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2013-2014 ACFR (July 1 - June 30 Annual Comprehensive Financial Report)CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) YEAR ENDED JUNE 30, 2014 CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2014 Prepared By FINANCE DEPARTMENT THIS PAGE INTENTIONALLY LEFT BLANK CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2014 TABLE OF CONTENTS INTRODUCTORY SECTION Letterof Transmittal....................................................................................................... List of Principal Officials................................................................................................. OrganizationalChart...................................................................................................... Certificate of Achievement for Excellence in Financial Reporting (GFOA).................... FINANCIAL SECTION Independent Auditors' Report........................................................................................ Management's Discussion and Analysis........................................................................ Basic Financial Statements: Government -Wide Financial Statements: Statementof Net Position........................................................................................ Statementof Activities............................................................................................. Fund Financial Statements: Balance Sheet — Governmental Funds................................................................... Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position.............................................................................. Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds............................................................................ Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Position — Proprietary Funds ....................................................... Statement of Revenues, Expenses and Changes in Fund Net Position — ProprietaryFunds.................................................................................................... Statement of Cash Flows — Proprietary Funds ........................................................ Statement of Fiduciary Net Position - Fiduciary Funds ........................................... Page vii viii ..1 ..5 19 20 22 25 26 28 29 30 31 33 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2014 TABLE OF CONTENTS Page Number FINANCIAL SECTION (CONTINUED) Statement of Changes in Fiduciary Net Position - Fiduciary Funds...............................................34 Notes to Financial Statements..............................................................................................................35 REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information..............................................................................74 Budgetary Comparison Schedule by Department — General Fund................................................75 Budgetary Comparison Schedules — Major Special Revenue Funds HousingAuthority PA No. 1.....................................................................................................76 HousingAuthority PA No. 2.....................................................................................................77 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Non -Major Governmental Funds.......................................................80 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non -Major Governmental Funds.......................................................................88 Budgetary Comparison Schedules — Special Revenue Funds StateGas Tax.........................................................................................................................95 Library......................................................................................................................................96 FederalAssistance...................................................................................................................97 SLEBG.....................................................................................................................................98 Lightingand Landscaping........................................................................................................99 Quimby...................................................................................................................................100 PublicSafety..........................................................................................................................101 ArtIn Public Places................................................................................................................102 SouthCoast Air Quality..........................................................................................................103 AB939...................................................................................................................................104 LawEnforcement...................................................................................................................105 JusticeAssistance Grant........................................................................................................106 MeasureA..............................................................................................................................107 Budgetary Comparison Schedules — Capital Projects Funds CapitalImprovement..............................................................................................................108 CivicCenter............................................................................................................................109 Infrastructure..........................................................................................................................110 Transportation........................................................................................................................111 Parksand Recreation.............................................................................................................112 LibraryDevelopment..............................................................................................................113 CommunityCenter.................................................................................................................114 StreetFacility..........................................................................................................................115 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2014 TABLE OF CONTENTS COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES (CONTINUED) Park Facility Fire Facility. Budgetary Comparison Schedules — Debt Service Funds Financing Authority .................................................... Combining Statement of Net Position — Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Fund Net Position — Internal Service Funds .......................... Combining Statement of Cash Flows — Internal Service Funds Combining Statement of Net Position — All Agency Funds Combining Statement of Changes in Assets and Liabilities — All Agency Funds STATISTICAL SECTION Net Position by Component............................................................ Changes in Net Position................................................................. Changes in Net Position — Governmental Activities ....................... Changes in Net Position — Business -type Activities ....................... Fund Balances of Governmental Funds ......................................... Changes in Fund Balances of Governmental Funds ...................... Assessed Value and Estimated Actual Value of Taxable Property Direct and Overlapping Property Tax Rates ................................... Principal Property Taxpayers......................................................... Property Tax Levies and Collections .............................................. Ratios of Outstanding Debt by Type ............................................... Ratio of General Bonded Debt Outstanding ................................... Direct and Overlapping Debt.......................................................... Legal Debt Margin Information....................................................... Pledged -Revenue Coverage.......................................................... Demographic and Economic Statistics ........................................... Page Number ..116 ..117 ..118 ..120 ..121 ..122 ..124 ..125 128 130 132 135 136 138 141 142 144 145 146 148 149 150 152 153 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2014 TABLE OF CONTENTS STATISTICAL SECTION (CONTINUED) Principal Employers Page Number 154 Full-time City Employees..............................................................................................................155 Operating Indicators 156 CapitalAsset Statistics.................................................................................................................157 Schedule of Insurance in Force....................................................................................................158 LlN •r of January 28, 2015 To the Citizens of the City of La Quinta, the Honorable Mayor and Members of the City Council I am pleased to present you with the City of La Quinta Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2014. This transmittal letter provides a non-technical summary of the City's finances, services, achievements and economic outlook. A more detailed discussion of the City's finances can be found in Management's Discussion and Analysis section (MD&A) that immediately follows the independent auditor's report. The MD&A provides a narrative introduction, overview, and analysis of the basic financial statements, The MD&A complements this letter of transmittal and should be read in conjunction with it. Ensuring the financial integrity of our public institutions is crucial to maintain the public's trust. Responsibility for the accuracy of the data and the completeness on fairness of the presentation, including all disclosures, rest with the City of La Quinta. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to fairly present the financial position and results of operations of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding to the City's financial activities have been included. The Comprehensive Annual Financial Report was prepared in conformance with Generally Accepted Accounting Principles (GAAP). The City's financial reporting is based upon all Governmental Accounting Standards Board (GASB) pronouncements. Government Code Section 26909 (a) requires that the City, as a local agency of the County, contract with a certified public accountant to perform an annual audit of the accounts and records of the City and that the audit conform to generally accepted auditing standards. Further, Government Code Section 26909 (b) states that an audit report shall be filed with the State Controller and with the County Auditor of the County in which the district is located within 12 months of the end of the fiscal year. In addition, City Ordinance 2.12.040 requires an annual audit be performed by a certified public accountant. This report is published to fulfill these requirements for the fiscal year ended June 30, 2014. 78-455 Calle Tampico I La Quinta I California 92253 1 760.777.7000 1 www1a-Quinta.or Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that has been established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The independent auditor's report is located at the front of the financial section of this report. Lance Soil & Lunghard LLP Certified Public Accountants have issued an unmodified ("clean") opinion on the City of La Quinta's financial statements for the year ended June 30, 2014. The independent audit involved examining evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and estimates made by management, and evaluating the overall financial statement presentation. The independent auditor concluded based on the audit that there was a reasonable basis for rendering an unmodified opinion that the City of La Quinta's financial statements for the fiscal year ended June 30, 2014 are fairly presented in conformity with GAAP. This is the most favorable conclusion and commonly known as a "clean" opinion. Profile of the Government The City of La Quinta is located 120 miles east of Los Angeles in the eastern portion of Riverside County known as the Coachella Valley. The City motto is "The Gem of the Desert." The City is governed by a five - member City Council under the Council/Manager form of government. The Mayor is directly elected by the citizens. The Mayor serves a two-year term and the four Council Members serve four-year terms, with two Council Members elected every two years. The Mayor and four Council Members are elected at large. The City was originally incorporated in 1982 as a general law City and it became a charter City in November 1996, The Council appoints the City Manager, who in turn appoints the heads of the various departments. The City of La Quinta provides a range of services, which include construction and maintenance of streets and other infrastructure; community development and planning; construction and code compliance; various recreational and cultural activities; and general municipal services. Services are also provided to the City and its citizens by contract and by the direct services of other government agencies and organizations. These services include police and fire protection, library services, visitor and tourist information, city promotion through the La Quinta Chamber of Commerce, water and sewer service, electricity service, refuse collection, public transit, and cable television service. The City of La Quinta is also financially accountable for a legally separate Successor Agency for the former Redevelopment Agency, a Financing Authority, and a Housing Authority. Additional information on these legally separate entities can be found in the notes to the financial statements. Pursuant to City Ordinance 2.08.060 and 2.12.030, the City Manager and Finance Director are responsible for the preparation of the annual budget for City Council consideration prior to the start of the fiscal year. The annual budget serves as the foundation for the City of La Quinta's financial planning and control. The budget is prepared by fund, function, department, and line item. Department heads may transfer line item resources within a division with the approval of the City Manager. Transfers between divisions and departments also need approval from the City Manager. Local Economy The City of La. Quinta comprises an area of approximately 32 square miles and, as of January 1, 2014 has a permanent population of 39,032 according to census data provided by the California Department of Finance. In addition to permanent residents, approximately 18,000 seasonal residents make La Quinta their home for three to six months each year. According to the State of California Employment Development Department (EDD), as of December 2014, the unemployment rate for the City of La Quinta was 3.8%, down from the annual average of 5.3% in 2013. This rate is significantly lower than the Riverside County unemployment rate of 7.4% and the statewide unemployment rate of 6.7%. Major employers include the La Quinta Resort and Club, Desert Sands Unified School District, Wal-Mart Super Center, Costco, Home Depot, Rancho La Quinta, Lowe's Home Improvement and Imperial Irrigation District. Home to the nationally acclaimed Arnold Palmer Classic Course at SilverRock Resort, La Quinta is a blend of beauty, charm, and opportunity. La Quinta's history is rich and its story a fascinating tale of success. Named by the Robb Report as the "Best Place to Live for Golf," La Quinta is home to over 20 exceptional golf courses including the famous PGA West. The historic La Quinta Resort and Club is the largest resort in the Coachella Valley and is complemented by other recently opened hospitality venues. The City embraces art and culture, offering the La Quinta Arts Festival and a variety of beautiful public art pieces. The bustling Highway 1 1 1 corridor and enchanting Old Town Village feature the best of shopping, dining and personal services. Long-term Financial Planning The City of La Quinta is committed to sound financial governance. The City has a long history of providing a superior level of public safety services, life enrichment opportunities, and a quality environment to its residents, businesses and visitors. The City Council adopted a conservative budget for fiscal year 2014-2015 based on the current economic conditions. The budget is balanced; all current expenditures are supported by current revenues. In June of 2014, the City Council approved a total of $14,244,766 in funding for various capital improvement projects for the fiscal year of 2014-2015 including a General Fund contribution of $1 million for the pavement management program. Other projects include traffic signals, sidewalk repairs and construction, accessibility improvements, and storm drain improvements. La Quinta has cultivated a sound foundation of general fund revenues including sales tax, transient occupancy tax, and property tax. Due to the timing of the City of La Quinta's incorporation in 1982 (after the passage of Proposition 13, the landmark property tax reform legislation enacted in 1978) the City receives a smaller share of property tax than cities incorporated prior to 1978; therefore the City relies heavily on sales tax and transient occupancy tax. The commitment to maintain the existing quality of life expectations includes addressing the concern that La Quinta's economic base cannot keep pace with escalating public safety costs and infrastructure needs. The elimination of redevelopment and the ever increasing competition the City faces from other markets and tourism venues, both state and national, further drives this concern. Considering measures to strengthen the City's economic base and/or incorporate new revenues is key to maintaining the City's excellent quality of municipal services. The Future In November of 2014, the City Council approved the SilverRock Development Program. The projected value of the Development Program is $420 million. The development would generate approximately $55.2 million in City tax ($48.0 million) and City fee ($7.2 million) revenue over a 15 - year period. However, given the need to build infrastructure and a permanent clubhouse (which the City was once going to do when the Redevelopment Agency existed), the City would invest up to $27.0 million in redevelopment agency bond proceeds and transient occupancy tax revenue over a 15 -year period. The Development Program includes the following: a 140 -room 5 -star quality luxury hotel and spa (170,000 square feet in total), for -sale, luxury - branded, single-family detached residences; a 200 -room, 4 -star quality Lifestyle Hotel, a reconfigured Arnold Palmer golf course; a conference center, and a mixed use retail and residential village. Awards and Acknowledge me nts The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of La Quinta for its comprehensive annual iv financial report {CAFR) for the fiscal year ended June 30, 2013. This was the seventeenth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated service of the finance department staff. Credit also must be given to the Mayor and City Council for their support in maintaining the highest standards of professionalism in the management of the City of La Quinta's finances. Rita Conrad Finance Director v City of La Quinta Directory of Officials June 30, 2014 CITY COUNCIL Dan Adolph, Mayor Lee Osborne, Mayor Pro Tern Linda Evans, Council Member Kristy Franklin, Council Member Terry Henderson, Council Member ADMINISTRATION Frank J. Spevacek, City Manager Rita Conrad, Finance Director Edie Hylton, Community Services Director Kathy Jenson, City Attorney Les Johnson, Community Dev. Director Tim Jonasson, Public Works Director/City Engineer Susan Maysels, City Clerk Vi s is n � `5U �P'y�o;nwao Y[ LU w C LSE000 CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of La Quinta, California Report on Financial Statements • David E. Hale, CPA, CFP • Donald G. Slater, CPA • Richard K. Kikuchi, CPA • Susan F. Matz, CPA • Bryan S. Gruber, CPA • Deborah A. Harper, CPA • Gary A. Cates, CPA • Michael D. Mangold, CPA • David S. Myers, CPA We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta, California, (the City) as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta, California, as of June 30, 2014, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Lance, Soil & Lunghard, LLP 203 North Brea Boulevard Suite 203 Brea, CA 92821 TEL 714.672.0022 Fax 714.672.0331 www.lslcpas.com Orange County Temecula Valley Silicon Valley CERTIFIED PUBLIC ACCOUNTANTS • GilYenel LSLCP4 viLmure, peeeer S boucher To the Honorable Mayor and Members of the City Council City of La Quinta, California Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, and the budgetary comparison information for the General Fund, Housing Authority PA No. 1, and Housing Authority PA No. 2 as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2 LSL 0 CERTIFIED PO®LIC ACCOuxT14nT5 A r m ESL, C— viLmure. neeLer R bnucher To the Honorable Mayor and Members of the City Council City of La Quinta, California Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 26, 2015 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Brea, California January 26, 2015 THIS PAGE INTENTIONALLY LEFT BLANK Management's Discussion and Analysis As management of the City of La Quinta, we offer readers of the City of La Quinta's financial statements this narrative, overview and analysis of the financial activities for the fiscal year ended June 30, 2014. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in an earlier section of this report. All amounts, unless otherwise indicated, are rounded to the nearest thousands of dollars. Financial Highlights • The assets of the City of La Quinta exceeded its liabilities at the close of the most recent fiscal year by $701,871,000 (net position). Of this amount, $79,232,000 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. Approximately $568,969,000 or 81 percent was invested in capital assets and is not available to meet ongoing obligations. • The governmental activities total net position increased by $2,511,000 and the Business -Type total net position decreased by $311,000 which is attributable to the SilverRock Golf Course. • As of the close of the current fiscal year, the City of La Quinta's governmental funds reported combined ending fund balances of $101,128,000, an increase of $2,375,000 in comparison with the prior year. The primary reason for this increase is due to the one-time distribution of property tax from the Redevelopment Property Tax Trust Fund (RPTTF). • At the end of the current fiscal year, the unassigned General Fund Balance comprised $10,700,000 of the total $91,634,000 General Fund Balance or 12 percent of the total Fund Balance and 31 percent of total General Fund budgeted expenditures • The total governmental activities debt decreased by $80,000 during the current fiscal year from $6,943,000 to $6,863,000. This decrease is mainly due to scheduled debt service payments that occurred during the fiscal year. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of La Quinta's basic financial statements. The City of La Quinta's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 5 Government -wide financial statements The government -wide financial statements are designed to provide readers with a broad overview of the City of La Quinta's finances, in a manner similar to a private -sector business. The statement of net position presents information on all of the City of La Quinta's assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of La Quinta is improving or deteriorating. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, for example, earned but unused vacation leave. Both of the government -wide financial statements mentioned above distinguish functions of the City of La Quinta that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of La Quinta include general government, public safety, community services, community development and public works. The business -type activities of the City of La Quinta include the SilverRock Golf course operations. The government -wide financial statements include not only the City of La Quinta itself (known as the primary government), but also the La Quinta Financing Authority and the La Quinta Housing Authority. Although legally separate entities, they function for all practical purposes as departments of the City of La Quinta, and therefore have been included as an integral part of the primary government. The government -wide financial statements can be found in the table of contents under the Financial Section of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of La Quinta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of La Quinta can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. 1.1 Governmental funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near- term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of La Quinta maintains thirty one (31) individual governmental funds, which are distinguished between major and non -major funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, two (2) capital project funds, and two (2) special revenue funds. These five (5) funds are considered to be major funds. Data from the other twenty seven (26) governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. The City of La Quinta adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found in the table of contents under the heading Basic Financial Statements. Proprietary funds Proprietary funds can be broken down into enterprise and internal service funds. The City of La Quinta maintains one (1) enterprise fund. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of La Quinta uses an enterprise fund to account for its SilverRock Golf Course operations, which is considered to be a major fund. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of La Quinta's various functions. The City of La Quinta has three (3) internal service funds to account for its major equipment replacement including vehicles, for its information technology systems, and for its park equipment and facility needs. Because these three services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the government - wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report The basic proprietary fund financial statements can be found on the pages listed in the table of contents for Proprietary Funds: Statement of Net Position, Statement of Revenues, Expenses and Changes in Fund Net Position, and Statement of Cash Flows. Fiduciary funds Fiduciary funds, also called agency funds, are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City of La Quinta's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on the pages listed in the table of contents for Fiduciary Funds: Statement of Fiduciary Net Position — Fiduciary Funds. Notes to the financial statements The notes to the financial statements provide additional information that is essential to obtain a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on the pages listed in the table of contents for Notes to Financial Statements. Other information In addition to the basic financial statements and accompanying notes, this report also presents the combining statements referred to earlier in connection with non -major governmental funds, internal service funds, and agency funds. The non -major governmental funds' combining statements are presented immediately following the Notes to the Financial Statements while the combining statements for the internal service funds and agency funds are presented following the budgetary comparison schedules for the debt service funds. Government -wide financial analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of La Quinta, assets exceeded liabilities by $701,871,000 at the close of the most recent fiscal year, which is $2,201,000 more than the previous year. M The largest portion of the City of La Quinta's Net Position, which was 81 % this year and 82% last year, reflects its investment in capital assets (e.g., land, buildings; machinery, and equipment), net of related debt. The City of La Quinta uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. However, it should be noted that the resources needed to repay the related debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate it. City of La Quinta Net Position An additional portion of the City of La Quinta's net position (8 percent versus 7 percent in the prior year) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted Net Position - $79,232,000 (11 percent) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of La Quinta is able to report positive balances in all three categories of Net Position, both for the government as a whole, as well as for its separate governmental activities; however, the business type unrestricted Net Position had a deficit in its net position of $4,675,000, which is approximately $76,000 less than the previous year. It Governmental activities Business -type activities Total 2014 2013 2014 2013 2014 2013 Current and other assets $163,106,840 $157,369,797 $ (4,404,429) $ (4,457,412) $158,702,411 $152,912,385 Capital assets 527,743,729 529,752,387 41,354,565 41,785,179 569,098,294 571,537,566 Total assets 690,850,569 687,122,184 36,950,136 37,327,767 727,800,705 724,449,951 Current liabilities 20,092,633 17,499,856 270,237 293,192 20,362,870 17,793,048 Non-current liabilities 5,566,976 6,942,844 - 43,736 5,566,976 6,986,580 Total liabilities 25,659,609 24,442,700 270,237 336,928 25,929,846 24,779,628 Net position: Net investment in capital assets 527,614,666 529,681,342 41,354,565 41,741,443 568,969,231 571,422,785 Restricted 53,669,248 49,598,397 - 53,669,248 49,598,397 Unrestricted 83,907,046 83,399,745 (4,674,666) (4,750,604) 79,232,380 78,649,141 Total net position $665,190,960 $662,679,484 $36,679,899 $36,990,839 $701,870,859 $699,670,323 An additional portion of the City of La Quinta's net position (8 percent versus 7 percent in the prior year) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted Net Position - $79,232,000 (11 percent) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of La Quinta is able to report positive balances in all three categories of Net Position, both for the government as a whole, as well as for its separate governmental activities; however, the business type unrestricted Net Position had a deficit in its net position of $4,675,000, which is approximately $76,000 less than the previous year. It Governmental activities Governmental activities Net Position increased by $2,511,000 accounting for a .38% percent change in the Net Position from the previous year. Key elements of these changes are as follows: City of La Quinta Changes in Net Position Revenues overall decreased by $11,274,000 with the largest category decrease in operating grants and contributions. In 2012-2013 $17.9 million was transferred for the former Redevelopment Agency's "low/mod" housing fund to the La Quinta Housing authority fund. This was a one-time transfer that did not repeat in 2013-2014. The second largest category decrease was in the extraordinary gain/loss on dissolution of the former Redevelopment Agency. The State disallowed $6,402,000 in loans owed to the City from the former Redevelopment Agency. These decreases were offset by increases in General Fund property tax, sales tax and development related fees and permits. 