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2008-2009 ACFR (July 1 - June 30 Annual Comprehensive Financial Report)CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2009 203 North Brea Blvd Suite 203 Brea, CA 92821 Lance Soll & Lunghard, LLP 41185 Golden Gate Circle Suite 103 Murrieta, CA 92562 CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2009 Prepared By FINANCE DEPARTMENT JOHN M. FALCONER Director of Finance CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2009 TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal ............................................................................................................................ i List of Principal Officials .................................................................................................................. viii Organizational Chart ......................................................................................................................... ix Certificate of Achievement for Excellence in Financial Reporting (GFOA) ........................................ x FINANCIAL SECTION Independent Auditors’ Report ................................................................................................................. 1 Management’s Discussion and Analysis ................................................................................................. 3 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets ................................................................................................................. 13 Statement of Activities .................................................................................................................... 14 Fund Financial Statements: Balance Sheet – Governmental Funds........................................................................................... 16 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ....................................................................................................... 19 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ................................................................................................... 20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................... 23 Budgetary Comparison Statement by Department – General Fund .............................................. 24 Budgetary Comparison Statement – Low/Moderate Income Housing PA No. 1 ............................ 25 Budgetary Comparison Statement – Low/Moderate Income Housing PA No. 2 ............................ 26 Statement of Net Assets – Proprietary Funds ................................................................................ 27 Statement of Revenues, Expenses and Changes in Fund Net Assets – Proprietary Funds ........................................................................................................................... 28 Statement of Cash Flows – Proprietary Funds ............................................................................... 29 Statement of Fiduciary Net Assets - Fiduciary Funds .................................................................... 31 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2009 TABLE OF CONTENTS (Continued) Page Number Notes to Financial Statements ........................................................................................................ 33 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Non-Major Governmental Funds ....................................................... 72 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non-Major Governmental Funds ....................................................................... 80 Budgetary Comparison Schedules – Special Revenue Funds State Gas Tax ........................................................................................................................ 87 Library ..................................................................................................................................... 88 Federal Assistance ................................................................................................................. 89 SLEBG .................................................................................................................................... 90 Indian Gaming ........................................................................................................................ 91 Lighting and Landscape ......................................................................................................... 92 RCTC ...................................................................................................................................... 93 Quimby ................................................................................................................................... 94 Public Safety ........................................................................................................................... 95 Arts In Public Places............................................................................................................... 96 South Coast Air Quality .......................................................................................................... 97 AB 939 .................................................................................................................................... 98 CV Violent Crime Task Force ................................................................................................. 99 Proposition 1B Fund ............................................................................................................. 100 Budgetary Comparison Schedules – Capital Projects Funds Capital Improvement ............................................................................................................ 101 Infrastructure......................................................................................................................... 102 Transportation....................................................................................................................... 103 Parks and Recreation ........................................................................................................... 104 Civic Center .......................................................................................................................... 105 Library Development ............................................................................................................ 106 Community Center ................................................................................................................ 107 Street Facility ........................................................................................................................ 108 Park Facility .......................................................................................................................... 109 Fire Facility ........................................................................................................................... 110 2004 Low/Mod Bond ............................................................................................................. 111 Redevelopment Agency PA No. 1 – Capital Projects .......................................................... 112 Redevelopment Agency PA No. 2 – Capital Projects .......................................................... 113 Budgetary Comparison Schedules – Debt Service Funds Financing Authority – Debt Service ...................................................................................... 114 Redevelopment Agency PA No. 1 – Debt Service ............................................................... 115 Redevelopment Agency PA No. 2 – Debt Service ............................................................... 116 Combining Statement of Net Assets – Internal Service Funds .................................................... 118 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2009 TABLE OF CONTENTS (Continued) Page Number Combining Statement of Revenues, Expenses and Changes in Fund Net Assets – Internal Service Funds ............................................................................... 119 Combining Statement of Cash Flows – Internal Service Funds ................................................... 120 Combining Balance Sheet – All Agency Funds ............................................................................ 122 Combining Statement of Changes in Assets and Liabilities – All Agency Funds ......................... 123 STATISTICAL SECTION Net Assets by Component ............................................................................................................ 126 Changes in Net Assets ................................................................................................................. 127 Changes in Net Assets – Governmental Activities ....................................................................... 128 Changes in Net Assets – Business-type Activities ....................................................................... 129 Fund Balances of Governmental Funds ....................................................................................... 130 Changes in Fund Balances of Governmental Funds.................................................................... 131 Assessed Value and Estimated Actual Value of Taxable Property .............................................. 132 Assessed Value and Estimated Actual Value of Taxable Property - Redevelopment Agency ............................................................................................................... 133 Direct and Overlapping Property Tax Rates ................................................................................. 134 Principal Property Taxpayers ....................................................................................................... 135 Property Tax Levies and Collections ............................................................................................ 136 Ratios of Outstanding Debt by Type ............................................................................................ 137 Ratio of General Bonded Debt Outstanding ................................................................................. 138 Direct and Overlapping Debt ........................................................................................................ 139 Legal Debt Margin Information ..................................................................................................... 140 Pledged-Revenue Coverage ........................................................................................................ 141 Demographic and Economic Statistics ......................................................................................... 142 Principal Employers ...................................................................................................................... 143 Full-time City Employees .............................................................................................................. 144 Operating Indicators ..................................................................................................................... 145 Capital Asset Statistics ................................................................................................................. 146 Schedule of Insurance in Force .................................................................................................... 147 November 17, 2009 To the Honorable Mayor, Members of the Governing Council, and Citizens of the City of La Quinta, California: Government Code 26909 (a) requires that the City, as a local agency of the County, contract with a certified public accountant to perform an annual audit of the accounts and records of the City and that the audit conform to generally accepted auditing standards. Further, Government Code 26909 (b) states that an audit report shall be filed with the State Controller and with the County Auditor of the County in which the district is located within 12 months of the end of the fiscal year. This report is published to fulfill these requirements for the fiscal year ended June 30, 2009. In addition, City Ordinance 2.12.040 requires an annual audit be performed by a certified public accountant. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Lance Soll & Lunghard LLP Certified Public Accountants have issued an unqualified opinion on the City of La Quinta financial statements for the year ended June 30, 2009. The independent auditor’s report is located at the front of the financial section of this report. Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements the letter of transmittal and should be read in conjunction with it. 