,765 6,003 15,714 2,314 6/30/2037 2,132,994 366,258 37,333 6,003 14,391 2,314 6/30/2038 1,899,532 366,261 33,668 6,003 12,978 2,313 6/30/2039 1,650,191 366,260 29,754 6,003 11,470 2,315 6/30/2040 1,383,895 366,259 25,573 6,003 9,858 2,314 6/30/2041 1,099,493 366,260 21,108 6,003 8,137 2,314 6/30/2042 6/30/2043 6/30/2044 6/30/2045 795,749 471,354 124,897 366,258 366,262 129,073 16,339 11,248 5,808 6,002 6,004 6,002 6,299 4,336 2,240 2,314 2,314 2,315 Total Interest Paid 7,01 3,741 123,410 46,168 3,073,917 53,610 20,540 Total Payments, All Plans 7,183,319 Total Potential Savings 3,148,067 27 While the June 30, 2023 reports show a total unfunded liability of almost $4.6 million, the balance can be adjusted for favorable/unfavorable events that have or will occur before the next reports are published. For example, the plan experienced a favorable event with a 9.3% investment return for June 30, 2024, which is higher than the expected 6.8% discount rate. The plan did however see some unfavorable events, including non -investment losses, which came from statewide higher than normal pay increases for active employees, higher than normal CPI which affected COLA adjustments for retirees, and increases to PEPRA members' pensionable wage cap (also based on CPI). Our CaIPERS actuary has estimated that our plan balance for 6/30/2025 would have $4.035 million in unfunded liability, which if paid by December 31st of this year would require approximately $3.9 million to pay off. Recommendations • Send an ADP to CaIPERS utilizing unassigned reserves (anticipated to come from Fiscal Year 2023/24 surplus). • Continue to consider ongoing ADPs as fiscal conditions allow, based on market conditions and unfunded liability balances on future actuarial reports. • Set goals for funded status of the City's pension plans. • Modify the Policy to allow staff to budget for these goals on an ongoing basis. A draft version of the General Fund Balance and Reserves policy is included with this report. The policy was modified to ensure the goals of the City are clearly communicated and allow City staff to create annual budgets and make necessary payments that align with the goals of remaining 95% funded or better at CaIPERS, and 100% funded or better when factoring in any trust balance. 28 4 atilt CALIFORNIA City of La Quinta General Fund Balance and Reserves Policy I. Purpose. This is the General Fund Balance and Reserves Policy (Policy) of the City of La Quinta (City); it defines the City's fund balance and reserve categories, identifies the need for reserves, and outlines the importance of maintaining the integrity of uses and funding amounts. The Policy also guides the City Council and staff when planning for contingencies, supports the City's credit rating, and ensures cash availability. II. Scope. This Policy applies to the City's General Fund; all Committed, Assigned, and Unassigned funds available as reported annually on the balance sheet in the City's Annual Comprehensive Financial Report (ACFR). III. General Policy. The Policy of the City is to maintain Reserves at an adequate level to address the community's needs through all contingencies. This Policy aligns with the organization's values of fiscal responsibility, maintaining a safe community, fostering a thriving economy, continuous transparency and accountability, and enhancing our Citizen's quality of life. The City's budgetary guiding principles state that one-time revenues should not be utilized for on-going expenditures; instead, they should be deposited into reserves or appropriated for one-time expenditures. Additionally, allocations for capital improvements, equipment replacement, and infrastructure investment should be part of the annual budget process through appropriations to Internal Service Funds. Additionally, the City seeks to reduce unfunded retirement costs in the most cost-efficient manner possible, and as such will annually budget and pre -pay any required Unfunded Accrued Liability payments, budget for Additional Discretionary Payments when necessary to maintain target funding levels, and maintain a Pension Stabilization Fund to manage fluctuations in funding status at CaIPERS. IV. Definitions. The Government Accounting Standards Board (GASB) Statement No. 54 defines fund balance as follows: A. Nonspendable Fund Balance: The nonspendable fund balance classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The criterion includes items that are not expected to be converted to cash, for example, inventories and prepaid amounts. It also includes the long-term amount of loans and notes receivable, as well as property acquired for resale. 29 B. Restricted Fund Balance: Amounts that are restricted to specific purposes should be reported as restricted fund balance. Fund balance should be reported as restricted when constraints placed on the use of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. C. Committed Fund Balance: Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest level of decision-making authority should be reported as committed fund balance. Those committed amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action (for example, legislation, resolution or ordinance) it employed to previously commit those amounts. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. D. Assigned Fund Balance: Amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed, should be reported as assigned fund balance. Intent should be expressed by (a) the governing body itself or (b) a body or official to which the governing body has delegated the authority to assign amounts to be used for specific purposes. The nature of the actions necessary to remove or modify an assignment is not as prescriptive as it is with regard to the committed fund balance classification. Constraints imposed on the use of assigned amounts are more easily removed or modified than those imposed on amounts that are classified as committed. E. Unassigned Fund Balance: Unassigned fund balance is the residual classification for the General Fund. This classification represents the fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. The General Fund should be the only fund that reports a positive unassigned fund balance amount. V. City's Reserve Categories and Targets Committed, assigned, and unassigned fund balance categories combined make up the "unrestricted" fund balance, which is the total amount that is either unconstrained or the constraints are self-imposed and can be modified by Council. As such, the following reserve categories would be classified as committed or assigned (with the exception of the pension reserves, which once placed in trust would be reported as a Restricted Reserves), and the remaining unassigned fund balance would be available for appropriation. Targets have been established for each category and will be periodically reviewed to ensure adequate levels. 