10 Governmental Business -type activities activities Total Revenues: 2014 2013 Change 2014 2013 Change 2014 2013 Change Program revenues: Charges for services $ 4,500,263 $ 2,533,941 $ 1,966,322 $ 3,481,424 $ 3,736,879 $(255,455) $ 7,981,687 $ 6,270,820 $ 1,710,867 Operating grants and contributions 14,587,153 28,068,940 (13,481,787) - - 14,587,153 28,068,940 (13,481,787) Capital grants and contributions 3,981,286 4,115,238 (133,952) 3,981,286 4,115,238 (133,952) General revenues: Property taxes 9,193,753 7,043,604 2,150,149 9,193,753 7,043,604 2,150,149 Othertaxes 17,671,307 16,487,958 1,183,349 - - 17,671,307 16,487,958 1,183,349 Investment income 2,190,357 1,605,718 584,639 1,567 2,225 (658) 2,191,924 1,607,943 583,981 Motor vehicle in lieu 3,291,042 3,157,330 133,712 - - - 3,291,042 3,157,330 133,712 Extraordinary gain/loss on dissolution of RDA (6,402,450) - (6,402,450) (6,402,450) - (6,402,450) Gain (loss) on sale of capital assets - (2,189,984) 2,189,984 - - (2,189,984) 2,189,984 Transfers (500,000) - (500,000) 500,000 500,000 - - Miscellaneous 243,498 28,551 214,947 678,046 100,799 577,247 921,544 129,350 792,194 Total revenues 48,756,209 60,851,296 (12,095,087) 4,661,037 3,839,903 821,134 53,417,246 64,691,199 (11,273,953) Expenses: - General government 4,830,239 4,511,023 319,216 - - - 4,830,239 4,511,023 319,216 Public safety 21,169,423 21,047,691 121,732 21,169,423 21,047,691 121,732 Community development 3,098,015 2,274,541 823,474 3,098,015 2,274,541 823,474 Community services 4,130,085 4,986,104 (856,019) 4,130,085 4,986,104 (856,019) Public works 12,610,994 11,803,133 807,861 12,610,994 11,803,133 807,861 Interest on long-term debt 405,977 447,048 (41,071) 405,977 447,048 (41,071) Golf course - - - 4,971,977 4,208,855 763,122 4,971,977 4,208,855 763,122 Total expenses 46,244,733 45,069,540 1,175,193 4,971,977 4,208,855 763,122 51,216,710 49,278,395 1,938,315 Increase in net position before transfers and restatements 2,511,476 15,781,756 (13,270,280) (310,940) (368,952) 58,012 2,200,536 15,412,804 (13,212,268) Restatements - (3,908,944) 3,908,944 - - (3,908,944) 3,908,944 Increase in net position 2,511,476 11,872,812 (9,361,336) (310,940) (368,952) 58,012 2,200,536 11,503,860 (9,303,324) Netposition- beginning 662,679,484 650,806,672 11,872,812 36,990,839 37,359,791 (368,952) 699,670,323 688,166,463 11,503,860 Net position - ending $ 665,190,960 $ 662,679,484 $ 2,511,476 $ 36,679,899 $ 36,990,839 $ (310,940) $ 701,870,859 $ 699,670,323 $ 2,200,536 Revenues overall decreased by $11,274,000 with the largest category decrease in operating grants and contributions. In 2012-2013 $17.9 million was transferred for the former Redevelopment Agency's "low/mod" housing fund to the La Quinta Housing authority fund. This was a one-time transfer that did not repeat in 2013-2014. The second largest category decrease was in the extraordinary gain/loss on dissolution of the former Redevelopment Agency. The State disallowed $6,402,000 in loans owed to the City from the former Redevelopment Agency. These decreases were offset by increases in General Fund property tax, sales tax and development related fees and permits. 10 • Expenses for Governmental Activities overall increased by $1,175,000 (2.6 percent increase). The biggest decrease was in the Governmental Activities category of Community Services which decreased by $856,100 or 17 percent. Library expenses were down by $259,000 and expenses were $367,000 less than expected. • Expenses related to Public Works governmental activities increased $808,000 as compared to the previous year. The primary reason for this change was an increase in depreciation. • Expenses related to Community Development governmental activities was $823,000 higher than the previous reporting period due to an increase in depreciation. Not including depreciation, expenses overall in this category were consistent with the prior year's amounts. • There were no contributions of assets from the governmental activities to the business -type activities. The primary government transferred $500,000 to the SilverRock Golf fund in order to offset revenue loss from portions of the course being closed while the Coachella canal realignment project was underway. Business -type activities This was the ninth full year of operations for the SilverRock Golf fund since the golf course began early operation in 2005. Net Position decreased by $ (311,000) from the effects of an operating loss. Charges for services primarily consisted of green fees which totaled $3,481,000, and was $255,000 less than the previous year, with golf course expenses of $4,972,000, which was $763,000 more than the previous year. • As mentioned above, during Fiscal Year 2013-2014, the General Fund transferred $500,000 to the SilverRock Golf fund in order to offset revenue loss from portions of the course being closed while the Coachella canal realignment project was underway. • No additional advances were required for the golf course operations. The total outstanding advance due to the General Fund from the inception of the Golf Course opening is $5,326,000. It is anticipated that these advances will be repaid from future income from SilverRock activities such as transient occupancy tax, sales tax and golf course net income generated on the site in future years. 11 Financial Analysis of the Government's Funds As noted earlier, the City of La Quinta uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds - The focus of the City of La Quinta's governmental funds is to provide information on near-term inflows, outflows, and balances of the funds. Such information is useful in assessing the City of La Quinta's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of La Quinta's governmental funds reported combined ending fund balances of $101,128,000 on as follows: Governmental fund balances ended the year totaling $101,128,000, an increase of $2,375,000 in comparison with the prior years' ending balance of $98,753,000. Of this amount $58,466,000 or 58% constitutes non -spendable reserves, which means that these reserves are not available to fund operating expenditures of the organization; $21,865,000 or 22% are restricted fund balances which are the result of external limitations on spending; $22,259,000 or 22% are committed fund balances which are the result of self-imposed limitations placed upon the funds by the Governing Board responsible for adopting the fund budget; and $209,000 are assigned reserves for the retrospective insurance adjustment. The remainder fund deficit or $1,671,000 represents unassigned fund balances or the residual net resources after taking into consideration the other classifications. General Fund The general fund is the chief operating fund of the City of La Quinta. At the end of the current fiscal year, unassigned fund balance of the general fund was $10,700,000 while total fund balance reached $91,634,000. As a measure of the general fund's liquidity, it may be useful to compare the total general fund balance to budgeted expenditures (including transfers out). The total fund balance represents 266 percent of the total budgeted expenditures. 12 Governmental Fund balances Category General Fund Percent All Other Funds Percent Total Funds Percent Nonspendable $ 58,466,029 64% $ - 0% $ 58,466,029 58% Restricted - 0% 21,865,127 230% 21,865,127 22% Committed 22,259,083 24% - 0% 22,259,083 22% Assigned 209,000 0% - 0% 209,000 0% Unassigned 10,699,641 12% (12,370,462) -130% (1,670,821) -2% Total $ 91,633,753 $ 9,494,665 $ 101,128,418 Governmental fund balances ended the year totaling $101,128,000, an increase of $2,375,000 in comparison with the prior years' ending balance of $98,753,000. Of this amount $58,466,000 or 58% constitutes non -spendable reserves, which means that these reserves are not available to fund operating expenditures of the organization; $21,865,000 or 22% are restricted fund balances which are the result of external limitations on spending; $22,259,000 or 22% are committed fund balances which are the result of self-imposed limitations placed upon the funds by the Governing Board responsible for adopting the fund budget; and $209,000 are assigned reserves for the retrospective insurance adjustment. The remainder fund deficit or $1,671,000 represents unassigned fund balances or the residual net resources after taking into consideration the other classifications. General Fund The general fund is the chief operating fund of the City of La Quinta. At the end of the current fiscal year, unassigned fund balance of the general fund was $10,700,000 while total fund balance reached $91,634,000. As a measure of the general fund's liquidity, it may be useful to compare the total general fund balance to budgeted expenditures (including transfers out). The total fund balance represents 266 percent of the total budgeted expenditures. 12 The City of La Quinta's general fund balance decreased by $939,000 in Fiscal Year 2013-2014. Key factors for this increase are as follows: • The State of California disallowed $6,403,000 in loans due to the General Fund from the Successor Agency to the former Redevelopment Agency. • This loss was offset by $5.3 million in increased General Fund revenues compared to FY 2012-2013. Property Tax increased by $3.17 million, however approximately $1.9 million of this was due to one-time payments from the Redevelopment Property Tax Trust Fund (RPTTF) related to the dissolution of RDA. Charges for services (primarily development related services) were up $618,000 and the category of licenses and permits were up by $387,000. Sales tax increased by $153,000 and Transient Occupancy Tax collections increased from FY 2012-2013 by $565,000. • Actual expenditures were $3,606,000 million less than the final budget, but $540,000 higher than FY 2012-2013 expenditure levels. $1,863,900 of expenditure savings has been carried over into FY 2014-2015 for encumbrance carryovers and Capital Improvement Project continuing appropriations. Housing Authority Project Area No. 1 Fund The Housing Authority fund is used to account for the housing activities of the Housing Authority in Project Area No. 1. The primary purpose of this fund is to promote and to provide quality housing in the City. The fund balance increased by $142,000 to end the year at $3,886,000. Housing Authority Project Area No. 2 Fund The Housing Authority fund is used to account for the housing activities of the Housing Authority in Project Area No. 2. The primary purpose of this fund is to promote and to provide quality housing in the City. The fund balance increased by $71,000 to end the year at $1,203,000. Capital Improvement Fund The Capital Improvement fund is primarily used to record the expenditure of funds for capital projects. The fund had thirty eight (38) active Capital Improvement Projects budgeted during Fiscal Year 2013-14. The three most active projects during the year were the Adams Street Bridge Improvements project ($1,636,000), Relocation of the Coachella Canal at SilverRock ($950,000), and Improvements at Highway 111 and Washington Street ($853,000). Other major projects budgeted in the future include Adams Street Bridge Improvements, the Senior Center Expansion, the Pavement Management and Slurry Seal Program, the Sports Complex Lighting Rehabilitation and Expansion project, and the Americans with Disabilities Act (ADA) Improvements for City owned properties. 13 Civic Center Fund The Civic Center fund is primarily used to collect developer impact fees for the construction of the City Hall expansion and the repayment of a portion of the debt service on the original City Hall construction. The City Hall expansion was completed in Fiscal Year 2007-08 and the final repayment of the original City Hall construction bonds is scheduled in Fiscal Year 2018-19. A $7.1 million advance from the General Fund is outstanding at the end of Fiscal Year 2013-14. Proprietary funds The City of La Quinta's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The financial activities of the City enterprise fund have already been addressed in the discussion of the City of La Quinta's business -type activities. In addition, the City has three (3) internal service funds to accumulate resources for equipment and vehicle replacement, information technology activities, and for park equipment and facility replacement. General Fund Budaetary Hiahliahts During the year there was a $1.7 million increase in appropriations and transfers out between the original ($35,247,900) and final amended budget ($36,965,350). Following are the main components of the changes: • The Final FY 2013-2014 amended budget included $1,103,700 in carryover appropriations from Fiscal Year 2012-2013. • The Final FY 2013-2014 amended budget included $713,200 in Mid -Year adjustments for: permanent and temporary staffing increases related to development in Public Works and Community Development; and, an increase for unemployment cost related to prior year lay-offs of staff. The budget increases were possible because of additional anticipated revenues, unassigned reserves, and reserves for carryovers and encumbrances. Capital Asset and Debt Administration Capital assets The City of La Quinta's investment in capital assets for its governmental and business - type activities as of June 30, 2014, amounts to $569,098,294 (net of accumulated depreciation). This investment in capital assets includes land, right of way, buildings and improvements, machinery and equipment, streets and bridges, and construction in progress. The investment in capital assets decreased this fiscal year due to the disposal of capital assets and depreciation expense which exceeded the purchase of capital assets. 14 The following chart lists the asset categories for governmental and business like activities net of depreciation: Citv of La Quinta Caaital Assets (net of deDreciation) Major capital asset events during the current fiscal year included the following: Governmental activities • Recording infrastructure improvements, street improvements, street right of way, street sidewalks and curbs and gutters, traffic signals, and street medians; • Completed the roundabout at Eisenhower @ Sinaloa for $989,811 • Completed the Calle Sinaloa sidewalk in the amount of $211,854 • Completed Fred Waring median improvements totaling $868,755 Business -type activities • The Golf Course capital asset balance at June 30, 2014, was $41,355,000, net of accumulated depreciation. The entire decrease of $431,000 was due to annual depreciation of the assets. Additional information on the City of La Quinta's capital assets can be found in Note 7 to the financial statements. Long-term debt At the end of the current fiscal year, the City of La Quinta had total bonded debt outstanding of $6,863,000. Of the total amount, $2,930,000 of this debt amount represents bonds secured solely by specified revenue sources. 15 Governmental Business -type Description activities activities Total 2014 2013 2014 2013 2014 2013 Land $ 69,609,372 $ 69,609,372 $36,840,832 $36,840,832 $106,450,204 $106,450,204 Buildings and improvements 45,518,392 47,830,084 4,425,600 4,660,157 49,943,992 52,490,241 Equipment and furniture 1,062,785 546,456 88,133 284,190 1,150,918 830,646 Vehicles 154,456 237,800 - - 154,456 237,800 Infrastructure 389,031,690 392,932,855 - - 389,031,690 392,932,855 Construction in progress 22,367,034 18,595,820 - - 22,367,034 18,595,820 Total $527,743,729 $529,752,387 $41,354,565 $41,785,179 $569,098,294 $571,537,566 Major capital asset events during the current fiscal year included the following: Governmental activities • Recording infrastructure improvements, street improvements, street right of way, street sidewalks and curbs and gutters, traffic signals, and street medians; • Completed the roundabout at Eisenhower @ Sinaloa for $989,811 • Completed the Calle Sinaloa sidewalk in the amount of $211,854 • Completed Fred Waring median improvements totaling $868,755 Business -type activities • The Golf Course capital asset balance at June 30, 2014, was $41,355,000, net of accumulated depreciation. The entire decrease of $431,000 was due to annual depreciation of the assets. Additional information on the City of La Quinta's capital assets can be found in Note 7 to the financial statements. Long-term debt At the end of the current fiscal year, the City of La Quinta had total bonded debt outstanding of $6,863,000. Of the total amount, $2,930,000 of this debt amount represents bonds secured solely by specified revenue sources. 15 Citv of La Quinta Outstandina Debt The total outstanding debt decreased by $80,000 during Fiscal Year 2013-14. The decrease was due to regular scheduled debt service payments. Additional information on the City of La Quinta's long-term debt can be found in Notes 8 and 9 of the financial statements. Economic Factors and Next Year's Budgets and Rates These factors were considered in preparing the City of La Quinta's budget for Fiscal Year 2014-2015: • The City of La Quinta had a 3.8% unemployment rate versus a 5.3% rate last year. This rate is significantly lower than the Riverside County rate of 7.4% and the State- wide unemployment rate of 6.7%. During the last ten years, the City of La Quinta has been in a growth phase with assessed values increasing from $6.32 billion in Fiscal Year 2004-2005 to $10.78 billion or over 70.5% percent in Fiscal Year 2013-2014. It is important to note however, that from Fiscal Year 2009-2010 to Fiscal Year 2013-2014 assessed values decreased by approximately 8.73%. • AB1 x26 dissolved California Redevelopment Agencies as of January 31, 2012. Due to the loss of Tax Increment, the City's ability to fund future capital projects has been severely curtailed. The City is still exploring ways to replace this funding source. The Fiscal Year 2014-15 General Fund revenue projection, after adjusting for the one-time RPTTF payment in FY 2013-2014, reflected an increase of $3,265,700 over the FY 2012-2013 budgeted amount. However, now that FY 2013-2014 has closed, revenue projections will need to be increased during the FY 2014-2015 Mid - Year Budget process to reflect better than estimated revenues. • The City of La Quinta adopted a balanced general fund budget for Fiscal Year 2014-2015. 16 Governmental Business -type activities activities Total Debt type: 2014 2013 2014 2013 2014 2013 Capital leases $ 129,063 $ 71,045 $ - $ 43,736 $ 129,063 $ 114,781 Compensated absences 838,982 744,007 - - 838,982 $ 744,007 Post retirement healthcare liability 663,377 559,591 - - 663,377 $ 559,591 General Liability Retrospective Deposit 209,320 - - - 209,320 $ - Loans payable 2,092,100 2,143,201 - - 2,092,100 $2,143,201 Revenue bonds 2,930,000 3,425,000 - - 2,930,000 $3,425,000 Total $6,862,842 $6,942,844 $ - $ 43,736 $6,862,842 $6,986,580 The total outstanding debt decreased by $80,000 during Fiscal Year 2013-14. The decrease was due to regular scheduled debt service payments. Additional information on the City of La Quinta's long-term debt can be found in Notes 8 and 9 of the financial statements. Economic Factors and Next Year's Budgets and Rates These factors were considered in preparing the City of La Quinta's budget for Fiscal Year 2014-2015: • The City of La Quinta had a 3.8% unemployment rate versus a 5.3% rate last year. This rate is significantly lower than the Riverside County rate of 7.4% and the State- wide unemployment rate of 6.7%. During the last ten years, the City of La Quinta has been in a growth phase with assessed values increasing from $6.32 billion in Fiscal Year 2004-2005 to $10.78 billion or over 70.5% percent in Fiscal Year 2013-2014. It is important to note however, that from Fiscal Year 2009-2010 to Fiscal Year 2013-2014 assessed values decreased by approximately 8.73%. • AB1 x26 dissolved California Redevelopment Agencies as of January 31, 2012. Due to the loss of Tax Increment, the City's ability to fund future capital projects has been severely curtailed. The City is still exploring ways to replace this funding source. The Fiscal Year 2014-15 General Fund revenue projection, after adjusting for the one-time RPTTF payment in FY 2013-2014, reflected an increase of $3,265,700 over the FY 2012-2013 budgeted amount. However, now that FY 2013-2014 has closed, revenue projections will need to be increased during the FY 2014-2015 Mid - Year Budget process to reflect better than estimated revenues. • The City of La Quinta adopted a balanced general fund budget for Fiscal Year 2014-2015. 16 Requests for Information This financial report is designed to provide a general overview of the City of La Quinta's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of La Quinta, Rita Conrad, Finance Director, 78-495 Calle Tampico, La Quinta, CA, 92253 or by telephone at 760-777- 7150. 17 THIS PAGE INTENTIONALLY LEFT BLANK m CITY OF LA QUINTA STATEMENT OF NET POSITION JUNE 30, 2014 Total Assets 690,850,569 Primary Government 727,800,705 Governmental Business -Type 37,774,127 - 37,774,127 Activities Activities Total Assets: Accrued liabilities 375,542 2,231 Cash and investments $ 70,362,527 $ 531,827 $ 70,894,354 Receivables: Unearned revenue 473,217 12,736 Accounts 127,774 55,333 183,107 Taxes 2,136,707 - 2,136,707 Notes and loans 33,865,838 - 33,865,838 Accrued interest 72,683 568 73,251 Internal balances 5,326,381 (5,326,381) - Prepaid costs 10,263 1,865 12,128 Deposits 18,430 250,000 268,430 Due from other governments 42,829,637 - 42,829,637 Inventories - 82,359 82,359 Land held for resale 8,320,000 - 8,320,000 Long-term retrospective refund 36,600 - 36,600 Capital assets not being depreciated 376,905,200 36,840,832 413,746,032 Capital assets, net of depreciation 150,838,529 4,513,733 155,352,262 Total Assets 690,850,569 36,950,136 727,800,705 Liabilities: Planning and development projects 37,774,127 - 37,774,127 Accounts payable 7,594,314 219,770 7,814,084 Accrued liabilities 375,542 2,231 377,773 Accrued interest 58,380 - 58,380 Unearned revenue 473,217 12,736 485,953 Deposits payable 8,009,058 35,500 8,044,558 Due to other governments 2,286,256 - 2,286,256 Noncurrent liabilities: Due within one year 1,298,866 - 1,298,866 Due in more than one year 5,563,976 - 5,563,976 Total Liabilities 25,659,609 270,237 25,929,846 Net Position: Net investment in capital assets 527,614,666 41,354,565 568,969,231 Restricted for: Planning and development projects 37,774,127 - 37,774,127 Public safety 274,274 - 274,274 Public works 1,571,163 - 1,571,163 Capital projects 1,590,168 - 1,590,168 Community services 12,459,516 - 12,459,516 Unrestricted 83,907,046 (4,674,666) 79,232,380 Total Net Position $ 665,190,960 $ 36,679,899 $ 701,870,859 See Notes to Financial Statements 19 CITY OF LA QUINTA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2014 Total General Revenues, Extraordinary Items, and Transfers Change in Net Position Net Position at Beginning of Year Net Position at End of Year See Notes to Financial Statements 20 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 4,830,239 $ 71,042 $ 248,412 $ - Public safety 21,169,423 1,412,819 7,430,052 43,600 Planning and development 3,098,015 595,980 3,860,792 412,124 Community services 4,130,085 1,224,719 97,118 - Public works 12,610,994 1,195,703 2,950,779 3,525,562 Interest on long-term debt 405,977 - - - Total Governmental Activities 46,244,733 4,500,263 14,587,153 3,981,286 Business -Type Activities: Golf Course 4,971,977 3,481,424 - - Total Business -Type Activities 4,971,977 3,481,424 - - Total Primary Government $ 51,216,710 $ 7,981,687 $ 14,587,153 $ 3,981,286 General Revenues: Taxes: Property taxes, levied for general purpose Transient occupancy taxes Sales taxes Franchise taxes Business licenses taxes Other taxes Motor vehicle in lieu - unrestricted Use of money and property Other Extraordinary gain/(loss) Transfers Total General Revenues, Extraordinary Items, and Transfers Change in Net Position Net Position at Beginning of Year Net Position at End of Year See Notes to Financial Statements 20 Net (Expenses) Revenues and Changes in Net Position (1,490,553) Primary Government (1,490,553) Governmental Business -Type 8,786,819 Activities Activities Total $ (4,510,785) $ - $ (4,510,785) (12,282,952) - (12,282,952) 1,770,881 - 1,770,881 (2,808,248) - (2,808,248) (4,938,950) - (4,938,950) (405,977) - (405,977) (23,176,031) - (23,176,031) (23,176,031) (1,490,553) (1,490,553) (1,490,553) (1,490,553) (1,490,553) (24,666,584) 9,193,753 - 9,193,753 6,307,737 - 6,307,737 8,786,819 - 8,786,819 1,688,263 - 1,688,263 307,654 - 307,654 580,834 - 580,834 3,291,042 - 3,291,042 2,190,357 1,567 2,191,924 243,498 678,046 921,544 (6,402,450) - (6,402,450) (500,000) 500,000 - 25,687,507 1,179,613 26,867,120 2,511,476 (310,940) 2,200,536 662,679,484 36,990,839 699,670,323 $ 665,190,960 $ 36,679,899 $ 701,870,859 See Notes to Financial Statements 21 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTALFUNDS JUNE 30, 2014 See Notes to Financial Statements 22 Capital Projects Special Revenue Funds Funds Housing Housing Authority PA Authority PA Capital General No.1 No.2 Improvement Assets: Pooled cash and investments $ 43,897,375 $ 1,833,304 $ 1,176,158 $ 2,435,752 Receivables: Accounts 44,819 17,208 36,945 28,802 Taxes 2,136, 707 - - - Notes and loans - 4,350,984 29,514,854 - Accrued interest 46,495 2,075 - - Prepaid costs 1,500 - 8,735 - Deposits 4,830 13,600 - Due from other governments 41,663,397 - 59,731 Due from other funds 234,815 - - Advances to other funds 15,163,183 - - Land held for resale 8,320,000 - Long-term retrospective refund 36,600 - - - Total Assets $ 111,549,721 $ 6,203,571 $ 30,750,292 $ 2,524,285 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 5,508,258 $ 4,661 $ - $ 1,709,932 Accrued liabilities 367,320 - 3,519 - Unearned revenues 59,154 - - 412,843 Deposits payable 7,246,798 23,205 28,679 492,433 Due to other governments 66,618 - - - Due to other funds - - - Advances from other funds - - - - Total Liabilities 13,248,148 27,866 32,198 2,615,208 Deferred Inflows of Resources: Unavailable revenues 6,667,820 2,289,267 29,514,854 - Total Deferred Inflows of Resources 6,667,820 2,289,267 29,514,854 - Fund Balances: Nonspendable: Prepaid costs 1,500 - - - Land held for resale 8,320,000 - - Advances to other funds 15,163,183 - - Deposits 4,830 - - Due from other Governments 34,976,516 - - - Restricted for: Planning and development projects - 3,886,438 1,203,240 - Public safety - - - - Community services - - - Public works - - - Capital Projects - - - Committed to: Working capital reserve 2,836,820 - - Capital Projects 1,507,429 - - Emergency reserve 16,034,995 - - Post retirement health benefits 1,523,401 - Carryovers 356,438 - - Assigned to: Insurance 209,000 - - Unassigned 10,699,641 - - (90,923) Total Fund Balances 91,633,753 3,886,438 1,203,240 (90,923) Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 111,549,721 $ 6,203,571 $ 30,750,292 $ 2,524,285 See Notes to Financial Statements 22 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTALFUNDS JUNE 30, 2014 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Land held for resale Long-term retrospective refund Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Prepaid costs Land held for resale Advances to other funds Deposits Due from other Governments Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Committed to: Working capital reserve Capital Projects Emergency reserve Post retirement health benefits Carryovers Assigned to: Insurance Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances See Notes to Financial Statements 23 Capital Projects Funds Other Total Governmental Governmental Civic Center Funds Funds $ - $ 16,107,746 $ 65,450,335 127,774 2,136,707 33,865,838 - 18,469 67,039 28 10,263 - - 18,430 1,106,509 42,829,637 - - 234,815 - 15,163,183 - 8,320,000 - - 36,600 $ - $ 17,232,752 $ 168,260,621 $ - $ 226,424 $ 7,449,275 - - 370,839 - 1,220 473,217 - 217,943 8,009,058 - 2,219,638 2,286,256 209,318 25,497 234,815 7,103,172 2,733,630 9,836,802 7,312,490 5,424,352 28,660,262 - - 38,471,941 - - 38,471,941 - - 1,500 - - 8,320,000 - - 15,163,183 - - 4,830 - - 34,976,516 - 880,328 5,970,006 - 274,274 274,274 - 12,459,516 12,459,516 - 1,571,163 1,571,163 - 1,590,168 1,590,168 - - 2,836,820 - - 1,507,429 - - 16,034,995 - - 1,523,401 - - 356,438 - 209,000 (7,312,490) (4,967,049) (1,670,821) (7,312,490) 11,808,400 101,128,418 $ - $ 17,232,752 $ 168,260,621 THIS PAGE INTENTIONALLY LEFT BLANK 24 CITY OF LA QUINTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2014 Fund balances of governmental funds Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity. Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable Retrospective Liability Capital lease payable Loans payable Compensated Absences Governmental funds report all OPEB contributions as expenditures, however in the statement of net position any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as a asset or liability. Accrued interest payable for the current portion of interest due on Bonds has not been reported in the governmental funds. $ (2,930,000) (209,320) (59,127) (2,092,100) (826,159) Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. Net Position of governmental activities See Notes to Financial Statements 25 $ 101,128,418 511,510,704 (6,116,706) (663,377) (58,380) 38,471,941 20,918,360 $ 665,190,960 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 Capital Projects F d Expenditures: Current: General government 3,864,326 Special Revenue Funds un s 21,130,503 - - - Housing Housing 238,571 367,338 - Community services 2,782,281 Authority PA Authority PA Capital - - - General No.1 No.2 Improvement Revenues: Principal retirement 11,918 - 51,101 - Taxes $ 26,559,246 $ - $ - $ - Assessments - - - - Licenses and permits 953,540 - - - Intergovernmental 8,508,823 - 429,425 3,525,562 Charges for services 1,238,277 - - - Use of money and property 879,804 380,454 195,155 - Fines and forfeitures 237,682 - - - Contributions from other agencies - - - 838,972 Developer participation - - - - Miscellaneous 327,519 467 6,333 - Total Revenues 38,704,891 380,921 630,913 4,364,534 Expenditures: Current: General government 3,864,326 - - - Public safety 21,130,503 - - - Planning and development 1,032,707 238,571 367,338 - Community services 2,782,281 - - - Public works 3,450,325 - - - Capital outlay 8,934 - - 7,916,318 Debt service: Principal retirement 11,918 - 51,101 - Interest and fiscal charges 5,559 - 141,756 - Total Expenditures 32,286,553 238,571 560,195 7,916,318 Excess (Deficiency) of Revenues Over (Under) Expenditures 6,418,338 142,350 70,718 (3,551,784) Other Financing Sources (Uses): Transfers in 117,988 - - 3,551,522 Transfers out (1,072,713) - - - Total Other Financing Sources (Uses) (954,725) - - 3,551,522 Extraordinary gain/(loss) (6,402,450) Net Change in Fund Balances (938,837) 142,350 70,718 (262) Fund Balances, Beginning of Year 92,572,590 3,744,088 1,132,522 (90,661) Fund Balances, End of Year $ 91,633,753 $ 3,886,438 $ 1,203,240 $ (90,923) See Notes to Financial Statements 26 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 Revenues: Taxes Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions from other agencies Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Extraordinary gain/(loss) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year See Notes to Financial Statements 27 Capital Projects C.. -.4 - Other Total Governmental Governmental Civic Center Funds Funds $ - $ 632,843 $ 27,192,089 - 951,181 951,181 - - 953,540 - 4,042,856 16,506,666 - - 1,238,277 - 719,635 2,175,048 - - 237,682 - - 838,972 224,260 2,834,994 3,059,254 - 3,000 337,319 224,260 9,184,509 53,490,028 201,400 3,101 4,068,827 - 58,583 21,189,086 - 109,861 1,748,477 - 1,229,151 4,011,432 - 1,166,725 4,617,050 - 49,495 7,974,747 - 495,000 558,019 29,861 233,834 411,010 231,261 3,345,750 44,578,648 (7,001) 5,838,759 8,911,380 - 532,253 4,201,763 - (3,262,966) (4,335,679 (2,730,713) (133,91 (6,402,450) (7,001) 3,108,046 2,375,014 (7,305,489) 8,700,354 98,753,404 $ (7,312,490) $ 11,808,400 $ 101,128,418 CITY OF LA QUINTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2014 Net change in fund balances - total governmental funds $ 2,375,014 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation and disposals exceeded capital outlay in the current period. Capital outlay $ 7,609,275 Depreciation (8,127,674) Disposal of capital assets (1,274,739) (1,793,138) The issuance of long-term debt liabilities provides current financial resources in the governmental funds, but issuing debt increases the long-term liabilities in the statement of net position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Principal repayments 495,000 General liability retrospective deposit payable (209,320) Capital lease repayments 11,918 Loan repayments 51,101 348,699 Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Governmental funds report all contributions in relation to the annual required contribution (ARC) for OPEB as expenditures, however in the statement of activities only the ARC is an expense. Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities. Change in net position of governmental activities See Notes to Financial Statements 28 5,033 (90,478) (103,786) 2,153,322 (383,190) $ 2,511,476 CITY OF LA QUINTA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2014 Assets: Current: Cash and investments Receivables: Accounts Accrued interest Prepaid costs Deposits Inventories Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Unearned revenues Deposits payable Accrued compensated absences Bonds, notes, and capital leases Total Current Liabilities Noncurrent: Advances from other funds Accrued compensated absences Bonds, notes, and capital leases Total Noncurrent Liabilities Total Liabilities Net Position: Net investment in capital assets Unrestricted Total Net Position Total Liabilities and Net Position See Notes to Financial Statements 29 Business -Type 145,039 Activities - 4,703 Enterprise Funds Governmental 35,500 Activities - - Internal Golf Course Service Funds $ 531,827 $ 4,912,192 55,333 568 1,865 250,000 82,359 921.952 5,644 4,917,836 41,354,565 16,233,025 41,354,565 16,233,025 $ 42,276,517 $ 21,150,861 $ 219,770 $ 145,039 2,231 4,703 12,736 - 35,500 - - 7,684 - 20,635 270,237 178,061 5,326,381 - - 5,139 - 49,301 5,326,381 54,440 5,596,618 232,501 41,354,565 16,163,089 (4,674,666) 4,755,271 36,679,899 20,918,360 $ 42,276,517 $ 21,150,861 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2014 Operating Revenues: Sales and service charges Miscellaneous Total Operating Revenues Operating Expenses: Administration and general Fuel and oil Maintenance and parts Contract services Software and supplies Depreciation expense Other Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Interest expense Gain (loss) on disposal of capital assets Total Nonoperating Revenues(Expenses) Income (Loss) Before Transfers Transfers in Transfers out Changes in Net Position Net Position: Beginning of Year End of Fiscal Year See Notes to Financial Statements 30 Business -Type Activities - Enterprise Funds Golf Course Governmental Activities - Internal Service Funds $ 3,481,424 $ 1,562,500 678,046 - 4,159,470 1,562,500 53,187 125,148 - 78,995 - 111,332 3,648,768 209,788 - 268,378 430,614 796,051 826,449 - 4,959,018 1,589,692 (799,548) (27,192) 1,567 (12,959) 15,309 (5,223) (11,392) 10,086 (810,940) (17,106) 500,000 - - (366,084) (310,940) (383,190) 36,990,839 21,301,550 $ 36,679,899 $ 20,918,360 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2014 Cash Flows from Operating Activities: Cash received from customers and users Cash received from/(paid to) interfund service provided Cash paid to suppliers for goods and services Cash paid to employees for services Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers out Cash transfers in Advance to other funds Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Proceeds from capital debt Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Capital lease down payment Proceeds from sales of capital assets Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year See Notes to Financial Statements 31 Business -Type Activities - Enterprise Funds Golf Course $ 4,211,499 (4,511,985) (52,785) Governmental Activities - Internal Service Funds $ 1,562,500 (581,460) (120,410) (353,271) 860,630 (366,084) 500,000 2,840 502,840 (366,084) (43,736) (12,959) 90,629 (587,144) (20,693) 1,390 (56,695) (515,818) 1,396 14,032 1,396 14,032 94,270 (7,240) 437,557 4,919,432 $ 531,827 $ 4,912,192 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2014 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in inventories Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in unearned revenue Increase (decrease) in compensated absences Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: There were no non-cash transactions in the current year. See Notes to Financial Statements 32 Business -Type Activities - Enterprise Funds Governmental Activities - Internal Golf Course Service Funds $ (799,548) $ (27,192) 430,614 796,051 43,830 - (5,212) - (30,981) 87,033 (173) 241 8,199 - - 4,497 446,277 887,822 $ (353,271) $ 860,630 CITY OF LA QUINTA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2014 Assets: Pooled cash and investments Receivables: Taxes Notes and loans Accrued interest Prepaid asset Due from other governments Restricted assets: Cash and investments with fiscal agents Total Assets Deferred Outflows of Resources: Deferred charge on refunding Total Deferred Outflows of Resources Liabilities: Accounts payable Accrued interest Deposits payable Long-term liabilities: Due in one year Due in more than one year Total Liabilities Net Position: Held in trust for pension Held in trust for other purposes Total Net Position See Notes to Financial Statements 33 Private - Pension Trust Purpose Trust Fund Fund Successor Agency Supplemental Agency of the Funds Pension Plan former RDA $ 264,925 $ 163,496 $ 31,289,063 18,542 - - - - 3,215,737 294 188 14,446 - - 450,511 - - 2,219,638 - - 33,870,741 $ 283,761 163,684 71,060,136 $ - - 4,275,185 - - 4,275,185 - - 12,851 - - 4,668,241 283,761 - - - - 8,525,000 - - 261,945,486 $ 283,761 - 275,151,578 163,684 - - (199,816,257) $ 163,684 $ (199,816,257) CITY OF LA QUINTA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2014 Extraordinary gain/(loss) Changes in Net Position Net Position - Beginning of the Year Net Position - End of the Year See Notes to Financial Statements 34 6,402,450 (12,364) 13,707,688 176,048 (213,523,945) $ 163,684 $ (199,816,257) Private - Pension Trust Purpose Trust Fund Fund Successor Supplemental Agency of the Pension Plan former RDA Additions: Taxes $ - $ 20,011,681 Interest and change in fair value of investments 469 (38,330) Total Additions 469 19,973,351 Deductions: Administrative expenses 12,833 544,180 Interest expense - 9,838,632 Contributions to City - 838,972 Loss on reduction of loan - 368,824 Cost of issuance - 1,077,505 Total Deductions 12,833 12,668,113 Extraordinary gain/(loss) Changes in Net Position Net Position - Beginning of the Year Net Position - End of the Year See Notes to Financial Statements 34 6,402,450 (12,364) 13,707,688 176,048 (213,523,945) $ 163,684 $ (199,816,257) CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1: Summary of Significant Accounting Policies a. Reporting Entity The City of La Quinta (City) was incorporated May 1, 1982, under the general laws of the State of California. In November 1996, the City became a charter City. The City operates under the Council — Manager form of government. The City provides many community services including public safety, highway and street maintenance, health and social services, cultural and leisure services, public improvements, planning and zoning services, and community development services. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. As required by generally accepted accounting principles, these financial statements present the government and its component units, which are entities for which the government is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization's governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. All of the City's component units are considered to be blended component units. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are reported with the interfund data of the primary government. The following organizations are considered to be component units of the City: City of La Quinta Public Financing Authority The La Quinta Public Financing Authority (Financing Authority) was established pursuant to a Joint Exercise of Powers Agreement dated November 19, 1991, between the City and the Former Redevelopment Agency. The purpose of the Financing Authority is to provide financing necessary for the construction of various public improvements through the issuance of debt. Although the Financing Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Financing Authority and the management of the City has operational responsibility for the Financing Authority. Separate financial statements of the Financing Authority are not prepared. City of La Quinta Housing Authority The La Quinta Housing Authority (Housing Authority) was established pursuant to California Housing Authorities Law (Health and Safety Code Sections 34200 et seq.) on September 15, 2009. The purpose of the Housing Authority is to provide safe and sanitary housing opportunities for La Quinta residents. Although the Housing 35 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 1: Summary of Significant Accounting Policies (Continued) Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Housing Authority and the management of the City has operational responsibility for the Financing Authority. Separate financial statements of the Housing Authority are not prepared. b. Government -Wide and Fund Financial Statements The basic financial statements of the City are composed of the following: • Government -wide financial statements • Fund financial statements • Notes to the financial statements Government -wide Financial Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business -type activities, which rely to a significant extent on fees and charges to external customers for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government's citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not properly included among program revenues are reported instead as general revenues. Amounts paid to acquire capital assets are capitalized as assets in the government -wide financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the government -wide financial statements, rather than as other financing sources. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditures. Fund Financial Statements The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the governmental, proprietary, and fiduciary funds are presented after the government -wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for 0 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 1: Summary of Significant Accounting Policies (Continued) governmental and proprietary funds. Fiduciary statements include financial information for fiduciary funds and similar component units. Fiduciary funds of the city primarily represent assets held by the City in a custodial capacity for other individuals or organizations. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation Government -wide Financial Statements While separate government -wide and fund financial statements are presented, they are interrelated. The governmental activities column incorporates data from governmental funds and internal service funds, while business -type activities incorporate data from the government's enterprise funds. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Governmental Funds In the fund financial statements, governmental funds are presented using the modified -accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses a 60 day availability period. Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed delivered tax revenues are recognized as revenues in the period in which the underlying exchange transaction on which they are based takes place. Imposed nonexchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government -mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets, deferred outflows of resources, current liabilities, and deferred inflows of resources are generally included on their balance sheets. The reported fund balance is considered to be a measure of "available spendable resources". Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses). Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. 37 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 1: Summary of Significant Accounting Policies (Continued) Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources", since they do not represent net current assets. Recognition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables. Noncurrent portions of other long-term receivables are offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. When both restricted and unrestricted resources are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources. Proprietary Funds The City's enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets, all deferred outflows of resources, all liabilities, and all deferred inflows of resources (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements, rather than as an Other Financing Source. Amounts paid to reduce long-term indebtedness of the proprietary funds are reported as a reduction of the related liability, rather than as expenditures. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Enterprise Funds are charges to customers for sales and services. Operating expenses for Enterprise Funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 03 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 1: Summary of Significant Accounting Policies (Continued) Fiduciary Funds The pension and private -purpose trust funds are reported using the economic resources measurement focus and the accrual basis of accounting. The agency fund has no measurement focus but utilizes the accrual basis of accounting for reporting its assets and liabilities. d. Major Funds, Internal Service Funds and Fiduciary Fund Types The City's major governmental funds are as follows: General Fund — This fund is the primary fund of the City and is used to account for all revenue and expenditures of the City not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Manager, City Attorney, Finance, City Clerk, Community Development, Police Services, Public Works, and Community Services. Housing Authority Project Area No. 1 — To account for the housing activities of the Housing Authority in Project Area 1 which is to promote and provide for quality housing. Revenues will be provided from the receipts and collections of notes and loans. All monies in the Housing Authority must be used in accordance with the applicable housing -related provisions of the Community Redevelopment Law. Housing Authority Project Area No. 2 — To account for the housing activities of the Housing Authority in Project Area 2 which is to promote and provide for quality housing. Revenues will be provided from the receipts and collections of notes and loans. All monies in the Housing Authority must be used in accordance with the applicable housing -related provisions of the Community Redevelopment Law. Capital Improvement Fund — This capital projects fund is used to account for the planning, design and construction of various capital projects throughout the City. Civic Center Fund — To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the Civic Center. The City's major proprietary fund is as follows: Golf Course — To account for the activities of the SilverRock Golf Resort. Other fund types of the City are as follows: Internal Service Funds: Equipment Replacement Fund — This fund accounts for equipment and vehicle maintenance and replacement services provided to other departments on a cost -reimbursement basis. Information Technology Fund — This fund is used to account for the acquisition for computer equipment, maintenance, and services to support information systems within the City. Costs are reimbursed by the benefiting departments. Park Equipment and Facilities Fund — This fund is used to account for the purchase and replacement of City owned park facility infrastructure. Costs are reimbursed by the benefiting departments. CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 1: Summary of Significant Accounting Policies (Continued) Fiduciary Funds: Agency Fund — This fund accounts for assets held by the City as an agency for assessment district bondholders. Pension Trust Fund — This fund accounts for the activities of the Supplemental Pension Savings Plan, which accumulates resources for pension benefit payments to qualified government employees. Private -Purpose Trust Fund — This fund accounts for the assets and liabilities of the former redevelopment agency and its allocated revenue to pay estimated installment payments of enforceable obligations until obligations of the former redevelopment agency are paid in full and assets have been liquidated. e. Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or Equity Investments For financial reporting purposes, investments are adjusted to their fair value. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. Some investments are valued on an unamortized cost basis. For these investments, there is no material difference from fair value. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance. Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary fund's share in the City's cash and investment pool. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the statement of cash flows, the entire balance of cash and investments on the combined balance sheet for the proprietary funds is considered cash and cash equivalents. Inventory Inventory is valued at cost using the first in/first out (FIFO) method. The City uses the consumption method of accounting for inventories. 40 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 1: Summary of Significant Accounting Policies (Continued) Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. The City utilizes the consumption method, in which prepaid items are accounted for in the period that the benefit was received. Capital Assets Capital assets (including infrastructure) are recorded at cost where historical records are available and at an estimated historical cost where no historical records exist. Contributed capital assets are valued at their estimated fair market value at the date of the contribution. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of three years or more. Capital Assets include public domain (infrastructure) consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains. Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government -wide financial statements and in the fund financial statements of the proprietary funds. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective balance sheet. The following schedule summarizes capital asset useful lives: Buildings and improvements 10-30 years Equipment and furniture 3-20 years Vehicles 5-10 years Infrastructure 10-50 years Software 5-10 years Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position and governmental fund balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position and fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City of La Quinta has no items that qualify for reporting in this category. In addition to liabilities, the statement of financial position and governmental fund balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from three sources: taxes, loans and grants. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 41 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 1: Summary of Significant Accounting Policies (Continued) Compensated Absences Vacation and sick time is vested on a percentage based on number of years employed at the City. Maximum accumulation of sick and vacation is 30 and 40 days, respectively. Upon termination or retirement, permanent employees are entitled to receive compensation at their current base salary for all unused vacation leave. If an employee terminates with a minimum of two years service, the employee is entitled to receive 25% of the value of his unused sick leave. The percentage increases by 25% for each five-year period until the employee is entitled to 75% of the value of their unused sick leave. This will occur upon the completion of ten years of continuous employment. The General Fund resources are used to pay for the accumulated benefits to employees. Fund Balance In the fund financial statements, governmental funds report the following fund balance classification: Nonspendable 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. Restricted includes amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation. Committed includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest authority, the City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is by a resolution. Assigned includes amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed. City Council is authorized to assign amounts to a specific purpose. The City Council authorizes assigned amounts for specific purposes pursuant to the policy-making powers granted through a resolution. Unassigned includes the residual amounts that have not been restricted, committed, or assigned to specific purposes. Fund Balance Flow Assumptions — governmental fund financial statements Sometimes the City of La Quinta will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the City's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 42 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 1: Summary of Significant Accounting Policies (Continued) Net Position Flow Assumption — governmental and proprietary fund financial statements Sometimes the City of La Quinta will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City's policy to consider restricted — net position to have been depleted before unrestricted — net position is applied. II. STEWARDSHIP Note 2: Stewardship, Compliance and Accountability a. At June 30, 2014, the following funds had deficit fund balances: Major Capital Projects Funds: Actual Capital Improvement $ 90,923 Civic Center 7,312,490 Nonmajor Special Revenue Funds: $ 872,791 Federal Assistance 12,914 Nonmajor Capital Projects Funds: 170,546 Parks and Recreation 469,486 Library Development 1,750,152 Street Facility 1,966,991 Fire Facility 766,639 Nonmajor Debt Service Funds: 678,946 Financing Authority 867 b. Excess of expenditures over appropriations are as follows: 11,918 Expenditures for the year ended June 30, 2014, exceeded the appropriations of the General Fund as follows: General Fund: General Government Fiscal Services Public Safety Police Parks and recreation Parks & recreation Public Works Administration Maintenance/operations-streets Engineering services Debt Service Principal retirement Interest and fiscal charges c. Budget Budget Actual Variance $ 856,413 $ 872,791 $ 16,378 13,468, 659 13, 639, 205 170,546 198,100 207,963 9,863 450,254 479,366 29,112 1,008,015 1,028,178 20,163 678,946 998,204 319,258 - 11,918 11,918 - 5,559 5,559 The Indian Gaming Fund, Development Agreement, Proposition 1 B, and Transportation Uniform Mitigation Fee Funds did not adopt a budget. 43 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments Cash and investments as of June 30, 2014, are classified in the accompanying financial statements as follows: Statement of Net Position: Cash and investments Statement of Fiduciary Net Position: Cash and investments Cash with fiscal agent Total cash and investments Cash and investments as of June 30, 2014, consist of the following: $ 70,894,354 31,717,484 33,870,741 $ 136,482,579 Cash on hand $ 1,450 Deposits with financial institutions 9,154,549 Investments 127,326,580 Total cash and investments $ 136,482,579 The California Government Code requires California banks and savings and loan associations to secure a City's deposits by pledging government securities with a value of 110% of a City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency. Cash Deposits At June 30, 2014, the carrying amount of the City's deposits was $9,154,549, and the bank balance was $9,448,210. The $293,661 difference represents outstanding checks and other reconciling items. Investments Authorized by the California Government Code and the City's Investment Policy The table below identifies the investment types that are authorized by the California Government Code and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. 44 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 3: Cash and Investments (Continued) This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. *Maximum *Maximum Investment Investment Types *Maximum Percentage of In One Authorized by State Law Maturity Portfolio Issuer U.S. Treasury Obligations 10 years None $30 million U.S. Agency Securities 3 years None 30 million Local Agency Bonds 10 years None 30 million California Local Agency Obligations 10 years 30% 30 million Commercial Paper 90 days 15% 5 million Certificates of Deposit 3 years 60% 250,000 Medium -Term Notes 3 years 10% 5 million Money Market Mutual Funds 60 days 20% 10% Local Agency Investment Fund (LAIF) N/A 30% 40 million Investment Agreements N/A N/A N/A * Based on state law requirements or investment policy requirements, Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of short term and long term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Investment Tvoe Certificates of Deposit Federal agency securities: Federal National Mortgage Association Federal Farm Credit Bank State investment pool Held by bond trustee: Money market funds Total Remaining Maturity (in Months) 6 Months Total or Less 1 to 3 Years 3 to 5 Years $ 6,490,738 $ - $ 1,441,156 $ 5,049,582 17,984,880 - 19,968,200 - 49,012,008 49,012,008 33,870,754 33,870,754 17,984,880 19,968,200 $ 127,326,580 $ 82,882,762 $ 39,394,236 $ 5,049,582 45 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 3: Cash and Investments (Continued) Disclosures Relatina to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's investment policy limits investments in commercial paper to those rated A-1 and P-1 or higher from Standard and Poor's (S&P) and money market mutual funds that are rated "AAA". The quality of U.S. Treasury securities is not analyzed since they are not deemed to have credit risk. As of June 30, 2014, the City had investments with a variety of issuers, all of which were "investment grade" and were legal under state and municipal law. The City's investments in money market mutual funds were all rated "AAA", and federal agency securities were all rated AA+ by S&P and Moody's. As of June 30, 2014, the City's investments in external investment pools were unrated. Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code, except for U.S. Agency Securities and Commercial Paper. As of June 30, 2014, the City had individual investments that represent 5% or more of total investments with Federal Farm Credit Bank and Federal National Mortgage Association. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relations to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. 46 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 3: Cash and Investments (Continued) GASB Statement No. 31 The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards (e.g. mark to market) for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the City reports its investments at fair value in the statement of net position and balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Note 4: Property Taxes Under California law, property taxes are assessed and collected by the counties up to 1 % of assessed value, plus other increases approved by the voters. The property taxes are recorded initially in a pool, and are then allocated to the cities based on complex formulas. Accordingly, the City of La Quinta accrues only those taxes that are received from the County within ninety days after year-end. Lien date January 1 Levy date July 1 Due dates November 1 and February 1 Collection dates December 10 and April 10 Note 5: Notes Receivable In September 1994, the Former Redevelopment Agency sold certain real property to LINC Housing for $2,112,847. The property was used to construct single-family homes and rental units to increase the City's supply of low and moderate income housing. The note bears interest at 6% per annum and is due in full on June 15, 2029. On February 1, 2012, this receivable was transferred to the Housing Authority Project Area No. 1 which took over the housing function of the Former Agency upon dissolution. The balance at June 30, 2014, including matured, unpaid interest of $2,289,267 is $4,324,655. In February 2011, the Former Redevelopment Agency entered into Disposition and Development Agreement with Coral Mountain Partners L.P. ("Coral Mountain") to fund up to $29,000,000 for the construction of a low and moderate income apartment complex with an estimated completion date of the apartment complex of March 2014. The Former Agency's $29,000,000 loan is evidenced by a Promissory Note executed by Coral Mountain ("Note"). Interest on the outstanding note amount will bear simple interest of 1 %. Principal and interest will be repaid on or before May 1s' of each year from annual residual receipts as defined in the Note once the project is completed and may be repaid early if the property is refinanced, or if the property is transferred to another entity. On February 1, 2012, this receivable was transferred to the Housing Authority Project Area No. 2 which took over the housing function of the Former Agency upon dissolution. As of June 30, 2014, the outstanding principal portion on the Note is $29,000,000 and the outstanding interest portion is $514,854. Other notes receivable as of February 1, 2012, were transferred to the Housing Authority Project Area No. 1 which took over the housing function of the Former Agency upon dissolution that totaled $26,329 at June 30, 2014. 47 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 6: California Joint Powers Insurance Authority Refund Balances Long-term Receivable Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the CJPIA. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. The California Joint Powers Insurance Authority (CJPIA) has temporarily deferred the payment on retrospective deposits owed to the CJPIA by members. The payment deferral period extends until July 1, 2013, for the Liability program and July 1, 2015, for the Workers' Compensation program. Retrospective deposit payments are scheduled to resume on these dates. The October 2013 annual retrospective adjustment is included in these balances. The City at June 30, 2014, had a retrospective refund due to the City in the amount of $36,600 relating to workers' compensation and a retrospective deposit due of $209,320 relating to general liability. Retrospective Balances will Change Annually Retrospective balances will change with each annual computation during the payment deferral period. Member balances may increase or decrease as a result of the most recent year's claim development. Accordingly, some members who chose to pay off their balance in full may be required to pay additional retrospective deposits in the future based on the outcome of actual claim development reflected in subsequent retrospective deposit computations. Conversely, if claim development is favorable then subsequent retrospective adjustments could potentially result in refunds to the member. More information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA.org. 48 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 7: Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2014, is as follows: Total Capital Assets, Ending Balance at Additions Deletions Transfers June 30, 2014 $ - $ - $ - $ 69,609,372 - 284,928,794 7,484,760 1,274,739 (2,438,807) 22,367,034 7,484,760 1,274,739 (2,438,807) 376,905,200 - - - 69,063,708 587,144 103,253 141,074 2,915,151 - - - 1,599,761 124,515 - 2,297,733 200,390,749 Being Depreciated Beginning 1,223 711,659 Balance at 2,438,807 273,969,369 July 1, 2013 Adjustments Governmental Activities: Capital assets, not being depreciated: Land $ 69,609,372 $ - Right of way 284,928,794 - Construction -in -progress 18,595,820 - Total Capital Assets, - 205,276 Not Being Depreciated 373,133,986 - Vehicles Capital assets, being depreciated: 1,223 83,344 Buildings and improvements 69,063,708 - Equipment and furniture 2,290,186 - Vehicles 1,598,538 1,223 Infrastructure 197,968,501 - Total Capital Assets, Ending Balance at Additions Deletions Transfers June 30, 2014 $ - $ - $ - $ 69,609,372 - 284,928,794 7,484,760 1,274,739 (2,438,807) 22,367,034 7,484,760 1,274,739 (2,438,807) 376,905,200 - - - 69,063,708 587,144 103,253 141,074 2,915,151 - - - 1,599,761 124,515 - 2,297,733 200,390,749 Being Depreciated 270,920,933 1,223 711,659 103,253 2,438,807 273,969,369 Less accumulated depreciation: Buildings and improvements 21,233,624 - 2,311,692 - - 23,545,316 Equipment and furniture 1,743,730 - 205,276 96,640 - 1,852,366 Vehicles 1,360,738 1,223 83,344 - - 1,445,305 Infrastructure 89,964,440 - 6,323,413 - - 96,287,853 Total Accumulated Depreciation 114,302,532 1,223 8,923,725 96,640 - 123,130,840 Total Capital Assets, Being Depreciated, Net 156,618,401 - (8,212,066) 6,613 2,438,807 150,838,529 Governmental Activities Capital Assets, Net $ 529,752,387 $ - _Lj7 $1,281,352 $ - $ 527,743,729 Depreciation expense was charged to the following functions in the Statement of Activities: General government $ 339,177 Community development 1,368,224 Community services 128 Public works 6,420,145 Internal service 796,051 $ 8,923,725 49 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 7: Capital Assets (Continued) Capital asset activity for business -type activities for the year ended June 30, 2014, is as follows: Depreciation expense was charged to the following function in the Statement of Activities: Golf Course $ 430,614 6111 Beginning Ending Balance at Balance at July 1, 2013 Additions Deletions June 30, 2014 Business -Type Activities: Capital assets, not being depreciated: Land $ 36,840,832 $ - $ - $ 36,840,832 Total Capital Assets, Not Being Depreciated 36,840,832 - - 36,840,832 Capital assets, being depreciated: Buildings and improvements 6,636,465 - - 6,636,465 Equipment and furniture 2,073,478 - - 2,073,478 Vehicles 20,348 - - 20,348 Software 20,255 - - 20,255 Total Capital Assets, Being Depreciated 8,750,546 - - 8,750,546 Less accumulated depreciation: Buildings and improvements 1,976,308 234,557 - 2,210,865 Equipment and furniture 1,789,288 196,057 - 1,985,345 Vehicles 20,348 - - 20,348 Software 20,255 - - 20,255 Total Accumulated Depreciation 3,806,199 430,614 - 4,236,813 Total Capital Assets, Being Depreciated, Net 4,944,347 (430,614) - 4,513,733 Governmental Activities Capital Assets, Net $ 41,785,179 $ (430,614) $ - $ 41,354,565 Depreciation expense was charged to the following function in the Statement of Activities: Golf Course $ 430,614 6111 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 8: Changes in Long -Term Liabilities - Governmental Activities a. Changes in Long -Term Debt The following is a summary of changes in governmental long-term liabilities of the City for the fiscal year ended June 30, 2014: b. A description of individual issues of debt (excluding defeased bonds) outstanding as of June 30, 2014, is as follows: Copier Lease Payable In June 2013, the City entered into a 5 -year lease agreement for photocopiers for $71,045 maturing in monthly increments of $1,456, with interest payable monthly at 8.47%. This new lease agreement qualifies as a capital lease for accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments at the inception date. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2014, are as follows: Year Ending Balance at June 30, Total Balance at June Due within 2016 July 1, 2013 Additions Deletions 30, 2014 one year City: 69,908 Less amount representing interest (10,781) Outstanding Principal $ 59,127 Compensated absences payable $ 744,007 $ 570,096 $ 475,121 $ 838,982 $ 475,121 Copier Lease Payable 71,045 - 11,918 59,127 12,967 Dell Computer Lease - 90,629 20,693 69,936 20,635 OPEB Liability 559,591 120,039 16,253 663,377 - General liability retrospective deposit payable - 209,320 - 209,320 209,320 RDA Project Area No. 2: Provident Loan 1,441,096 - 35,341 1,405,755 38,411 US Department of Agriculture 702,105 - 15,760 686,345 17,412 Financing Authority: Revenue bonds 3,425,000 - 495,000 2,930,000 525,000 Total $ 6,942,844 $ 990,084 $ 1,070,086 $ 6,862,842 $ 1,298,866 b. A description of individual issues of debt (excluding defeased bonds) outstanding as of June 30, 2014, is as follows: Copier Lease Payable In June 2013, the City entered into a 5 -year lease agreement for photocopiers for $71,045 maturing in monthly increments of $1,456, with interest payable monthly at 8.47%. This new lease agreement qualifies as a capital lease for accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments at the inception date. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2014, are as follows: Year Ending June 30, Total 2015 $ 17,477 2016 17,477 2017 17,477 2018 17,477 Total Payments 69,908 Less amount representing interest (10,781) Outstanding Principal $ 59,127 51 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 8: Changes in Long -Term Liabilities — Governmental Activities (Continued) Dell Computer Lease Payable In April 2014, the City entered into a 5 -year lease agreement for Dell computers for $90,629 maturing in annual increments ranging from $20,693 to $408, with interest payable annually at 4.79%. This lease agreement qualifies as a capital lease for accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments at the inception date. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2014, are as follows: Year Ending June 30, Total 2015 $ 23,474 2016 23,474 2017 23,474 2018 5,977 2019 427 Total Payments 76,826 Less amount representing interest (6,890) Outstanding Principal $ 69,936 1996 Lease Revenue Refunding Bonds On November 15, 1996, the Financing Authority issued $8,790,000 of 1996 Lease Revenue Refunding Bonds to defease the remaining 1991 Local Agency Revenue Bonds in the amount of $8,200,000 and to provide funds for construction of remaining improvements to the La Quinta Civic Center site. The bonds consist of $3,630,000 of serial bonds and $5,150,000 of term bonds. The serial bonds will accrue interest at rates between 3.70% and 5.30% and principal amounts mature between October 1, 1997 and October 1, 2008, in amounts ranging from $285,000 to $380,000. The term bonds accrue interest at a rate of 5.55% and mature on October 1, 2018. A surety agreement has been purchased to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The amount of principal outstanding at June 30, 2014, is $ 2,930,000. 52 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 8: Changes in Long -Term Liabilities — Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2014, are as follows: Interest $ 148,046 118,076 86,441 53,141 18,038 Totals $ 2,930,000 $ 423,742 California Joint Powers Insurance Authority Retrospective Deposit Liability Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the CJPIA. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. CJPIA has taken the amount owed to them by the City as an offset to the CJPIA General Liability cumulative refund due to the City by the CJPIA. More information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA.org. At June 30, 2014, the City had a retrospective liability totaling $209,320. Loans Washington Street Apartments In October 2008, the former redevelopment agency acquired the Washington Street Apartments for cash and the assumption of the following debt: Provident Bank Loan This loan was originally entered into with the previous owner of the Washington Street Apartments and Provident Bank for $1,696,000 in August 2001 at an 8.36% interest rate. The loan is amortized on a thirty year basis with the outstanding balance due in twenty years or August 2021. The outstanding principal balance in October 2008 when the property was acquired by the former redevelopment agency was $1,572,031. The loan is secured by a deed of trust on the property and is senior to the United States Department of Agriculture (USDA) loan which is also secured by a deed of trust on the property. Repayment of the monthly loan amount of $12,873 is made from tenant rent receipts. The source for the final principal payment due in August 2021, of $1,050,109 will be determined at a future date. The principal balance of this loan at June 30, 2014, is $1,405,755. 53 Principal 2015 $ 525,000 2016 555,000 2017 585,000 2018 615,000 2019 650,000 Interest $ 148,046 118,076 86,441 53,141 18,038 Totals $ 2,930,000 $ 423,742 California Joint Powers Insurance Authority Retrospective Deposit Liability Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the CJPIA. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. CJPIA has taken the amount owed to them by the City as an offset to the CJPIA General Liability cumulative refund due to the City by the CJPIA. More information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA.org. At June 30, 2014, the City had a retrospective liability totaling $209,320. Loans Washington Street Apartments In October 2008, the former redevelopment agency acquired the Washington Street Apartments for cash and the assumption of the following debt: Provident Bank Loan This loan was originally entered into with the previous owner of the Washington Street Apartments and Provident Bank for $1,696,000 in August 2001 at an 8.36% interest rate. The loan is amortized on a thirty year basis with the outstanding balance due in twenty years or August 2021. The outstanding principal balance in October 2008 when the property was acquired by the former redevelopment agency was $1,572,031. The loan is secured by a deed of trust on the property and is senior to the United States Department of Agriculture (USDA) loan which is also secured by a deed of trust on the property. Repayment of the monthly loan amount of $12,873 is made from tenant rent receipts. The source for the final principal payment due in August 2021, of $1,050,109 will be determined at a future date. The principal balance of this loan at June 30, 2014, is $1,405,755. 53 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 8: Changes in Long -Term Liabilities - Governmental Activities (Continued) The minimum annual requirements to amortize the loan payable as of June 30, 2014, are as follows: Totals $ 1,405,755 $ 865,093 United States Department of Agriculture (USDA) Rural Development Promissory Note This promissory note was originally entered into with the previous owner of the Washington Street Apartments and USDA - Rural Development for $1,500,000 in November 1980 at a 10.00% interest rate. The note is amortized on a fifty year basis with the outstanding balance due in October 2030. The outstanding principal balance, in October 2008, when the property was acquired by the former redevelopment agency was $760,721. The loan is secured by a deed of trust on the property and is subordinated to the Provident loan which is also secured by a deed of trust on the property. Repayment of the monthly loan amount of $7,107 is made from tenant rent receipts and a rental subsidy from the USDA. Rural Development has agreed to a 9% interest rate subsidy on the Promissory Note as long as the Apartment renters meet certain program eligibility requirements. The principal balance of this note at June 30, 2014, is $686,345. Principal Interest 2015 $ 38,411 $ 119,134 2016 41,748 116,064 2017 45,375 112,726 2018 49,317 109,099 2019 53,602 105,157 2020-2022 1,177,302 302,913 Totals $ 1,405,755 $ 865,093 United States Department of Agriculture (USDA) Rural Development Promissory Note This promissory note was originally entered into with the previous owner of the Washington Street Apartments and USDA - Rural Development for $1,500,000 in November 1980 at a 10.00% interest rate. The note is amortized on a fifty year basis with the outstanding balance due in October 2030. The outstanding principal balance, in October 2008, when the property was acquired by the former redevelopment agency was $760,721. The loan is secured by a deed of trust on the property and is subordinated to the Provident loan which is also secured by a deed of trust on the property. Repayment of the monthly loan amount of $7,107 is made from tenant rent receipts and a rental subsidy from the USDA. Rural Development has agreed to a 9% interest rate subsidy on the Promissory Note as long as the Apartment renters meet certain program eligibility requirements. The principal balance of this note at June 30, 2014, is $686,345. Compensated absences Compensated absences are described in note 1. The liability is typically liquidated by the general fund. Other Post -Employment Benefits (OPEB) OPEB are described in Note 15. The liability is typically liquidated by the general fund. 54 Principal Interest 2015 $ 17,412 $ 67,870 2016 19,235 66,047 2017 21,249 64,033 2018 23,474 61,807 2019 25,932 59,349 2020-2024 176,546 249,863 2025-2029 290,473 135,936 2030-2032 112,024 8,602 Totals $ 686,345 $ 713,507 Compensated absences Compensated absences are described in note 1. The liability is typically liquidated by the general fund. Other Post -Employment Benefits (OPEB) OPEB are described in Note 15. The liability is typically liquidated by the general fund. 54 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 9: Changes in Long -Term Liabilities — Business -type Activities Changes in business -type long-term liabilities for the year ended June 30, 2014, were as follows: Balance at Balance at Due within July 1, 2013 Additions Deletions June 30, 2014 one year Golf Course: Capital leases payable $ 43,736 $ - $ 43,736 $ - $ - The City of La Quinta entered into several capital lease agreements for the operation of the Silver Rock Golf Resort. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The lease with Wells Fargo Financing Leasing, Inc. ended in September 2013. Note 10: Debt Without Governmental Commitment The City of La Quinta sold Improvement Bonds issued pursuant to the California State Improvement Act of 1915. The Bonds are payable from the annual installments collected on the regular property tax bills sent to owners of property having unpaid assessments levied against land benefited by the projects. The bonds are neither general obligations of the City nor any other political subdivision and the full faith and credit of the City is not pledged for repayment thereof, therefore, they are not included in the long-term liabilities in the accompanying financial statements. The City is not liable for repayment of the debt, but is only acting as agent for the property owners in collecting the assessments and forwarding the collections to bondholders. The following is a summary of Improvement Bonds outstanding at June 30, 2014. Amount Assessment District No. 97-1 Proceeds $ 705,262 55 Outstanding at Maturity Date Interest Rate June 30, 2014 9/2/2018 4.10% - 5.60% $ 205,000 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 11: Interfund Receivables and Payables The composition of current interfund receivable and payable as of June 30, 2014, are as follows: Due to Other Funds Civic Center Non -Major Fund Governmental Total Due From Other Funds General Fund $ 209,318 $ 25,497 $ 234,815 The interfund balances were made to cover negative cash balances and other temporary loans at June 30, 2014. The composition of non-current interfund receivable and payable as of June 30, 2014, are as follows: Advances From Other Funds Non -Major Civic Center Governmental Golf Course TOTAL Advances to Other Funds General Fund $ 7,103,172 $ 2,733,630 $ 5,326,381 $ 15,163,183 a) In September 2006, an advance up to $9,615,094 for the City Hall expansion from the General Fund to the Civic Center Developer Impact Fee Fund was approved. As of June 30, 2014, the Civic Center expansion was completed and the amount of the advance was $7,103,172 outstanding. The advance accrues interest that would have been earned by Local Agency Investment Fund. b) As of June 30, 2014, the General Fund has advanced to the Golf Course fund $5,326,381. The advances accrue interest at the City's investment pool rate and are to be repaid by the golf course out of future profits. c) In October 2009, an advance up to $2,033,687 for the Phase 1 of the Corporate Yard from the General Fund to the Street and Park Maintenance Facility Funds was approved. As of June 30, 2014, the amount of the outstanding advance was $1,966,991. The advance accrues interest at the earnings rate of the City's investment pool fund. d) In February 2003, the Redevelopment Agency Capital Projects PA No. 2 Fund advanced $1,350,131 to the Fire Facility Fund to provide funding for development of the City's north Fire Station. On March 1, 2012 the outstanding advance of $925,192 was transferred from the Redevelopment Agency to the General Fund with the Redevelopment Agency receiving $925,192 in cash for the outstanding balance. The advance accrues interest at the earnings rate of the City's investment pool funds. As of June 30, 2014, the remaining balance of the advance was $766,639. 6 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 12: Interfund Transfers Transfers In General Fund Capital Improvement Non -Major Governmental Golf Course Total: Transfers Out Equipment Replacement - Non -Major Internal Service General Fund Governmental Fund Total $ - $ 117,988 $ 570,713 2,980,809 2,000 164,169 500,000 - $ 1,072,713 $ 3,262,966 $ $ 117,988 3,551,522 366,084 532,253 - 500,000 366,084 $ 4,701,763 a) $117,988 was transferred to the General Fund from various non -major funds to fund various program expenses within the City related to operations and grant funded activities. b) $570,713 was transferred from the General Fund to the Capital Improvement Fund to transfer various capital projects and sales tax rebate agreements. c) $2,980,809 was transferred to Capital Improvement Fund from various non -major funds to fund various capital projects within the City. d) A combined $532,253 was transferred to various non -major funds from the General Fund, Equipment Replacement Fund, and other non -major funds to support various administrative operations, capital project, and debt service expenses within the City. e) $500,000 was transferred from the General Fund to the Golf Course Fund to fund the canal restoration project. 57 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 IV. OTHER INFORMATION Note 13: Defined Benefit Pension Plan Plan Description The City of La Quinta contributes to the California Public Employees Retirement System (PERS), a cost sharing multiple -employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost -of -living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of PERS' annual financial report may be obtained from their executive office: 400 P Street, Sacramento, CA 95814. Funding Policy Participants are required to contribute 8% of their annual covered salary. The City makes the contributions required of City employees on their behalf and for their account. The City is required to contribute at an actuarially determined rate; the current rate is 14.660% of annual covered payroll. The contribution requirements of plan members and the City are established and may be amended by PERS. Contributions For the year ended June 30, 2014, the City's contribution of $760,966 was equal to the City's required and actual contribution. Contributions are made from the General Fund, Golf Course Fund and Information Technology Fund. The required contribution was determined as part of the June 30, 2011, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.5% investment rate of return (net of administrative expenses) and (b) projected annual salary increases that range from 3.30% to 14.20% depending on age, service, and type of employment. Both (a) and (b) include inflation component of 2.75%. The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a three-year period. PERS unfunded actuarial accrued liability (or surplus) is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at June 30, 2014, was 21 years. Fiscal Year Contribution Contributed 6/30/2012 $ 906,917 100% 6/30/2013 869,462 100% 6/30/2014 760,966 100% Note 14: Defined Contribution Plans Plan Description The Supplemental Pension Savings Plan is a defined contribution pension plan established by the City to provide retirement excess benefits to general employees of the City. At June 30, 2014, there was one plan member. There are no required contributions by plan members. During the 2013-2014 fiscal year the City made no contributions to fund the Supplemental Pension Savings Plan. +� CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 15: Post -Employment Health Benefits Plan Description The City of La Quinta provides other postemployment benefits (OPEB) through a single -employer defined benefit healthcare plan by contributing on behalf of all eligible retirees' $115/month for calendar 2013 and 2014, increased in all future years according to the rate of medical inflation. These benefits are provided per contract between the City and the employee associations. A separate financial report is not available for the plan. Funding Policy The contribution requirements of plan members and the City are established and may be amended by the City, City Council and/or the employee association. Currently, contributions are not required from plan members. A contribution was made during 2013-2014 fiscal year for $16,253. As a result, the City calculated and recorded a net OPEB obligation, representing the difference between the annual required contribution (ARC) and actual contributions, as presented below: Annual required contribution (ARC) $ 138,992 Interest on net OPEB obligation 5,596 Adjustment to ARC (24,549) Annual OPEB cost 120,039 Contributions made (16,253) (Decrease) increase in net OPEB obligation 103,786 Net OPEB obligation (asset) - beginning of year 559,591 Net OPEB obligation (asset) - end of year $ 663,377 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2013-2014 and the two preceding years were as follows: Actual Percentage Fiscal Annual Contribution of Annual Net OPEB Year OPEB (Net of OPEB Cost Obligation End Cost Adjustments) Contributed (Asset) 6/30/2012 $ 128,493 $ 6,160 4.79% $ 459,644 6/30/2013 116,408 16,461 14.14% 559,591 6/30/2014 120,039 16,253 13.54% 663,377 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 15: Post -Employment Health Benefits (Continued) Funded Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The information is as of the latest actuarial valuation information available. Actuarial Methods and Assu Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The required contribution was determined as part of the July 1, 2011, actuarial valuation using the entry age actuarial cost method. The actuarial assumptions included a 5.0% investment rate of return, projected salary increases ranging from 5.0% to 8.0%, a 4.0% per year cost -of -living adjustments, and an 8% healthcare trend rate.. Both include an inflation component of 4%. The actuarial value of assets is set equal to the reported market value of assets. The UAAL is being amortized as a level dollar on an open basis. The remaining amortization period at June 30, 2014, was twenty-five years. The number of active participants is 12. Note 16: Liability, Workers' Compensation, and Purchased Insurance The City of La Quinta is a member of the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (Authority). The Authority is composed of 119 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The Authority began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine -member Executive Committee. Each member pays an annual contribution to cover estimated losses for the coverage period. This initial funding is paid at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage period are closed on a pool -wide basis. This subsequent cost re -allocation among members based on actual claim development can result in adjustments of either refunds or additional deposits required. .e Actuarial Actuarial Actuarial Percent of Type of Valuation Value of Accrued Covered Valuation Date Assets Liability Funding Ratio Covered Payroll Payroll Interest Rate Actual 7/1/2008 $ - $ 590,676 0.0% $ 7,821,474 7.6% 5.0% Actual 7/1/2011 - 428,328 0.0% 7,459,445 5.7% 5.0% Actuarial Methods and Assu Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The required contribution was determined as part of the July 1, 2011, actuarial valuation using the entry age actuarial cost method. The actuarial assumptions included a 5.0% investment rate of return, projected salary increases ranging from 5.0% to 8.0%, a 4.0% per year cost -of -living adjustments, and an 8% healthcare trend rate.. Both include an inflation component of 4%. The actuarial value of assets is set equal to the reported market value of assets. The UAAL is being amortized as a level dollar on an open basis. The remaining amortization period at June 30, 2014, was twenty-five years. The number of active participants is 12. Note 16: Liability, Workers' Compensation, and Purchased Insurance The City of La Quinta is a member of the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (Authority). The Authority is composed of 119 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The Authority began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine -member Executive Committee. Each member pays an annual contribution to cover estimated losses for the coverage period. This initial funding is paid at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage period are closed on a pool -wide basis. This subsequent cost re -allocation among members based on actual claim development can result in adjustments of either refunds or additional deposits required. .e CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 16: Liability, Workers' Compensation, and Purchased Insurance (Continued) The total funding requirement for self-insurance programs is estimated using actuarial models and prefunded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk -sharing pool. Additional information regarding the cost allocation methodology is provided below. General Liability In the liability program claims are pooled separately between police and non -police exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $750,000 up to the reinsurance attachment point of $5 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to $10 million are paid under a reinsurance contract subject to a $2.5 million annual aggregate deductible. The $2.5 million annual aggregate deductible is fully covered under a separate policy; as such no portion of it is retained by the Authority. Costs of covered claims from $10 million to $15 million are paid under two reinsurance contracts subject to a combined $3 million annual aggregate deductible. The $3.0 million annual aggregate deductible is fully retained by the Authority. (6) Costs of covered claims from $15 million to $20 million are paid under reinsurance agreements. (7) Costs of covered claims from $20 million to $50 million are paid under excess insurance policies. The overall coverage limit for each member including all layers of coverage is $50 million per occurrence. Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a pooled sub -limit of $30 million per occurrence. This $30 million subsidence sub -limit is composed of (a) $5 million retained within the pool's SIR, (b) $15 million in reinsurance, subject to the same annual aggregate deductibles previously stated, and (c) $10 million in excess insurance. The excess insurance layer has a $10 million annual aggregate limit. Workers' Compensation In the workers' compensation program claims are pooled separately between public safety (police and fire) and non-public safety exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $100,000 up to the reinsurance attachment point of $2 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $2 million up to statutory limits are paid under a reinsurance policy. 61 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 16: Liability, Workers' Compensation, and Purchased Insurance (Continued) Protection is provided per statutory liability under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members. Additional Coverage Property Insurance The City of La Quinta participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of La Quinta property is currently insured according to a schedule of covered property submitted by the City of La Quinta to the Authority. City of La Quinta property currently has all-risk property insurance protection in the amount of Non Participant. There is a $5,000 deductible per occurrence except for non -emergency vehicle insurance which has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Earthquake and Flood Insurance The City of La Quinta purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City of La Quinta property currently has earthquake protection in the amount of Non Participant. There is a deductible of 5% per unit of value with a minimum deductible of $100,000. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Crime Insurance The City of La Quinta purchases crime insurance coverage in the amount of Non Participant with a Non Participant deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retrospective adjustments. Note 17: Commitments and Contingencies The following material construction commitments existed at June 30, 2014: Project Name Senior Center Expansion Pavement Management & Slurry Seal 62 Contract Expenditures Remaining Amount to date Commitments $ 2,575,998 $ 919,207 $ 1,656,791 2,117,714 148,948 1,968,766 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 18: Fund Balance Fund Balance Commitments The City has the following committed fund balance shown on the balance sheet: Committed to emergency reserve - the City established the amount of 35% of the Fiscal Year 2013-2014 budget plus $4,000,000 which totals $16,034,995 in the General Fund for the year ended June 30, 2014. The funds would be drawn upon pursuant to the Municipal Code Section 2.20 which defines an emergency or disaster to mean the actual or threatened existence of conditions of disaster or of extreme peril to the safety of persons and property within this city caused by such conditions as air pollution, fire, flood, storm, epidemic, riot, earthquake or other conditions, including conditions resulting from war or imminent threat of war but other than conditions resulting from a labor controversy, which conditions are or are likely to be beyond the control of the services, regular personnel, equipment and facilities of the city and which may require the combined forces of other political jurisdictions to combat. Committed to post retirement health benefits - the City has committed a portion of fund balance for the payment in future years of their Post retirement health benefits. For the year ended June 30, 2014, the City has committed $1,523,401 for this purpose. Committed to working capital reserve - the City established the amount of 8.25% of the Fiscal Year 2013-2014 budget which totals $2,836,820 in the General Fund for the year ended June 30, 2014. Committed to Fiscal Year 2014 carryovers to Fiscal Year 2015 $356,438. Committed to Fiscal Year 2014 capital project carryovers to Fiscal Year 2015 1,507,429. These committed amounts have been approved by Council based on certain percentages and will be used only in the event of Council approval. Note 19: Golf Course Management Agreement The City entered into an agreement with Landmark Golf Management LLC (operator) to manage the golf operations at the city -owned SilverRock Golf Course. The Agreement entered into on April 6, 2004, sets forth a five year term commencing upon the completion of the golf course. On January 14, 2005, the golf course was deemed to be complete and management was turned over to the operator. The contract provides that the operator will manage the day to day operations, hire employees, provide golf pro shop and food services, manage all marketing and promotional activities, prepare the annual budget report for Council consideration, and manage accounting and payroll functions. In addition to the annual payment for management services, the City has advanced the operator $250,000 to pay for golf course expenses. Twice a month the operator submits a request for reimbursement to the City to replenish the City's advance. In addition, the agreement sets forth the establishment of a capital reserve fund of 2% of green fees. For the fiscal year ending June 30, 2014, the Golf Course had an operating loss before contributions and transfers of $810,940. 63 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 20: Reimbursement Agreements The City entered into a sales tax sharing agreement on January 30, 2006, with Costco Wholesale Corporation. Under the terms of the agreement the City shall make quarterly payments of 40% of any sales tax generated from Costco in an amount not to exceed $4,000,000 over a ten year period. Due to the reporting of sales tax information by the State Board of Equalization to the City, the reimbursement payments by the City will lag by one quarter. The agreement terminates when either the $4,000,000 limit is reached or in 10 years whichever comes first. The Costco business opened in November 2006. As of June 30, 2014, the City made $98,498 in reimbursement payments to the owner leaving an outstanding balance of $1,382,482. Note 21: Extraordinary Items Notes payables owed to the City of La Quinta in the amount of $6,402,450 were included in the transfer of the assets and liabilities of the former redevelopment agency as of February 1, 2012 due to the dissolution of the Former Redevelopment Agency. During the current year the California Department of Finance disallowed these notes as enforceable obligations and as a result were transferred back to the City. This transaction is shown as an extraordinary loss in the Governmental Statement of Revenues, Expenditures and Changes in Fund Balance and an extraordinary gain in the Statement of Changes in Fiduciary Net Position. Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 ("the Bill") that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of La Quinta that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the "successor agency" to hold the assets until they are distributed to other units of state and local government. On January 3, 2011, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 2012-002. After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. The Successor Agency to the former Redevelopment Agency is reported as a fiduciary fund (private purpose trust fund). 64 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) a. Cash and Investments Cash and investments reported in the accompanying financial statements consisted of the following: Cash and investments pooled with the City $ 31,289,063 Cash and investments with fiscal agent 33,870,741 $ 65,159,804 b. Loans Receivable Owner Participation Agreement — Garff Properties, LLC In July 2010, the former redevelopment agency entered into an Owner Participation Agreement (OPA) with an Garff Properties -La Quinta, LLC ("Garff') that provides for the Former Agency to provide a rehabilitation loan to Garff of up to $2,300,000 for the construction of a new auto dealership facility and rehabilitation of an existing dealership facility. In connection with the OPA, Garff has executed a promissory note which is secured by a deed of trust, and an operating covenant. The loan will be repaid by crediting future sales and property tax increment taxes generated on the site until the cumulative taxes collected equals the loan amount. At that time, the note will be cancelled and the operating covenant will terminate. If, after ten years of operation, a shortfall exists between the revenues collected and the outstanding loan amount, the note will be cancelled and the operating covenant will terminate. Further, if at any time through no fault of the dealership certain future events outside of the dealership control occur the note will be cancelled and the operating covenant will terminate. The balance at June 30, 2014, is $1,715,738. Owner Participation Agreement — Torre Nissan In June 2011, the former redevelopment agency entered into an Owner Participation Agreement (OPA) with an autodealer, Mega Dealer, LLC ("Torre Nissan") that provides for the Agency to provide a rehabilitation loan to Torre Nissan of up to $1,500,000 for the remodeling of the existing dealership and an expansion of the dealership facility to accommodate a new line of electric and commercial vehicles. The new expansion will also include service and parts sales facilitates. In connection with the OPA, Torre Nissan has executed a promissory note, which is secured by a subordinated deed of trust. If Nissan Motor Company ceases to exist, the note will be cancelled and the operating covenant will terminate. At the end of the ten-year operating covenant, the operating covenant will terminate and the note will be cancelled, and any outstanding loan balance will be forgiven. As of June 30, 2014, construction was in progress and $1,499,999 of the $1,500,000 had been expended leaving an available balance of $1. c. Due from other Governments La Quinta Community Park In July 2002, an advance of $4,167,912 was made from the former redevelopment agency to provide funding for the development of the publicly owned improvements to the La Quinta Community Park. The advance accrues interest at the earnings rate of the City's investment pool fund. As of June 30, 2014, the remaining balance of the advance for the La Quinta Community Park is $469,486. 65 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) La Quinta Library In April 2005, another advance of $2,490,273 was made from the former redevelopment agency to provide funding for the construction of the public library. The advance accrues interest at the earnings rate of the City's investment pool fund. The remaining balance of this advance at June 30, 2014, is $1,750,152. d. Long -Term Debt A description of long-term debt outstanding (excluding defeased debt) of the Successor Agency as of June 30, 2014, follows: Balance at Balance at June Due within one July 1, 2013 Additions Defeasements Deletions 30, 2014 year Tax allocation bonds $ 130,870,000 $ 120,245,000 $ 124,905,000 $ 35,000 $ 126,175,000 $ 5,910,000 City loans 41,378,966 - - 6,402,450 34,976,516 - Revenue bonds 106,305,000 - - 2,495,000 103,810,000 2,615,000 Unamortized premiums/discounts (1,024,145) 6,047,330 (778,466) 292,681 5,508,970 - Total $ 277,529,821 $ 126,292,330 $ 124,126,534 $ 9,225,131 $ 270,470,486 $ 8,525,000 Tax Allocation Bonds As of June 30, 2014, the following issuances of Tax Allocation Bonds were outstanding: Series 1998, Project Area No. 1 Tax allocation refunding bonds, Series 1998, in the amount of $15,760,000 were issued by the Former Agency to refund the outstanding aggregate principal amount of the former redevelopment agency's Tax Allocation Bonds, Series 1991. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. Interest rates on the bonds range from 5.20% to 5.25% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 1. Term Bonds maturing September 1, 2028, are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2013, and on each September 1 thereafter, through September 1, 2028, at a price equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. These bonds were defeased as of June 30, 2014, with the issuance of the 2013 Series A and 2013 Series B Subordinate Tax Allocation Refunding Bonds. CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Series 1998, Project Area No. 2 Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the former redevelopment agency to refund the outstanding aggregate principal amount of the Former Agency's Tax Allocation Bonds, Series 1992. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 2. Interest rates on the bonds range from 3.75% to 5.28% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 2. Term Bonds maturing September 1, 2028 and September 1, 2033, are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2009 and September 1, 2019, respectively, and on each September 1 thereafter equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. These bonds were defeased as of June 30, 2014, with the issuance of the 2013 Series A and 2013 Series B Subordinate Tax Allocation Refunding Bonds. Series 2001, Project Area No. 1 On August 15, 2001, the former redevelopment agency issued tax allocation bonds in the amount of $48,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2001 tax allocation bonds were issued at a discount of $422,400 and issuance costs of $1,517,325. The bonds consist of $17,280,000 of term bonds that accrue interest at 5.00% and mature on September 1, 2021, and $30,720,000 of term bonds that accrue interest at 5.18% and mature on September 1, 2031. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. These bonds were defeased as of June 30, 2014 with the issuance of the 2013 Series A and 2013 Series B Subordinate Tax Allocation Refunding Bonds. Series 2002, Project Area No. 2 On June 12, 2002, the former redevelopment agency issued tax allocation bonds in the amount of $40,000,000 to finance capital projects benefiting the La Quinta redevelopment Project Area No. 2. The 2002 tax allocation bonds were issued at a discount of $360,000 and issuance costs of $1,250,096. The bonds consist of $6,355,000 of serial bonds and $33,645,000 of term bonds. Interest Rates on serial bonds range from 1.75% and 4.00% and are payable semi-annually on March 1 and September 1 of each year until maturity. Term bonds accrue interest at 5.00% and 5.125% and mature on September 1, 2022 and September 1, 2023. The interest and principal on the bonds are payable from pledged tax increment revenues. 67 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. These bonds were defeased as of June 30, 2014, with the issuance of the 2013 Series A and 2013 Series B Subordinate Tax Allocation Refunding Bonds. Series 2003, Project Area No. 1 On September 1, 2003, the former redevelopment agency issued tax allocation bonds in the amount of $26,400,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2003 tax allocation bonds were issued at a discount of $277,200 and issuance costs of $629,191. Interest is payable semi-annually on March 1 and September 1 of each year, commencing March 1, 2004. Interest payments range from 4.24% to 6.44% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2013 through September 1, 2032, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2004, September 1, 2014, and September 1, 2024, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. These bonds were defeased as of June 30, 2014, with the issuance of the 2013 Series A and 2013 Series B Subordinate Tax Allocation Refunding Bonds. Series 2011, Project Area No. 2 On June 6, 2011, the former redevelopment agency issued subordinate taxable tax allocation bonds in the amount of $6,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 2. The 2011 tax allocation bonds were issued at a discount of $86,207 and issuance costs of $108,500. The bonds consist of $190,000 of term bonds that accrue interest at 5.375% and mature on September 1, 2016, $280,000 of term bonds that accrue interest at 7.125% and mature on September 1, 2021, $380,000 of term bonds that accrue interest at 7.600% and mature on September 1, 2026, and $5,150,000 of term bonds that accrue interest at 8.150% and mature on September 1, 2031. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2014, is $5,930,000 with an unamortized discount of $76,912. :: CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2014, are as follows: Totals $ 5,930,000 $ 9,737,758 Series 2013A On December 17, 2013, the former redevelopment agency issued subordinate tax allocation refunding bonds in the amount of $97,190,000 to refinance outstanding long term obligations held by the Successor Agency. The 2013 Series A tax allocation bonds were issued at a premium of $6,056,280 and issuance costs of $480,001. Interest rates on the bonds range from 3.00% to 5.00% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from property tax revenue. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2014, is $97,190,000 with an unamortized premium of $5,753,466. The minimum annual requirements to amortize the bond payable as of June 30, 2014, are as follows: Principal Interest 2015 $ 40,000 $ 473,930 2016 40,000 471,780 2017 40,000 469,630 2018 50,000 466,774 2019 50,000 463,211 2020-2024 315,000 2,252,905 2025-2029 440,000 2,112,006 2030-2034 650,000 1,894,875 2035-2039 3,440,000 1,097,398 2040-2042 865,000 35,249 Totals $ 5,930,000 $ 9,737,758 Series 2013A On December 17, 2013, the former redevelopment agency issued subordinate tax allocation refunding bonds in the amount of $97,190,000 to refinance outstanding long term obligations held by the Successor Agency. The 2013 Series A tax allocation bonds were issued at a premium of $6,056,280 and issuance costs of $480,001. Interest rates on the bonds range from 3.00% to 5.00% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from property tax revenue. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2014, is $97,190,000 with an unamortized premium of $5,753,466. The minimum annual requirements to amortize the bond payable as of June 30, 2014, are as follows: Totals $ 97,190,000 $ 52,180,505 We Principal Interest 2015 $ 4,690,000 $ 5,371,591 2016 3,405,000 4,385,588 2017 3,505,000 4,264,413 2018 3,645,000 4,121,413 2019 3,790,000 3,953,763 2020-2024 22,005,000 16,651,441 2025-2029 28,035,000 10,493,640 2030-2034 28,115,000 2,938,656 Totals $ 97,190,000 $ 52,180,505 We CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Series 2013B On December 17, 2013, the former redevelopment agency issued subordinate tax allocation refunding bonds in the amount of $23,055,000 to refinance outstanding long term obligations held by the Successor Agency. The 2013 Series B tax allocation bonds were issued at a discount of $8,951 and issuance costs of $122,274. The bonds consist of $3,710,000 of term bonds that accrue interest at 5.240% and mature on September 1, 2026, $4,335,000 of term bonds that accrue interest at 5.550% and mature on September 1, 2029, and $5,115,000 of term bonds that accrue interest at 5.820% and mature on September 1, 2032. The remaining $9,895,000 matures annually with rate ranging from 0.76% to 4.89%. The interest and principal on the bonds are payable from property tax revenue. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2014, is $23,055,000 with an unamortized discount of $8,503. The minimum annual requirements to amortize the bond payable as of June 30, 2014, are as follows: Principal Interest 2015 $ 1,180,000 $ 1,240,888 2016 865,000 1,032,011 2017 880,000 1,016,504 2018 900,000 996,053 2019 920,000 970,318 2020-2024 5,150,000 4,276,983 2025-2029 6,525,000 2,835,432 2030-2033 6,635,000 798,053 Totals $ 23,055,000 $ 13,166,242 The Agency completed the advance refunding of the 1998 Project Area 1, 1998 Project Area 2, 2001 Project Area 1, 2002 Project Area 2, and 2003 Project Area 1 Tax Allocation Bonds with the issuance of the 2013 A and 2013 B Tax Allocation Refunding Bonds to reduce its total debt service payments by $10,707,824 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $4,275,185 which is reported as a deferred loss on refunding. Revenue Bonds As of June 30, 2014, the following issuances of Revenue Bonds were outstanding: 2004 Series A Local Agency Revenue Bonds On June 29, 2004, the La Quinta Financing Authority issued revenue bonds in the amount of $90,000,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2 and to advance refund the Agency's 70 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Redevelopment Project Areas No. 1 and 2, 1995 Housing Tax Allocation Bonds. The 2004 local agency revenue bonds were issued with issuance costs of $2,600,229 and a premium of $476,496. Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2005. Interest payments range from 3% to 5.25% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2024, September 1, 2029 and September 1, 2034, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2017, September 1, 2025, and September 1, 2030, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The principal balance of outstanding bonds at June 30, 2014, is $75,480,000 with an unamortized premium of $112,473. The minimum annual requirements to amortize the bond payable as of June 30, 2014, are as follows: Totals $ 75,480,000 $ 47,482,191 2011 Series A Local Agency Subordinate Taxable Revenue Bonds On June 9, 2011, the La Quinta Financing Authority issued revenue bonds in the amount of $28,850,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2. The 2011 local agency subordinate taxable revenue bonds were issued with issuance costs of $323,375 and a discount of $308,839. Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2011. Interest payments range from 3.750% to 8.185% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. 71 Principal Interest 2015 $ 2,075,000 $ 3,823,431 2016 2,175,000 3,714,463 2017 2,290,000 3,597,256 2018 2,410,000 3,473,881 2019 2,535,000 3,344,075 2020-2024 14, 830, 000 14, 520, 756 2025-2029 19, 090, 000 10,163, 219 2030-2034 24,415,000 4,700,072 2035-2037 5,660,000 145,038 Totals $ 75,480,000 $ 47,482,191 2011 Series A Local Agency Subordinate Taxable Revenue Bonds On June 9, 2011, the La Quinta Financing Authority issued revenue bonds in the amount of $28,850,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2. The 2011 local agency subordinate taxable revenue bonds were issued with issuance costs of $323,375 and a discount of $308,839. Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2011. Interest payments range from 3.750% to 8.185% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. 71 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Term bonds maturing on September 1, 2026, September 1, 2031 and September 1, 2036, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2022, September 1, 2027, and September 1, 2032, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. A portion of the proceeds were used to fund the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The principal balance of outstanding bonds at June 30, 2014, is $28,330,000 with an unamortized discount of $271,554. The minimum annual requirements to amortize the bond payable as of June 30, 2014, are as follows: Totals Loans from the City of La Quinta $ 28,330,000 $ 32,461,697 The City of La Quinta loaned money to the former Redevelopment Agency to cover operating and capital shortfalls. These loans were paid back to the City during the 2010-2011 fiscal year. This repayment was disallowed by the California Department of Finance during their Asset Transfer Review of the former Redevelopment Agency and demanded that this money be remitted to the State for distribution to the effecting taxing entities. The City reversed this transaction and the payable to the State is properly recorded by the Successor Agency as of June 30, 2013. In a letter dated November 6, 2013 the California Department of Finance approved the loans as enforceable obligations to be paid through Successor Agency property tax. As of June 30, 2014, the amount due to the City of La Quinta was $34,976,516. e. Pledged Tax Revenues The City pledged, as security for bonds issued, either directly or through the Financing Authority, a portion of tax increment revenue (including Low and Moderate Income Housing set-aside and pass through allocations) that it receives. The bonds issued were to provide financing for various capital projects, accomplish Low and Moderate Income Housing projects and to defease previously issued bonds. Assembly Bill 1X 26 provided that upon dissolution of the Redevelopment Agency, property taxes allocated to redevelopment agencies no longer are deemed tax increment but rather property tax revenues and will be allocated first to successor agencies to make payments on the indebtedness incurred by the dissolved redevelopment agency. Total principal and 72 Principal Interest 2015 $ 540,000 $ 2,137,987 2016 565,000 2,111,712 2017 590,000 2,081,067 2018 625,000 2,045,406 2029 665,000 2,004,653 2020-2024 4,065,000 9,234,748 2025-2029 5,835,000 7,383,218 2030-2034 8,515,000 4,595,381 2035-2037 6,930,000 867,525 Totals Loans from the City of La Quinta $ 28,330,000 $ 32,461,697 The City of La Quinta loaned money to the former Redevelopment Agency to cover operating and capital shortfalls. These loans were paid back to the City during the 2010-2011 fiscal year. This repayment was disallowed by the California Department of Finance during their Asset Transfer Review of the former Redevelopment Agency and demanded that this money be remitted to the State for distribution to the effecting taxing entities. The City reversed this transaction and the payable to the State is properly recorded by the Successor Agency as of June 30, 2013. In a letter dated November 6, 2013 the California Department of Finance approved the loans as enforceable obligations to be paid through Successor Agency property tax. As of June 30, 2014, the amount due to the City of La Quinta was $34,976,516. e. Pledged Tax Revenues The City pledged, as security for bonds issued, either directly or through the Financing Authority, a portion of tax increment revenue (including Low and Moderate Income Housing set-aside and pass through allocations) that it receives. The bonds issued were to provide financing for various capital projects, accomplish Low and Moderate Income Housing projects and to defease previously issued bonds. Assembly Bill 1X 26 provided that upon dissolution of the Redevelopment Agency, property taxes allocated to redevelopment agencies no longer are deemed tax increment but rather property tax revenues and will be allocated first to successor agencies to make payments on the indebtedness incurred by the dissolved redevelopment agency. Total principal and 72 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2014 Note 22: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) interest remaining on the debt is $385,013,393 with annual debt service requirements as indicated above. For the current year, the total property tax revenue recognized by the Successor Agency for the payment of indebtedness incurred was $20,011,681 and the debt service obligation on the bonds was $16,042,042. f. Conduit Debt Financing 2002 Series B Multifamilv Housina Revenue Bonds In April 2002, the Agency issued $3,000,000 of 2002 Series B Multifamily Housing Revenue Bonds to provide financing for the acquisition, construction and equipping of a multifamily senior rental housing project known as Miraflores Apartments located in the City of La Quinta. The bonds mature on June 1, 2035, and bear interest at 5.5% per annum. Outstanding bonds at June 30, 2014, are $2,610,000. The bond is secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bond is not an obligation of the issue, but payable solely from the security. g. Insurance The Successor Agency of the former redevelopment agency is covered under the insurance policy of the City of La Quinta at June 30, 2014. h. Extraordinary Items Notes payables owed to the City of La Quinta in the amount of $6,402,450 were included in the transfer of the assets and liabilities of the former redevelopment agency as of February 1, 2012 due to the dissolution of the Former Redevelopment Agency. During the current year the California Department of Finance disallowed these notes as enforceable obligations and as a result were transferred back to the City. This transaction is shown as an extraordinary loss in the Governmental Statement of Revenues, Expenditures and Changes in Fund Balance and an extraordinary gain in the Statement of Changes in Fiduciary Net Position. 