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 Assistant City Managers and 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 through the County of Riverside, library services through the County of Riverside, visitor and tourist information through Palm Springs Desert Resort Communities Convention and Visitors Authority, City promotion through the La Quinta Chamber of Commerce, water and sewer service through the Coachella Valley Water District, electricity service through the Imperial Irrigation District, refuse collection through Burrtec Waste Industries, public transit through Sunline Transit Agency, and cable service through Time Warner. The City of La Quinta also is financially accountable for a legally separate Redevelopment Agency and Financing Authority. Additional information on these two legally separate entities can be found in the notes to the financial statements. Pursuant to City Ordinance 2.08.060 and 2.12.030, the City Manager and Finance Director are responsible for the preparation of the annual budget for City Council consideration prior to the start of the fiscal year. The annual budget serves as the foundation for the City of La Quinta’s financial planning and control. The budget is prepared by fund, function, department and line item. Department heads may transfer line item resources within a division with the approval of the City Manager. Transfers between divisions and departments need approval from the City Council and the City Manager. ii Local economy According to the State of California Economic Development Department (EDD), as of June 2009, the total workforce for the City of La Quinta was 14,800 of which 13,700 were employed for a 7.4% unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 14.0% and the statewide unemployment rate of 11.6%. During the last ten years, the City of La Quinta has been in a growth phase with net assessed values increasing from $2.69 billion in Fiscal Year1999-2000 to $12.52 billion (over 465%). This major increase in assessed value consists primarily of residential development; however, in the last three years major commercial development has occurred along the Highway 111 corridor. The City of La Quinta has transformed itself from a retirement community known as the “Gem of the Desert” and the western home of golf to a year-round full-service community. Major employers include the La Quinta Resort and Club, PGA West, Home Depot, Wal-Mart, Rancho La Quinta, and Lowe’s. During the past ten years, the City of La Quinta general fund expenditures have increased 314%. Two Departments that have exceeded the average include Community Services (389%), and Public Safety (379%). In the case of Community Services, much of the increase can be attributed to adding library services and park maintenance functions to the Department. In the case of Public Safety, much of the increase is reflected in increased police service personnel. During the same ten-year period, the City of La Quinta general fund revenues increased 203%. Sources that exceeded the average include intergovernmental (373%), taxes (233%), and interest earnings (225%). In the case of intergovernmental revenues, most of the increase is attributable to the way the fire service contract is accounted for and an increase in motor vehicle fees. In the case of taxes, the increase is due greatly to the increase in sales tax revenues from the commercial development along Highway 111. And finally, the increase in interest earnings is due to greater General Fund reserves and additional advances between the General Fund and the Redevelopment Agency. Offsetting these increases were decreases in licenses and permits (-65%) and charges for services (-65%) from the same period ten years ago. These decreases can be attributed to the rapid slow down to development related activates experienced in the City of La Quinta in Fiscal Year 2008-2009. While the City has experienced record setting growth in the past, the recession of Fiscal Year 2008-2009 has impacted the City of La Quinta. This downturn has resulted in our residents and businesses experiencing: (1) a higher level of unemployment, (2) lower property values; (3) more commercial store closings and (4) more home foreclosures than in previous years. In addition, the credit crisis has resulted in fewer new home starts and new businesses delaying their plans to open iii stores in the City. While the City is the home of large and small retailers and hotels, no significant store openings have occurred in Fiscal Year 2008-2009 and several large retailers and a hotel have closed their doors. This has resulted in a reduction in actual tax collections in Fiscal Year 2008-2009 and downward revenue projections for Fiscal Year 2009-2010. If the recession continues, as it very well might, future revenue declines past Fiscal Year 2009-2010 may be on the horizon. In Fiscal Year 2008-2009, the City did tighten its fiscal belt at its mid year review and will have to continue to monitor and possibly further reduce expenditures in Fiscal Year 2009- 2010 given the revenue shortfalls that may continue to occur. Long-term financial planning Each year the City embarks on a strategic planning process which begins in the spring with a discussion of the City Council goals and ends with adoption of the budget in June. The documents that are generated in this strategic planning process include a presentation of the financial achievements for the past fiscal year, a five-year cash flow projection for each City, Redevelopment Agency and Financing Authority fund, and a financial management strategies and recommendation report for the coming fiscal year. W ithin the financial strategies and recommendation report, a “build out” analysis is included which estimates the annual General Fund revenue (inflows) and expenditures (outflows) in thirty years. This build out analysis is updated every three years based upon future land use designations, existing land use and population projections. This build out report projects that in twenty (20) years, with an estimated population of 81,771 versus the current 42,958, the annual revenues into the General Fund will be $3,276,000 less than expenditures. With this information provided during the mid-year financial review, the City of La Quinta is attempting to attract revenue- producing businesses and hotels consistent with its land use planning, while at the same time providing current and future residents a level of service that makes them proud to call La Quinta their home. During Fiscal Year 2008-2009, the General Fund balance decreased by $125,000 consisting of revenue decreases primarily in taxes and intergovernmental offset by expenditure savings in the police and fire divisions in the Public Safety Department, the Planning & Development Administration division, and the Street Maintenance division in Public Works Department. The General Fund balance as of June 30, 2009 was $92.3 million of which $46.2 iv million versus $45.5 million in Fiscal Year 2007-2008 was reserved and $46.1 million versus $47.0 million in Fiscal Year 2007-2008 was unreserved with designations. These designations include an emergency reserve set at 35% of the annual budget plus $4,000,000 and a cash flow reserve of 8.25% of the annual budget. Other designations of the General Fund balance at year end can be found in the Footnotes to the Financial Statements. Additional components of the strategic planning process include the Economic Development Plan, the Capital Improvement Program, the Annual Budget and the Five-Year Resource Allocation Plan. An explanation of each of these documents is provided below. Economic Development Plan This plan outlines a vision and direction for the City’s economic development activities. It presents the mission statement, implementation policies, projected resources, and business plan the City and the La Quinta Redevelopment Agency will follow to sustain a comprehensive economic development effort. It is goal-oriented in that the economic development efforts specified in the plan are a key to generating the financial resources necessary to support both the Resource Allocation Plan and the Capital Improvement Plan. Capital Improvement Plan This plan is primarily a planning document that establishes five-year funding priorities for capital improvements. This plan also includes a listing of all the other desired capital improvements that cannot, or need not, be fu nded within the five-year horizon and totaled $84.5 million. Five-Year Resource Allocation Plan This plan is primarily a planning document that provides a five-year horizon for forecasted operational needs of each department, as well as the City as a whole. This plan is a cyclical review of all operations expenditures to reassess funding mechanisms behind personnel responsibilities and the various service levels of all programs. Annual Budget This document is the annual implementation tool for the overall planning process. The budget will encompass each element of the strategic planning effort and will implement: the goals of the Economic Development Plan; the resource and demand allocation outlined in the Five-Year Resource Allocation Plan; and the capital improvement investment for a given year. v Relevant Financial Policies The State of California has mandated in the past that the City of La Quinta, pursuant to State of California Revenue and Taxation Code Section 97.70 , contribute $332,000 from the General Fund in Fiscal Year 2005-2006 with a similar amount in Fiscal Year 2004-2005 to meet the State budget crisis. Again, in Fiscal Year 2009- 2010 the State of California has mandated that $965,000 in General Fund property taxes be transferred to the State. Also, from Fiscal Year 2002-2003 through Fiscal Year 2005-2006, the La Quinta Redevelopment Agency has contributed $7.8 million to the State of California pursuant to State of California Health and Safety Code 33681.12 to meet its budget shortfalls. The $7.8 million of funds that have been diverted to the State will not be refunded and are not be available for use within the City of La Quinta. While no State mandated contributions were required from Fiscal Year 2006-2007 through Fiscal Year 2008-2009, the State budget crisis of Fiscal Year 2009-2010 will result in an additional diversion of $23.69 million and $4.9 million in Fiscal Year 2010-2011 from the La Quinta Redevelopment Agency for a total take away of $36.3 million. Major Initiatives The La Quinta Redevelopment Agency (Agency) will be spending a considerable amount of effort to acquire sites and facilitate the development of affordable housing units in the City. Toward this end, the Agency is working in partnership with the Coachella Valley Housing Coalition to construct a 218-unit affordable rental housing project on fifteen acres at the northwest corner of Dune Palms Road and Avenue 48 in the City of La Quinta. The Agency’s financial commitment toward this project is $30.1 million and land valued at $8.85 million. The City has a major public facility expansion underway rebuilding Fire Station 32 at its new location at Avenue 52 and Desert Club. Once completed, this $4.2 million facility will better serve the residents of the La Quinta Cove and surrounding areas. The La Quinta Redevelopment Agency has acquired a 525-acre parcel at Avenue 52 and Jefferson Street for the development of two golf courses, a clubhouse, and future hotel resort development. The first golf course was dedicated in January 2005 with the second course, permanent clubhouse, and infrastructure in the planning stages. The Agency continues to seek quality development opportunities for future hotel(s) on the property to generate additional General Fund revenues. vi Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of La Quinta for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2008. This was the thirteenth 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. Respectfully submitted, Thomas P. Genovese John M. Falconer City Manager Finance Director vii viii ix x INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of La Quinta, California We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta, California, as of and for the year ended June 30, 2009, which collectively comprise the City's basic financial statements as listed in the accompanying table of contents. These financial statements are the responsibility of the City of La Quinta’s management. Our responsibility is to express an opinion on t hese financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta as of June 30, 2009, and the respective changes in financial position and cash flows, where applicable, and the respective budgetary comparisons for the General Fund, the Low/Moderate Income Housing PA No. 1 and the Low/Moderate Income Housing PA No. 2 for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated September 22, 2009, on our consideration of the City of La Quinta's internal control over financial reporting and our tests of its compliance with certain laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis is not a required part of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Lance, Soll & Lunghard, LLP 203 North Brea Boulevard Suite 203 Brea, CA 92821 TEL: 714.672.0022 Fax: 714.672.0331 www.lslcpas.com 41185 Golden Gate Circle Suite 103 Murrieta, CA 92562 TEL: 951.304.2728 Fax: 951.304.3940 Brandon W. Burrows, C.P.A Donald L. Parker, C.P.A Michael K. Chu, C.P.A David E. Hale, C.P.A, C.F.P. A Professional Corporation Donald G. Slater, C.P.A Richard K. Kikuchi, C.P.A Susan F. Matz, C.P.A. To the Honorable Mayor and Members of the City Council City of La Quinta, California Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying introductory section, the combining and individual fund statements, schedules and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying combining and individual nonmajor fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements, and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The accompanying introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. September 22, 2009 2 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, 2009. 