30 A. Natural Disaster Emergency Reserves: May be utilized for the preparation, recovery, and restoration of services before, during and/or after a natural disaster (such as flood, earthquake, etc.) as defined by La Quinta Municipal Code §2.20.020. The target of $15,000,000 was determined by conducting a risk analysis of all City assets, insurance levels, and potential federal/state contributions towards disaster recovery efforts. B. Economic Downturn Reserves: May be used in such instances as a declared national, state, or regional recession; loss of a major (top 10) revenue - generating business; or a natural disaster resulting in a significant decline in revenues. These reserves may also be used if overall revenues decrease, or expenses increase, by more than 10% of the previous year's actual revenues or expenditures. The target of $13,000,000 was based on a long-term analysis of the revenue and expenditure flows (which included the financial impacts of the Great Recession, the loss of Redevelopment Agencies, and the COVID 19 pandemic) as well as the application of the Consumer Price Index (CPI) increases to the original base target. C. Cash Flow Reserves: This reserve category is maintained to have adequate cash on hand to account for the uneven receipt of revenue. For example, property tax accounts for a large percentage of annual revenue, the bulk of which is not remitted until December and May of each year. The target for the Cash Flow Reserves is 10% of each year's revenue budget, or a minimum of $5,000,000. D. Capital Improvement Reserves: This category will fund capital assets and infrastructure rehabilitation, improvement, and replacement. The target of $12,000,000 is based on annual depreciation of assets as well as a CPI increase as described above. E. Unfunded Genes on iabilityPension Stabilization Fund: This reserve will be maintained in an irrevocable trust and which may be used to fund future pension obligations such as annual pension fund normal cost payments, required unfunded pension liability payments, and/or any additional discretionary contributions to pay down the unfunded liability. The goal will be to maintain at least a 95% funded status as reported on the annual CaIPERS actuarial reports, and a 100% funded status when taking into consideration the trust balance, with City staff carefully analyzing the options before recommending funding decisions. In order to adequately cover a worst-case scenario in the investment returns of the Public Employees' Retirement Fund (PERF), Tthe target amount for the trust shall be 20% of the Entry Age Accrued Liability as published on the most recently available annual CaIPERS actuarial is the amount of the unfunded liability on the most recent CaIPERS actuarial reports, or with a minimum ef-set 31 at $5,000,000, and was determined through a review of the City's unfunded pension liability and annual contributions. VI. Unassigned Fund Balance. The City may retain the equivalent of two months of general fund budgeted operating expenditures, or a minimum of $8,000,000 in unassigned fund balance which could fund one-time expenditures or capital expenses at the City Council's discretion. Unassigned fund balance is derived from budgeted and/or unanticipated surplus (derived from revenues over budget and/or expenditures under budget), which is reported annually in the year-end budget report in any year such surplus exists. Recommendations for use of unassigned balance shall take into consideration the whole of the City's Strategic Plan, aligning focus areas and goals, while factoring in the capital improvement project costs of labor and materials, inflation rates, the CaIPERS discount rate, expected returns on the City's investments, and other market conditions as applicable. VII. Measure G Reserves. The City has a local district transactions tax of 1% known as Measure G. The City monitors Measure G activity and excess revenues over expenditures are recorded as Reserves on the City's Balance Sheet. These funds can also be used for one-time expenditures or capital expenses at the City Council's discretion and are subject to annual reporting and oversight by the Financial Advisory Commission (FAC). VIII. Authority Over Reserves. At Council's direction, reserves may be utilized for their intended purpose as defined herein. The Policy may be amended by Council resolution and requires a 4/5th approval ("supermajority"). IX. Building to Target and Replenishments. City Council adoption of this Policy will establish the funding targets. Going forward, the City Council shall annually review each reserve category and funding level during the mid -year budget process, once the ACFR is published and final fund balances are known. Funds will generally come from excess revenues over expenditures, one-time revenues, or specific departmental savings over budgeted expenditures, and may be allocated to each reserve category as directed by Council until the target level is reached. Once all targets are reached, funds remain in the unassigned fund balance. Likewise, upon use of any reserves, the categories will be replenished back to target in a similar manner. City Staff shall evaluate whether excess unassigned reserves shall be allocated to the Pension Stabilization Trust or directly to CaIPERS and budget accordingly when focusing on the policy goals in sections 111 and V. X. Policy Review. This policy shall be reviewed every five (5) years to assess the City's then current financial condition, risks, and the adequacy of current targetlevels. 32 DEPARTMENTAL REPORT ITEM NO. 1 City of La Qu i nta FINANCIAL ADVISORY COMMISSION SPECIAL MEETING DEPARTMENT REPORT TO: Members of the Financial Advisory Commission FROM: Claudia Martinez, Finance Director DATE: November 13, 2024 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 Audit for fiscal year 2023/24 will take place from November 25 through December 6 o Year-end entries and audit preparation are well underway • Annual Street and Road Improvement Audit for fiscal year 2023/24, to be filed with the State Controller's Office- In process • Annual Measure A Local Streets and Roads Audit for fiscal year 2023/24, to be filed with the Riverside County Transportation Commission- In process COMMITTEE UPDATES • 10 -Year Projection Task Force (Commissioners Anderson, Batavick, and Dorsey) o Conducted meeting on October 28, 2024 • Measure G Sales Tax Oversight Compliance Report for FY 2023/24 o Initial meeting to be scheduled for November • Financial Statement and Audit training - Staff is currently researching options with the new auditing firm CITY UPDATES • Hwy 111 Corridor Specific Plan; prior City Council and Planning Commission joint meeting held on: o September 26, 2023 o To date, expenditures related to the project are detailed in the Project Activity Report (Attachment 1), in the amount of $1,049,693.33. Revenue allocations of Measure G do not yet include the most recent quarter entry. 33 • The City is currently exploring the following: o Feasibility of undergrounding utilities in various areas of the City; prior City Council study sessions held on: • September 19, 2023 • December 19, 2023 o Imperial Irrigation District (IID) power distribution substations in La Quinta cost -share options for upgrades; prior City Council study sessions held on January 16, 2024. City Manager's Office is in negotiations with IID and all impacted stakeholders to find an equitable solution. Agreement with IID would be required before equipment can be ordered; pending design approval from IID, and final estimated costs before the City's potential cost-sharing is defined, which would be presented to Council for approval. Staff encourages the FAC members to view the meetings as time permits. • Tropical Storm Hilary — Federal Disaster Assistance o The City is currently working with FEMA and meeting on a weekly basis on the reporting and reimbursement process. UPCOMING EVENTS • La Quinta Art Celebration Encore will take place on November 14- 17, 2024 at the Civic Center Campus. • Open House Meet & Greet 2024 will take place on December 3, 2024 at City Hall. 