73 CITY OF LA QUINTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2014 Note 1: Budget Procedures General Budget Policies The City adopts an annual budget prepared on the modified accrual basis of accounting for its governmental funds and on the accrual basis of accounting for its proprietary funds. The City manager or his designee is authorized to transfer budgeted amounts between the accounts of any department or funds that are approved by City Council. Prior year appropriations lapse unless they are approved for carryover into the following fiscal year. Expenditures may not legally exceed appropriations at the department level. Budgets were not adopted for the Development Agreement funds. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue, and similar governmental funds. Encumbrances outstanding at year-end are reported as an unassigned fund balance. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year end are completed. They do not constitute expenditures or estimated liabilities. Budget Basis of Accounting Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). Excess Expenditures over budget General Fund: General Government Fiscal Services Public Safety Police Parks and recreation Parks & recreation Public Works Administration Maintenance/operations-streets Engineering services Debt Service Principal retirement Interest and fiscal charges Budget Actual Variance $ 856,413 $ 872,791 $ 16,378 13, 468, 659 13, 639, 205 170,546 198,100 207,963 9,863 450,254 479,366 29,112 1,008,015 1,028,178 20,163 678,946 998,204 319,258 - 11,918 11,918 - 5,559 5,559 74 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERALFUND YEAR ENDED JUNE 30, 2014 75 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 92,572,590 $ 92,572,590 $ 92,572,590 $ - Resources (Inflows): Taxes 22,619,500 23,520,500 26,559,246 3,038,746 Licenses and permits 1,055,100 916,800 953,540 36,740 Intergovernmental 8,926,500 8,926,500 8,508,823 (417,677) Charges for services 633,500 760,900 1,238,277 477,377 Use of money and property 758,100 653,800 879,804 226,004 Fines and forfeitures 243,000 163,000 237,682 74,682 Miscellaneous 150,000 104,700 327,519 222,819 Transfers in 150,000 202,972 117,988 (84,984) Proceeds from sale of capital asset - - - - Extraordinary loss - - (6,402,450) (6,402,450) Amounts Available for Appropriation 127,108,290 127,821,762 124,993,019 (2,828,743) Charges to Appropriation (Outflow): General government Legislative 724,600 724,600 645,146 79,454 City Manager 655,000 724,981 594,276 130,705 Marketing 538,100 578,100 572,064 6,036 Human Resources 666,600 761,600 637,885 123,715 City Clerk 392,500 388,800 359,684 29,116 Fiscal Services 915,300 856,413 872,791 (16,378) Central Services 1,147,900 245,900 182,480 63,420 Public safety Police 13,278,100 13,468,659 13,639,205 (170,546) Public Buildings 1,133,900 1,032,500 944,958 87,542 Code Compliance 795,600 795,600 733,340 62,260 Building & Safety 791,300 961,300 927,447 33,853 Fire 5,252,400 5,230,900 4,697,732 533,168 Emergency Services 199,200 199,200 187,821 11,379 Planning and development Administration 594,200 706,120 670,081 36,039 Current Planning 457,500 494,574 362,626 131,948 Parks and recreation Community Services Admin 911,000 1,001,541 846,875 154,666 Senior Center 385,200 360,200 346,721 13,479 Parks & Recreation 198,100 198,100 207,963 (9,863) Park Maintenance 1,402,600 1,535,600 1,380,722 154,878 Public works Administration 435,900 446,454 479,366 (32,912) Development Services 562,700 641,600 588,684 52,916 Maintenance/Operations - Street 11,000 1,008,015 1,028,178 (20,163) Maintenance/Operations - Lighting 462,700 698,431 355,893 342,538 Engineering Services 911,500 678,946 998,204 (319,258) Capital outlay 61,959 8,934 53,025 Debt service: Principal retirement - - 11,918 (11,918) Interest and fiscal charges - - 5,559 (5,559) Transfers out 2,425,000 3,143,758 1,072,713 2,071,045 Total Charges to Appropriations 35,247,900 36,943,851 33,359,266 3,584,585 Budgetary Fund Balance, June 30 $ 91,860,390 $ 90,877,911 $ 91,633,753 $ 755,842 75 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 1 YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Planning and development Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 76 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,884,667 $ 3,744,088 $ 3,744,088 $ - 245,500 245,500 380,454 134,954 125,000 125,000 467 (124,533) 3,255,167 4,114,588 4,125,009 10,421 290,700 290,700 238,571 52,129 290,700 290,700 238,571 52,129 $ 2.964.467 $ 3.823.888 $ 3.886.438 $ 62.550 76 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 2 YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Planning and development Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 77 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,146,138 $ 1,132,522 $ 1,132,522 $ - 627,200 627,200 429,425 (197,775) 2,800 2,800 195,155 192,355 4,200 4,200 6,333 2,133 1,780,338 1,766,722 1,763,435 (3,287) 354,300 495,800 367,338 128,462 193,000 51,200 51,101 99 188,600 188,900 141,756 47,144 735,900 735,900 560,195 175,705 $1,044,438 $ 1,030,822 $ 1,203,240 $ 172,418 77 OTHER GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues (other than expendable trusts and major capital projects) and the related expenditures that are legally required to be accounted for in a separate fund. The City of La Quinta has the following Special Revenue Funds: State Gas Tax Fund — To account for gasoline allocations made by the State of California. These revenues are restricted by the State to expenditures for street -related purposes only. Library Fund — To account for revenues from property tax increment dedicated library services. Federal Assistance Fund — To account for revenues from the Community Development Block Grants received from the Federal Government and the expenditures of those resources. State Law Enforcements Block Grant (SLEBG) Fund — To account for state funded "Citizens for Public Safety" (COPS) program activities, as per Assembly Bill 3229, which supplements frontline police services such as anti -gang community crime prevention. Indian Gaming Fund — To account for contributions for public safety activities to reduce crime and increase public safety. Lighting and Landscape Special Assessment District 89-1 Fund — To account for special assessments levied on real property and the expenditure thereof from City-wide lighting and landscape maintenance and improvements. Quimby Fund — To account for the accumulation of developer fees received under the provisions of the Quimby Act for park development and improvements. Capital projects to be funded from this source will be budgeted and expended in a separate capital projects fund. La Quinta Public Safety Officer Fund — To account for contributions to be distributed to public safety officers disabled or killed in the line of duty. Arts in Public Places — To account for development fees paid in lieu of acquisition and installation of approved artworks in a development with expenditures restricted to acquisition, installation, maintenance and repair of artworks at approved sites. South Coast Air Quality Fund — To account for contributions from the South Coast Air Quality Management District. Use is limited to reduction and control of airborne pollutants. AB 939 Fund — To account for the State mandated program to reduce waste sent to the landfills through recycling efforts. Development Agreement Fund — To account for the proceeds of development agreement revenues collected and the related expenditures in accordance with State requirements. Law Enforcement — To account for law enforcement grants. 78 Proposition 1 B - To account for the revenues and expenditures related to Proposition 1 B monies. Justice Assistance Grant — To account for Federal Bureau of Justice Block Grant program grant funds, which are used to reduce crime and improve public safety. Measure A - To account for the revenues and expenditures related to Measure A monies. Transportation Uniform Mitigation Fee - To account for the revenues and expenditures related to Transportation Uniform Mitigation Fee monies. CAPITAL PROJECT FUNDS Capital projects funds account for the financial resources to be used for the acquisition, construction or improvements of major capital facilities and infrastructure. Infrastructure Fund - To account for the accumulation of resources provided through developer fees for the acquisition, construction or improvement of the City's infrastructure, prior to adoption of the new Developer Impact Fee Structure on August 16, 1999. This fund accounts for all developer resources received prior to this date, and is budgeted by the Council through adoption of the annual capital improvement program budget. Transportation Fund, Parks and Recreations Fund, Library Development Fund, Community Center Fund, Street Facility Fund, Park Facility Fund, Fire Facility Fund — To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the City's infrastructure. The Developer Impact Fee was adopted by the City Council on August 16, 1999. Eight new funds have been established to account for the specific impact areas of these fees, and are budgeted by the Council through adoption of the annual Capital Improvement Program budget. DEBT SERVICE FUNDS Debt Service Funds are used to account for the accumulation of resources for, and the payment of, governmental long-term debt principal and interest. La Quinta Financing Authority Fund — To account for rental activity for the Civic Center and rental income used to pay the Financing Authority Civic Center and 2004 Local Agency Revenue Bond debt obligations. 79 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 Special Revenue Funds Federal Gas Tax Library Assistance SLEBG Assets: Pooled cash and investments $ 927,257 $ 2,824,332 $ - $ 63,881 Receivables: Accrued interest 563 3,593 - 66 Prepaid costs - - - - Due from other governments 132,398 818,738 - - Total Assets $ 1,060,218 $ 3,646,663 $ - $ 63,947 Liabilities, and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Unearned revenues - - - - Deposits payable - - - - Due to other governments - - - - Due to other funds - - 12,914 - Advances from other funds - - - - Total Liabilities - - 12,914 - Fund Balances: Restricted for: Planning and development projects - - - - Public safety - - - 63,947 Community services - 3,646,663 - - Public works 1,060,218 - - - Capital Projects - - - - Unassigned - - (12,914) - Total Fund Balances 1,060,218 3,646,663 (12,914) 63,947 Total Liabilities and Fund Balances $ 1,060,218 $ 3,646,663 $ - $ 63,947 :1 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 (CONTINUED) 81 Special Revenue Funds Lighting and Indian Gaming Landscaping Quimby Public Safety Assets: Pooled cash and investments $ 39,230 $ - $ 8,126,156 $ 31,328 Receivables: Accrued interest 16 - 8,811 34 Prepaid costs - - - - Due from other governments - 18,057 - - Total Assets $ 39,246 $ 18,057 $ 8,134,967 $ 31,362 Liabilities, and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Unearned revenues 1,220 - - - Deposits payable - - - - Due to other governments - - - - Due to other funds - 11,716 - - Advances from other funds - - - - Total Liabilities 1,220 11,716 - - Fund Balances: Restricted for: Planning and development projects - - - - Public safety - - - 31,362 Community services - - 8,134,967 - Public works 38,026 6,341 - - Capital Projects - - - - Unassigned - - - - Total Fund Balances 38,026 6,341 8,134,967 31,362 Total Liabilities and Fund Balances $ 39,246 $ 18,057 $ 8,134,967 $ 31,362 81 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 Special Revenue Funds Art in Public South Coast Development Places Air Quality AB 939 Agreement Assets: Pooled cash and investments $ 680,508 $ 113,010 $ 773,664 $ 217,820 Receivables: Accrued interest 781 120 888 250 Prepaid costs - - - - Due from other governments - - - - Total Assets $ 681,289 $ 113,130 $ 774,552 $ 218,070 Liabilities, and Fund Balances: Liabilities: Accounts payable $ 3,403 $ 7,336 $ 18 $ - Unearned revenues - - - - Deposits payable - - - 217,943 Due to other governments - - - - Due to other funds - - - - Advances from other funds - - - - Total Liabilities 3,403 7,336 18 217,943 Fund Balances: Restricted for: Planning and development projects - 105,794 774,534 - Public safety - - - - Community services 677,886 - - - Public works - - - - Capital Projects - - - 127 Unassigned - - - - Total Fund Balances 677,886 105,794 774,534 127 Total Liabilities and Fund Balances $ 681,289 $ 113,130 $ 774,552 $ 218,070 82 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 (CONTINUED) Special Revenue Funds Justice Law Proposition Assistance Enforcement 1B Grant Measure A Assets: Pooled cash and investments Receivables: Accrued interest Prepaid costs Due from other governments Total Assets Liabilities, and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Fund Balances: Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Unassigned Total Fund Balances Total Liabilities and Fund Balances $ 157,293 $ - $ 2,648 $ 349,763 189 - - 379 28 - - - 21,130 - - 116,186 $ 178,640 $ - $ 2,648 $ 466,328 $ 2,323 $ - $ - $ - 2,323 - - - 176,317 - 2,648 - - - - 466,328 176,317 - 2,648 466,328 $ 178,640 $ - $ 2,648 $ 466,328 83 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 Assets: Pooled cash and investments Receivables: Accrued interest Prepaid costs Due from other governments Total Assets Liabilities, and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Fund Balances: Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Unassigned Total Fund Balances Total Liabilities and Fund Balances Special Revenue Funds Transportation Uniform Capital Projects Funds Parks and Infrastructure Transportation Recreation $ 213,506 $ 23,181 $ 1,517,790 $ - 88 27 1,692 - $ 213,594 $ 23,208 $ 1,519,482 $ - $ 213,344 $ - $ - $ - - - - 469,486 213,344 - - 469,486 250 - - - - 23,208 1,519,482 - - - - (469,486) 250 23,208 1,519,482 (469,486) $ 213,594 $ 23,208 $ 1,519,482 $ - 84 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 (CONTINUED) 85 Capital Projects Funds Library Community Development Center Street Facility Park Facility Assets: Pooled cash and investments $ - $ 46,379 $ - $ - Receivables: Accrued interest - 972 - - Prepaid costs - - - - Due from other governments - - - - Total Assets $ - $ 47,351 $ - $ - Liabilities, and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Unearned revenues - - - - Deposits payable - - - - Due to other governments 1,750,152 - - - Due to other funds - - - - Advances from other funds - - 1,966,991 - Total Liabilities 1,750,152 - 1,966,991 - Fund Balances: Restricted for: Planning and development projects - - - - Public safety - - - - Community services - - - - Public works - - - - Capital Projects - 47,351 - - Unassigned (1,750,152) - (1,966,991) - Total Fund Balances (1,750,152) 47,351 (1,966,991) - Total Liabilities and Fund Balances $ - $ 47,351 $ - $ - 85 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 :. Capital Debt Service Projects Funds Funds Total Financing Governmental Fire Facility Authority Funds Assets: Pooled cash and investments $ - $ - $ 16,107,746 Receivables: Accrued interest - - 18,469 Prepaid costs - - 28 Due from other governments - - 1,106,509 Total Assets $ - $ - $ 17,232,752 Liabilities, and Fund Balances: Liabilities: Accounts payable $ - $ - $ 226,424 Unearned revenues - - 1,220 Deposits payable - - 217,943 Due to other governments - - 2,219,638 Due to other funds - 867 25,497 Advances from other funds 766,639 - 2,733,630 Total Liabilities 766,639 867 5,424,352 Fund Balances: Restricted for: Planning and development projects - - 880,328 Public safety - - 274,274 Community services - - 12,459,516 Public works - - 1,571,163 Capital Projects - - 1,590,168 Unassigned (766,639) (867) (4,967,049) Total Fund Balances (766,639) (867) 11,808,400 Total Liabilities and Fund Balances $ - $ - $ 17,232,752 :. THIS PAGE INTENTIONALLY LEFT BLANK ,m CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Federal Gas Tax Library Assistance SLEBG 1,384,827 2,234,832 169,126 108,333 1,102 10,299 - 163 1,385,929 2,245,131 169,126 108,496 - 1,220,253 - - 206,725 - - - 206,725 1,220,253 - - 1,179,204 1,024,878 169,126 108,496 105 - - - (248,698) (97,098) (169,126) (91,494) (248,593) (97,098) (169,126) (91,494) 930,611 927,780 - 17,002 129,607 2,718,883 (12,914) 46,945 $ 1,060,218 $ 3,646,663 $ (12,914) $ 63,947 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 (CONTINUED) Special Revenue Funds Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year 960,000 - - 38,026 (8,819) 941,395 92 70,354 2,000 (1,118,651) - - - (1,048,297) 2,000 38,026 (8,819) (106,902) 2,092 - 15,160 8,241,869 29,270 $ 38,026 $ 6,341 $ 8,134,967 $ 31,362 061 Lighting and Indian Gaming Landscaping Quimby Public Safety Revenues: Taxes $ - $ - $ - $ - Assessments - 951,181 - - Intergovernmental 38,026 - - - Use of money and property - - 23,635 92 Developer participation - - 917,760 - Miscellaneous - - - - Total Revenues 38,026 951,181 941,395 92 Expenditures: Current: General government - - - - Public safety - - - - Planning and development - - - - Community services - - - - Public works - 960,000 - - Capital outlay - - - - Debt service: Principal retirement - - - - Interest and fiscal charges - - - - Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year 960,000 - - 38,026 (8,819) 941,395 92 70,354 2,000 (1,118,651) - - - (1,048,297) 2,000 38,026 (8,819) (106,902) 2,092 - 15,160 8,241,869 29,270 $ 38,026 $ 6,341 $ 8,134,967 $ 31,362 061 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Art in Public South Coast Development Places Air Quality AB 939 Agreement - 47,077 - - 2,072 318 2,477 44 94,118 - - - 3,000 - - - 99,190 47,395 2,477 44 - 31,079 78,782 - 8,898 - - - 49,495 - - - 58,393 31,079 78,782 - 40,797 16,316 (76,305) 44 (28,600) - - - (28,600) - - - 12,197 16,316 (76,305) 44 665,689 89,478 850,839 83 $ 677,886 $ 105,794 $ 774,534 $ 127 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 (CONTINUED) Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Justice Law Proposition Assistance Enforcement 1 B Grant Measure A $ - $ - $ - $ 632,843 51,633 - 9,002 - 514 - - 664 52,147 - 9,002 633,507 58,583 - - - 58,583 - - - (6,436) - 9,002 633,507 (105) (6,354) (285,146) (105) (6,354) (285,146) (6,436) (105) 2,648 348,361 182,753 105 - 117,967 $ 176,317 $ - $ 2,648 $ 466,328 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 Special Revenue Funds Capital Projects Funds Transportation Uniform Parks and Mitigation Fee Infrastructure Transportation Recreation Revenues: Taxes $ - $ - $ - $ - Assessments - - - - Intergovernmental - - - Use of money and property 230 72 3,532 - Developer participation - - 947,268 585,784 Miscellaneous - - - - Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year 230 72 950,800 585,784 35,194 3,230 35,194 3,230 230 72 915,606 582,554 448,291 - - - 448,291 - 230 72 1,363,897 582,554 20 23,136 155,585 (1,052,040) $ 250 $ 23,208 $ 1,519,482 $ (469,486) CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 (CONTINUED) Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Capital Projects Funds Library Community Development Center Street Facility Park Facility - 3,070 - - 98,332 36,695 38,919 11,503 98,332 39,765 38,919 11,503 7,428 - 8,229 - 7,428 - 8,229 - 90,904 39,765 30,690 11,503 11,503 - (1,206,191) - (11,503) - (1,206,191) 11,503 (11,503) 90,904 (1,166,426) 42,193 - (1,841,056) 1,213,777 (2,009,184) - $ (1,750,152) $ 47,351 $ (1,966,991) $ - CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Capital Debt Service Projects Funds Funds Total Financing Governmental Fire Facility Authority Funds $ - $ - $ 632,843 951,181 4,042,856 671,351 719,635 104,615 - 2,834,994 - - 3,000 104,615 671,351 9,184,509 3,101 3,101 - 58,583 - - 109,861 - - 1,229,151 - - 1,166,725 - - 49,495 - 495,000 495,000 3,402 176,351 233,834 3,402 674,452 3,345,750 101,213 (3,101) 5,838,759 532,253 (3,262,966) - - (2,730,713) 101,213 (3,101) 3,108,046 (867,852) 2,234 8,700,354 $ (766,639) $ (867) $ 11,808,400 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STATE GAS TAX YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 129,607 $ 129,607 $ 129,607 $ - 1,293,500 1,293,500 1,384,827 91,327 200 200 1,102 902 - - 105 105 1,423, 307 1,423,307 1,515,641 92,334 1,293,700 356,693 206,725 149,968 - - 248,698 (248,698) 1,293,700 356,693 455,423 (98,730) Budgetary Fund Balance, June 30 $ 129,607 $ 1,066,614 $ 1,060,218 $ (6,396) 95 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY YEAR ENDED JUNE 30, 2014 Variance with S• Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 2,718,883 $ 2,718,883 $ 2,718,883 $ - Resources (Inflows): Intergovernmental 2,000,000 2,000,000 2,234,832 234,832 Use of money and property 6,000 6,000 10,299 4,299 Amounts Available for Appropriations 4,724,883 4,724,883 4,964,014 239,131 Charges to Appropriation (Outflow): Community services 1,718,500 1,718,500 1,220,253 498,247 Transfers out 50,000 578,649 97,098 481,551 Total Charges to Appropriations 1,768,500 2,297,149 1,317,351 979,798 Budgetary Fund Balance, June 30 $ 2,956,383 $ 2,427,734 $ 3,646,663 $ 1,218,929 S• CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FEDERAL ASSISTANCE YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (12,914) $ (12,914) $ (12,914) $ - - 164,845 169,126 4,281 (12,914) 151,931 156,212 4,281 -_ 352,645 169,126 183,519 352,645 169,126 183,519 Budgetary Fund Balance, June 30 $ (12,914) $ (200,714) $ (12,914) $ 187,800 97 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SLEBG YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 46,945 $ 46,945 $ 46,945 $ - 100,000 145,290 108,333 (36,957) 100,000 145,290 91,494 53,796 3: CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIGHTING AND LANDSCAPING YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Assessments Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 15,160 $ 15,160 $ 15,160 $ - 960,000 960,000 951,181 (8,819) 975,160 975,160 966,341 (8,819) 960,000 960,000 960,000 960,000 960,000 960,000 $ 15,160 $ 15,160 6,341 $ (8,819) CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE QUIMBY YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with 8,438,866 1,118, 651 7,320,215 Budgetary Fund Balance, June 30 $ 8,261,869 $ (176,997) $ 8,134,967 $ 8,311,964 100 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 8,241,869 $ 8,241,869 $ 8,241,869 $ - 20,000 20,000 23,635 3,635 - - 917,760 917,760 - - 70,354 70,354 8,261,869 8,261,869 9,253,618 991,749 8,438,866 1,118, 651 7,320,215 Budgetary Fund Balance, June 30 $ 8,261,869 $ (176,997) $ 8,134,967 $ 8,311,964 100 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 101 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 29,270 $ 29,270 $ 29,270 $ - 100 100 92 (8) 2,000 2,000 2,000 - 31,370 31,370 31,362 (8) - 2,000 - 2,000 101 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE ART IN PUBLIC PLACES YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Community services Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 102 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 665,689 $ 665,689 $ 665,689 $ - 3,500 3,500 2,072 (1,428) 50,000 50,000 94,118 44,118 - 3,000 3,000 - 719,189 722,189 764,879 42,690 24,700 24,700 8,898 15,802 105,000 105,000 49,495 55,505 - 228,600 28,600 200,000 129,700 358,300 86,993 271,307 $ 589,489 $ 363,889 $ 677,886 $ 313,997 102 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SOUTH COAST AIR QUALITY YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Planning and development Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 89,478 $ 89,478 $ 89,478 $ - 40,200 40,200 47,077 6,877 300 300 318 18 129,978 129,978 136,873 6,895 40,200 40,200 31,079 9,121 40,200 40,200 31,079 9,121 Budgetary Fund Balance, June 30 $ 89,778 $ 89,778 $ 105,794 $ 16,016 103 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE AB 939 YEAR ENDED JUNE 30, 2014 Variance with 104 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 850,839 $ 850,839 $ 850,839 $ - Resources (Inflows): Use of money and property 3,000 3,000 2,477 (523) Amounts Available for Appropriations 853,839 853,839 853,316 (523) Charges to Appropriation (Outflow): Planning and development 101,000 103,100 78,782 24,318 Transfers out - 199,490 - 199,490 Total Charges to Appropriations 101,000 302,590 78,782 223,808 Budgetary Fund Balance, June 30 $ 752,839 $ 551,249 $ 774,534 $ 223,285 104 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LAW ENFORCEMENT YEAR ENDED JUNE 30, 2014 Variance with 105 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 182,753 $ 182,753 $ 182,753 $ - Resources (Inflows): Intergovernmental - 47,958 51,633 3,675 Use of money and property - 500 514 14 Amounts Available for Appropriations 182,753 231,211 234,900 3,689 Charges to Appropriation (Outflow): Public safety - 58,400 58,583 (183) Total Charges to Appropriations - 58,400 58,583 (183) Budgetary Fund Balance, June 30 $ 182,753 $ 172,811 $ 176,317 $ 3,506 105 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE JUSTICE ASSISTANCE GRANT YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 10,000 12,542 9,002 (3,540) 10,000 12,542 9,002 (3,540) - 12,542 6,354 6,188 - 12,542 6,354 6,188 $ 10,000 $ - $ 2,648 $ 2,648 106 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE MEASURE A YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 117,967 $ 117,967 $ 117,967 $ - 693,500 693,500 632,843 (60,657) 235,000 804,000 285,146 518,854 107 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Contributions Developer participation Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (90,661) $ (90,661) $ (90,661) $ - - 23,252,713 3,525,562 (19,727,151) - - 838,972 838,972 - 394,090 - (394,090) 400,000 58,989,230 3,551,522 (55,437,708) 309,339 82,545,372 7,825,395 (74,719,977) - 82,661,034 7,916,318 74,744,716 - 82,661,034 7,916,318 74,744,716 Budgetary Fund Balance, June 30 $ 309,339 $ (115,662) $ (90,923) $ 24,739 108 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CIVIC CENTER YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Debt service: Interest and fiscal charges Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (7,323,569) $ (7,305,489) $(7,305,489) $ - 90,000 90,000 224,260 134,260 (7,233,569) (7,215,489) (7,081,229) 134,260 201,400 201,400 201,400 28,800 28,800 29,861 (1,061) 230,200 230,200 231,261 (1,061) Budgetary Fund Balance, June 30 $ (7,463,769) $ (7,445,689) $(7,312,490) $ 133,199 109 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INFRASTRUCTURE YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 23,136 $ 23,136 $ 23,136 $ - 72 72 23,136 23,136 23,208 72 $ 23,136 $ 23,136 $ 23,208 $ 72 110 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE TRANSPORTATION YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 111 9,300 9,300 35,194 9,300 35,194 (25,894) (25,894) $ 1,005,497 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,532,068 $ 155,585 $ 155,585 $ - 7,700 7,700 3,532 (4,168) 360,000 360,000 947,268 587,268 - - 448,291 448,291 1,899,768 523,285 1,554,676 1,031,391 111 9,300 9,300 35,194 9,300 35,194 (25,894) (25,894) $ 1,005,497 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATION YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (1,086,122) $ (1,052,040) $(1,052,040) $ - 90,000 90,000 585,784 495,784 (996,122) (962,040) (466,256) 495,784 4,400 4,400 3,230 1,170 4,400 4,400 3,230 1,170 Budgetary Fund Balance, June 30 $ (1,000,522) $ (966,440) $ (469,486) $ 496,954 112 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY DEVELOPMENT YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (1,838,208) $ (1,841,056) $(1,841,056) $ - 30,000 30,000 98,332 68,332 (1,808,208) (1,811,056) (1,742,724) 68,332 9,500 9,500 7,428 2,072 9,500 9,500 7,428 2,072 Budgetary Fund Balance, June 30 $ (1,817,708) $ (1,820,556) $(1,750,152) $ 70,404 113 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE COMMUNITY CENTER YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,210,736 $ 1,213,777 $ 1,213,777 $ - 4,500 4,500 3,070 (1,430) 6,900 6,900 36,695 29,795 1,222,136 1,225,177 1,253,542 28,365 1,206,200 1,206,191 1,206,191 1,206, 200 1,206,191 1,206,191 Budgetary Fund Balance, June 30 $ 15,936 $ 18,986 $ 47,351 $ 28,365 114 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STREET FACILITY YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ (2,014,572) $ (2,009,184) Variance with Final Budget Actual Positive Amounts (Negative) $(2,009,184) $ - 15,000 15,000 38,919 23,919 2,200 2,200 11,503 9,303 (1,997,372) (1,991,984) (1,958,762) 33,222 10,000 10,000 8,229 1,771 10,000 10,000 8,229 1,771 $ (2,007,372) $ (2,001,984) $(1,966,991) $ 34,993 115 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARK FACILITY YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 2,200 2,200 11,503 9,303 2,200 2,200 11,503 9,303 2,200 2,200 11,503 (9,303) 2,200 2,200 11,503 (9,303) Budgetary Fund Balance, June 30 116 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FIRE FACILITY YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (879,742) $ (867,852) $ (867,852) $ - 38,000 38,000 104,615 66,615 (841,742) (829,852) (763,237) 66,615 3,500 3,500 3,402 98 3,500 3,500 3,402 98 Budgetary Fund Balance, June 30 $ (845,242) $ (833,352) $ (766,639) $ 66,713 117 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FINANCING AUTHORITY YEAR ENDED JUNE 30, 2014 Budgetary Fund Balance, July 1 Resources (Inflows): Charges for services Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 118 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,534 $ 2,234 $ 2,234 $ - 5,000 5,000 - (5,000) 673,400 673,400 671,351 (2,049) 679,934 680,634 673,585 (7,049) 6,000 6,000 3,101 2,899 495,000 495,000 495,000 - 176,400 176,400 176,351 49 677,400 677,400 674,452 2,948 $ 2,534 $ 3,234 $ (867) $ (4,101) 118 INTERNAL SERVICE FUNDS Internal service funds are used to account for activities involved in rendering services to departments within the City. Costs of materials and services used are accumulated in this fund and charged to the user departments as such goods are delivered or services rendered. The City of La Quinta has the following Internal Service Funds: Equipment Replacement Fund — used to account for the ultimate replacement of City owned and operated vehicles and equipment Information Technology Fund — used to account for the purchase and replacement of information systems. Park Equipment and Facilities Fund — used to account for the purchase and replacement of City owned park facility infrastructure. 