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 $564,221,000 (net assets). Of this amount, $92,487,000 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The governmental activities total net assets increased by $16,919,000 and the business-type total net assets decreased by $1,069,000 attributable to 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 $180,428,000, a decrease of $7,397,000 in comparison with the prior year. Approximately 60 percent of this total amount, $109,087,000, is available for spending at the government's discretion (unreserved fund balance). • At the end of the current fiscal year, the operations/projects/transfers designations comprised $18,988,000 or 41 percent of total general fund budgeted expenditures. • The City of La Quinta’s total debt decreased by $5,813,000 during the current fiscal year from $241,665,000 to $237,368,000 through normally scheduled debt service payments. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of La Quinta’s basic financial statements. The City of La Quinta’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements The government-wide financial statements are designed to provide readers with a broad overview of the City of La Quinta’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City of La Quinta’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of La Quinta is improving or deteriorating. The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related 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 (e.g., earned but unused vacation leave). 3 Both of the government-wide financial statements distinguish functions of the City of La Quinta that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of La Quinta include general government, public safety, community services, planning and development and public works. The business-type activities of the City of La Quinta include the SilverRock Golf course operations. The government-wide financial statements include not only the City of La Quinta itself (known as the primary government), but also the La Quinta Redevelopment Agency and the La Quinta Financing Authority. Although legally separate entities they function for all practical purposes as departments of the City of La Quinta, and therefore have been included as an integral part of the primary government. The government-wide financial statements can be found in the table of contents under the Financial Section of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of La Quinta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of La Quinta can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. 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 five (35) 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) special revenue funds, two (2) debt service funds and three (3) capital project funds. These seven (7) funds are considered to be major funds. Data from the other twenty six (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 statement has been provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found in the table of contents under the heading Basic Financial Statements. 4 Proprietary funds Proprietary funds can be broken down into enterprise and internal service funds. The City of La Quinta maintains one (1) proprietary fund. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of La Quinta uses an enterprise fund to account for its SilverRock Golf Course operations, which is considered to be a major fund. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of La Quinta’s various functions. The City of La Quinta has three (3) internal service funds to account for its major equipment replacement including vehicles, for its information technology systems, and for its park equipment and facility needs. Because these three services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report The basic proprietary fund financial statements can be found on the pages listed in the table of contents for Proprietary Funds: Statement of Net Assets, Statement of Revenues, Expenditures and Changes in Net Assets, and Statement of Cash Flows. Fiduciary funds Fiduciary funds, also called agency funds, are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City of La Quinta’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on the pages listed in the table of contents for Fiduciary Funds: Statement of Fiduciary Assets and Liabilities – Agency Funds. Notes to the financial statements The notes provide additional information that is essential to 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 the Basic Financial Statements. Other information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of La Quinta's General Fund and its budget appropriations. Required supplementary information can be found in the table of contents under the section Required Supplemental Information and includes Notes to the Required Supplementary Information and a General Fund Budgetary Comparison Schedule. The combining statements referred to earlier in connection with non-major governmental funds, internal service funds, and agency funds are presented immediately following the required supplementary. Combining and individual fund statements and schedules can be found in the table of contents under Supplementary Schedules. Government-wide financial analysis As noted earlier, net assets may serve over time as a useful indicator of a govern ment's financial position. In the case of the City of La Quinta, assets exceeded liabilities by $564,221,000 at the close of the most recent fiscal year, which is $15,850,000 greater than the previous year. The largest portion of the City of La Quinta’s net assets, which was 65% this year and 70% last year, reflects its investment in capital assets (e.g., land, buildings; machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. The City of La Quinta uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of La Quinta’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 5 City of La Quinta Net Assets 2009 2008 2009 2008 2009 2008 Assets: Current and other assets 225,009,148$ 233,280,016$ (3,721,932)$ (2,917,790)$ 221,287,216$ 230,362,226$ Capital assets 559,028,995 536,929,916 42,821,825 43,459,062 601,850,820 580,388,978 Total assets 784,038,143$ 770,209,932$ 39,099,893$ 40,541,272$ 823,138,036$ 810,751,204$ Liabilities: Current liabilities 22,137,899$ 21,364,433$ 215,522$ 191,734$ 22,353,421$ 21,556,167$ Non-current liabilities 236,278,140 240,142,880 285,217 681,047 236,563,357 240,823,927 Total liabilities 258,416,039$ 261,507,313$ 500,739$ 872,781$ 258,916,778$ 262,380,094$ Net assets: 323,669,955$ 343,019,328$ 42,767,282$ 42,778,015$ 366,437,237$ 385,797,343$ Restricted 105,297,168 86,041,189 - - 105,297,168 86,041,189 Unrestricted 96,654,981 79,642,102 (4,168,128) (3,109,524) 92,486,853 76,532,578 Total Net Assets 525,622,104$ 508,702,619$ 38,599,154$ 39,668,491$ 564,221,258$ 548,371,110$ Invested in Capital assets, net of related debt Governmental activities Business-type activities Total An additional portion of the City of La Quinta's net assets (19 percent versus 16 percent in the prior year) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets - $92,487,000 (16 percent) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of La Quinta is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental activities; however, the business type unrestricted net assets had a deficit of $4,168,000. Governmental activities Governmental activities increased net assets by $16,919,000 accounting for a 3 percent change in the net assets from the previous year. Key elements of these changes are as follows: City of La Quinta Changes in Net Assets 2009 2008 Change 2009 2008 Change 2009 2008 Change Revenues: Program reveues: Charges for services 3,121,276$ 4,467,560$ (1,346,284)$ 3,368,135$ 3,814,233$ (446,098)$ 6,489,411$ 8,281,793$ (1,792,382)$ Operating grants and contributions 10,725,280 5,905,664 4,819,616 - - - 10,725,280 5,905,664 4,819,616 Capital grants and contributions 10,647,270 50,090,419 (39,443,149) - - - 10,647,270 50,090,419 (39,443,149) General revenues: Property taxes 6,653,583 6,014,305 639,278 - - - 6,653,583 6,014,305 639,278 Other taxes 50,735,819 58,641,107 (7,905,288) - - - 50,735,819 58,641,107 (7,905,288) Investment income 7,387,244 10,230,489 (2,843,245) 3,074 4,310 (1,236) 7,390,318 10,234,799 (2,844,481) Motor vehicle in lieu 3,940,801 3,803,647 137,154 - - - 3,940,801 3,803,647 137,154 Gain (loss) on sale of capital assets 21,542 57,346 (35,804) - - - 21,542 57,346 (35,804) Miscellaneous 118,567 1,220,627 (1,102,060) - - - 118,567 1,220,627 (1,102,060) Total reveues 93,351,382 140,431,164 (47,079,782) 3,371,209 3,818,543 (447,334) 96,722,591 144,249,707 (47,527,116) Expenses: General government 7,836,146 6,953,073 883,073 - - - 7,836,146 6,953,073 883,073 Public safety 19,736,941 13,472,036 6,264,905 - - - 19,736,941 13,472,036 6,264,905 Planning and development 16,162,689 35,323,858 (19,161,169) - - - 16,162,689 35,323,858 (19,161,169) Community services 5,963,850 5,797,116 166,734 - - - 5,963,850 5,797,116 166,734 Public works 11,100,833 11,097,526 3,307 - - - 11,100,833 11,097,526 3,307 Interest on long-term debt 15,631,438 15,522,441 108,997 - - - 15,631,438 15,522,441 108,997 Golf course - - - 4,440,546 4,809,302 (368,756) 4,440,546 4,809,302 (368,756) Total expenses 76,431,897 88,166,050 (11,734,153) 4,440,546 4,809,302 (368,756) 80,872,443 92,975,352 (12,102,909) 16,919,485 52,265,114 (35,345,629) (1,069,337) (990,759) (78,578) 15,850,148 51,274,355 (35,424,207) Transfers - - - - - - - - Contributions - - - 352,687 (352,687) - 352,687 (352,687) Restatements - - - - - - - - Increase in net assets 16,919,485 52,265,114 (35,345,629) (1,069,337) (638,072) (431,265) 15,850,148 51,627,042 (35,776,894) Net assets - 7/1/2008 508,702,619 456,437,505 52,265,114 39,668,491 40,306,563 (638,072) 548,371,110 496,744,068 51,627,042 Net assets - 6/30/2009 525,622,104$ 508,702,619$ 16,919,485$ 38,599,154$ 39,668,491$ (1,069,337)$ 564,221,258$ 548,371,110$ 15,850,148$ Increase in net assets before transfers and restatements Governmental activities Business-type activities Total 6 • Revenues decreased by $47,080,000 with the largest category decrease in capital grants and contributions $39,443,000. Capital grants and contributions decreased primarily as a result of the acquisition of Highway 111 from Caltrans in the prior fiscal year 2007-2008 for $37,617,000. In addition, the other taxes category decreased $7,900,000 consisting primarily in decreased property tax increment (net of pass through payments) ($5,413,000), sales taxes ($1,213,000), and transient occupancy taxes ($847,000). • Expenses decreased by $11,734,000 with the two largest category changes being a decrease in Planning and Development ($19,161,000) and an increase in the Public Safety category of $6,265,000. The decrease in the Planning and Development costs is a result of completion of the Vista Dunes Courtyard Homes. The increase in the Public Safety costs is a result of higher Police costs and construction beginning on the Station 32 Fire station. • There were no contributions in assets from the governmental activities to the business-type activities. Expenses and Program Revenues - Government Activities 7,836,146 19,736,941 5,963,850 15,631,43815,846,470 11,100,833 16,162,689 404,592 3,728,554 170,140 4,344,070 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 General government Public safety Planning and development Community services Public works Interest expense Expenses Program revenues Expenses and Program Revenues - Business-type Activities 4,440,546 3,368,135 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000 Golf Expenses Program revenues 7 Business-type activities This was the fourth full year of operations for the SilverRock Golf fund since the golf course began early operation in 2005. Net assets decreased by $ (1,069,000) from the effects of an operating loss. Charges for services primarily consisted of green fees and totaled $3,368,000 which was $446,000 less than the previous year with golf course expenses of $4,441,000, which was $369,000 less than the previous year. 