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. Attachment: 1. Project Activity Report 34 adit a City of La Quinta ATTACHMENT 1 Project Activity Report By Project Number Report Dates: 07/01/2019 - 11/08/2024 Project Number Project Name Group Type Status 201905 Highway 111 Corridor Area Plan Implementati Fund 401 Construction in Process St Improvements Active Revenues Account Key Account Name Category Total Activity 201905MG Measure G Funding Measure G - Measure G Funding -860,167.91 GL Account Number 401-0000-49500 401-0000-49500 GL Account Name Post Date Description Transfers In 03/31/2020 MG 201905 HWY 111 CORRIDOR PLAN Transfers In 06/30/2020 MG 201905 HIGHWAY 111 CORRIDOR AREA PLAN 401-0000-49500 Transfers In 09/30/2020 MG 201905 HIGHWAY 111 CORRIDOR AREA PLAN 401-0000-49500 Transfers In 12/31/2020 MG 201905 HIGHWAY 111 CORRIDOR AREA PLAN 401-0000-49500 Transfers In 03/31/2021 MG 201905 HIGHWAY 111 CORRIDOR AREA PLAN 401-0000-49500 Transfers In 06/30/2021 MG HIGHWAY 111 CORRIDOR AREA PLAN 401-0000-49500 Transfers In 09/30/2021 MG 201905 HIGHWAY 111 CORRIDOR PLAN 401-0000-49500 Transfers In 12/31/2021 MG 201905 HWY CORRIDOR AREA PLAN 401-0000-49500 Transfers In 03/31/2022 MG 201905 HWY CORRIDOR AREA PLAN 401-0000-49500 Transfers In 06/30/2022 MG 201905 HWY CORRIDOR AREA PLAN 401-0000-49500 Transfers In 09/30/2022 MG 201905 HWY CORRIDOR AREA PLAN 401-0000-49500 Transfers In 12/31/2022 MG 201905 HIGHWAY 111 CORRIDOR AREA 401-0000-49500 Transfers In 03/31/2023 MG 201905 HIGHWAY 111 CORRIDOR AREA 401-0000-49500 Transfers In 06/30/2023 MG 201905 HIGHWAY 111 CORRIDOR AREA 401-0000-49500 Transfers In 09/30/2023 MG 201905 HIGHWAY 111 CORRIDOR AREA 401-0000-49500 Transfers In 12/31/2023 MG 201905 HIGHWAY 111 CORRIDOR AREA 401-0000-49500 Transfers In 03/31/2024 MG 201905 HIGHWAY 111 CORRIDOR AREA 201905SB1 SB1 Maintenance Funding SB1 Maint Fund - SB1 Maintenance Funding GL Account Number GL Account Name Post Date Description 401-0000-49500 Transfers In 06/30/2024 SB1 201905 HIGHWAY 111 CORRIDOR AREA 401-0000-49500 Transfers In 06/30/2024 SB1 201905/202223 HIGHWAY 111 CORRIDOR AREA Vendor Name Vendor Name Item Number Activity - 1,980.00 - 5,006.25 FY 19/20 Total: -6,986.25 - 11,715.00 - 41,035.00 - 7,955.00 - 230,049.59 FY 20/21 Total: -290,754.59 - 2,995.00 - 30,468.25 - 3,020.00 - 130,479.46 FY 21/22 Total: -166,962.71 - 14,775.00 - 4,537.50 - 145,350.50 - 120,554.00 FY 22/23 Total: -285,217.00 - 49,950.15 - 1,662.50 - 58,634.71 FY 23/24 Total: -110,247.36 -180,117.99 Item Number Activity - 102,565.49 - 77,552.50 FY 23/24 Total: -180,117.99 Total Revenues: -1,040,285.90 11/8/2024 2:38:26 PM Page 1 of 5 35 Project Activity Report Expenses Account Key 201905D GL Account Number 401-0000-60185 401-0000-60185 401-0000-60185 401-0000-60185 401-0000-60185 401-0000-60185 Account Name Design Expense GL Account Name Design Design Design Design Design Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design 401-0000-60185 Design Category Design - Design Expense Post Date 12/18/2020 12/18/2020 04/16/2021 04/16/2021 06/11/2021 06/25/2021 10/08/2021 10/29/2021 04/22/2022 04/22/2022 06/30/2022 06/30/2022 09/02/2022 03/03/2023 03/03/2023 03/03/2023 03/03/2023 03/17/2023 06/30/2023 06/30/2023 06/30/2023 06/30/2023 06/30/2023 09/08/2023 01/26/2024 05/24/2024 05/24/2024 06/30/2024 06/30/2024 06/30/2024 06/30/2024 09/20/2024 09/20/2024 Description 2019-05 HWY 111 CORRIDOR PROJECT (PLAN&ENG) 2019-05 HWY 111 CORRIDOR PROJECT (PLAN&ENG) 02/2021 - HWY 111 PLANNING/ ENGINEERING SVCS 12/2020 - HWY 111 PLANNING/ ENGINEERING SVCS 04/2021 - HWY 111 PLANNING/ENGINEERING SVCS 05/2021 - HWY 111 PLANNING/ENGINEERING SVCS 06/2021 - HWY 111 PLANNING/ENGINEERING SVCS 07/2021 - HWY 111 PLANNING/ENGINEERING SVCS 03/24/22 - HWY 111 SITE TOUR LUNCH 03/24/22 - HWY 111 SITE TOUR TRANSPORTATION 03/2022 HWY 111 CORRIDOR PLANNING/ENGINEERIN 06/2022 HWY 111 CORRIDOR PLANNING/ENGINERRI 07/2022 - HWY 111 CORRIDOR PLANNING/ENGINERRI 09/2022 HWY 111 CORRIDOR PLANNING/ENGINEERIN 10/2022 HWY 111 CORRIDOR PLANNING/ENGINEERIN 11/2022 HWY 111 CORRIDOR PLANNING/ENGINEERIN 12/2022 HWY 111 CORRIDOR PLANNING/ENGINEERIN 01/2023 HWY 111 CORRIDOR PLANNING/ENGINEERIN 02/2023 - HWY 111 CORRIDOR PLANNING/ENGINEERI 03/2023 - HWY 111 CORRIDOR PLANNING/ENGINEERI 04/2023 - HWY 111 CORRIDOR PLANNING/ENGINEERI 05/2023 - HWY 111 CORRIDOR PLANNING/ENGINEERI 06/2023 - HWY 111 CORRIDOR PLANNING/ENGINERRI 07/2023 HWY 111 CORRIDOR PLANNING/ENGINEERIN 10/2023 - HWY 111 CORRIDOR PLANNING/ENGINEERI 01/2024 HWY 111 CORRIDOR PLANNING/ENGINEERIN 03/2024 HWY 111 CORRIDOR PLANNING/ENGINEERIN 04/2024 HWY 111 CORRIDOR PLANNING/ENGINEERIN 05/01-06/30/24 - ONCALL PLANNING SERVICES ACCRUE 05/2024 HWY 111 CORRIDOR PLANNING ACCRUE 06/2024 HWY 111 CORRIDOR PLANNING Vendor Name GHD INC. GHD INC. GHD INC. GHD INC. GHD INC. GHD INC. ATTACHMENT 1 Report Dates: 07/01/2019 - 11/08/2024 Item Number 151505 153361 158460 155454 161990 163575 FY 20/21 Total: GHD INC. 165668 GHD INC. 380-0000621 BANK OF THE WEST (PLEASE SEE MAR'226925BM BANK OF THE WEST (PLEASE SEE MAR'226925BM GHD INC. 380-0012735 GHD INC. 380-0016011 FY 21/22 Total: GHD INC. GHD INC. GHD INC. GHD INC. GHD INC. GHD INC. GHD INC. GHD INC. GHD INC. GHD INC. GHD INC. 380-0017688 380-0020901 380-0023845 380-0024095 380-0025445 380-0027217 380-0028778 380-0030405 380-0031910 380-0033492 380-0035378 FY 22/23 Total: GHD INC. 380-0036834 GHD INC. 380-0041445 GHD INC. 380-0047294 GHD INC. 380-0048891 GHD INC. 380-0051494 TERRA NOVA PLANNING & RESE TN1198158 05/2024 HWY 111 CORRIDOR PLANNING/ENGINEERIN GHD INC. 06/2024 HWY 111 CORRIDOR PLANNING/ENGINEERIN GHD INC. FY 23/24 Total: 380-0054142REV 380-0054348 Total Activity 967,287.08 Activity 8,290.00 25, 600.00 78,461.25 32,923.75 75,409.84 34,827.25 255,512.09 19,315.75 8,620.00 207.43 460.00 41,235.83 84,123.70 153,962.71 12,962.50 49, 617.50 51,571.25 18,251.25 9,171.25 12,726.75 18,667.58 9,366.25 22,207.51 22,721.95 42,803.21 270,067.00 49,312.65 54,534.71 32,062.36 53,767.93 13,082.70 877.50 20,296.30 37,277.50 261,211.65 20,296.30 37,277.50 11/8/2024 2:38:26 PM Page 2 of 5 36 Project Activity Report GL Account Number GL Account Name Post Date 401-0000-60185 Design 09/20/2024 401-0000-60185 Design 09/30/2024 401-0000-60185 Design 09/30/2024 401-0000-60185 Design 11/08/2024 201905P Professional Expense GL Account Number GL Account Name 401-0000-60103 Professional Services 03/20/2020 401-0000-60103 Professional Services 04/24/2020 401-0000-60103 Professional Services 06/12/2020 401-0000-60103 Professional Services 06/30/2020 Description Vendor Name HWY 111 CONSTRUCTION SIGNAGE BEST SIGNS INC ACCRUE 05/2024 HWY 111 CORRIDOR PLANNING ACCRUE 06/2024 HWY 111 CORRIDOR PLANNING 08/2024 HWY 111 CORRIDOR PLANNING/ENGINEERIN GHD INC. Professional - Professional Expense Post Date Description 02/2020 HIGHWAY 111 CORRIDOR 03/2020 HIGHWAY 111 CORRIDOR 05/2020 HIGHWAY 111 CORRIDOR 06/2020 HIGHWAY 111 CORRIDOR 401-0000-60103 Professional Services 09/04/2020 401-0000-60103 