119 CITY OF LA QUINTA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2014 Assets: Current: Cash and investments Receivables: Accrued interest Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Accrued compensated absences Capital leases Total Current Liabilities Noncurrent: Accrued compensated absences Capital leases Total Noncurrent Liabilities Total Liabilities Net Position: Net investment in capital assets Unrestricted Total Net Position Total Liabilities and Net Position Governmental Activities - Internal Service Funds Park Equipment Information Equipment Replacement Technology and Facilities Totals $ 2,411,907 $ 869,730 $ 1,630,555 $ 4,912,192 2,783 1,039 1,822 5,644 2,414,690 870,769 1,632,377 4,917,836 541,968 606,257 15,084,800 16,233,025 541,968 606,257 15,084,800 16,233,025 $ 2,956,658 $ 1,477,026 $ 16,717,177 $ 21,150,861 $ 12,085 $ 120,415 $ 12,539 $ 145,039 - 4,703 - 4,703 7,684 - 7,684 12,085 153,437 12,539 178,061 5,139 - 5,139 49,301 - 49,301 - 54,440 - 54,440 12,085 207,877 12,539 232,501 541,968 536,321 15,084,800 16,163,089 2,944,573 1,269,149 16,704,638 20,918,360 $ 2,956,658 $ 1,477,026 $ 16,717,177 $ 21,150,861 120 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2014 Governmental Activities - Internal Service Funds Operating Revenues: Sales and service charges Total Operating Revenues Operating Expenses: Administration and general Fuel and oil Maintenance and parts Contract services Software and supplies Depreciation expense Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Gain (loss) on disposal of capital assets Total Nonoperating Revenues(Expenses) Income (Loss) Before Transfers Transfers out Changes in Net Position Net Position: Beginning of Year End of Fiscal Year Park Equipment Information Equipment and Replacement Technology Facilities Totals $ 562,200 $ 497,800 $ 502,500 $ 1,562,500 562,200 497,800 502,500 1,562,500 - 125,148 - 125,148 78,995 - - 78,995 111,332 - - 111,332 9,920 151,451 48,417 209,788 - 268,378 - 268,378 132,986 136,942 526,123 796,051 333,233 681,919 574,540 1,589,692 228,967 (184,119) (72,040) (27,192) 7,734 1,390 2,649 (6,613) 4,926 15,309 - (5,223) 9,124 (3,964) 4,926 10,086 238,091 (188,083) (67,114) (17,106) (366,084) (127,993) (188,083) (366,084) (67,114) (383,190) 3,072,566 1,457,232 16,771,752 21,301,550 $ 2,944,573 $ 1,269,149 $ 16,704,638 $ 20,918,360 121 CITY OF LA QUINTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2014 Cash Flows from Operating Activities: Cash received from customers and users Cash received from/(paid to) interfund service provided Cash paid to suppliers for goods and services Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers out Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Proceeds from capital debt Acquisition and construction of capital assets Capital lease payment Proceeds from sales of capital assets Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in compensated absences Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Increase in Capital Lease Governmental Activities - Internal Service Funds Equipment Information Replacement Technology Park Equipment and Facilities Totals $ 562,200 $ 497,800 $ 502,500 $ 1,562,500 (201,633) (343,949) (35,878) (581,460) - (120,410) - (120,410) 360,567 33,441 466,622 860,630 (366,084) - - (366,084) (366,084) - - (366,084) 90,629 90,629 (28,858) (558,286) - (587,144) - (20,693) - (20,693) 1,390 - - 1,390 (27,468) (488,350) - (515,818) 7,133 2,780 4,119 14,032 7,133 2,780 4,119 14,032 (25,852) (452,129) 470,741 (7,240) 2,437,759 1,321,859 1,159,814 4,919,432 $ 2,411,907 $ 869,730 $ 1,630,555 $ 4,912,192 $ 228,967 $ (184,119) $ (72,040) $ (27,192) 132,986 136,942 526,123 796,051 (1,386) 75,880 12,539 87,033 - 241 - 241 - 4,497 - 4,497 131,600 217,560 538,662 887,822 $ 360,567 $ 33,441 $ 466,622 $ 860,630 $ - $ 90,629 $ - $ 90,629 122 AGENCYFUNDS Agency funds are used to account for assets held by the City as an agent for individual, private organizations and other governmental units. The agency funds and their purposes are as follows: The City of La Quinta has the following agency funds: Assessment District No. 97-1 and 2001-1 — To account for assessments paid to the City for debt service payments on bond issues used to finance sewer improvements. 123 CITY OF LA QUINTA COMBINING STATEMENT OF NET POSITION ALL AGENCY FUNDS JUNE 30, 2014 Liabilities: Deposits payable Total Liabilities 124 $ 146,834 $ 136,927 $ 283,761 $ 146,834 $ 136,927 $ 283,761 Assessment Assessment District No. 97- District No. 1 2001-1 Totals Assets: Pooled cash and investments $ 145,461 $ 119,464 $ 264,925 Receivables: Taxes 1,216 17,326 18,542 Accrued interest 157 137 294 Total Assets $ 146,834 $ 136,927 $ 283,761 Liabilities: Deposits payable Total Liabilities 124 $ 146,834 $ 136,927 $ 283,761 $ 146,834 $ 136,927 $ 283,761 CITY OF LA QUINTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2014 Assessment District No. 2001-1 $ Balance $ 492,905 $ 817,061 $ Balance Assets: 7/1/2013 Additions Deductions 6/30/2014 Assessment District No. 97-1 Pooled cash and investments $ 445,489 $ 236,765 $ 562,790 $ Assets: Receivables: 502 932 1,140 Pooled cash and investments $ 143,592 $ 256,140 $ 254,271 $ 145,461 Receivables: Accrued interest 381 760 1,004 Taxes Total Assets 987 456,496 3,190 276,103 2,961 595,672 1,216 Accrued interest Liabilities: 121 601,196 172 2,285,594 136 2,603,029 157 Total Assets $ 144,700 $ 259,502 $ 257,368 $ 146,834 Liabilities: Total Liabilities $ 456,496 $ 1,788,681 $ 2,108,250 $ Deposits payable $ 144,700 $ 496,913 $ 494,779 $ 146,834 Total Liabilities $ 144,700 $ 496,913 $ 494,779 $ 146,834 Assessment District No. 2001-1 $ 589,081 $ 492,905 $ 817,061 $ 264,925 Assets: Pooled cash and investments $ 445,489 $ 236,765 $ 562,790 $ 119,464 Receivables: 502 932 1,140 294 Taxes $ 10,626 $ 38,578 $ 31,878 $ 17,326 Accrued interest 381 760 1,004 137 Total Assets $ 456,496 $ 276,103 $ 595,672 $ 136,927 Liabilities: $ 601,196 $ 2,285,594 $ 2,603,029 $ 283,761 Deposits payable $ 456,496 $ 1,788,681 $ 2,108,250 $ 136,927 Total Liabilities $ 456,496 $ 1,788,681 $ 2,108,250 $ 136,927 Totals - All Agency Funds Assets: Pooled cash and investments $ 589,081 $ 492,905 $ 817,061 $ 264,925 Receivables: Taxes 11,613 41,768 34,839 18,542 Accrued interest 502 932 1,140 294 Total Assets $ 601,196 $ 535,605 $ 853,040 $ 283,761 Liabilities: Deposits payable $ 601,196 $ 2,285,594 $ 2,603,029 $ 283,761 Total Liabilities $ 601,196 $ 2,285,594 $ 2,603,029 $ 283,761 125 THIS PAGE INTENTIONALLY LEFT BLANK 126 STATISTICAL SECTION This part of the City of La Quinta's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Financial Trends Page These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. 128 Revenue Capacity These schedules obtain information to help the reader assess the government's most significant local revenue source, the property tax. 141 Debt Capacity These schedules present information to help the reader assess the ability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. 146 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities that take place. 153 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. 156 127 CITY OF LA QUINTA Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) Business -type activities Net investment in capital assets $ 41,300,846 $ 42,075,172 $ 42,692,025 $ 42,778,015 $ 42,536,608 Restricted - - - - - Unrestricted (626,658) (1,665,646) (2,385,462) (3,109,524) (3,937,454) Total business -type activities Net Position $ 40,674,188 $ 40,409,526 $ 40,306,563 $ 39,668,491 $ 38,599,154 Primary government Net investment in capital assets $ 274,661,975 $ 295,634,289 $ Fiscal Year $ 385,797,343 $ 366,206,563 Restricted 2005 2006 2007 2008 2009 Governmental activities: 59,734,413 84,463,730 104,554,115 76,532,578 92,717,527 Net investment in capital assets $ 233,361,129 $ 253,559,117 $ 300,220,033 $ 343,019,328 $ 323,669,955 Restricted 43,421,857 65,159,623 49,277,895 86,041,189 105,297,168 Unrestricted 60,361,071 86,129,376 106,939,577 79,642,102 96,654,981 Total governmental activities Net Position $ 337,144,057 $ 404,848,116 $ 456,437,505 $ 508,702,619 $ 525,622,104 Business -type activities Net investment in capital assets $ 41,300,846 $ 42,075,172 $ 42,692,025 $ 42,778,015 $ 42,536,608 Restricted - - - - - Unrestricted (626,658) (1,665,646) (2,385,462) (3,109,524) (3,937,454) Total business -type activities Net Position $ 40,674,188 $ 40,409,526 $ 40,306,563 $ 39,668,491 $ 38,599,154 Primary government Net investment in capital assets $ 274,661,975 $ 295,634,289 $ 342,912,058 $ 385,797,343 $ 366,206,563 Restricted 43,421,857 65,159,623 49,277,895 86,041,189 105,297,168 Unrestricted 59,734,413 84,463,730 104,554,115 76,532,578 92,717,527 Total primary government Net Position $ 377,818,245 $ 445,257,642 $ 496,744,068 $ 548,371,110 $ 564,221,258 Source: City of La Quinta 128 TABLE 1 2010 2011 2012 2013 2014 $ 336,459,272 $ 276,787,752 $ 534,388,479 $ 529,681,342 $ 527,614,666 96,332,870 107,042,126 26,585,382 49,598,397 53,669,248 77,187,433 97,009,428 89,832,811 83,399,745 83,907,046 $ 509,979,575 $ 480,839,306 $ 650,806,672 $ 662,679,484 $ 665,190,960 $ 42,879,482 $ 42,491,051 $ 42,105,683 $ 41,741,443 $ 41,354,565 (4,863,848) (4,918,951) (4,745,892) (4,750,604) (4,674,666) $ 38,015,634 $ 37,572,100 $ 37,359,791 $ 36,990,839 $ 36,679,899 $ 379,338,754 $ 319,278,803 $ 576,494,162 $ 571,422,785 $ 568,969,231 96,332,870 107,042,126 26,585,382 49,598,397 53,669,248 72,323,585 92,090,477 85,086,919 78,649,141 79,232,380 $ 547,995,209 $ 518,411,406 $ 688,166,463 $ 699,670,323 $ 701,870,859 129 Expenses: Governmental activities: General government Public safety Planning and development Community services Public works Contribution to other agencies Interest on long-term debt Total governmental activities expenses Business -type activities: Golf Course Total business -type activities expenses Total primary government expenses Program revenues: Governmental activities: Charges for services: General government Public safety Planning and development Community services Public works Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business -type activities: Charges for services: Golf Course Capital grants and contributions Total business -type activities program revenues Total primary government program revenues Net revenues (expenses): Governmental activities Business -type activities Total net revenues (expenses) General revenues and other changes in Net Position: Governmental activities: Taxes: Property taxes Tax increment Transient occupancy taxes Sales tax Franchise taxes Business license taxes Othertaxes Motor vehicle in lieu, unrestricted Investment income Gain (loss) on sale of capital assets Miscellaneous Extraordinary gain/loss on dissolution of RDA Transfers Total governmental activities Business -type activities: Investment income Gain (loss) on sale of capital assets Miscellaneous Transfers Total business -type activities Total primary government Changes in Net Position Governmental activities Business -type activities Total primary government The transfer was for land & golf course improvements transferred to the Enterprise Fund. Source: City of La Quinta CITY OF LA QUINTA Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year 2005 2006 2007 2008 2009 $ 3,595,906 $ 4,229,871 $ 6,284,342 $ 6,953,073 $ 7,836,146 8,512,875 9,065,244 12,724,100 13,472,036 19,736,941 5,752,239 5,906,915 7,736,520 35,323,858 7,317,689 1,157,141 1,426,033 4,299,453 5,797,116 14,808,850 9,101,582 10,006,335 10,511,874 11,097,526 11,100,833 15,265,051 15,494,656 15,163,422 15,522,441 15,631,438 43,384,794 46,129,054 56,719,711 88,166,050 76,431,897 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 45,262,085 50,652,200 61,239,884 92,927,631 80,872,443 (41,459,643) ° (1,137,203) ° (874,645) 445,663 717,849 60,530 8,328 25,053 4,438,115 4,168,206 2,659,515 2,050,492 1,373,952 754,938 1,873,676 169,643 134,211 138,391 252,501 428,947 387,065 374,092 275,178 2,815,703 3,021,379 2,244,156 1,900,437 1,308,702 1,935,578 3,603,173 3,796,495 5,905,664 10,725,280 18,591,423 33,918,901 17,601,131 50,090,419 10,647,270 29,233,921 47,732,131 26,918,535 60,463,643 24,493,826 (1,069,337) $ 39,173,451 $ 67,440,141 $ 50,786,397 1,091,836 3,120,728 3,540,748 3,814,233 3,368,135 352,687 1,091,836 3,120,728 3,540,748 4,166,920 3,368,135 30,325,757 50,852,859 30,459,283 64,630,563 27,861,961 (14,150,873) 1,603,077 (29,801,176) (27,702,407) (51,938,071) (785,455) (1,402,418) (979,425) (594,661) (1,072,411) (14,936,328) 200,659 (30,780,601) (28,297,068) (53,010,482) 2,579,245 3,679,079 4,999,051 6,014,305 6,653,583 24,443,112 35,168,329 42,583,031 42,114,893 36,702,197 4,831,338 5,437,238 5,448,361 5,327,203 4,480,467 6,773,566 7,613,075 8,896,716 8,492,213 7,279,513 1,185,087 1,044,470 1,259,985 1,748,082 1,533,249 251,618 276,917 307,032 317,011 285,304 1,141,177 1,049,701 872,753 641,705 455,089 2,453,642 2,740,233 3,291,055 3,803,647 3,940,801 4,336,050 6,319,502 11,854,951 10,230,489 7,387,244 3,717,470 1,967,292 - 57,346 21,542 2,397,474 1,943,093 2,052,246 1,220,627 118,567 (41,459,643) ° (1,137,203) ° (874,645) 12,650,136 66,101,726 80,690,536 79,967,521 68,857,556 - 553 1,817 4,310 3,074 - - - (47,721) - 41,459,643 ° 1,137,203 a 874,645 41,459,643 1,137,756 876,462 (43,411) 3,074 54,109,779 67,239,482 81,566,998 79,924,110 68,860,630 (1,500,737) 67,704,803 50,889,360 52,265,114 16,919,485 40,674,188 (264,662) (102,963) (638,072) (1,069,337) $ 39,173,451 $ 67,440,141 $ 50,786,397 $ 51,627,042 $ 15,850,148 130 TABLE 2 2010 2011 2012 2013 2014 $ 34,287,068 $ 11,283,358 $ 6,183,712 $ 4,511,023 $ 4,830,239 21,274,519 21,070,458 20,815,454 21,047,691 21,169,423 5,173,326 18,715,283 6,378,352 2,274,541 3,098,015 15,923,380 4,735,964 5,093,402 4,986,104 4,130,085 12,326,726 10,757,279 13,288,521 11,803,133 12,610,994 - 31,324,064 - - - 15,330,603 14,353,359 3,021,496 447,048 405,977 104,315,622 112,239,765 54,780,937 45,069,540 46,244,733 4,169,768 4,202,274 4,085,282 4,208,855 4,971,977 4,169,768 4,202,274 4,085,282 4,208,855 4,971,977 108,485,390 116,442,039 58,866,219 49,278,395 51,216,710 (500,000) 21,439 47,696 86,869 38,812 71,042 1,100,491 1,044,399 1,020,822 927,604 1,412,819 69,391 74,471 68,470 112,695 595,980 250,557 210,151 247,397 245,392 1,224,719 1,124, 647 1,086,771 1,080,744 1,209,438 1,195, 703 15,363,650 13,152,942 11,289,673 28,068,940 14,587,153 5,974,311 3,157,828 9,990,793 4,115,238 3,981,286 23,904,486 18,774,258 23,784,768 34,718,119 23,068,702 (583,520) (443,534) (212,309) (368,952) (310,940) 3,584,996 3,756,615 3,871,898 3,736,879 3,481,424 3,584,996 3,756,615 3,871,898 3 736,879 3,481,424 27,489,482 22,530,873 27,656,666 38,454,998 26,550,126 (80,411,136) (93,465,507) (30,996,169) (10,351,421) (23,176,031) (584,772) (445,659) (213,384) (471,976) (1,490,553) (80,995,908) (93,911,166) (31,209,553) (10,823,397) (24,666,584) 6,278,470 5,942,353 21,370,476 7,043,604 9,193,753 35,390,317 32,569,795 - - - 4,265,438 4,737,968 5,446,883 7,833,545 6,307,737 6,927,388 7,323,835 7,713,741 5,980,684 8,786,819 1,585,427 1,607,829 1,687,440 1,669,476 1,688,263 302,223 285,270 293,592 292,966 307,654 461,957 437,235 428,963 518,778 580,834 3,714,437 3,515,395 3,173,826 3,157,330 3,291,042 5,362,684 4,693,974 1,925,255 1,605,718 2,190,357 2,330 - - 28,551 - 477,936 3,211,584 268,644 192,509 243,498 - - 158,654,715 (2,189,984) (6,402,450) (500,000) 64,768,607 64,325,238 200,963,535 26,133,177 25,687,507 1,252 2,125 1,075 2,225 1,567 - - - 100,799 - - - - - 678,046 500,000 1,252 2,125 1,075 103,024 1,179,613 64,769,859 64,327,363 200,964,610 26,236,201 26,867,120 (15,642,529) (29,140,269) 169,967,366 15,781,756 2,511,476 (583,520) (443,534) (212,309) (368,952) (310,940) $ (16,226,049) $ (29,583,803) $ 169,755,057 $ 15,412,804 $ 2,200,536 131 Expenses: General government Public safety Planning and development Community services Public works Contribution to other agencies Interest on long-term debt Total governmental activities expenses Program revenues: Charges for services: General government Public safety Planning and development Community services Public works Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Net program revenues (expenses) General revenues and other changes in net position: Taxes: Property taxes Tax increment Transient occupancy taxes Sales tax Franchise tax Business license taxes Other tax Motor vehicle in lieu, unrestricted Investment income Miscellaneous Gain (loss) on sale of capital assets Extraordinary gain/loss on dissolution of RDA Transfers Total governmental activities Changes in net position - governmental activities Source: City of La Quinta CITY OF LA QUINTA Changes in Net Position - Governmental Activities Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year 2005 2006 2007 2008 2009 $ 3,595,906 $ 4,229,871 $ 6,284,342 $ 6,953,073 $ 7,836,146 8,512,875 9,065,244 12,724,100 13,472,036 19,736,941 5,752,239 5,906,915 7,736,520 35,323,858 7,317,689 1,157,141 1,426,033 4,299,453 5,797,116 14,808,850 9,101,582 10,006,335 10,511,874 11,097, 526 11,100,833 15,265,051 15,494,656 15,163,422 15,522,441 15,631,438 43,384,794 46,129,054 56,719,711 88,166,050 76,431,897 445,663 717,849 60,530 8,328 25,053 4,438,115 4,168,206 2,659,515 2,050,492 1,373,952 754,938 1,873,676 169,643 134,211 138,391 252,501 428,947 387,065 374,092 275,178 2,815,703 3,021,379 2,244,156 1,900,437 1,308,702 1,935,578 3,603,173 3,796,495 5,905,664 10,725,280 18,591,423 33,918,901 17,601,131 50,090,419 10,647,270 29,233,921 47,732,131 26,918,535 60,463,643 24,493,826 2,579,245 3,679,079 24,443,112 35,168,329 4,831,338 5,437,238 6,773,566 7,613,075 1,185,087 1,044,470 251,618 276,917 1,141,177 1,049,701 2,453,642 2,740,233 4,336,050 6,319,502 2,397,474 1,943,093 3,717,470 1,967,292 (41,459,643) (1,137,203) 12,650,136 66,101,726 $ (1,500,737) $ 67,704,803 132 4,999,051 6,014,305 6,653,583 42,583,031 42,114,893 36,702,197 5,448,361 5,327,203 4,480,467 8,896,716 8,492,213 7,279,513 1,259,985 1,748, 082 1,533,249 307,032 317,011 285,304 872,753 641,705 455,089 3,291,055 3,803,647 3,940,801 11,854,951 10,230,489 7,387,244 2,052,246 1,220,627 118,567 - 57,346 21,542 (874,645) 80,690,536 79,967,521 68,857,556 $ 50,889,360 $ 52,265,114 $ 16,919,485 Table 3 2010 2011 2012 2013 2014 $ 34,287,068 $ 11,283,358 $ 6,183,712 $ 4,511,023 $ 4,830,239 21,274,519 21,070,458 20,815,454 21,047,691 21,169,423 5,173,326 18,715,283 6,378,352 2,274,541 3,098,015 15,923,380 4,735,964 5,093,402 4,986,104 4,130,085 12,326,726 10,757,279 13,288,521 11,803,133 12,610,994 1,086,771 11 X94 nR4 _ _ _ 104,315,622 112,239,765 54,780,937 45,069,540 46,244,733 21,439 47,696 86,869 38,812 71,042 1,100,491 1,044,399 1,020,822 927,604 1,412,819 69,391 74,471 68,470 112,695 595,980 250,557 210,151 247,397 245,392 1,224,719 1,124,647 1,086,771 1,080,744 1,209,438 1,195,703 15,363,650 13,152,942 11,289,673 28,068,940 14,587,153 5,974,311 3,157,828 9,990,793 4,115,238 3,981,286 23,904,486 18,774,258 23,784,768 34,718,119 23,068,702 (80,411,136) (93,465,507) (30,996,169) (10,351,421) (23,176,031) 6,278,470 5,942,353 21,370,476 7,043,604 9,193,753 35,390,317 32,569,795 - - - 4,265,438 4,737,968 5,446,883 5,980,684 6,307,737 6,927,388 7,323,835 7,713,741 7,833,545 8,786,819 1,585,427 1,607,829 1,687,440 1,669,476 1,688,263 302,223 285,270 293,592 292,966 307,654 461,957 437,235 428,963 518,778 580,834 3,714,437 3,515,395 3,173,826 3,157,330 3,291,042 5,362,684 4,693,974 1,925,255 1,605,718 2,190,357 477,936 3,211,584 268,644 192,509 243,498 2,330 - - 28,551 - - - 158,654,715 (2,189,984) (6,402,450) - - - (500,000) 64,768,607 64,325,238 200,963,535 26,133,177 25,687,507 $ (15,642,529) $ (29,140,269) $ 169,967,366 $ 15,781,756 $ 2,511,476 133 THIS PAGE INTENTIONALLY LEFT BLANK 134 CITY OF LA QUINTA Changes in Net Position - Business -type Activities Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year TABLE 4 The City of La Quinta implemented the business type activities in FY 2004/2005. The transfer was for land &golf course improvements transferred to the Enterprise Fund. R This was the first full year of operations for the Golf Course Source: City of La Quinta 135 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Expenses: Golf Course $ 1,877,291 $ 4,523,146 $ 4,520,173 $ 4,761,581 $ 4,440,546 $ 4,169,768 $ 4,202,274 $ 4,085,282 $ 4,208,855 $ 4,971,977 Total business -type activities expenses 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 4,202,274 4,085,282 4,208,855 4,971,977 Program revenues: Charges for services: Golf Course 1,091,836 2 3,120,728 3,540,748 3,814,233 3,368,135 3,584,996 3,756,615 3,871,898 3,736,879 3,481,424 Capital grants and contributions - - - 352,687 - - - - - - Total business -type activities program revenues 1,091,836 3,120,728 3,540,748 4,166,920 3,368,135 3,584,996 3,756,615 3,871,898 3,736,879 3,481,424 Net revenues (expenses) (785,455) (1,402,418) (979,425) (594,661) (1,072,411) (584,772) (445,659) (213,384) (471,976) (1,490,553) General revenues and other changes in Net Position: Investment income - 553 1,817 4,310 3,074 1,252 2,125 1,075 2,225 1,567 Gain (loss) on sale of capital assets - - - (47,721) - - - - - - Insurance Recoveries - - - - - - - - 100,799 - Miscellaneous - - - - - - - - - 678,046 Transfers - 164,190 874,645 - - - - - - 500,000 Capital contributions 41,459,643 973,013 979,425 Total business -type activities 41,459,643 1,137,756 1,855,887 (43,411) 3,074 1,252 2,125 1,075 103,024 1,179,613 Changes in Net Position - business -type $ 40,674,188 $ (264,662) $ 876,462 $ (638,072) $ (1,069,337) $ (583,520) $ (443,534) $ (212,309) $. (368,952) $ (310,940) activities The City of La Quinta implemented the business type activities in FY 2004/2005. The transfer was for land &golf course improvements transferred to the Enterprise Fund. R This was the first full year of operations for the Golf Course Source: City of La Quinta 135 CITY OF LA QUINTA Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) In Fiscal Year 2009-2010, the City implemented GASB 54 which changed the reporting requirements for fund balances in the financial statements. This table has been updated to reflect the impact of GASB 54 not only for Fiscal Year 2009-10 but for all prior years. The increase was primarily the result of the issuance of the 2011 Financing Authority bonds. Source: City of La Quinta 136 Fiscal Year 2005 2006 2007 2008 2009 General fund: Nonspendable: Prepaid costs $ 507,931 $ 503,642 $ 11,774 $ 10,601 $ 12,424 Land held for resale - - - - - Advances to other funds 31,904,659 22,700,961 27,597,329 45,264,966 46,137,692 Deposits - 5,903 - 4,825 9,830 Due from Other Governments - - - - - Restricted for: Debt service - - - - - Committed: Emergency reserve 15,067,577 16,905,386 18,722,524 19,651,824 18,201,948 Post retirement health benefits - - - - - Capital Projects 589,875 10,877,058 482,718 2,100,000 2,144,085 Working capital reserve - - - - - Carryovers - - - - - Educational purposes 1,000,000 750,000 500,000 250,000 - Library 11,981 - - - - Economic development 467,072 4,967,072 2,327,430 1,911,131 - Assigned: Continuing appropriations 1,069,667 1,319,787 2,257,200 2,835,297 3,485,747 Insurance - - - - - Unassigned 13,308,205 18,239,315 32,741,545 20,423,375 22,335,655 Total general fund $ 63,926,967 $ 76,269,124 $ 84,640,520 $ 92,452,019 $ 92,327,381 All other governmental funds: Nonspendable: Prepaid costs $ - $ 7,987 $ 7,977 $ 5,353 $ 19,197 Notes and loans 2,117,873 2,112,597 2,081,645 2,076,063 2,067,028 Advances to other funds 7,061,027 5,365,097 4,823,543 4,402,213 4,321,119 Deposits 1,110 - - - 4,540 Restricted: Planning and development projects 16,144,465 26,172,191 15,297,481 21,906,749 25,807,752 Public safety 154,115 143,846 153,818 198,843 245,468 Community services 2,889,245 9,696,885 12,214,375 11,406,628 11,387,631 Public works 256,881 462,171 104,878 309,566 7,539,181 Capital Projects 99,186,105 92,112,917 66,225,066 69,626,275 50,556,856 Debt service 4,605,101 10,288,494 24,309,220 5,094,635 5,490,098 Assigned: Continuing appropriations - - - - 2,000 Unassigned (18,801,305) (7,133,230) (7,854,868) (19,653,179) (19,339,823) Total all other governmental funds $ 113,614,617 $ 139,228,955 $ 117,363,135 $ 95,373,146 $ 88,101,047 In Fiscal Year 2009-2010, the City implemented GASB 54 which changed the reporting requirements for fund balances in the financial statements. This table has been updated to reflect the impact of GASB 54 not only for Fiscal Year 2009-10 but for all prior years. The increase was primarily the result of the issuance of the 2011 Financing Authority bonds. Source: City of La Quinta 136 TABLE 5 2010 2011 2012 2013 2014 $ 9,030 $ 23,260 $ 27,481 $ 11,786 $ 1,500 - 8,320,000 8,320,000 8,320,000 8,320,000 57, 897, 671 15, 373,104 15,417, 929 15, 509, 691 15,163,183 9,830 9,967 118,516 4,830 4,830 - - - 41,378,966 34,976,516 - 169,631 173,426 - - 17, 774, 648 18, 018, 595 17, 516, 295 16, 034, 995 16, 034, 995 1,258,059 1,258,059 1,523,401 1,523,401 1,523,401 - - - 2,848,737 1,507,429 - - - - 2,836,820 - - - - 356,438 1,555,176 1,768,494 1,041,172 1,013,533 - - - - - 209,000 13,525,704 48,140,444 47,737,861 5,926,651 10,699,641 $ 92,030,118 $ 93,081,554 $ 91,876,081 $ 92,572,590 91,633,753 $ 7,740 $ 10,563 $ 12,875 $ 10,310 $ - 2,088,709 2,081,614 2,065,611 2,062,589 - 4,293,166 4,569,188 - - - 6,400 6,000 13,600 13,600 - 31,032,124 34,018,930 10,767,199 3,730,533 5,970,006 48,852 96,364 245,187 258,968 274,274 11, 675,417 10, 248, 314 11,162, 057 11, 626,441 12,459, 516 448,731 396,355 145,823 262,754 1,571,163 53,123,856 58,111,106 4,089,156 1,392,581 1,590,168 3,890 4,001,426 2,534 2,234 - (33,626,907) (13,250,398) (13,248,593) (13,179,196) (12,370,462) $ 69,101,978 $100,289,462 $ 15,255,449 $ 6,180,814 $ 9,494,665 137 CITY OF LA QUINTA Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) "'The capitalizable expenditures were derived from the Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds. Source: City of La Quinta 138 Fiscal Year 2005 2006 2007 2008 2009 Revenues: Taxes $ 68,175,347 $ 89,704,947 $100,103,324 $ 105,870,933 $ 99,816,072 Assessments 825,292 818,526 877,191 909,229 927,816 Licenses and permits 3,226,167 5,145,430 2,788,882 2,107,035 871,167 Intergovernmental 10,242,876 18,585,468 14,803,971 15,382,135 18,679,355 Charges for services 3,402,602 3,367,989 1,821,794 1,334,060 673,779 Use of money and property 9,798,356 12,671,662 14,804,348 12,874,926 7,043,646 Contributions - - - 37,643,190 240,591 Developer participation 6,091,156 12,473,440 5,310,440 6,537,991 2,243,785 Miscellaneous 528,903 637,054 412,353 629,471 720,185 Total revenues 102,290,699 143,404,516 140,922,303 183,288,970 131,216,396 Expenditures Current: General government 3,970,921 4,644,954 6,150,699 7,367,144 7,230,436 Public safety 12,364,583 13,029,187 15,685,493 17,181,775 18,946,866 Planning and development 5,719,373 5,847,563 28,994,177 15,374,160 7,261,835 Community services 1,104,509 1,248,308 4,027,302 5,336,757 4,698,985 Public works 6,206,769 6,987,014 6,755,507 6,563,494 6,324,055 Capital projects 40,012,387 25,445,550 36,420,417 82,883,317 32,363,859 Debt service: Principal retirement 3,793,660 4,777,748 5,647,940 5,949,311 6,319,580 Interest and fiscal charges 14,355,577 15,554,612 15,059,977 15,424,708 15,348,598 Payment to bond escrow - - - - - Payments under pass-through obligations 25,756,321 35,958,291 36,498,575 42,989,023 42,426,670 Total expenditures 113,284,100 113,493,227 155,240,087 199,069,689 140,920,884 Excess (deficiency) of revenues over (under) expenditures (10,993,401) 29,911,289 (14,317,784) (15,780,719) (9,704,488) Other financing sources (uses): Issuance of tax allocation bonds - - - - - Issuance of revenue bonds - - - - - Transfers in 49,248,081 35,828,335 60,954,576 88,604,682 40,502,929 Transfers out (49,248,081) (35,992,525) (60,954,576) (87,342,608) (40,527,930) Other debts issued - - - - 2,332,752 Capital leases - - - 182,094 - Proceeds from sale of capital assets 8,566,295 8,209,396 124,097 158,061 - Total other financing sources (uses) 8,566,295 8,045,206 124,097 1,602,229 2,307,751 Extraordinary gain/loss on dissolution of redevelopment agency - - - - - Net change in fund balances $ (2,427,106) $ 37,956,495 $ (14,193,687) $ (14,178,490) $ (7,396,737) Debt service as a percentage of noncapital expenditures"' 62.0% 65.5% 61.0% 47.1% 59.0% "'The capitalizable expenditures were derived from the Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds. Source: City of La Quinta 138 TABLE 6 2010 2011 2012 2013 2014 $ 93,831,918 $ 88,498,457 $ 53,632,023 $ 23,506,679 $ 27,192,089 966,639 956,048 950,292 954,058 951,181 472,409 547,071 482,831 566,510 953,540 19,473,076 19, 005, 643 15, 875, 582 15,464,942 16, 506, 666 484,043 501,418 635,111 625,813 1,238,277 5,338,679 4,670,732 1,914,518 1,582,762 2,175,048 395,823 327,751 303,773 18,377,253 838,972 273,739 945,805 903,144 1,226,825 3,059,254 608,342 319,763 276,327 491,267 575,001 121,844,668 115,772,688 74,973,601 62,796,109 53,490,028 30,220,882 10,885,519 4,881,922 4,587,888 4,068,827 20,116,936 19,826,372 19,669,517 20,168,038 21,189,086 6,028,492 8,460,420 4,314,646 27,514,768 1,748,477 4,204,626 4,147,758 4,086,686 4,411,536 4,011,432 6,862,887 4,808,060 6,192,733 5,067,370 4,617,050 14,514,910 21,287,775 13,335,989 8,622,783 7,974,747 6,616,412 7,011,261 7,066,726 556,871 558,019 15,357,968 15,037,919 6,701,079 437,678 411,010 38,710,894 35,607,089 16,755,441 - - 142,634,007 127,072,173 83,004,739 71,366,932 44,578,648 (20,789,339) (11,299,485) (8,031,138) (8,570,823) 8,911,380 - 6,000,000 - - - - 28,850,000 - - - 30,386,372 61,657,034 12,554,752 29,841,053 4,201,763 (28,893,365) (61,652,479) (12,580,120) (29,841,053) (4,335,679) - - - 71,045 - - 8,683,850 875,275 121,652 - 1,493,007 43,538,405 849,907 192,697 (133,916) - - (79,058,255) - (6,402,450) $ (19,296,332) $ 32,238,920 $ (86,239,486) $ (8,378,126) $ 2,375,014 47.6% 53.0% 43.7% 1.6% 139 3.0% THIS PAGE INTENTIONALLY LEFT BLANK 140 CITY OF LA QUINTA Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in dollars) Entire City (including Redevelopment Agency) Fiscal Year Taxable Ended June 30 Residential Commercial TABLE 7 Other Unsecured Less Tax- Exempt Assessed Direct Industrial (Note 2) Property Property Value Rate 2005 $5,141,870,192 $ 300,597,832 $ 16,173,285 $ 830,852,243 $ 44,014,548 $ (113,037,003) $6,220,471,097 0.8091 2006 6,427,108,159 404,672,261 19,229,049 1,005,373,906 72,554,357 (115,071,146) 7,813,866,586 0.9992 2007 8,047,222,562 622,347,465 19,605,470 1,296,976,028 88,740,840 (99,245,721) 9,975,646,644 0.9992 2008 9,514,081,076 789,425,538 20,028,196 1,531,134,827 101,433,002 (89,688,505) 11,866,414,134 0.9992 2009 10,034,763,263 827,032,029 20,432,889 1,528,398,712 113,185,065 (107,777,195) 12,416,034,763 1.0000 2010 9,483,530,068 823,821,531 20,845,624 1,414,468,679 121,272,880 (110,752,890) 11,753,185,892 1.0000 2011 8,870,471,785 771,419,124 20,792,716 1,250,399,544 118,972,704 (161,265,140) 10,870,790,733 1.0000 2012 8,612,579,049 725,788,432 20,944,939 1,041,585,372 107,421,771 (176,887,605) 10,331,431,958 1.0000 2013 8,510,574,371 735,622,855 19,644,835 1,079,529,412 108,971,608 (179,344,969) 10,274,998,112 1.0000 2014 8,959,562,854 743,340,208 20,374,889 1,072,744,515 111,330,270 (180,600,133) 10,726,752,603 1.0000 NOTES: Note 1: In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1 % based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re -assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Note 2: Includes dry farm, government owned, institutional, irrigated, recreational, vacant, cross reference and unknown. 