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 spendable resources. 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 $180,428,000, a decrease of $7,397,000 in comparison with the prior year. Of this amount $109,087,000 or 60% constitutes unreserved, which is available for spending at the government's discretion. The remainder of fund balance ($71,341,000) is reserved or designated to indicate that it is not available for new spending because it has already been committed to 1) to pay debt service ($18,729,000), 2) to advance funds to other funds ($50,459,000), or 3) for a variety of other restricted purposes ($2,153,000). General Fund The general fund is the chief operating fund of the City of La Quinta. At the end of the current fiscal year, unreserved fund balance of the general fund was $46,128,000, while total fund balance reached $92,327,000. 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 200 percent of the total budgeted expenditures. The City of La Quinta’s general fund balance decreased by $125,000 during the current fiscal year. Key factors in this slight decrease are as follows: • Actual expenditures were $9,876,000 less than the final budget. Divisions that were under budget for the year were Street Maintenance ($2,230,000), Police ($495,000), Fire ($827,000), and Planning & Development Administration ($775,000). In addition, actual transfers out were $4,276,000 less than budgeted with $3,749,000 of this amount unspent Fire Station 32 construction costs and $430,000 for the Avenue 52 and Desert Club traffic signal which will both be carried over to fiscal year 2009-2010. • Actual revenues were $7,589,000 less than the final budget. Categories that received less than the final budget were taxes ($2,377,000) and intergovernmental ($5,534,000). Sales taxes were $952,000 less than budgeted and transient taxes were $1,145,000 less and budgeted. Actual sales tax and transient occupancy tax collections in fiscal year 2008-2009 were $1,566,000 and $1,018,000, respectively, less than Fiscal year 2007-2008. Intergovernmental revenues were less than budgeted because drawdowns from the Fire Tax Credit were not necessary for fire operations ($827,000), Fire Station 32 construction costs ($3,749,000), and the Avenue 52 Desert Club Traffic Signal ($430,000). 8 Low/Moderate Income Housing PA No. 1 and 2 Fund The Low/Moderate Income Housing No. 1 and 2 Funds are used to account for the promotion of low and moderate income capital projects in the La Quinta Redevelopment Project Area 1 and 2 from 20% of the tax increment property tax generated in these Project Areas. During fiscal year 2008-2009, PA 1 net changes in fund balance increased by $462,000 and PA 2 net changes in fund balance increased by $3,374,000 from fiscal year 2007-2008. The fund balance available in these funds at year end was $6,248,000 and $19,887,000, respectively. During the fiscal year, the Low/Moderate Income Housing PA No. 1 Fund purchased the Washington Street Apartments for $6,188,000 and assumed $2,333,000 in debt from the previous owner. Capital Improvement Fund The fund is primarily used to record the expenditure of funds for capital projects. Major capital projects funded during fiscal year 2008-2009 were Wolff Waters Apartments, Highway 111 widening between Adams Street and Jefferson Street, Fred Waring Drive street improvements, Ave 58 street improvements, and SilverRock Clubhouse planning expenditures. Civic Center Fund The 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 2007-2008 and the final repayment of the original City Hall construction bonds is scheduled in fiscal year 2018-2019. A $9.62 million advance from the General Fund is outstanding at the end of fiscal year 2008-2009. Redevelopment Agency Project Area 1 Capital Projects Fund The fund is primarily used to account for the construction of projects in this area within the Redevelopment Agency Project Area 1 which is generally south of Ave 50. The major funding for these projects was a $5 million transfer from the Debt Service Fund for capital projects including the permanent SilverRock Clubhouse and SilverRock infrastructure improvements. Redevelopment Agency Project Area 1 & 2 Debt Service Funds The Redevelopment Agency Project Area 1 & 2 Debt Service Funds are used to accumulate resources, primarily property taxes, to pay debt service. The fund balance in Project Area 1 increased by $398,000, even with a $5 million transfer to the Redevelopment Agency Project Area 1 Capital Project Fund and a decrease of $2.96 million of property tax increment revenues. The Debt Service Project Area 1 Fund did not have to make an estimated $4.85 million payment to the State of California for an Educational Relief Augmentation Fund (ERAF) payment in fiscal year 2008-2009. The fund balance in Project Area 2 increased by $1.33 million during the current fiscal year to reduce the fund balance deficit from -4.46 million to -3.13 million. The key factor in this increase was that even while property tax increment revenue was $390,000 less than the prior Fiscal year, revenues still continued to exceed expenditures in the fund. 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. 9 General Fund Budgetary Highlights During the year there was a $5,683,000 increase in appropriations and transfers out between the original ($40,554,000) and final amended budget ($46,237,000). Following are the main components of the changes: • During the mid-year review, the General Fund budget for various divisions was reduced by $954,000 based upon an estimated decrease of revenues forecasted for fiscal year 2008-2009; • $4,216,000 for the Fire Station 32 construction and $430,000 for the Avenue 52 traffic signal were appropriated. These two projects are funded by a combination of Fire Tax credit funds and developer impact fee funds; and, • The fiscal year 2007-2008 budget included carryover encumbrances of $161,500 and $2,606,000 in carryover appropriations into fiscal year 2008-2009. The budget increases were possible because of additional anticipated revenues and the carryover encumbrances and appropriations were possible from available net changes in fund balances. Capital Asset and Debt Administration Capital assets The City of La Quinta’s investment in capital assets for its governmental and business-type activities as of June 30, 2009, amounts to $601,851,000 (net of accumulated depreciation). This investment in capital assets includes land, right of way, buildings and improvements, machinery and equipment, streets and bridges, and construction in progress. The investment in capital assets increased this fiscal year from the purchase of properties which exceeded the depreciation expenses. The following chart lists the asset categories for governmental and business like activities net of depreciation. City of La Quinta Capital Assets (net of depreciation) 2009 2008 2009 2008 2009 2008 Land 75,663,033$ 80,645,874$ 36,840,832$ 36,840,832$ 112,503,865$ 117,486,706$ Buildings and improvements 45,394,528 44,355,498 5,598,377 5,832,933 50,992,905 50,188,431 Equipment and furniture 1,002,533 913,530 378,554 773,115 1,381,087 1,686,645 Vehicles 652,497 655,934 2,036 6,105 654,533 662,039 Software - - 2,026 6,077 2,026 6,077 Infrastructure 393,914,087 370,659,873 - - 393,914,087 370,659,873 Construction in progress 42,402,317 39,699,207 - - 42,402,317 39,699,207 Total 559,028,995$ 536,929,916$ 42,821,825$ 43,459,062$ 601,850,820$ 580,388,978$ Governmental activities Business-type activities Total Major capital asset events during the current fiscal year included the following: Governmental activities • The transfer of $8,845,000 of land held by the Redevelopment Agency to the Coachella Valley Housing Coalition for the Wolff Waters Affordable Housing Project; • Recording infrastructure improvements, including developer dedications of $6,364,000, to street improvements, street right of way, street sidewalks and curbs and gutters, and street medians; • Completed construction of the Phase 2 Jefferson Street Improvements totaling $15,485,000; 10 • Completed widening of Highway 111 between Adams Street and Jefferson Street to three lanes totaling $2,952,000; • Completed construction of Avenue 58 between Madison Street and Jefferson Street totaling $1,128,000; and, • The purchase of the land and Washington Street Apartment buildings for affordable housing totaling $6,183,221. Business-type activities • No improvements to the SilverRock Resort were made in fiscal year 2008-2009. Additional information on the City of La Quinta’s capital assets can be found in Footnote 6 to the financial statements. Long-term debt At the end of the current fiscal year, the City of La Quinta had total bonded debt outstanding of $240,984,000. $142,265,000 of this debt amount represents bonds secured solely by specified revenue sources (i.e., tax allocation bonds); while, $91,715,000 of the debt represents revenue bonds that will be paid from pledged tax increment property tax housing funds. In addition, $681,000 in capital equipment leases is outstanding in connection with SilverRock Golf Course. City of La Quinta Outstanding Debt 2009 2008 2009 2008 2009 2008 Debt type: Capital leases 149,169$ 182,094$ 285,217$ 681,047$ 434,386$ 863,141$ Compensated absences 919,100 833,155 - - 919,100 833,155 Developer agreement 343,814 499,786 - - 343,814 499,786 Pass through agreement 2,874,653 3,660,621 - - 2,874,653 3,660,621 Dut to government agencies 2,330,065 1,828,311 - - 2,330,065 1,828,311 Loans payable 1,556,283 - - - 1,556,283 - Tax allocation bonds 139,190,000 142,265,000 - - 139,190,000 142,265,000 Revenue bonds 89,720,000 91,715,000 - - 89,720,000 91,715,000 Total 237,083,084$ 240,983,967$ 285,217$ 681,047$ 237,368,301$ 241,665,014$ Governmental activities Business-type activities Total The total outstanding debt decreased by $4,297,000 during fiscal year 2008-2009. In conjunction with the purchase of the land and Washington Street Apartment buildings, the La Quinta Redevelopment Agency assumed a United States Department of Agriculture (USDA) outstanding note of $761,000 and a loan from Provident Bank of $1,572,000 from the previous owner of the Washington Street Apartments. Additional information on the City of La Quinta's long-term debt can be found in notes 7 and 8 of the financial statements. Economic Factors and Next Year's Budgets and Rates These factors were considered in preparing the City of La Quinta’s budget for fiscal year 2009-2010: • The City of La Quinta had a 7.4 versus 4.3 percent last year unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 14.0 versus 8.4 percent last year and the statewide unemployment rate of 11.6 versus 7.0 percent last year. • During the last ten years, the City of La Quinta has been in a growth phase with net assessed values increasing from $2.69 billion in fiscal year 1999-2000 to $12.52 billion or over 465 percent. 11 • During the current fiscal year, the general fund net loss was $(125,000) and $3,447,000 of General fund balance has been designated for carry over appropriations and encumbrances. • The State of California fiscal year 2009-2010 and 2010-2011 budgets include a State-wide diversion of tax increment funding from Redevelopment Agencies. The La Quinta Redevelopment Agency portion of these take-aways is estimated to be $23,560,000 in fiscal year 2009-2010 and $4,851,000 in fiscal year 2010-2011. The City of La Quinta adopted a balanced general fund budget for fiscal year 09/10. Requests for Information This financial report is designed to provide a general overview of the City of La Quinta’s finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of La Quinta, John Falconer, Finance Director, P.O. Box 1504, La Quinta, CA, 92247 or by telephone at 760-777-7150. 