Professional Services 09/25/2020 401-0000-60103 Professional Services 10/09/2020 401-0000-60103 Professional Services 12/04/2020 401-0000-60103 Professional Services 01/15/2021 401-0000-60103 Professional Services 01/22/2021 401-0000-60103 Professional Services 03/05/2021 401-0000-60103 Professional Services 03/19/2021 401-0000-60103 Professional Services 04/23/2021 401-0000-60103 Professional Services 05/28/2021 401-0000-60103 Professional Services 06/18/2021 401-0000-60103 Professional Services 06/30/2021 401-0000-60103 Professional Services 09/17/2021 401-0000-60103 Professional Services 09/17/2021 401-0000-60103 Professional Services 11/05/2021 401-0000-60103 Professional Services 12/03/2021 401-0000-60103 Professional Services 01/14/2022 401-0000-60103 Professional Services 01/14/2022 401-0000-60103 Professional Services 02/25/2022 401-0000-60103 Professional Services 03/18/2022 401-0000-60103 Professional Services 04/15/2022 401-0000-60103 Professional Services 06/30/2022 401-0000-60103 Professional Services 06/30/2022 401-0000-60103 Professional Services 08/26/2022 401-0000-60103 Professional Services 10/07/2022 401-0000-60103 Professional Services 10/28/2022 07/2020 HIGHWAY 111 CORRIDOR 08/2020 HIGHWAY 111 CORRIDOR 09/2020 HIGHWAY 111 CORRIDOR 10/2020 HIGHWAY 111 CORRIDOR HIGHWAY 111 CORRIDOR HIGHWAY 111 CORRIDOR HIGHWAY 111 CORRIDOR HIGHWAY 111 CORRIDOR HIGHWAY 111 CORRIDOR HIGHWAY 111 CORRIDOR HIGHWAY 111 CORRIDOR HIGHWAY 111 CORRIDOR 07/2021 HIGHWAY 111 CORRIDOR 08/2021 HIGHWAY 111 CORRIDOR 09/2021 HIGHWAY 111 CORRIDOR 10/2021 HIGHWAY 111 CORRIDOR 11/2021 - HIGHWAY 111 CORRIDOR 12/2021 HIGHWAY 111 CORRIDOR 01/2022 HIGHWAY 111 CORRIDOR 02/2022 HIGHWAY 111 CORRIDOR 03/2022 - HIGHWAY 111 CORRIDOR 05/2022 HIGHWAY 111 CORRIDOR 06/2022 HIGHWAY 111 CORRIDOR 07/2022 2019-05 HIGHWAY 111 CORRIDOR 08/2022 HIGHWAY 111 CORRIDOR 09/2022 - 2019-05 HIGHWAY 111 CORRIDOR Vendor Name NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC ATTACHMENT 1 Report Dates: 07/01/2019 - 11/08/2024 Item Number 98554 380-0057493 FY 24/25 Total: Activity 3,540.13 - 20,296.30 - 37,277.50 22,993.50 26,533.63 82,406.25 Item Number Activity 8 JOB 2019-08 1,980.00 9 JOB 2019-08 825.00 11 JOB 2019-08 330.00 12 JOB 2019-08 3,851.25 FY 19/20 Total: 6,986.25 13 JOB 2019-08 14 JOB 2019-08 15 JOB 2019-08 16 JOB 2019-08 17 JOB 2019-08 18 JOB 2019-08 19 JOB 2019-08 2019-08.20 2019-08.21 2019-08.22 2019-08.23 2019-08.24 FY 20/21 Total: 2019-08.25 2019-08.26 2019-08.27 2019-08.28 2019-08.29 2019-08.30 2019-08.31 2019-08.32 2019-08.33 2019-08.35 2019-08.36 FY 21/22 Total: 2019-08.37 2019-08.38 2019.08.39 9,240.00 2,475.00 2,182.50 4,962.50 2,657.50 720.00 980.00 3,597.50 2,072.50 1,657.50 1,850.00 2,847.50 35,242.50 630.00 2,365.00 790.00 1,742.50 620.00 930.00 192.50 1,277.50 1,860.00 967.50 1,625.00 13,000.00 1,812.50 1,700.00 1,962.50 11/8/2024 2:38:26 PM Page 3 of 5 37 Project Activity Report GL Account Number GL Account Name Post Date 401-0000-60103 Professional Services 12/16/2022 401-0000-60103 Professional Services 02/03/2023 401-0000-60103 Professional Services 02/24/2023 401-0000-60103 Professional Services 05/05/2023 401-0000-60103 Professional Services 05/05/2023 401-0000-60103 Professional Services 06/23/2023 401-0000-60103 Professional Services 06/30/2023 401-0000-60103 Professional Services 08/25/2023 401-0000-60103 Professional Services 10/13/2023 401-0000-60103 Professional Services 10/27/2023 401-0000-60103 Professional Services 11/17/2023 401-0000-60103 Professional Services 01/19/2024 401-0000-60103 Professional Services 01/19/2024 401-0000-60103 Professional Services 02/23/2024 401-0000-60103 Professional Services 04/26/2024 401-0000-60103 Professional Services 05/31/2024 401-0000-60103 Professional Services 06/30/2024 401-0000-60103 Professional Services 06/30/2024 401-0000-60103 Professional Services 09/06/2024 401-0000-60103 Professional Services 10/04/2024 401-0000-60103 Professional Services 11/08/2024 Description 12/2022 - 2019-05 HIGHWAY 111 CORRIDOR 12/2022 - 2019-05 HIGHWAY 111 CORRIDOR 01/2023 - 2019-05 HIGHWAY 111 CORRIDOR 03/2023 HIGHWAY 111 CORRIDOR 03/2023 HIGHWAY 111 CORRIDOR 05/2023 - 2019-05 HIGHWAY 111 CORRIDOR 06/2023 - 2019-05 HIGHWAY 111 CORRIDOR 07/2023 HIGHWAY 111 CORRIDOR 08/2023 - 2019-05 HIGHWAY 111 CORRIDOR 09/2023 HIGHWAY 111 CORRIDOR 10/2023 - 2019-05 HIGHWAY 111 CORRIDOR 11/2023 HIGHWAY 111 CORRIDOR 12/2023 HIGHWAY 111 CORRIDOR 01/2024 HIGHWAY 111 CORRIDOR 03/2024 HIGHWAY 111 CORRIDOR 04/2024 HIGHWAY 111 CORRIDOR 05/2024 HIGHWAY 111 CORRIDOR 06/2024 HIGHWAY 111 CORRIDOR 07/2024 - HIGHWAY 111 CORRIDOR 08/2024 - HIGHWAY 111 CORRIDOR 09/2024 HIGHWAY 111 CORRIDOR Vendor Name NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC NAI CONSULTING INC ATTACHMENT 1 Report Dates: 07/01/2019 - 11/08/2024 Item Number Activity 2019-08.41 875.00 2019-08.42 3,312.50 2019-08.43 700.00 2019-08.45 2,137.50 2019-08.44 725.00 2019-08.47 1,250.00 2019-08.48 675.00 FY 22/23 Total: 15,150.00 2019-08.49 2019-08.50 2019-08.51 2019-08.52 2019-08.53 2019-08.54 2019-08.55 2019-08.57 2019-08.58 2019-08.59 2019-08.60 FY 23/24 Total: 2024-03.01 2024-03.02R1 2024-03.03 FY 24/25 Total: Total Expenses: 201905 Total: 637.50 437.50 700.00 525.00 887.50 875.00 2,337.50 500.00 750.00 537.50 987.50 9,175.00 970.00 475.00 1,407.50 2,852.50 1,049,693.33 9,407.43 11/8/2024 2:38:26 PM Page 4 of 5 38 Project Activity Report Project Summary ATTACHMENT 1 Report Dates: 07/01/2019 - 11/08/2024 Summary Revenue Over/ Project Number Project Name Total Revenue Total Expense (Under) Expenses 201905 Highway 111 Corridor Area Plan Imr 1,040,285.90 1,049,693.33 -9,407.43 Project Totals: 1,040,285.90 1,049,693.33 -9,407.43 Group Summary Revenue Over/ Group Total Revenue Total Expense (Under) Expenses Fund 401 Construction in Process 1,040,285.90 1,049,693.33 -9,407.43 Group Totals: 1,040,285.90 1,049,693.33 -9,407.43 Type Summary Revenue Over/ Type Total Revenue Total Expense (Under) Expenses St Improvements 1,040,285.90 1,049,693.33 -9,407.43 Type Totals: 1,040,285.90 1,049,693.33 -9,407.43 11/8/2024 2:38:26 PM Page 5 of 5 39 40 DEPARTMENTAL REPORT ITEM NO. 2 City of La Quinta FINANCIAL ADVISORY COMMISSION MEETING STAFF REPORT TO: Members of the Financial Advisory Commission FROM: Rosemary Hallick, Principal Management Analyst DATE: November 13, 2024 SUBJECT: SECOND QUARTER 2024 (APRIL -JUNE) SALES TAX UPDATE The attached report was prepared by consultants, HdL Companies, as an update of sales tax receipts for second quarter sales from April to June 2024. • La Quinta's overall adjusted sales tax receipts for major industry groups decreased 4.5% as compared to last year. As a comparison, Riverside County was down 0.5% and the state was down 0.7%. The decrease was spread between various categories such as general consumer goods, restaurants (particularly fine dining and fast -casual), state & county pools, building and construction, autos & transportation and fuel & service stations. 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. La Quinta Riverside County Southern California California Per Capita Sales $10,001 $9.000 $8,000 $7,000 $6,000 $5,000 $4,000 2Q 3Q 40 10 20 3Q 4Q 10 2Q 3Q 4Q 10 2Q 21 21 21 22 22 22 22 23 23 23 23 24 24 • General consumer goods (such as department stores) made up 35% of sales tax revenue and 39% of Measure G revenue. • Autos and transportation made up 8% of sales tax revenue and 13% of Measure G revenue. 