141 CITY OF LA QUINTA Direct and Overlapping Property Tax Rates (Rate per $100 of assessed value) Last Nine Fiscal Years Tax Rate Area 020-005 City 020-005 020-005 020-005 020.005 020-005 020-005 020-005 020-015 Redevelopment 020-089 020-089 020-089 020-089 020-089 Non -Project Area Project Area 1 2006' 20071 20081 20091 20101 2011 t 2012 t 2013 1 20141 2006 2 2007 2 20083 20093 20103 2011 3 2012 3 Direct Rates: Coachella Valley Water District 0.0442 0.0332 0.0462 0.0464 0.0660 0.0860 0.0800 0.0800 0.1000 0.0199 0.0208 0.0484 0.0464 0.0660 0.0860 City of La Quinta 0.0760 0.0760 0.0760 0.0506 0.0506 0.0734 0.0760 0.0760 0.0760 0..0000 0.0000 0.0000 0.0152 0.0036 0.0049 0.0524 Redevelopment agency Project Area 1 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.5830 0.5880 0.5150 0.5245 0.5432 0.5310 0.0000 Redevelopment agency Project Area 2 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 County of Riverside 0.1960 0.1960 0.1960 0.2587 0.2587 0.2316 0.1957 0.1958 0.1958 0.2639 0.2619 0.2619 0.2325 0.2501 0.2471 0.2683 County Free Library 0.0250 0.0250 0.0250 0.0284 0.0284 0.0280 0.0252 0.0253 0.0253 0.0276 0.0276 0.0276 0.0277 0.0275 0.0282 0.0294 County Structure Fire Protection 0.0540 0.0540 0.0540 0.0610 0.0610 0.0602 0.0544 0.0544 0.0544 0.0595 0.0595 0.0595 0.0595 0.0595 0.0607 0.0633 Coachella Vallev Unified School District 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.4322 0.4322 0.4322 0.0170 0.0150 0.0020 0.0149 0.0167 0.0182 0.0000 Desert Sands Unified School 0.4320 0.4320 0.4320 0.3765 0.3765 0.3716 0.0000 0.0000 0.0000 0.0160 0.0140 0.0140 0.0695 0.0568 0.0637 0.3905 Desert Community College District 0.0700 0.0700 0.0700 0.0782 0.0782 0.0772 0.0698 0.0698 0.0698 0.0030 0.0030 0.0720 0.0177 0.0152 0.0166 0.0812 Riverside County Office of Education 0.0380 0.0380 0.0380 0.0426 0.0426 0.0420 0.0380 0.0380 0.0380 0.0030 0.0030 0.0180 0.0093 0.0027 0.0038 0.0442 Riverside County Regional Park & Open Space 0.0040 0.0040 0.0040 0.0000 0.0000 0.0000 0.0039 0.0039 0.0039 0.0000 0.0000 0.0030 0.0000 0.0000 0.0000 0.0000 CV Public Cemetery 0.0032 0.0032 0.0032 0.0035 0.0035 0.0035 0.0032 0.0031 0.0031 0.0000 0.0000 0.0000 0.0008 0.0002 0.0003 0.0037 CV Mosquito 0.0127 0.0127 0.0127 0.0142 0.0142 0.0141 0.0127 0.0127 0.0127 0.0120 0.0120 0.0120 0.0112 0.0111 0.0112 0.0148 Desert Recreation District 0.0192 0.0192 0.0192 0.0215 0.0215 0.0213 0.0192 0.0192 0.0192 0.0010 0.0020 0.0010 0.0044 0.0014 0.0019 0.0223 Coachella Valley Water District 0.0250 0.0250 0.0250 0.0284 0.0284 0.0281 0.0254 0.0254 0.0254 0.0130 0.0130 0.0010 0.0127 0.0120 0.0124 0.0295 CV Resource Conservation 0.0003 0.0003 0.0003 0.0004 0.0004 0.0004 0.0003 0.0003 0.0003 0.0000 0.0000 0.0130 0.0001 0.0000 0.0000 0.0004 CVWD District 1 Debt Service 0.0118 0.0118 0.0118 0.0000 0.0000 0.0131 0.0119 0.0118 0.0118 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 CVWD Storm Water Unit 0.0320 0.0320 0.0320 0.0360 0.0360 0.0355 0.0321 0.0321 0.0321 0.0010 0.0010 0.0000 0.0000 0.0000 0.0000 0.0000 Total Direct Rate 0.9992 0.9992 0.9992 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Tax Rate Area 020-005 020-005 020-005 020-005 020-005 020.005 020-005 020-005 020-005 020-015 020-015 020-089 020-089 020-089 020-089 020-089 Overlapping Rates 4: Desert Sands Unified School 0.0767 0.0761 0.0799 0.0799 0.0811 0.1004 0.1147 0.1116 0.1095 0.0767 0.0761 0.0756 0.0799 0.0811 0.1004 0.0757 Coachella Valley Water District 0.0442 0.0332 0.0462 0.0464 0.0660 0.0860 0.0800 0.0800 0.1000 0.0199 0.0208 0.0484 0.0464 0.0660 0.0860 0.0862 Desert Community College District 0.0199 0.0199 0.0199 0.0199 0.0200 0.0200 0.0200 0.0200 0.0200 0.0208 0.0199 0.0199 0.0199 0.0200 0.0200 0.0079 Total Overlapping Rate 0.1408 0.1292 0.1460 0.1462 0.1671 0.2064 0.2147 0.2116 0.2295 0.1174 0.1168 0.1439 0.1462 0.1671 0.2064 0.1698 Total Direct and Overlapping Rate 1.1400 1.1284 1.1452 1.1462 1.1671 1.2064 1.2147 1.2116 1.2295 NOTE: In 1978, California voters passed Proposition 13 which sets the property tax rete at a 1.00% fixed amount for direct taxes. This 1 % is shared by all taxing agencies for which the subject property resides within. Source: County of Riverside Auditor Controller's Office ' Direct rate from Tax Rate Area (TRA) 020-059 provided by Heil Coren & Cone and overlapping debt rates from California Municipal Statistics Direct rate taken from an analysis by the City of La Quints Finance Department staff of all TRA's in the Project area and do not include State ERAF deductions and overlapping rates provided by California Municipal Statistics a Direct rate taken from an analysis of the TRA in the Project area and do not include State ERAF deductions and overlapping rates provided by Califomia Municipal Statistics 4 Overlapping rates are based upon a single tax rate area only. Note: The information was first presented in Fiscal Year 2006. 142 1.1174 1.1168 1.1439 1.1462 1.1671 1.2064 1.1698 TABLE 8 Redevelopment Project Area 2 2006 2 2007 2 20083 20093 20103 2011 3 2012 3 0.0000 0.0000 0.0000 0.0000 0.0000 0.0019 0.0499 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.2860 0.2920 0.2910 0.3193 0.3174 0.3059 0.0000 0.2617 0.2617 0.2617 0.2517 0.2537 0.2511 0.2553 0.0280 0.0280 0.0280 0.0280 0.0280 0.0286 0.0280 0.0603 0.0603 0.0603 0.0603 0.0603 0.0616 0.0602 0.0000 0.0000 0.0020 0.0000 0.0000 0.0000 0.0000 0.2000 0.1980 0.1970 0.1860 0.1859 0.1930 0.3716 0.0420 0.0410 0.0410 0.0386 0.0386 0.0401 0.0772 0.0230 0.0220 0.0220 0.0210 0.0210 0.0218 0.0420 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0001 0.0035 0.0150 0.0140 0.0140 0.0141 0.0141 0.0141 0.0140 0.0060 0.0060 0.0060 0.0053 0.0053 0.0059 0.0212 0.0770 0.0760 0.0760 0.0757 0.0757 0.0740 0.0281 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0004 0.0000 0.0000 0.0000 0.0000 0.0000 0.0005 0.0131 0.0010 0.0010 0.0010 0.0000 0.0000 0.0014 0.0355 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 020-144 020-144 020-144 020-144 020-144 020144 020-144 0.0767 0.0761 0.0756 0.0799 0.0811 0.1004 0.0757 0.0442 0.0332 0.0484 0.0464 0.0660 0.0860 0.0862 0.0199 0.0199 0.0199 0.0199 0.0200 0.0200 0.0079 0.1408 0.1292 0.1439 0.1462 0.1671 0.2064 0.1698 1.1408 1.1292 1.1439 1.1462 1.1671 1.2064 1.1698 143 CITY OF LA QUINTA Principal Property Taxpayers Current Year and Ten Years Ago (in dollars) 2014 2005 Source: HdL Coren & Cone TABLE 9 Taxable Assessed Taxpayer Value Total City LQR Golf LLC $ 187,262,071 TD Desert Development 66,184,018 East of Madison LLC 52,669,611 Inland American La Quinta Pavilion 44,267,502 Coral Option I LLC 43,458,609 Lennar Homes of California 30,530,804 Town and Country Partners LLC 30,170,000 Walmart Real Estate Business Trust 28,905,663 Aventine Development 24,316,859 Costco Wholesale Corporation 22,877,221 KSL Desert Resorts Inc - Toll California V - ND La Quinta Partners - Quarry at La Quinta Inc - Coral Mountain - M and H Realty Partners 11 - $ 530,642,358 Source: HdL Coren & Cone TABLE 9 144 Percent of Percent of Total City Total City Taxable Taxable Taxable Assessed Assessed Assessed Rank Value Value Rank Value 1 1.74% - - 2 0.61% 40,646,535 5 0.64% 3 0.49% - - 4 0.41% - - 5 0.40% 21,395,329 7 0.34% 6 0.28% 41,197,452 4 0.65% 7 0.28% - - 8 0.27% - - 9 0.23% 21,116,001 8 0.33% 10 0.21% - - - 209,088,140 1 3.31% - 62,641,138 2 0.99% - 41,566,490 3 0.66% - 22,943,872 6 0.36% - 17,020,344 9 0.27% - 15,908,379 10 0.25% 4.92% $ 493,523,680 7.80% 144 CITY OF LA QUINTA Property Tax Levies and Collections Last Nine Fiscal Years ( in dollars) Collected within the Fiscal Taxes Levied Fiscal Year of Levy Year Ended for the Percent June 30 Fiscal Year Amount of Levy Collections in Subsequent Years TABLE 10 Total Collections to Date Amount Percent of Levy 2006 $ 61,420,601 $ 73,097,362 119.01% $ 2,092,062 $ 75,189,424 122.42% 2007 74,170,170 83,797,365 112.98% 1,802,076 85,599,441 115.41% 2008 83,018,429 87,804,912 105.77% 3,216,547 91,021,459 109.64% 2009 83,934,188 86,721,572 103.32% 1,471,940 88,193,512 105.07% 2010 78,621,410 80,651,874 102.58% 434,643 81,086,517 103.14% 2011 72,735,079 74,047,640 101.80% 259,209 74,306,849 102.16% 2012 69,307,476 37,885,360 54.66% 181,381 38,066,741 54.92% 2013 5,706,535 5,823,575 102.05% 180,723 6,004,298 105.22% 2014 5,845,390 5,808,387 99.37% 202,342 6,010,729 102.83% NOTES: The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed -through to other agencies. Effective February 1, 2012, AB1x26 dissolved the Redevelopment Agencies throughout the State of California which resulted in the reduction of amounts collected during Fiscal Year 2011-2012 and all subsequent years. The total tax levy is based on the Statements of Original Charge and Tax Increment Summaries from the Riverside County Auditor - Controller's Office. This amount does not include the results of any successful appeals of a taxpayers assessed valuation. As such, the percentage of the levy collected may be lower than expected. The City participates in the Riverside County Teeter program, which allows for a 30% advance, one settlement payment for the first installment, a 10% advance, a settlement payment for the second installment, and one final settlement payment, which is generally received during November of the subsequent year. Collections for 2014 are for amounts received as of August 31, 2014 The information was first presented in Fiscal Year 2006. Source: County of Riverside Auditor Controller's Office 145 Governmental Activities Reimbursement Agreement Capital leases USDA Loan Provident Savings Loan Due to Coachella Valley Unified School District Due to County of Riverside Developer Agreement Tax Allocation Bonds Project Area 1 Tax Allocation Bonds Project Area 2 2004 Local Agency Revenue Bonds ' 2011 Local Agency Revenue Bonds City Hall Lease Revenue Bonds Unamortized Discount and Issuance Costs Total Governmental Business -type Activities Capital Leases Total Business -type activities CITY OF LA QUINTA Ratios of Outstanding Debt by Type Last Ten Fiscal Years (in dollars) Fiscal Year Ended 2005 2006 2007 2008 2009 $ 378,311 $ 328,311 $ 278,311 $ 228,311 $ 178,311 - - - - 149,169 - 751,754 - - - - 1,556,283 5,927,263 5,186,627 4,431,178 3,675,731 2,874,653 1,950,000 1,850,000 1,750,000 1,600,000 1,400,000 898,141 776,030 643,539 511,048 343,814 140,263,659 141,785,000 139,145,000 136,350,000 133,390,000 6,230,000 6,130,000 6,025,000 5,915,000 5,800,000 87,947,058 89,265,000 87,745,000 86,175,000 84,560,000 6,575,000 6,245,000 5,900,000 5,540,000 5,160,000 (877,230) (877,230) (841,087) (804,944) 250,169,432 250,688,738 245,040,798 239,154,003 235,359,040 801,417 1,090,602 825,848 681,048 285,217 801,417 1,090,602 825,848 681,048 285,217 Total Primary Government $ 250,970,849 $ 251,779,340 $ 245,866,646 $ 239,835,051 $ 235,644,257 Population - State Department of Finance January 1 36,145 38,340 41,092 42,958 43,778 Number of Households 17,549 18,762 20,176 21,058 21,355 Median Household Income $ 80,118 $ 82,938 $ 87,799 $ 91,366 $ 92,156 Percentage of Personal Income Debt Per Capita 17.85% 16.18% 13.88% 12.47% 11.97% $ 6,943 $ 6,567 $ 5,983 $ 5,583 $ 5,383 'Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 1 The debt service payment for the 2004 Lease Revenue Bonds are made from Redevelopment Project Area 1 & 2 low & moderate income tax increment. 146 TABLE 11 2010 2011 2012 2013 2014 $ 128,311 $ - $ - $ - $ - 114,583 78,253 40,090 71,045 129,063 741,171 729,480 - 702,105 686,345 1,530,958 1,503,433 1,441,096 1,405,755 2,072,965 1,255,243 - - 1,200,000 1,000,000 - 111,077 $ 174,584 - - 0.17% 130,255,000 126,925,000 - 6,781 $ 5,680,000 11,555,000 - 82,890,000 81,150,000 - - 28,850,000 - - - 4,760,000 4,340,000 3,895,000 3,425,000 2,930,000 (768,801) (1,115,799) - - - 228,778,771 256,270,610 3,935,090 5,639,246 5,151,163 54,543 286,097 169,084 43,736 54,543 286,097 169,084 43,736 $ 228,833,314 $ 256,556,707 $ 4,104,174 $ 5,682,982 $ 5,151,163 44,421 37,836 38,075 38,401 39,032 23,489 23,489 23,528 23,612 23,871 $ 90,124 $ 104,410 $ 104,045 $ 111,077 $ 109,365 10.81% 10.46% 0.17% 0.22% 0.20% $ 5,151 $ 6,781 $ 108 $ 148 $ 132 147 CITY OF LA QUINTA TABLE 12 Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years (In Dollars) Outstanding General Bonded Debt Fiscal Year City Hall Local Agency Tax Percent of Per Ended Lease Revenue Allocation Assessed Median June 30 Obligation Bonds ' Bonds Total Value 1 Household Income 2005 6,575,000 87,947,058 146,493,659 241,015,717 3.87% 3,008 2006 6,245,000 89,265,000 147,915,000 243,425,000 3.12% 2,935 2007 5,900,000 87,745,000 145,170,000 238,815,000 2.39% 2,720 2008 5,540,000 86,175,000 142,265,000 233,980,000 1.97% 2,561 2009 5,160,000 84,560,000 139,190,000 228,910,000 1.84% 2,484 2010 4,760,000 82,890,000 135,935,000 223,585,000 1.90% 2,481 2011 4,340,000 110,000,000 138,480,000 252,820,000 2.33% 2,421 2012 3,895,000 - - 3,895,000 0.04% 37 2013 3,425,000 - - 3,425,000 0.03% 31 2014 2,930,000 - - 2,930,000 0.03% 27 General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). Assessed value has been used because the actual value of taxable property is not readily available in the State of California. Source: City of La Quinta 148 CITY OF LA QUINTA Direct and Overlapping Debt June 30, 2014 City Assessed Valuation Total Assessed Valuation Source: Riverside County Auditor Controller Percentage Applicable 1 Overlapping Debt Repaid with Property Taxes And Assessments TABLE 13 $ 10,726,752,603 $ 10,726,752,603 Estimated Share of Outstanding Overlapping Debt 6/30/14 Debt Desert Community College District 16.753% $ 316,283,162 $ 52,986,918 Coachella Valley Unified School District 53.357% 182,018,662 97,119,697 Desert Sands Unified School District (DSUSD) 20.209% 282,295,470 57,049,092 DSUSD Community Facilities District No. 1 88.912% 1,380,000 1,226,986 City of La Quinta 1915 Act Bonds 100.000% 205,000 205,000 Coachella Valley Water District Assessment District No. 68 86.122% 2,120,000 1,881,298 Total overlapping debt repaid with property taxes 784,302,294 210,468,991 Overlapping Other Debt including Certifications of Participation (COP): Riverside County General Fund Obligations 5.145% $ 692,656,315 $ 35,637,167 Riverside County Pension Obligations 5.145% 334,515,000 17,210,797 Riverside County Board of Education COP 5.145% 2,700,000 138,915 Coachella Valley Unified School District COP 53.357% 43,720,000 23,327,680 DSUSD COP 20.209% 66,445,000 13,427,870 Coachella Valley Recreation and Park District COP 26.474% 2,150,000 569,191 Total overlapping other debt Total overlapping debt City direct debt Total direct and overlapping debt 1,142,186,315 90,311,620 1,926,488,609 300,780,611 5,151,163 $ 305,931,774 Notes: For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value. Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. Source: California Municipal Statistics, Inc.- overlapping debt Source: City of La Quinta - City Direct debt 149 CITY OF LA QUINTA Legal Debt Margin Information Last Ten Fiscal Years Fiscal Year 2005 2006 2007 2008 2009 Assessed valuation $ 6,220,471,097 $ 7,813,866,586 $ 9,975,646,644 $11,866,414,134 $12,416,034,763 Debt limit percentage 15% 15% 15% 15% 15% Debt limit 933,070,665 1,172,079,988 1,496,346,997 1,779,962,120 1,862,405,214 Total net debt applicable to limit: General obligation bonds - - Legal debt margin Total debt applicable to the limit as a percentage of debt limit $ 933,070,665 $ 1,172,079,988 $ 1,496,346,997 $ 1,779,962,120 $ 1,862,405,214 0.0% 0.0% 0.0% 0.0% 0.0% Section 43605 of the Government Code of the State of California limits the amount of indebtedness for public improvements to 15% of the assessed valuation of all real and personal property of the City. The City of La Quinta has no general bonded indebtedness. Source: City of La Quinta Finance Department based upon the Assessed valuation received from the County of Riverside Auditor Controllers Office 150 TABLE 14 2010 2011 2012 2013 2014 $ 11,753,185,892 $ 10,870,790,733 $ 10,331,431,958 $ 10,274,998,112 $ 10,726,752,603 15% 15% 15% 15% 15% 1,762,977,884 1,630,618,610 1,549,714,794 1,541,249,717 1,609,012,890 $ 1,762,977,884 $ 1,630,618,610 $ 1,549,714,794 $ 1,541,249,717 $ 1,609,012,890 0.0% 0.0% 0.0% 0.0% 0.0% 151 CITY OF LA QUINTA Pledged -Revenue Coverage Last Ten Fiscal Years (In Dollars) TABLE 15 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. ' Lease revenues consist of payments from the City General Fund and Civic Center Development Impact Fee Fund. 152 Local Agency Revenue Bonds (City Hall Project) Fiscal Year Ended Lease Less: Other Net Lease Debt Service June 30 Revenue' Debt Payments Revenue Principal Interest Coverage 2005 $ 681,220 $ - $ 681,220 315,000 366,220 1.00 2006 680,575 - 680,575 330,000 350,575 1.00 2007 678,865 - 678,865 345,000 333,865 1.00 2008 675,880 - 675,880 360,000 315,880 1.00 2009 676,450 - 676,450 380,000 296,450 1.00 2010 675,280 - 675,280 400,000 275,280 1.00 2011 672,525 - 672,525 420,000 252,525 1.00 2012 673,521 - 673,521 445,000 228,521 1.00 2013 673,130 - 673,130 470,000 203,130 1.00 2014 671,351 - 671,351 495,000 176,351 1.00 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. ' Lease revenues consist of payments from the City General Fund and Civic Center Development Impact Fee Fund. 152 CITY OF LA QUINTA Demographic and Economic Statistics Last Ten Calendar Years TABLE 16 Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Year Calendar Year Year Year Year Year Year Year Year Year Sources: 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 City Land (Sq Miles) (3) 35.1 35.10 35.10 35.31 35.31 35.31 35.31 35.16 35.16 35.16 Population (1) 36,145 38,340 41,092 42,958 43,778 44,421 37,836 38,075 38,401 39,032 Median Household Income (in dollars) (7) $80,118 $82,938 $87,799 $91,366 $92,156 $90,124 $104,410 $104,045 $111,077 $109,365 Number of Dwelling Units (3) 17,549 18,762 20,176 21,058 21,355 23,489 23,528 23,528 23,612 23,871 Persons per Household (1) 2.88 2.86 2.85 2.85 2.85 2.87 2.55 2.56 2.58 2.59 Average Income per person per household (4) $27,838 $29,050 $30,850 $32,047 $32,324 $31,457 $40,961 $40,722 $43,053 $42,226 Labor Force (2) 14,300 14,500 15,300 15,200 14,800 14,600 14,400 15,100 15,300 15,600 Employment (2) 13,900 14,100 14,900 14,600 13,700 13,500 13,300 14,100 14,400 14,900 Unemployment Rate (2) 2.80% 2.76% 2.61% 3.95% 7.43% 7.53% 7.64% 6.62% 5.60% 4.30 Median age (4) (6) 36 36.4 36.4 36.4 42.2 41.5 42.8 43.6 44.8 Sources: (1) State of California Department of Finance - January 1 of each year (2) State of California Employment Development Department website (3) City of La Quinta Building & Safety and Community Development Departments (4) Hdl-Coren & Cone Companies (5) The population number was updated based upon the 2010 United States Census (6) The information was not collected before 2006 (7) Calculated usinq 'Persons per Household" multiplied by "Average Income per Person per Household." 153 CITY OF LA QUINTA TABLE 17 Principal Employers Current Year and Ten Years Ago Employer Activity La Quinta Resort & Club Hotel & Golf Resort PGA West Golf Resort Desert Sands Unified School District Government Wal-Mart Super Center Retailer Costco Retailer Rancho La Quinta Golf Resort Home Depot Retailer Lowe's Home Improvement Retailer Imperial Irrigation District Utility Company Stater Brothers Grocery Store Vons Grocery Store Total employment listed Total City Employment - July 1 Source: City of La Quinta 2013-2014 2004-2005 Percent of 154 Number of Total Number of Rank Employees Employment Employees Rank 1 1,250 8.39% 1,500 1 2 1,198 8.04% 1,100 2 3 1,180 7.92% 550 3 4 352 2.36% 250 4 5 246 1.65% - - 6 175 1.17% 200 5 7 168 1.13% 180 6 8 153 1.03% 150 7 9 142 0.95% 110 9 10 114 0.77% 126 8 11 99 0.66% 103 10 5,077 34.07% 4,269 14,900 13,900 154 CITY OF LA QUINTA Full-time City Employees by Function Last Ten Fiscal Years Function 2005 2006 2007 2008 2009 Administration 8.00 9.00 10.00 12.00 12.00 City Clerk 5.00 5.00 5.00 6.00 6.00 Finance 8.00 9.00 9.00 9.00 9.00 Community Services 8.00 10.25 10.25 11.25 11.25 Building and Safety 21.00 22.00 24.00 25.00 25.00 Planning and Development 9.00 12.00 12.00 12.00 12.00 Community Development - - - - - Public Works 23.50 26.25 26.25 28.25 29.25 Golf Course 0.50 O.So 0.50 0.50 0.50 Total 83.00 94.00 97.00 104.00 105.00 Source: City of La Quints NOTE: The City of La Quints contracts with the County of Riverside for Police Services and with the California Department of Forestry through a contract with the Riverside. - The City merged the Building and Safety Department with the Planning and Development Department in 2014 155 2010 2011 2012 2013 2014 13.00 14.00 12.00 11.00 7.00 6.00 6.00 5.00 5.00 4.00 9.00 9.00 8.00 8.00 7.00 10.35 10.25 10.35 10.35 9.00 25.00 24.00 21.00 21.00 10.00 9.00 8.00 9.00 - - - - 16.65 27.25 26.25 24.25 23.25 21.00 0.40 0.50 0.40 0.40 0.35 101.00 99.00 89.00 88.00 65.00 TABLE 18 Finance: Number of Active Business Licenses Number of Animal Licenses Processed Number of Accounts Payable Checks Processed Number of investment purchases Par value of investments Number of cleared checks Number of outgoing bank vdres Public Works: Encroachment permits issued Request for services Building & Safety: Permits: Single family Detached Single family Attached Residential Pool Wall/Fence Other Total Permits Code Compliance: Animal Control Incidents Handled Vehicle abatements Garage Sale Permits Weed abatements Nuisance abatements Community Services: Library activities: Library Volume Library books checked out Library Cards Issued Number of School Children Visiting Library Library Volunteer Hours Senior Center: Number of visits Senior Center Volunteer Hours Recreation activities: Participants: Leisure Classes Special events Adult Sports Golf course: Golf rounds played Average $ Green fee Planning and Development: Number of residential units approved Commercial square footage approved Note: Information not collected before 2006 Source: City of La Quints, CITY OF LA QUINTA TABLE 19 Operating Indicators by Function Last Nine Fiscal Years 2006 2007 2008 2009 2010 2011 2012 2013 2014 3,208 3,424 3,690 3,523 3,428 3,183 3,310 3,520 3,998 892 1,022 1,272 1,609 1,768 1,619 1,674 1,505 1,602 4,696 4,722 4,840 4,819 4,393 4,530 3,766 3,576 3,696 39 73 64 36 32 20 27 30 22 $ 327,417,000 $ 392,729,000 $ 424,500,000 $ 229,969,000 $ 267,213,000 $ 189,810,285 $ 188,782,874 $ 164,614,769 $ 136,323,300 5,081 4,837 5,501 5,269 4,984 4,912 5,103 3,899 3,922 202 158 136 91 75 87 63 58 58 304 218 110 132 78 104 65 124 109 618 419 1152 1931 1306 746 534 740 1,322 1,044 526 297 129. 56 85 39 83 147 227 38 0 6 12 0 11 0 0 866 612 331 207 152 148 127 162 204 1,502 963 583 299 178 218 149 167 220 1,607 1,404 1,121 908 790 1,033 916 1,042 1,158 5,246 3,543 2,332 1,549 1,188 1,484 1,242 1,454 1,729 1,901 687 2,920 3,630 3,984 4,392 4,246 3,206 1,645 909 296 351 346 214 263 139 99 88 1,190 1,444 1,519 1,535 1,663 1,805 1,430 1,404 1,255 141 76 117 97 125 143 106 1,404 43 1,611 2,032 2,142 3,130 2,340 2,252 2,433 1,668 730 42,050 44,981 66,124 81,124 89,060 92,484 109,000 63,955 71,874 55,002 99,659 117,738 215,843 259,711 263,064 275,838 220,690 329,154 5,550 5,325 3,675 3,684 3,547 3,822 4,477 2,966 2,035 745 260 841 1,036 772 1,881 962 737 1,539 1,891 1,583 1,951 2,342 2,723 4,280 2,720 2,226 1,340 14,305 12,955 14,013 15,739 20,326 18,403 16,642 9,350 11,500 3,481 4,192 3,332 2,583 3,131 3,099 2,690 2,233 2,745 1,373 1,192 990 1,140 1,437 1,512 2,016 1,475 1,177 4,668 7,809 8,109 11,053 8,795 8,933 36,305 5,970 5,927 3,402 6,827 8,550 10,806 13,364 13,092 5,647 3,865 5,878 38,934 40,548 40,516 39,150 43,779 45,269 46,949 46,352 43,610 $ 71.12 $ 76.97 $ 81.09 $ 76.13 $ 71.59 $ 70.70 $ 70.40 $ 67.44 $ 66.83 1,063 534 338 100 255 208 285 228 494 533,726 124,821 342,502 390,097 6,200 27,526 61,662 0 113,149 156 CITY OF LA QUINTA Capital Asset Statistics by Function Last Ten Fiscal Years 1 In Fiscal Year ending 2009, street lights at intersections were included for the first time. 2 In Fiscal Year ending 2006 traffic signals , traffic signs, and undeveloped park acreage were included for the first time. 157 TABLE 20 2013 2014 128 128 22 22 269 277 52 54 2,984 3,018 12 13 13 13 218 218 40 40 1 1 1 1 1 1 2005 2006 2007 2008 2009 2010 2011 2012 Public works: Streets (miles) 118.40 118.40 122 127 127 127 127 128 Bikepaths (miles) 22 22 22 22 22 22 22 22 Streetlights 1 ' 73 85 85 261 265 265 269 Traffic signals 2 2 44 45.25 45.25 49 50 50 51 Traffic signs 2 2 2,799 2,845 2,895 2,899 2,909 2,919 2,934 Bridges 2 2 12 12 12 12 12 12 12 Parks and recreation: Parks 12 12 12 13 13 13 13 13 Park Acreage 207 207 207 209 209 218 218 218 Undeveloped Park Acreage 2 40 40 40 40 40 40 40 Senior Center 1 1 1 1 1 1 1 1 Museum 1 1 1 1 1 1 1 1 Library 1 1 1 1 1 1 1 1 Golf Course: Municipal golf courses - 1 1 1 1 1 1 1 1 In Fiscal Year ending 2009, street lights at intersections were included for the first time. 2 In Fiscal Year ending 2006 traffic signals , traffic signs, and undeveloped park acreage were included for the first time. 157 TABLE 20 2013 2014 128 128 22 22 269 277 52 54 2,984 3,018 12 13 13 13 218 218 40 40 1 1 1 1 1 1 Company Name Policy Number Hartford FA0267254-11 Hartford FA026725413 Lexington 20412887 Lloyds WB -0009204 Lloyds W14D19140101 California Joint Powers Insurance Authority California Joint Powers Insurance Authority Alliant PEC0011896301 CITY OF LA QUINTA Schedule of Insurance in Force June 30, 2014 Coverage Employee Dishonesty, Forgery, Computer Fraud Employee Dishonesty, Forgery, Computer Fraud All Risk Property Insurance Including Auto Physical Damage, Terrorism, Boiler & Machinery (Excluding Earthquake) Earthquake/Flood Real & Personal Property Including Contingent Tax Interruption Earthquake/Flood Real & Personal Property Including Contingent Tax Interruption Comprehensive General Liability Worker's Compensation Pollution Liability TABLE 21 Limits Term Premium $1 Million 12/03/12 - 12/03/13 $3,375 $1 Million 12/03/13 - 12/03/14 $3,224 $20 Million 07/01/13 - 07/01/14 $65,388 Single Limit per Occurrence subject to other sublimits $20 Million 2/07/13 - 2/07/14 $108,193 $20 Million 02/07/14 - 02/07/15 $103,922 $50 Million 6/30/13 - 6/30/14 $209,710 (1) Single Limit per Occurrence $10 Million 6/30/13 - 6/30/14 $227,643 (1) $10 Million 7/01/11 - 7/01/14 $26,227 Notes: (1) A retrospective adjustment to the liability and workers compensation programs, in the amount of $270,586, reduced the amount due for the fiscal year to $166,767. 158