12 CITY OF LA QUINTA STATEMENT OF NET ASSETS Governmental Business-Type Activities Activities Total Assets: Cash and investments 174,164,370$ 237,757$ 174,402,127$ Receivables: Accounts 200,550 15,356 215,906 Taxes 2,426,472 - 2,426,472 Notes and loans 13,239,548 - 13,239,548 Accrued interest 291,185 231 291,416 Internal balances 4,290,475 (4,290,475) - Prepaid costs 31,621 1,865 33,486 Deposits 14,370 250,000 264,370 Inventories - 63,334 63,334 Due from other governments 7,380,249 - 7,380,249 Deferred charges 4,241,470 - 4,241,470 Restricted assets: Cash and investments with fiscal agent 18,728,838 - 18,728,838 Capital assets not being depreciated 401,585,410 36,840,832 438,426,242 Capital assets, net of depreciation 157,443,585 5,980,993 163,424,578 Total Assets 784,038,143 39,099,893 823,138,036 Liabilities: Accounts payable 3,623,794 161,908 3,785,702 Accrued liabilities 434,287 2,093 436,380 Accrued interest 4,071,598 - 4,071,598 Due to other governments 963,333 - 963,333 Retentions payable 2,322,197 - 2,322,197 Unearned revenue 5,075,887 2,521 5,078,408 Deposits payable 5,538,859 49,000 5,587,859 OPEB Obligation 107,944 - 107,944 Noncurrent liabilities: Due within one year 7,535,512 230,674 7,766,186 Due in more than one year 228,742,628 54,543 228,797,171 Total Liabilities 258,416,039 500,739 258,916,778 Net Assets: Invested in capital assets, net of related debt 323,669,955 42,767,282 366,437,237 Restricted for: Public safety 245,468 - 245,468 Planning and development 32,755,936 - 32,755,936 Community services 924,450 - 924,450 Public works 65,881,216 - 65,881,216 Debt service 5,490,098 - 5,490,098 Unrestricted 96,654,981 (4,168,128) 92,486,853 Total Net Assets 525,622,104$ 38,599,154$ 564,221,258$ JUNE 30, 2009 Primary Government See Notes to Financial Statements 13 CITY OF LA QUINTA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2009 Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government 7,836,146$ 25,053$ 145,087$ -$ Public safety 19,736,941 1,373,952 2,333,764 20,838 Planning and development 16,162,689 138,391 3,770,704 434,975 Community services 5,963,850 275,178 129,414 - Public works 11,100,833 1,308,702 4,346,311 10,191,457 Interest on long-term debt 15,631,438 - - - Total Governmental Activities 76,431,897 3,121,276 10,725,280 10,647,270 Business-Type Activities: Golf Course 4,440,546 3,368,135 - - Total Business-Type Activities 4,440,546 3,368,135 - - Total Primary Government 80,872,443$ 6,489,411$ 10,725,280$ 10,647,270$ General Revenues: Taxes: Property taxes, levied for general purpose Tax increment Sales taxes Transient occupancy taxes Franchise taxes Business licenses taxes Other taxes Use of money and property Motor vehicle in lieu - unrestricted Gain on sale of capital asset Other Total General Revenues and Transfers Change in Net Assets Net Assets at Beginning of Year Net Assets at End of Year Program Revenues See Notes to Financial Statements 14 Primary Government Governmental Business-Type Activities Activities Total (7,666,006)$ -$ (7,666,006)$ (16,008,387) - (16,008,387) (11,818,619) - (11,818,619) (5,559,258) - (5,559,258) 4,745,637 - 4,745,637 (15,631,438) - (15,631,438) (51,938,071) - (51,938,071) - (1,072,411) (1,072,411) - (1,072,411) (1,072,411) (51,938,071) (1,072,411) (53,010,482) 6,653,583 - 6,653,583 36,702,197 - 36,702,197 7,279,513 - 7,279,513 4,480,467 - 4,480,467 1,533,249 - 1,533,249 285,304 - 285,304 455,089 - 455,089 7,387,244 3,074 7,390,318 3,940,801 - 3,940,801 21,542 - 21,542 118,567 - 118,567 68,857,556 3,074 68,860,630 16,919,485 (1,069,337) 15,850,148 508,702,619 39,668,491 548,371,110 525,622,104$ 38,599,154$ 564,221,258$ Net (Expenses) Revenues and Changes in Net Assets See Notes to Financial Statements 15 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2009 Capital Projects Funds General Assets: Cash and investments 56,267,267$ 4,128,834$ 17,636,140$ 3,133,461$ Receivables: Accounts 61,958 10,685 42,703 - Taxes 1,549,215 76,709 101,742 - Notes and loans - 3,795,746 9,443,802 - Accrued interest 156,415 3,760 22,805 - Prepaid costs 12,424 - 19,197 - Deposits 9,830 - 4,540 - Due from other governments 6,015,082 - - 442,560 Due from other funds 18,890 - 2,143,702 - Advances to other funds 46,137,692 - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets 110,228,773$ 8,015,734$ 29,414,631$ 3,576,021$ Liabilities and Fund Balances: Liabilities: Accounts payable 2,614,562$ 25,838$ 53,911$ 856,772$ Accrued liabilities 431,280 - - - Due to other governments 11,709 - - - Retentions payable - - - 2,322,197 Deferred revenues 5,606,812 1,728,718 9,443,802 - Unearned revenues 4,181,505 - - 182,052 Deposits payable 5,055,524 12,785 29,597 215,000 Due to other funds - - - - Advances from other funds - - - - Total Liabilities 17,901,392 1,767,341 9,527,310 3,576,021 Fund Balances: Reserved: Reserved for encumbrances 39,214 - - - Reserved for prepaid costs 12,424 - 19,197 - Reserved for notes and loans - 2,067,028 - - Reserved for advances to other funds 46,137,692 - - - Reserved for deposits 9,830 - 4,540 - Reserved for debt service - - - - Unreserved: Unreserved, reported in: General Fund 46,128,221 - - Special revenue funds - 4,181,365 19,863,584 - Capital projects funds - - - - Debt service funds - - - - Total Fund Balances 92,327,381 6,248,393 19,887,321 - Total Liabilities and Fund Balances 110,228,773$ 8,015,734$ 29,414,631$ 3,576,021$ Special Revenue Fund Low/Moderate Income Housing PA No. 1 Low/Moderate Income Housing PA No. 2 Capital Improvement See Notes to Financial Statements 16 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2009 Assets: Cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Due to other governments Retentions payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Reserved: Reserved for encumbrances Reserved for prepaid costs Reserved for notes and loans Reserved for advances to other funds Reserved for deposits Reserved for debt service Unreserved: Unreserved, reported in: General Fund Special revenue funds Capital projects funds Debt service funds Total Fund Balances Total Liabilities and Fund Balances (Continued) -$ 29,816,233$ 17,755,276$ 16,191,418$ - - - - - - 306,837 391,969 - - - - - 34,557 19,587 20,897 - - - - - - - - - - - - - - - - - 3,385,401 - - - 11,729,717 - - -$ 44,965,908$ 18,081,700$ 16,604,284$ -$ 36,625$ -$ -$ - - - - - - 599,558 352,066 - - - - - - - - - - - - - - - - - - - - 9,617,167 - 12,000,000 19,378,966 9,617,167 36,625 12,599,558 19,731,032 - - - - - - - - - - - - - 3,385,401 - - - - - - - 11,729,717 - - - - - - - - - - (9,617,167) 29,814,165 - - - - 5,482,142 (3,126,748) (9,617,167) 44,929,283 5,482,142 (3,126,748) -$ 44,965,908$ 18,081,700$ 16,604,284$ Debt Service FundsCapital Projects Funds Civic Center Redevelopment Agency PA No. 1 Redevelopment Agency PA No. 1 Redevelopment Agency PA No. 2 See Notes to Financial Statements 17 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2009 Assets: Cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Due to other governments Retentions payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Reserved: Reserved for encumbrances Reserved for prepaid costs Reserved for notes and loans Reserved for advances to other funds Reserved for deposits Reserved for debt service Unreserved: Unreserved, reported in: General Fund Special revenue funds Capital projects funds Debt service funds Total Fund Balances Total Liabilities and Fund Balances Other Total Governmental Governmental Funds Funds 23,628,283$ 168,556,912$ 85,204 200,550 - 2,426,472 - 13,239,548 26,857 284,878 - 31,621 - 14,370 922,607 7,380,249 - 2,162,592 935,718 50,458,811 6,999,121 18,728,838 32,597,790$ 263,484,841$ 26,889$ 3,614,597$ - 431,280 - 963,333 - 2,322,197 - 16,779,332 712,330 5,075,887 225,953 5,538,859 2,162,592 2,162,592 5,172,203 46,168,336 8,299,967 83,056,413 2,000 41,214 - 31,621 - 2,067,028 935,718 50,458,811 - 14,370 6,999,121 18,728,838 - 46,128,221 13,804,876 37,849,825 2,548,152 22,745,150 7,956 2,363,350 24,297,823 180,428,428 32,597,790$ 263,484,841$ See Notes to Financial Statements 18 CITY OF LA QUINTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30, 2009 Fund balances of governmental funds 180,428,428$ Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity: Infrastructure and right-of-way 459,878,794 Other capital assets 158,310,170 Accumulated depreciation (75,271,832) Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable (228,910,000) Unamortized bond premium/discount 804,944 Unamortized cost of issuance 4,241,470 Other long-term liabilities (7,253,984) Compensated absences (911,539) Accrued interest payable for the current portion of interest due on long-term debt has not been reported in the governmental funds. (4,071,598) Revenues reported as deferred revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity.16,779,332 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The assets and liabilities of the internal service funds must be added to the Statement of Net Assets.21,705,863 The net post-employment benefit liability is recorded in the government-wide financial statements but not in the fund financial statements.(107,944) Net assets of governmental activities 525,622,104$ See Notes to Financial Statements 19 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Capital Projects Funds General Revenues: Taxes 20,687,205$ 10,129,845$ 5,695,928$ -$ Assessments - - - - Licenses and permits 871,167 - - - Intergovernmental 8,907,566 - 327,205 2,491,732 Charges for services 663,738 - - - Use of money and property 4,196,101 227,847 406,256 - Fines and forfeitures 434,635 - - - Contributions - - - - Developer participation - - 16,136 900,834 Miscellaneous 121,691 91,632 48,360 - Total Revenues 35,882,103 10,449,324 6,493,885 3,392,566 Expenditures: Current: General government 6,266,263 - - - Public safety 18,905,111 - - - Planning and development 1,367,350 1,380,108 1,072,134 - Community services 2,989,567 - - - Public works 4,667,193 - - - Capital outlay 434,241 6,188,260 - 25,665,723 Debt service: Principal retirement 32,925 - 24,715 205,972 Interest and fiscal charges - - 131,279 42,482 Pass-through agreement payments - - - - Total Expenditures 34,662,650 7,568,368 1,228,128 25,914,177 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,219,453 2,880,956 5,265,757 (22,521,611) Other Financing Sources (Uses): Transfers in 353,550 - 307,656 22,521,611 Transfers out (1,697,641) (4,752,176) (2,199,766) - Other debts issued - 2,332,752 - - Total Other Financing Sources (Uses)(1,344,091) (2,419,424) (1,892,110) 22,521,611 Net Change in Fund Balances (124,638) 461,532 3,373,647 - Fund Balances, Beginning of Year 92,452,019 5,786,861 16,513,674 - Fund Balances, End of Year 92,327,381$ 6,248,393$ 19,887,321$ -$ Special Revenue Funds Low/Moderate Income Housing PA No. 1 Low/Moderate Income Housing PA No. 2 Capital Improvement See Notes to Financial Statements 20 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Revenues: Taxes Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Pass-through agreement payments Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Other debts issued Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year (Continued) -$ -$ 40,519,380$ 22,783,714$ - - - - - - - - - - - - - - - - - 684,429 220,854 269,131 - - - - - - - - 145,087 - - - - - - - 145,087 684,429 40,740,234 23,052,845 205,776 - 484,171 261,348 - - - - - 1,007,276 - - - - - - - - - - - - - - - - 3,745,968 315,000 163,478 - 8,350,190 1,961,712 - - 23,240,384 19,186,286 369,254 1,007,276 35,820,713 21,724,346 (224,167) (322,847) 4,919,521 1,328,499 - 5,000,000 4,444,520 1,953,599 - (2,872,058) (8,966,396) (1,953,599) - - - - - 2,127,942 (4,521,876) - (224,167) 1,805,095 397,645 1,328,499 (9,393,000) 43,124,188 5,084,497 (4,455,247) (9,617,167)$ 44,929,283$ 5,482,142$ (3,126,748)$ Debt Service FundsCapital Projects Funds Civic Center Redevelopment Agency PA No. 1 Redevelopment Agency PA No. 1 Redevelopment Agency PA No. 2 See Notes to Financial Statements 21 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Revenues: Taxes Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Pass-through agreement payments Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Other debts issued Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Other Total Governmental Governmental Funds Funds -$ 99,816,072$ 927,816 927,816 - 871,167 6,952,851 18,679,354 10,041 673,779 1,279,619 7,284,237 - 434,635 - - 1,181,728 2,243,785 23,867 285,550 10,375,922 131,216,395 12,878 7,230,436 41,755 18,946,866 2,434,967 7,261,835 1,709,418 4,698,985 1,656,862 6,324,055 75,635 32,363,859 1,995,000 6,319,580 4,699,457 15,348,598 - 42,426,670 12,625,972 140,920,884 (2,250,050) (9,704,489) 5,921,994 40,502,930 (18,086,294) (40,527,930) - 2,332,752 (12,164,300) 2,307,752 (14,414,350) (7,396,737) 38,712,173 187,825,165 24,297,823$ 180,428,428$ See Notes to Financial Statements 22 CITY OF LA QUINTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES JUNE 30, 2009 Net change in fund balances - total governmental funds (7,396,737)$ 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 capital outlays exceeded depreciation in the current period. Capital outlay 32,363,859 Depreciation expense (9,809,578) The issuance of long-term liabilities provides current financial resources in the governmental funds, but issuing debt increases the long-term liabilities in the Statement of Net Assets. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. New debt issued (2,332,752) Repayment of principal 6,319,580 Amortization of issuance costs, premiums and discounts (362,403) Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period.79,563 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.(190,256) Revenues reported as deferred revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity.(2,376,032) 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.624,241 Change in net assets of governmental activities 16,919,485$ See Notes to Financial Statements 23 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT BY DEPARTMENT GENERAL FUND YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 92,452,019$ 92,452,019$ 92,452,019$ -$ Resources (Inflows): Taxes 23,410,100 23,064,554 20,687,205 (2,377,349) Licenses and permits 1,264,080 834,080 871,167 37,087 Intergovernmental 9,240,800 14,441,467 8,907,566 (5,533,901) Charges for services 722,029 541,609 663,738 122,129 Use of money and property 4,258,078 4,168,078 4,196,101 28,023 Fines and forfeitures 270,000 270,000 434,635 164,635 Miscellaneous 98,776 98,776 121,691 22,915 Transfers in 838,171 405,959 353,550 (52,409) Amounts Available for Appropriation 132,554,053 136,276,542 128,687,672 (7,588,870) Charges to Appropriation (Outflow): General government Legislative 1,010,322 1,011,422 905,083 106,339 City Manager 452,143 367,992 408,086 (40,094) Development Services 2,138,497 2,155,076 1,768,500 386,576 Management Services 1,547,699 1,493,899 1,396,937 96,962 City Clerk 715,586 695,783 608,386 87,397 Fiscal Services 926,626 837,824 849,212 (11,388) Central Services 402,511 402,511 330,059 72,452 Total general government 7,193,384 6,964,507 6,266,263 698,244 Public safety Police 11,948,610 12,017,952 11,522,687 495,265 Building & Safety Admin.395,318 300,373 356,687 (56,314) Building 989,516 967,320 942,093 25,227 Code Compliance 997,512 997,975 971,551 26,424 Animal Control 407,510 408,210 380,868 27,342 Civic Center Bldg 585,926 566,416 507,270 59,146 Fire 4,819,375 4,893,085 4,066,235 826,850 Emergency Services 151,274 155,774 157,720 (1,946) Total public safety 20,295,041 20,307,105 18,905,111 1,401,994 Planning and Development Administration 1,065,142 1,535,886 761,091 774,795 Current Planning 675,286 753,586 606,259 147,327 Total planning and development 1,740,428 2,289,472 1,367,350 922,122 Community Services Community Services Admin 1,055,656 1,291,811 971,724 320,087 Senior Center 436,902 364,802 403,145 (38,343) Parks & Recreation 223,579 230,779 208,331 22,448 Park Maintenance 1,421,031 1,421,331 1,406,367 14,964 Total community services 3,137,168 3,308,723 2,989,567 319,156 Public works Administration 718,443 685,523 644,425 41,098 Development Services 1,091,168 1,017,350 981,811 35,539 Maintenance/Operations - Street 2,640,789 2,950,373 720,869 2,229,504 Maintenance/Operations - Lighting 1,230,321 1,143,354 989,341 154,013 Traffic 549,479 680,189 564,329 115,860 Construction Management 821,577 256,072 766,418 (510,346) Total public works 7,051,777 6,732,861 4,667,193 2,065,668 Capital outlay 420,446 660,128 434,241 225,887 Debt service: Principal retirement - - 32,925 (32,925) Transfers out 715,454 5,973,790 1,697,641 4,276,149 Total Charges to Appropriations 40,553,698 46,236,586 36,360,291 9,876,295 Budgetary Fund Balance, June 30 92,000,355$ 90,039,956$ 92,327,381$ 2,287,425$ See Notes to Financial Statements 24 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT LOW/MODERATE INCOME HOUSING PA NO. 1 YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 5,786,861$ 5,786,861$ 5,786,861$ -$ Resources (Inflows): Taxes 11,501,200 11,169,000 10,129,845 (1,039,155) Use of money and property 53,000 25,000 (12,744) (37,744) Contributions 225,000 225,000 240,591 15,591 Miscellaneous - 100,650 91,632 (9,018) Other debts issued - 2,453,458 2,332,752 (120,706) Proceeds from sale of capital assets 150,000 150,000 - (150,000) Amounts Available for Appropriation 17,716,061 19,909,969 18,568,937 (1,341,032) Charges to Appropriation (Outflow): Planning and development 1,691,131 1,770,240 1,380,108 390,132 Capital outlay - 6,517,255 6,188,260 328,995 Transfers out 4,444,479 4,752,135 4,752,176 (41) Total Charges to Appropriations 6,135,610 13,039,630 12,320,544 719,086 Budgetary Fund Balance, June 30 11,580,451$ 6,870,339$ 6,248,393$ (621,946)$ See Notes to Financial Statements 25 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT LOW/MODERATE INCOME HOUSING PA NO. 2 YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 16,513,674$ 16,513,674$ 16,513,674$ -$ Resources (Inflows): Taxes 5,872,700 5,843,250 5,695,928 (147,322) Intergovernmental - 335,392 327,205 (8,187) Use of money and property 380,500 431,780 406,256 (25,524) Developer participation - - 16,136 16,136 Miscellaneous - 47,817 48,360 543 Transfers in - 307,656 307,656 - Amounts Available for Appropriation 22,766,874 23,479,569 23,315,215 (164,354) Charges to Appropriation (Outflow): Planning and development 878,844 1,419,180 1,072,134 347,046 Debt service: Principal retirement - 22,294 24,715 (2,421) Interest and fiscal charges - 137,544 131,279 6,265 Transfers out 1,983,598 4,780,742 2,199,766 2,580,976 Total Charges to Appropriations 2,862,442 6,359,760 3,427,894 2,931,866 Budgetary Fund Balance, June 30 19,904,432$ 17,119,809$ 19,887,321$ 2,767,512$ See Notes to Financial Statements 26 CITY OF LA QUINTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2009 Governmental Activities- Internal Service Funds Assets: Cash and investments 237,757$ 5,607,458 $ Receivables: Accounts 15,356 - Accrued interest 231 6,307 Prepaid costs 1,865 - Deposits 250,000 - Inventories 63,334 - Total Current Assets 568,543 5,613,765 Noncurrent: Capital assets - net of accumulated depreciation 42,821,825 16,111,863 Total Noncurrent Assets 42,821,825 16,111,863 Total Assets 43,390,368$ 21,725,628$ Liabilities and Net Assets: Liabilities: Current: Accounts payable 161,908$ 9,197$ Accrued liabilities 2,093 3,007 Unearned revenues 2,521 - Deposits payable 49,000 - Capital leases payable 230,674 - Total Current Liabilities 446,196 12,204 Noncurrent: Advances from other funds 4,290,475 - Compensated absences - 7,561 Capital leases payable 54,543 - Total Noncurrent Liabilities 4,345,018 7,561 Total Liabilities 4,791,214 19,765 Net Assets: Invested in capital assets, net of related debt 42,536,608 16,111,863 Unrestricted (3,937,454) 5,594,000 Total Net Assets 38,599,154 21,705,863 Total Liabilities and Net Assets 43,390,368$ 21,725,628$ Business-Type Activities - Enterprise Funds Golf Course See Notes to Financial Statements 27 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS JUNE 30, 2009 Governmental Activities- Internal Service Funds Operating Revenues: Sales and service charges 3,368,135$ 1,624,476$ Total Operating Revenues 3,368,135 1,624,476 Operating Expenses: Salaries and benefits 77,080 113,131 Fuel and oil - 79,531 Maintenance and parts - 101,560 Contract services 3,571,252 135,274 Software and supplies - 106,209 Depreciation 637,237 799,628 Other 65,784 22,428 Total Operating Expenses 4,351,353 1,357,761 Operating Income (Loss)(983,218) 266,715 Nonoperating Revenues (Expenses): Interest revenue 3,074 103,007 Interest expense (89,193) - Gain (loss) on disposal of capital assets - 21,542 Total Nonoperating Revenues (Expenses)(86,119) 124,549 Income (Loss) Before Contributions and Transfers (1,069,337) 391,264 Capital contributions - 207,977 Transfers in - 25,000 Changes in Net Assets (1,069,337) 624,241 Net Assets: Beginning of Year 39,668,491 21,081,622 Change in Net Assets (1,069,337) 624,241 End of Fiscal Year 38,599,154$ 21,705,863$ Business-Type Activities - Enterprise Funds Golf Course See Notes to Financial Statements 28 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2009 Governmental Activities- Internal Service Funds Cash Flows from Operating Activities: Cash received from customers and users 3,366,124$ -$ Cash received from/(paid to) interfund service provided (11,058) 1,624,476 Cash paid to suppliers for goods and services (3,603,076) (461,072) Cash paid to employees for services (76,744) (108,822) Net Cash Provided (Used) by Operating Activities (324,754) 1,054,582 Cash Flows from Non-Capital Financing Activities: Cash transfers in - 25,000 Advance from other funds 875,202 - Net Cash Provided (Used) by Non-Capital Financing Activities 875,202 25,000 Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets - (136,450) Principal paid on capital debt (395,830) - Interest paid on capital debt (89,193) - Proceeds from sales of capital assets - 21,542 Net Cash Provided (Used) by Capital and Related Financing Activities (485,023) (114,908) Cash Flows from Investing Activities: Interest received 3,331 115,187 Net Cash Provided (Used) by Investing Activities 3,331 115,187 Net Increase (Decrease) in Cash and Cash Equivalents 68,756 1,079,861 Cash and Cash Equivalents at Beginning of Year 169,001 4,527,597 Cash and Cash Equivalents at End of Year 237,757$ 5,607,458$ Business-Type Activities - Enterprise Funds Golf Course See Notes to Financial Statements 29 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2009 Governmental Activities- Internal Service Funds Business-Type Activities - Enterprise Funds Golf Course Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss)(983,218.00)$ 266,715.00$ Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation 637,237 799,628 (Increase) decrease in accounts receivable (3,266) - (Increase) decrease in inventories 707 - Increase (decrease) in accounts payable 10,195 (16,070) Increase (decrease) in accrued liabilities 336 676 Increase (decrease) in deposits payable 12,000 - Increase (decrease) in unearned revenue 1,255 - Increase (decrease) in compensated absences - 3,633 Total Adjustments 658,464 787,867 Net Cash Provided (Used) by Operating Activities (324,754)$ 1,054,582$ Non-Cash Investing, Capital, and Financing Activities: Capital assets contributed by other funds -$ 207,977$ See Notes to Financial Statements 30 CITY OF LA QUINTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2009 Agency Funds Assets: Cash and investments 566,970$ Receivables: Taxes 11,296 Accrued interest 655 Total Assets 578,921$ Liabilities: Deposits payable 578,921$ Total Liabilities 578,921$ See Notes to Financial Statements 31 THIS PAGE INTENTIONALLY LEFT BLANK 32 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2009 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1: Summary of Significant Accounting Policies a. Reporting Entity The City of La Quinta (“the 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: La Quinta Redevelopment Agency The La Quinta Redevelopment Agency (Agency) has established two redevelopment project areas pursuant to the State of California Health & Safety Code, Section 33000 entitled “Community Redevelopment Law”. On November 29, 1983 and May 16, 1989, the City Council approved and adopted the Redevelopment Plans for the La Quinta Redevelopment Project Areas No. 1 and No. 2, respectively. These plans provide for the elimination of blight and deterioration, which was found to exist in the project areas. Although the Agency is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Agency. Separate financial statements of the Agency can be obtained at City Hall. 33 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) City of La Quinta Public Financing Authority The La Quinta Public Financing Authority (Authority) was established pursuant to a Joint Exercise of Powers Agreement dated November 19, 1991, between the City of La Quinta and the La Quinta Redevelopment Agency. The purpose of the Authority is to provide financing necessary for the construction of various public improvements through the issuance of debt. Although the 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 Authority. Separate financial statements of the Authority are not prepared. b. Government-Wide and Fund Financial Statements The basic financial statements of the City are composed of the following: Government-wide financial statements Fund financial statements Notes to the financial statements Financial reporting is based upon all GASB pronouncements, as well as the FASB Statements and Interpretations, APB Opinions, and Accounting Research Bulletins that were issued on or before November 30, 1989, that does not conflict with or contradict GASB pronouncements. Government-wide Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not properly included among program revenues are reported instead as general revenues. Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as expenditure. Proceeds of long-term debt are recorded as a liability in the government-wide financial statements, rather than as other financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditure. 