41 Sales Tax 1 • The City continues to benefit from online purchasing in the form of the County pool share, which was 14% of our sales tax revenue. Autos and Transportation Building and Construction Autos and -J Transportation ' Fuel and Service Stations 2024 Percent of Total Food and Drug s Business and industry State an County Pools Business and industry Restaurants and Hotels 2024 Percent of Total Fuel and Service Stations Food and Drug s General Consumer Goods Measure G Building and Construction Restaurants and Hotels General Consumer Goods 42 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 did adjust the Fiscal 2023/24 budget to account for slowing sales, however final actuals slightly missed by 0.28%. Fiscal year-to-date sales tax collections are shown in the chart below. Combined, the City received $27.6 million in sales and transactions taxes for the year, as compared to $28.9 million in Fiscal 2022/23, down about 4.5%. Payment Bradley Burns Measure G MG % of BB July 2023 Advance August 2023 Advance September 2023 -3rd Qtr Payment October 2023 Advance November 2023 Advance December 2023 4th Qtr Payment January 2024 advance February 2024 advance March 2024 1st Qtr payment April 2024 Advance May 2024 Advance June 2024 - 2nd Qtr Payment 2023 $ 2023'$ 2024 $ 2024 $ 833,873 $ 1,091,167 725,567 $ 966,223 865,626 $ 1,136,836 2,425,066 $ 3,194,227 1,099,316 $ 1,342,070 979,253 $ 1,227,838 1,273,172 $ 1,677,790 3,351,741 $ 4,247,698 1,222,359 $ 1,512,916 1,128,322 $ 1,382,154 1,142,907 $ 1,451,498 3,493,588 $ 4,346,568 1,037,749 $ 1,272,340 1,037,566 $ 1,302,521 824,768 $ 1,107,829 2,900,083 $ 3,682,691 130.86% 133.17% 131.33% 131.72% 122.08% 125.39% 131.78% 126.73% 123.77% 122.50% 127.00% 124.42% 122.61% 125.54% 134.32% 126.99% 2023/24 Final Actual $ Adopted 2023/24 Budget $ 2023/24 Budget Adjustment $ Final 2023/24 Budget $ Variance to Budget $ 12,170,477 $ 12,700,000 $ (495,000) $ 12,205,000 $ (34,523) $ Attachment 1: HdL Q2 2024 Sales Tax Update Attachment 2: HdL September 2024 California Forecast 15,471,183 15,700,000 (185,000) 15,515,000 (43,817) 43 1 ATTACHMENT 1 CITY OF LA QUINTA SALES TAX UPDATE 2Q 2024 (APRIL - JUNE) taCkgrai LA QUINTA TOTAL: $ 2,957,651 -4.5% -0.5% -0.7% 2Q2024 © COUNTY © STATE *Allocation aberrations have been adjusted to reflect sales activity $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $o General Consumer Goods i Restaurants and Hotels SALES TAX BY MAJOR BUSINESS GROUP County and State Pools 1 Building and Construction ■ Autos and Transportation Fuel and Service Stations Food and Drugs Business and Industry Legend Q2 2023* • Q2 2024* Measure G TOTAL: $3,692,568 © -4.0% CITY OF LA QUINTA HIGHLIGHTS La Quinta's receipts from April through June were 5.8% below the second sales period in 2023. Excluding reporting aberrations, actual sales were down 4.5%. Consumers cut back on restaurant visits or picked less expensive options as they look for more ways to save amid a higher cost of living. Despite dropping lumber prices, the building -construction industry is facing an overall slowing of new projects, reducing overall receipts. The autos -transportation industry reported a sluggish sales quarter as consumers struggle with elevated interest rates and soaring prices. The food -drugs groups reported slightly lower totals as prices for certain grocery categories dropped and consumers continued to look for bargains. Large, one- time use tax payments in 2Q23 created a temporary drop in receipts from the business -industry sector. The City's share of the countywide use tax pool decreased 1.4% when compared to the same period in the prior year. Measure G, the City's voter -approved transactions and use tax, brought in an additional $3,678,118 in revenue. Net of aberrations, taxable sales for all of Riverside County declined 0.5% over the comparable quarterly period; the Southern California region was down 0.5%. TOP 25 PRODUCERS Arco AM PM Best Buy Circle K Costco Floor & Decor G & M Oil Genesis/Hyundai of La Quinta Home Depot In N Out Burger Kohls La Quinta Chevrolet & Cadillac La Quinta Resort & Club Lowes Marshalls McDonald's PGA WEST Private Clubhouse & Golf Courses Ross Target TJ Maxx TJS Enterprises Torre Nissan Tower Mart Ulta Beauty Vons Walmart Supercenter 44 HdL© Companies www.hdlcompanies.com 888.861.0220 Published by HdL Companies in Fall 2024 2Q 2024 CITY OF LA QUI NTA SALES TAX UPDATE STATEWIDE RESULTS California's local one cent sales and use tax receipts during the months of April through June were 0.6% lower than the same quarter one year ago after adjusting for accounting anomalies. The calendar year second quarter is traditionally the beginning of the summer spending season; however, returns were relatively flat when compared to a year ago. For many California agencies, this also marks the end of the 2023-24 fiscal year, where statewide sales tax revenues were down 1.3% from the 2022-23 fiscal year. Consistent with recent trends, auto - transportation receipts fell 6.2% - the largest sector decline this quarter. Sustained high interest rates, tightened credit standards, and increased cost of insurance all converged to impact returns. While inventory -levels for many dealerships have rebounded, it's only proving to create downward pressure on prices, further constraining receipts. Summer weather usually marks fruitful periods for building -construction, however as property owners struggle to access equity for improvements, year -over -year receipts declined. The price of lumber and other materials are now more affordable, but new projects have been sidelined by developers until financing and mortgage costs drop further. Similarly, as the price of consumer goods has cooled with moderate inflation rates, returns from multiple merchants have curtailed. Men's and women's apparel, home furnishings, electronic -appliance and specialty stores could not escape the change in shopper's preferences for lower priced items from large brick -and -mortar retailers like discount department stores. Restaurants experienced only a modest gain of 0.7%. As AB 1228 is enacted - state law increasing California's minimum wage at designated eateries - third party data reports that foot traffic to all such establishments decreased during this same time period. Not only are diners selecting less expensive places to eat, but many may have been pushed to limit their frequency to dine out. Multiple of sectors experienced mild growth including allocations from the countywide use tax pool and the business -industrial group, both benefiting from online shopping, and fuel -service stations as drivers continue to hit the road even as gas prices remain elevated. Halfway through the current calendar year, revenue trends remain slightly lower than a year ago overall. Although the Federal Reserve recently reduced the Fed Funds Rate helping temper the cost of financing, personal consumption forecasts remain insipid through the remainder of 2024. Consumers are more likely to wait for greater improvement of household economic conditions before extending themselves again, inspiring the next sales tax growth cycle. REVENUE BY BUSINESS GROUP La Quinta This Fiscal Year* Others 9% Cons.Goods 36% w Building 10% Pools 14% Restaurants 22% Autos/Trans. 9% *ADJUSTED FOR ECONOMIC DATA TOP NON -CONFIDENTIAL BUSINESS TYPES La Quinta Business Type Casual Dining Service Stations Electronics/Appliance Stores Leisure/Entertainment Quick -Service Restaurants Family Apparel Grocery Stores Specialty Stores Fine Dining Fast -Casual Restaurants Q2 '24* 251.0 119.6 118.5 114.7 102.8 85.4 78.7 68.3 54.5 33.3 County HdL State Change Change Change -1.7%© 0.1%O 0.7%0 -6.4%O-0.9%I© 2.3%0 8.1%O -1.6%O -10.2% -4.5%© -2.3%© 2.5%Ip 1.2%0 0.5%© 0.9%0 1.9%© 1.6%0 -4.4%i© -4.6%© -5.8%O -5.8%O 2.7%O 3.2%0 *In thousands of dollars -10.7% 4.4%© -1.9%© -4.4%© -1.6%0 -9.8% -13.7% *Allocation aberrations have been adjusted to reflect sales activity 45 ATTACHMENT 2 CALIFORNIA FORECAST SALES TAX TRENDS & ECONOMIC DRIVERS SEPTEMBER 2024 888.861.02201solutions@hdlcompanies.com1hdlcompanies.com Hc119 STATEWIDE Companies SALES TAX TRENDS 2024/2512025/26 TOTAL 0.3% 1 2.7% Overview: The September Federal Funds rate reduction was an economic signal that inflation is coming in near expectations while the labor market weakened over recent months. This action may spur some changes in consumer spending patterns, but overall does not translate into a short-term burst in sales taxes. As the important holiday shopping season approaches, expectations are that buyers will start outlays sooner. Some consumers are expected to spend less as stubborn inflated prices for household obligations (utilities, insurance, and food) take priority over procurement of non-essential and gift items. The current year's minute increase will not recapture the (-1.3%) FY 2023-24 statewide decline; thus, anticipate a slow rise in revenues over the next two years. 1641 Autos/Transportation a 2024/2512025/26 3.5% Tax receipts from vehicle sales continued to decline, normalizing after a period of unusually strong growth that peaked in 2022. Luxuryvehicles have been hit hardest, driving a sharper drop in overall car sales. The industry remains burdened by elevated prices, high interest rates, and a challenging economic environment. While the stock market is once again nearing new all-time highs, the bond market has stabilized. Acknowledging that the Federal Reserve began cutting interest rates, recovery in the sector is likely to be gradual. Additional setbacks, such as a cyberattackon automobile dealerships that disrupted transactions during the critical two weeks before the July 4th holiday sales weekend, are expected to obscure any early signs of improvement. Building/Construction -0.5% 1 4.0% Second quarter 2024 results reflected several changes that lowered sales. Big box home improvement stores saw a sharper downturn as homeowners continue to suspend big-ticket purchases. Lumber and roofing suppliers in some areas are losing sales volume as roofing and general construction projects appear to be slowing. The backlog of contractstoinstall residential rooftopsolarprojectsfollowingthechange in the net metering fee structure two years ago is also winding down, cutting demand for materials. Infrastructure projects using concrete and asphalt products held steady, but some regions are sluggish. With interest rates falling in the short term, the construction industry does not expect this decline will be enough to prompt an uptick in activity. Business/Industry 2.2% 1 2.6% Consumers continue to embrace the convenience of shopping online, with ecommerce sales rising and more "local" orders filled from CA - based fulfillment centers, comprising a stunning 30% of total B&I revenues. Solar/energy projects created significant gains in the recent quarter. However, medical -biotech, business -to -business, and heavy industrial sales remained relatively flat or declined as economic variables stunted potential growth. Farm/construction equipment, garden/agricultural supplies and IT -related office purchases were also sluggish. Given this group's diversity, growth rates reflect modest expansion. With twenty-one unique tax segments, predictions vary widely based on the size and character of local businesses. 2024/2512025/26 Fuel/Service Stations -3.9% 1 2.0% Most factors in this sector sustained downward pressure in 2Q24. Of note, the consumption of motor vehicle gasoline measured in gallons sold has declined 13% since the peak level in 2018. Crude and pump prices are dropping based on weaker demand in China and record levels of California fuel supplies on hand. OPEC is planning to hold current production cuts steady until the end of calendar year 2024. This has not offset impact as West Texas Intermediate barrel prices have dropped to the lowest levels since December 2021. Given these price contractions, our forecast reflects a significant reduction in the associated sales tax in the final two calendar quarters of 2024. Predictions for 2025 show a gradual boost in fuel related taxes. General Consumer Goods -0.6% 1 1.3% Direct sales tax allocations contracted in the second quarter following a soft downward revision to first quarter data from general retailers. Through the first six months of 2024, general consumer goods declined (-1.2%) compared to the prior year. While consumers remain resilient in this space, broadening of online shopping behaviors and bigger in-state fulfillment shifted allocations to other sectors. Additionally, many segments experienced deflationary pressures resulting in lower sales tax, absent substantial demand expansion. Key indicators include elevated levels of non -discretionary spending, mild personal income gains, and the expectancy for households to attempt to rebuild savings; all of which keep pressure on consumer spending habits. The short-term outlook foresees a tightening in receipts throughout the remainder of the calendar year. �i f Restaurants/Hotels 1.7% 1 3.5% IMenu price increases led to an obvious impact on consumer behavior as foot traffic to restaurants was down about 2.5%. The noticeable shift towards value offerings saw consumers showing resistance to high menu prices. Overall, while some eateries are struggling with fewer patrons, others are finding ways to attract customers by balancing price increases with value and experience. Hotels saw a slow but steady increase in occupancy rates while navigating cost pressures and changing consumer behaviors. Growth in both segments was offset by these persistent challenges. Food/Drugs -0.6% 1 1.5% o Grocery stores' profits rose 1.8% in 2Q24 as several businesses introduced new private label items to provide customers with a greater selection and find more value for their money. Convenience - liquor stores felt soft revenues and revealed fewer transactions on discretionary items such as liquor and snack foods. Cannabis returns had a sharp (-10.8%) decline as the price of cannabis products hit a low in the market. Further, closure of more drug stores throughout the state forced customers to shop at alternative retailers for their traditional drug stores merchandise. Last year finished -2.8%; anticipate the fiscal year 2024-25 to remain flat. 1111 State and County Pools 2.5% 1 3.0% The taxes remitted to the pools over the last fiscal year declined 1%. Of note, pools remain the largest tax generator of the eight categories highlighted in these forecast publications. Given the nuances in California sales tax law with more online orders processed at local stores or at in-state fulfillment