34 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Fund Financial Statements The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial information for fiduciary funds and similar component units. Fiduciary funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation Government-wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental Funds In the fund financial statements, governmental funds are presented using the modified-accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses a 60 day availability period, with the exception of gas tax which is 120 days. Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed delivered tax revenues are recognized as revenues in the period in which the underlying exchange transaction on which they are based takes place. Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. 35 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period. Non-current portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered “available spendable resources”, since they do not represent net current assets. Recognition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables. Noncurrent portions of other long-term receivables are offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. When both restricted and unrestricted resources are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources. Proprietary Funds The City’s enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net assets. Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness of the 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. 36 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Operating expenses for Enterprises Funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Private-sector standards of accounting and financial reporting issued prior to December 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. Fiduciary Funds The City’s fiduciary funds are agency funds. Agency funds are custodial in nature. Assets equal liabilities. Agency funds are presented using the accrual basis of accounting. d. Major Funds, Internal Service Funds and Fiduciary Fund Types The City’s major 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, Building and Safety, and Community Services. Low / Moderate Income Housing – Project Area No. 1 Fund – This fund is used to account for the required 20% set aside of property tax increments that is legally restricted for increasing and improving housing for low and moderate income households. Low / Moderate Income Housing – Project Area No. 2 Fund – This fund is used to account for the required 20% set aside of property tax increments that is legally restricted for increasing and improving housing for low and moderate income households. Capital Improvement Fund – This capital projects fund is used to account for the planning, design and construction of various capital projects throughout the City of La Quinta and the La Quinta Redevelopment Agency. Civic Center Fund – To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the Civic Center. Redevelopment Agency Project Area No. 1 – Capital Project Fund – To account for the bond proceeds, interest and other funding that will be used for development, planning, construction and land acquisition. Redevelopment Agency Project Area No. 1 - Debt Service Fund – This debt service fund is used to account for the accumulation of resources for the payment of debt service for bond principal and interest and trustee fees for Project Area No. 1. 37 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Redevelopment Agency Project Area No. 2 - Debt Service Fund – This Debt service fund is used to account for the accumulation of resources for the payment of debt service for bond principal, interest and trustee fees for Project Area No. 2. The City’s major proprietary fund is as follows: Golf Course – To account for the activities of the SilverRock Golf Resort. Other fund types of the City are as follows: Internal Service Funds: Equipment Replacement Fund – This fund accounts for equipment and vehicle maintenance and replacement services provided to other departments on a cost-reimbursement basis. Information Technology Fund – This fund is used to account for the acquisition for computer equipment, maintenance, and services to support information systems within the City. Costs are reimbursed by the benefiting departments. Park Equipment and Facilities Fund – This fund is used to account for the purchase and replacement of City owned park facility infrastructure. Costs are reimbursed by the benefiting departments. Agency Funds: These funds account for assets held by the City as an agency for assessment district bondholders. e. Assets, Liabilities and Net Assets or Equity Investments For financial reporting purposes, investments are adjusted to their fair value. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. Some investments are valued on an unamortized cost basis. For these investments, there is no material difference from fair value. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investment balance. Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary fund’s share in the cash and investment pool of the City of La Quinta. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the 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. 38 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Inventory Inventory is valued at cost using the first in / first out (FIFO) method. The City uses the consumption method of accounting for inventories. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Capital Assets Capital assets (including infrastructure) are recorded at cost where historical records are available and at an estimated historical cost where no historical records exist. Contributed capital assets are valued at their estimated fair market value at the date of the contribution. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of three years or more. Capital Assets include public domain (infrastructure) consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains. Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the governm ent-wide financial statements and in the fund financial statements of the proprietary funds. Depreciation is charged as an expense against operations and accumulated depreciations is reported on the respective balance sheet. The following schedule summarizes capital asset useful lives: Buildings and improvements 10-30 years Equipment and furniture 3-20 years Vehicles 5-10 years Infrastructure 10-50 years Software 5-10 years Compensated Absences Sick time is vested on a percentage based on number of years employed at the City. Maximum accumulation of sick and vacation is 30 and 40 days, respectively. Upon termination or retirement, permanent employees are entitled to receive compensation at their current base salary for all unused vacation leave. If an employee terminates with a minimum of two years service, the employee is entitled to receive 25% of the value of his unused sick leave. The percentage increases by 25% for each five-year period until the employee is entitled to 75% of the value of his unused sick leave. This will occur upon the completion of ten years of continuous employment. Fund Balance In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. 39 City of La Quinta Notes to Financial Statements (Continued) II. STEWARDSHIP Note 2: Stewardship, Compliance and Accountability a. Budgetary Data General Budget Policies The City adopts an annual budget prepared on the modified accrual basis of accounting for its governmental funds and on the accrual basis of accounting for its proprietary funds. The City manager or his designee is authorized to transfer budgeted amounts between the accounts of any department or funds that are approved by City Council. Prior year appropriations lapse unless they are approved for carryover into the following fiscal year. Expenditures may not legally exceed appropriations at the department level. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue, and similar governmental funds. Encumbrances outstanding at year-end are reported as a reservation of fund balance. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year end are completed. They do not constitute expenditures or estimated liabilities. Budget Basis of Accounting Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). b. At June 30, 2009, the following funds had deficit fund balances: Major Capital Projects Funds: Civic Center (9,617,167)$ Major Debt Service Funds: Redevelopment Agency PA No. 2 (3,126,748) Nonmajor Special Revenue Funds: Library (131,086) Nonmajor Capital Projects Funds: Library (131,086) Parks and Recreation (1,444,776) Library Development (1,940,626) Fire Facility (935,718) 40 City of La Quinta Notes to Financial Statements (Continued) Note 2: Stewardship, Compliance and Accountability (Continued) c. Excess of expenditures over appropriations are as follows: Expenditures for the year ended June 30, 2009, exceeded the appropriations of the General Fund and major special revenue funds as follows: Budget Actual Variance General Fund: General Government City Manager 367,992$ 408,086$ (40,094)$ Fiscal services 837,824 849,212 (11,388) Public Safety Building & safety admin 300,373 356,687 (56,314) Emergency services 155,774 157,720 (1,946) Community Services Senior center 364,802 403,145 (38,343) Public Works Construction management 256,072 766,418 (510,346) III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments Cash and investments as of June 30, 2009, are classified in the accompanying financial statements as follows: Statement of Net Assets: Cash and investments 174,402,127$ Cash with fiscal agent 18,728,838 Statement of Fiduciary Net Assets: Cash and investments 566,970 Total cash and investments 193,697,935$ Cash and investments as of June 30, 2009, consist of the following: Cash on hand 1,565$ Deposits with financial institutions 986,916 Investments 192,709,454 Total cash and investments 193,697,935$ 41 City of La Quinta Notes to Financial Statements (Continued) Note 3: Cash and Investments (Continued) Investments Authorized by the California Government Code and the Entity’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. 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. Investment Types Authorized by State Law *Maximum Maturity *Maximum Percentage of Portfolio *Maximum Investment In One Issuer U.S. Treasury Obligations 5 years None None U.S. Agency Securities 3 years None $20 million Commercial Paper 90 days 15% $5 million Certificates of Deposit 3 years 60% None Medium-Term Notes 3 years 10% $5 million Money Market Mutual Funds 60 days 60%10% Local Agency Investment Fund (LAIF) N/A 25% $40 million Investment Agreements N/A N/A N/A * Based on state law requirements or investment policy requirements, whichever is more restrictive Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that a re authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Maximum Maturity Maximum Percentage Allowed U.S. Treasury Obligations None None U.S. Agency Securities None None Banker's Acceptance 360 days None Commercial Paper 270 days None Money Market Mutual Funds N/A None Negotiable Certificates of Deposit 360 days None Authorized Investment Type 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. 42 City of La Quinta Notes to Financial Statements (Continued) Note 3: Cash and Investments (Continued) 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: Total 6 Months or Less 6 Months to 1 Year 1 to 3 Years U.S. Treasury bills 99,898,396$ 99,898,396$ -$ -$ Certificates of Deposit 969,000 - - 969,000 Commercial paper 4,998,734 4,998,734 - - Medium term notes 12,119,302 1,997,131 - 10,122,171 State investment pool 55,995,184 55,995,184 - - Held by bond trustee: Money market funds 754,621 754,621 - - U.S. Treasury bills 17,974,217 17,974,217 - - Total 192,709,454$ 181,618,283$ -$ 11,091,171$ Investment Type Remaining Maturity (in Months) Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's investment policy limits investments in commercial paper to those rated A-1 and P-1 or higher from Standard and Poor’s (S&P) and Moody’s, respectively; medium term notes that are rated “AA” or higher by S&P; and money market mutual funds that are rated “AAA”. The quality of U .S. Treasury securities is not analyzed since they are not deemed to have credit risk. As of June 30, 2009, 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 commercial paper were all rated A-1 and P-1 or higher from S&P and Moody’s and insured under the Temporary Loan Guarantee Program (TLGP). The City’s investments in medium term notes were all rated AA or better by S&P with all but one investment in this category insured under the TLGP. The City's investments in money market mutual funds were all rated “AAA” by S&P and Moody’s. As of June 30, 2009, 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 (limited to a face value of $20 million) and Commercial Paper and Medium-Term Notes (limited to a face value of $5 million). As of June 30, 2009, the City had no investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total investments. 