centers, pool revenues softened slightly from the peak of fiscal year 2021-22. Mcommerce (shopping on mobile devices) continues to contribute to an expanding ecommerce portion of national retail sales, and spending by this means broke records during the first months of 2024. Modest pool gains are estimated, offering key opportunities for growth by retailers anchored to Gen Z consumer trends using digital commerce platforms. HdL Companies California Forecast 47 September 2024 Proposition 172 Total fiscal year 2023-24 Proposition 172 (P-172) statewide revenues ended about 1% lower than the prior year. The forecast anticipates essentially flat results for the 2024-25 fiscal period, with moderate growth in 2025-26. As the calendar year Bradley -Burns results are impacted by taxpayer modifications, audits, economic impacts, etc. - Proposition 172 pro -rata factors and resultant P-172 revenues will fluctuate for many counties pursuant to the State's allocation methodology. NATIONAL AND STATEWIDE ECONOMICS ECONOMIC DRIVERS U.S. Real GDP Growth 2024/2512025/26 2.4% 1 2.3% Despite concerns over the last two years, the U.S. economy has performed well, averaging a 2.8% real growth rate over the past eight quarters. Propelled by consumer spending, business investment has bounced back even with higher interest rates. Further contributing to real GDP growth are expanding real exports, which hit a record high in the second quarter of the year despite the strong dollar. Modest signs of slowing are seen in the labor and housing markets. Inflation has finally cooled after two years of ongoing efforts from the Fed to a moderate 2.6% pace over the last 12 months. The FOMC followed through and cut interest rates by 50 basis points; the first interest rate cut in over four years. These falling rates will give the U.S. economy a boost in the short run but may increase risks for 2025. gCA Unemployment Rate 5.3%15.4% No longer the national leader, California's unemployment rate has risen to 5.3%, now tied with Illinois for 3rd place. Despite the increase in unemployment from 4.8% to 5.3% over the past year, other labor market indicators such as initial claims for unemployment insurance and data on involuntary job separations have not increased. Although the state's unemployment rate is higher than in some states, its year - over -year change was nearly identical to the national average. As of July 2024, California had 1.6 unemployed persons per job opening, higher than the national average of 0.8. This marks a significant shift from the 0.9 average between January 2022 and January 2024. ECA Total Nonfarm Employment Growth I\ 1.1%11.0% California's labor market gained momentum in the second half of the year, with payrolls up 1.6% as of August 2024, compared to just 0.2% in 2023. There is little to suggest an end to the current expansion, now past the four-year mark, however California's long run growth will be limited by lack of housing. The Federal Reserve's recent 50 -basis -point interest rate cut, typically reserved for economic distress, could stimulate California's labor market. The Fed does not foresee a recession in the near future. 11. Inl U.S. Unemployment Rate 2024/2512025/26 4.3%14.3% The U.S. unemployment rate has risen nearly one percentage point over the last 18 months, with payroll employment numbers revised downward. These trends may be misleading, as involuntary separations and unemployment insurance claims have not increased. Historically, such unemployment rate increases occur during recessions, but this is a lagging indicator, and current economic output is not contracting. The ongoing expansion, now over four years, shows no signs of ending. U.S. households' financial health underpins short-term optimism. Despite a softer labor market, earnings growth outpaces inflation, with weekly earnings up 3.3% over the past year. Record household net worth and low debt burdens support continued spending growth. CA Residential Building Permits 108,8211 115,871 Since 2018, residential building permits in California have stagnated, deepening the state's housing crisis. In 2Q2024 the number of residential permits issued was down 8% year -over -year, the lowest since 2Q 2016. Despite growing demand, strict zoning laws, regulatory barriers, and high construction costs have limited new builds, driving up prices and making housing unaffordable for many residents. Recent Federal Reserve interest rate cuts may boost permits by lowering borrowing costs, encouraging more projects. Governor Newsom's new housing bills aim to address the scarcity, but it is uncertain whether they will significantly reduce home prices. CA Median Existing Home Price $739,3321$759,640 Housing affordability remains a challenge for California residents. High mortgage rates have increased costs for buyers and reduced the number of sellers. The recent downward trend in mortgage rates bodes well for housing market demand, as the average has declined 1.5 percentage points from its peak in October 2023 to 6.4% today. The 50 -basis -point reduction in the federal funds rate might push these rates further, giving some homeowners the freedom to refinance and potentially increase listings. A significant drop in home prices is unlikely due to increased buyer interest. The core issue in the California housing market continues to be a lack of supply. Watch our webinar for more info! 48 HdL Companies California Forecast September 2024 HdLCompanies Delivering Insight, Revenue, and Efficiency to Local Government igse HdL Companies 888.861.0220 solutions@hdlcompanies.com hdlcompanies.com California's allocation data trails actual sales activity by three to six months. HdL compensates for the lack of current information by reviewing the latest reports, statistics and perspectives from fifty or more economists, analysts and trade associations to reach a consensus on probable trends for coming quarters. The forecast is used to help project revenues based on statewide formulas and for reference in tailoring sales tax estimates appropriate to each client's specific demographics, tax base and regional trends. Beacon Economics LLC 310.571.3399 BeaconEcon.com Beacon Economics has proven to be one of the most thorough and accurate economic research/analytical forecasting firms in the country. Their evaluation of the key drivers impacting local economies and tax revenues provides additional perspective to HdL's quarterly consensus updates. The collaboration and sharing of information between Beacon and HdL helps both companies enhance the accuracy of the work that they perform for their respective clients. POWER POINTS FINANCIAL ADVISORY COMMISSION MEETING NOVEMBER 13, 2024 November 13, 2024 1 Financial Advisory Commission Meeting November 13, 2024 1 2 November 13, 2024 2 Financial Advisory Commission Meeting 11/13/2024 Presentation Item No. 1 Coachella Valley Association of Governments Arts & Music Line Project Update Arts & Music Line Project Status Update 3 4 November 13, 2024 3 CVWD Coordination Design Right-of-Way Environmental 5 6 November 13, 2024 4 Project Cost Design Right-of-Way Construction ATP 55.6% CVAG 33.3% Indio 7.4% La Quinta 2.8% Coachella 0.9% $65.6 million Q4 Q1 Q2 Q3 Q4 Q1 CVWD Complete Plans Caltrans Approval Bidding Award Finish EDUCATION PROGRAM 2024 2025 2028 7 8 November 13, 2024 5 Avenue 48 Washington St – Dune Palms Rd 9 10 November 13, 2024 6 11 12 November 13, 2024 7 Avenue 48 Dune Palms Rd – Van Buren St 13 14 November 13, 2024 8 15 16 November 13, 2024 9 17 18 November 13, 2024 10 Ave 48 at Dune Palms Rd Ave 48 at La Quinta Evacuation Channel 19 20 November 13, 2024 11 Ave 48 at La Quinta Evacuation Channel Ave 48 at La Quinta Evacuation Channel 21 22 November 13, 2024 12 Ave 48 at Hjorth St Ave 48 at Hjorth St 23 24 November 13, 2024 13 La Quinta Evacuation Channel La Quinta Evacuation Channel 25 26 November 13, 2024 14 Ave 48 at La Quinta Evacuation Channel 27 28 November 13, 2024 15 La Quinta Evacuation Channel Connection to CV Link 29 30 November 13, 2024 16 CV Link Update Completed Segments 1/2 Segments 3/4/5 Segment 6 31 32 November 13, 2024 17 West Valley 11-mile uninterrupted pathway from Palm Springs Visitor Center to downtown Cathedral City East Valley 14-mile uninterrupted pathway from Washington Street in La Quinta through four other jurisdictions to Avenue 56 in Thermal Palm Springs 33 34 November 13, 2024 18 Palm Springs Palm Springs 35 36 November 13, 2024 19 La Quinta La Quinta 37 38 November 13, 2024 20 Indio Indio 39 40 November 13, 2024 21 Indio Coachella 41 42 November 13, 2024 22 Coachella Coachella 43 44 November 13, 2024 23 Substantial Completion December 2024 Closeout & Cleanup June 2025 Financial Advisory Commission Meeting 11/13/2024 Business Session Item No. 1 Approve the FAC Subcommittee Recommendations on Funding Outstanding Pension Obligations & Revisions to the General Fund Balance & Reserves Policy for City Council Consideration 45 46 November 13, 2024 24 CalPERS PERF • Public Employee’s Retirement Fund (PERF) • As of June 2023, assets $464.6 billion or 72% funded • Preliminary for June 2024 assets $502.9 billion or 75% funded CalPERS Pensions • Nation’s largest public pension fund with more than 2 million members • Provide pensions to 685K retirees and 103K beneficiaries/survivors • $32 Billion in Pension Payments in 2024 47 48 November 13, 2024 25 City Pension Tiers Classic Tier Tier 2 PEPRA Tier Totals Entry Age Normal Accrued Liability 58,124,122$ 1,425,777$ 4,854,435$ 64,404,334$ Plan's Market Value of Assets 54,216,782$ 1,276,825$ 4,335,953$ 59,829,560$ Unfunded Accrued Liability 3,907,340$ 148,952$ 518,482$ 4,574,774$ Funded Ratio 93.3% 89.6% 89.3% 92.90% Classic Tier Tier 2 PEPRA Tier Hire Date On and Before 12/31/2012 On and after 12/17/2012 On and after 1/1/2013 Benefit Formula 2.5% at age 55 2% at age 60 2% at age 62 Benefit Vesting Schedule 5 years of service 5 years of service 5 years of service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 and up 50 and up 52 and up Required employee contribution rate 8.000% 7.000% 7.750% Required employer contribution rate 14.180% 10.190% 7.960% Number of Active Members* 18 (19)8 69 +16 Number of Retired Members* 124 +24 2 +1 1 +1 * As of June 30, 2023 from CalPERS valuation reports. Red indicates change from 2019 reports Additional Discretionary Payments Fiscal Year Classic Tier Tier 2 PEPRA Tier Total 2018/19 -$ 15,353$ 22,060$ 37,413$ 2019/20 -$ 20,000$ 10,000$ 30,000$ 2020/21 1,000,000$ 6,419$ 57,345$ 1,063,764$ 2021/22 2,500,000$ 2,500,000$ 2022/23 11,200,000$ 11,200,000$ 2023/24 350,000$ 130,000$ 470,000$ 950,000$ TOTAL 15,050,000$ 171,772$ 559,405$ 15,781,177$ Additional Discretionary Payments to CalPERS GovInvest conservatively estimates that the City has saved $17 to $19 million in future interest payments as a result of these ADPs 49 50 November 13, 2024 26 Amortization Schedule Date Balance Payment Balance Payment Balance Payment 6/30/2025 3,939,824 336,556 69,800 7,344 25,628 2,267 6/30/2026 3,859,921 343,981 66,957 7,009 25,028 2,279 6/30/2027 3,766,911 351,407 64,266 6,673 24,375 2,290 6/30/2028 3,659,903 358,833 61,740 6,338 23,666 2,303 6/30/2029 3,537,943 366,258 59,389 6,003 22,896 2,314 6/30/2030 3,400,017 366,260 57,223 6,003 22,062 2,315 6/30/2031 3,252,710 366,259 54,910 6,003 21,170 2,315 6/30/2032 3,095,388 366,259 52,440 6,003 20,218 2,315 6/30/2033 2,927,368 366,260 49,802 6,003 19,200 2,314 6/30/2034 2,747,921 366,258 46,985 6,002 18,114 2,314 6/30/2035 2,556,274 366,259 43,978 6,003 16,954 2,315 6/30/2036 2,351,594 366,260 40,765 6,003 15,714 2,314 6/30/2037 2,132,994 366,258 37,333 6,003 14,391 2,314 6/30/2038 1,899,532 366,261 33,668 6,003 12,978 2,313 6/30/2039 1,650,191 366,260 29,754 6,003 11,470 2,315 6/30/2040 1,383,895 366,259 25,573 6,003 9,858 2,314 6/30/2041 1,099,493 366,260 21,108 6,003 8,137 2,314 6/30/2042 795,749 366,258 16,339 6,002 6,299 2,314 6/30/2043 471,354 366,262 11,248 6,004 4,336 2,314 6/30/2044 124,897 129,073 5,808 6,002 2,240 2,315 6/30/2045 Total 7,013,741 123,410 46,168 Interest Paid 3,073,917 53,610 20,540 7,183,319 3,148,067 Current Amortization Schedule Classic Current Amortization Schedule PEPRA Current Amortization Schedule Tier 2 Total Payments, All Plans Total Potential Savings Policy Goals • Set targets for plan funded status and pension rust balance • Allow for annual budgeting of pension liabilities • Provide flexibility for City to make decisions based on market conditions and competing priorities for funds 51 52 November 13, 2024 27 Recommendations • Send an ADP to CalPERS utilizing unassigned reserves (from anticipated FY 2023/24 surplus) in the amount of $3.9 million • Revise policy – Set target funded status of pension plan to at least 95%, or 100% when also factoring in trust balance – Set target for trust fund to 20% of Entry Age Accrued Liability (which would be about $12.8 million), while maintaining that the minimum would be $5.0 million Financial Advisory Commission Meeting 11/13/2024 Departmental Report Item No. 2 Second Quarter 2024 (April-June) Sales Tax Update 53 54 November 13, 2024 28 Summary • Sales Taxes still trending slightly downward – total receipts (on a cash basis) down 4.5% to LY for the Quarter • The County and State also saw declines • Overall consumers continue to be more cautious in their spending and are leaning toward value options Major Industry Groups 55 56 November 13, 2024 29 Sales and MG History YTD Measure G Total Receipts % change to prior year Final Budget Variance to Budget Percent of Budget Fiscal 16-17 1,462,650$ 1,000,000$ 462,650$ 146.26% Fiscal 17-18 9,967,657$ 9,600,000$ 367,657$ 103.83% Fiscal 18-19 10,958,118$ 9.94% 10,145,000$ 813,118$ 108.01% Fiscal 19-20 10,310,526$ -5.91%9,646,500$ 664,026$ 106.88% Fiscal 20-21 12,594,389$ 22.15% 10,617,200$ 1,977,189$ 118.62% Fiscal 21-22 15,615,411$ 23.99% 13,500,000$ 2,115,411$ 115.67% Fiscal 22-23 16,088,087$ 3.03% 15,500,000$ 588,087$ 103.79% Fiscal 23-24 15,471,183$ -3.83% 15,515,000$ (43,817)$ 99.72% Fiscal 24-25 2,041,970$ 15,000,000$ YTD Sales Tax Fiscal 16-17 8,597,655$ 8,604,000$ (6,345)$ 99.93% Fiscal 17-18 8,989,328$ 4.56% 8,776,100$ 213,228$ 102.43% Fiscal 18-19 9,947,125$ 10.65%9,300,000$ 647,125$ 106.96% Fiscal 19-20 8,825,489$ -11.28% 8,235,900$ 589,589$ 107.16% Fiscal 20-21 10,729,160$ 21.57% 9,428,700$ 1,300,460$ 113.79% Fiscal 21-22 12,589,104$ 17.34% 11,500,000$ 1,089,104$ 109.47% Fiscal 22-23 12,799,992$ 1.68% 12,250,000$ 549,992$ 104.49% Fiscal 23-24 12,170,477$ -4.92% 12,205,000$ (34,523)$ 99.72% Fiscal 24-25 1,548,105$ 12,000,000$ The Financial Advisory Commission Special Meeting will be on December 4, 2024 57 58 November 13, 2024 30 59