43 City of La Quinta Notes to Financial Statements (Continued) Note 3: Cash and Investments (Continued) 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 Entity 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. 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 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 44 City of La Quinta Notes to Financial Statements (Continued) Note 4: Property Taxes (Continued) The La Quinta Redevelopment Agency’s primary source of revenue comes from property taxes. Property taxes allocated to the Agency are computed in the following manner: a) The assessed valuation of all property within the project area is determined on the date of adoption of the Redevelopment Plan. b) Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are allocated to the Agency; all taxes on the “frozen” assessed valuation of the propert y are allocated to the City and other districts. The Agency has no power to levy and collect taxes and any legislative property tax shift might reduce the amount of tax revenues that would otherwise be available to pay the principal of, and interest on, debt. Broadened property tax exemptions could have a similar effect. Conversely, an increase in the tax rate or assessed valuation, or any reduction or elimination of present exemptions would increase the amount of tax revenues that would be available to pay principal and interest on debt. Note 5: Notes Receivable Outstanding Balance at June 30, 2009 In September 1994, the Redevelopment Agency sold certain real property to LINC Housing for $2,112,847. The property was used to construct single-family homes and rental units to increase the City's supply of low and moderate income housing. The note bears interest at 6% per annum and is due in full on June 15, 2029.3,764,107$ In December 2000, the Redevelopment Agency entered into an agreement with LINC Housing to receive $9,500,000 as a reimbursement for Agency costs incurred for the construction of infrastructure related to the development of senior apartments. Payments are due to the Agency based on annual positive cash flow generated by the rental of the units. All unpaid principal and interest on the note are due fifty-five years after the completion of the project. Interest on the note accrues at 3% per annum.9,443,802 Other notes receivable 31,639 Total notes receivable balance at June 30, 2009 13,239,548$ 45 City of La Quinta Notes to Financial Statements (Continued) Note 6: Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2009, is as follows: Beginning Ending Balance at Balance at July 1, 2008 Additions Deletions Transfers June 30, 2009 Governmental Activities: Capital assets, not being depreciated: Land 80,645,874$ 3,862,159$ 8,845,000$ -$ 75,663,033$ Right of way 282,676,426 843,634 - - 283,520,060 Construction-in-progress 39,699,207 25,914,176 1,474,607 (21,736,459) 42,402,317 Total Capital Assets, Not Being Depreciated 403,021,507 30,619,969 10,319,607 (21,736,459) 401,585,410 Capital assets, being depreciated: Buildings and improvements 55,127,713 2,934,270 - - 58,061,983 Equipment and furniture 1,983,605 221,896 101,506 64,645 2,168,640 Vehicles 1,584,718 198,515 204,834 - 1,578,399 Infrastructure 151,821,209 5,826,173 2,960,462 21,671,814 176,358,734 Total Capital Assets, Being Depreciated 210,517,245 9,180,854 3,266,802 21,736,459 238,167,756 Less accumulated depreciation: Buildings and improvements 10,772,215 1,895,240 - - 12,667,455 Equipment and furniture 1,070,075 197,538 101,506 - 1,166,107 Vehicles 928,784 201,950 204,832 - 925,902 Infrastructure 63,837,762 4,479,392 2,352,447 - 65,964,707 Total Accumulated Depreciation 76,608,836 6,774,120 2,658,785 - 80,724,171 Total Capital Assets, Being Depreciated, Net 133,908,409 2,406,734 608,017 21,736,459 157,443,585 Governmental Activities Capital Assets, Net 536,929,916$ 33,026,703$ 10,927,624$ -$ 559,028,995$ Depreciation expense was charged to the following functions in the Statement of Activities: General government 124,925$ Public safety 1,048,913 Planning and development 65,571 Community services 921,155 Public works 4,613,556 Total governmental activities 6,774,120$ 46 City of La Quinta Notes to Financial Statements (Continued) Note 6: Capital Assets (Continued) Capital asset activity for business-type activities for the year ended June 30, 2009, is as follows: Beginning Ending Balance at Balance at July 1, 2008 Additions Delet ions Transfers June 30, 2009 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 1,779,148 - - - 1,779,148 Vehicles 20,348 - - - 20,348 Software 20,255 - - - 20,255 Total Capital Assets, Being Depreciated 8,456,216 - - - 8,456,216 Less accumulated depreciation: Buildings and improvements 803,532 234,556 - - 1,038,088 Equipment and furniture 1,006,033 394,561 - - 1,400,594 Vehicles 14,243 4,069 - - 18,312 Software 14,178 4,051 - - 18,229 Total Accumulated Depreciation 1,837,986 637,237 - - 2,475,223 Total Capital Assets, Being Depreciated, Net 6,618,230 (637,237) - - 5,980,993 Governmental Activities Capital Assets, Net 43,459,062$ (637,237)$ -$ -$ 42,821,825$ Depreciation expense was charged to the following function in the Statement of Activities: Golf Course 637,237$ 47 City of La Quinta Notes to Financial Statements (Continued) Note 7: 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, 2009: Beginning Balance at July 1, 2008 Additions Deletions Balance at June 30, 2009 Due within one year City: Compensated absences payable $ 833,155 1,048,039$ 962,094$ 919,100$ 919,100$ Due to the Coachella Valley Association of Governments 228,311 - 50,000 178,311 50,000 Developer Agreement Payable 499,786 - 155,972 343,814 169,230 Copier Lease Payable 182,094 - 32,925 149,169 34,586 Redevelopment Agency: RDA Project Area No. 1: Tax allocation bonds 136,350,000 - 2,960,000 133,390,000 3,135,000 Pass-through agreements payable: Coachella Valley Unified School District 3,660,621 - 785,968 2,874,653 801,688 RDA Project Area No. 2: Tax allocation bonds 5,915,000 - 115,000 5,800,000 120,000 Due to County of Riverside 1,600,000 - 200,000 1,400,000 200,000 Provident Loan - 1,572,031 15,748 1,556,283 25,325 US Department of Agriculture - 760,721 8,967 751,754 10,583 Financing Authority: Revenue bonds 91,715,000 - 1,995,000 89,720,000 2,070,000 Total $ 240,983,967 $ 3,380,791 $ 7,281,674 237,083,084 $ 7,535,512 Less: Unamortized premiums/discounts (804,944) Net Long-Term Debt 236,278,140$ For the governmental activities, accrued employee benefits are generally liquidated by the general fund. b. A description of individual issues of debt (excluding defeased bonds) outstanding as of June 30, 2009, is as follows: Due to the Coachella Valley Association of the Governments The City of La Quinta entered into an Interchange Reimbursement Agreement with the Coachella Valley Association of Governments (CVAG) to finance capital improvements at the Washington Street I-10 interchange. The City has agreed to reimburse CVAG $828,311 over a period of seventeen years beginning July 31, 1996. The annual payments to CVAG range from $28,311 to $50,000. At June 30, 2009, the balance payable was $178,311. 48 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) The minimum annual requirements to amortize the payable to Coachella Valley Association of Governments as of June 30, 2009, are as follows: Principal 2009 - 2010 50,000$ 2010 - 2011 50,000 2011 - 2012 50,000 2012 - 2013 28,311 Totals 178,311$ Developer Agreement Payable In December 1998, the City entered into a tax sharing agreement with Stamko Development Co. in relation to the development of an auto mall located within the City. For a period of ten years, the agreement requires the City to make quarterly payments to the developer in the amount of 33% of the sales and use tax revenues generated by the site up to a maximum amount of $122,250 in any twelve month period. Additionally, if the sales and use tax revenues generated exceed $530,000, adjusted annually by the CPI index, the City is required to pay $76,204 for that year for a maximum of ten years, based upon a $500,000 note at an interest rate of 8.5%. For the year ended June 30, 2009, the City paid the developer $122,250 in sales tax reimbursement and $76,204 since the sales tax generated exceeded the required amount. The balance at June 30, 2009, is $343,814. The minimum annual requirements to amortize the developer agreement payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 169,230$ 29,224$ 2010 - 2011 174,584 23,870 Totals 343,814$ 53,094$ Copier Lease Payable In June 2008, the City entered into a 5-year lease agreement for photocopiers for $182,094 maturing in monthly increments ranging from $2,682 in July 2008 to $3,417 in June 2013, with interest payable monthly at 4.93%. This lease agreement qualifies as a capital lease for accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments at the inception date. 49 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) The minimum future lease obligations and the net present value of the lease payments as of June 30, 2009 are as follows: Year Ending June 30, Total 2010 44,358$ 2011 44,358 2012 44,358 2013 44,358 Total Payments 177,432 Less Amount Representing Interest (28,263) Outstanding Principal 149,169$ Tax Allocation Bonds As of June 30, 2009, the following issuances of Tax Allocation Bonds were outstanding: Series 1994, Project Area No. 1 Tax Allocation Refunding Bonds, Series 1994, were issued by the Agency on May 5, 1994, in the amount of $26,665,000 to refund the outstanding aggregate principal amount of the Agency’s Tax Allocation Bonds, Series 1989 and 1990. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. Interest rates on the bonds range from 3.80% to 8% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest on and principal of the bonds are payable solely from pledged tax increment revenues. The bonds are not just subject to redemption prior to maturity. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2009, is $8,920,000. The minimum annual requirements to amortize the bond payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 2,000,000$ 578,160$ 2010 - 2011 2,145,000 426,868 2011 - 2012 2,305,000 264,443 2012 - 2013 2,470,000 90,155 8,920,000$ 1,359,626$ 50 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) Series 1998, Project Area No. 1 Tax allocation refunding bonds, Series 1998, in the amount of $15,760,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency’s Tax Allocation Bonds, Series 1991. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. Interest rates on the bonds range from 5.20% to 5.25% and are payable semi-annually on March 1 and September 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 was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2009, is $15,760,000. The minimum annual requirements to amortize the bond payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 -$ 819,520$ 2010 - 2011 - 819,520 2011 - 2012 - 819,520 2012 - 2013 - 819,520 2013 - 2014 655,000 802,490 2014 - 2019 3,825,000 3,450,070 2019 - 2024 4,935,000 2,317,250 2024 - 2029 6,345,000 857,870 Totals 15,760,000$ 10,705,760$ Series 1998, Project Area No. 2 Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency’s Tax 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 at a price equal to the principal amount thereof plus accrued interest. 51 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2009, is $5,800,000. The minimum annual requirements to amortize the bond payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 120,000$ 299,550$ 2010 - 2011 125,000 293,272 2011 - 2012 130,000 286,738 2012 - 2013 140,000 279,819 2013 - 2014 145,000 272,516 2014 - 2019 840,000 1,240,731 2019 - 2024 1,085,000 992,381 2024 - 2029 1,405,000 666,881 2029 - 2034 1,810,000 247,275 Totals 5,800,000$ 4,579,163$ Series 2001, Project Area No. 1 On August 15, 2001, the Agency issued tax allocation bonds in the amount of $48,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2001 tax allocation bonds were issued at a discount of $422,400 and issuance costs of $1,517,325. The bonds consist of $17,280,000 of term bonds that accrue interest at 5.00% and mature on September 1, 2021, and $30,720,000 of term bonds that accrue interest at 5.18% and mature on September 1, 2031. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2009, is $48,000,000 with an unamortized discount of $384,497. The minimum annual requirements to amortize the bond payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 -$ 2,430,720$ 2010 - 2011 - 2,430,720 2011 - 2012 - 2,430,720 2012 - 2013 - 2,430,720 2013 - 2014 1,565,000 2,391,595 2014 - 2019 9,095,000 10,669,725 2019 - 2024 11,605,000 8,089,803 2024 - 2029 14,865,000 4,742,618 2029 - 2034 10,870,000 849,915 Totals 48,000,000$ 36,466,536$ 52 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) Series 2002, Project Area No. 1 On June 12, 2002, the Agency issued tax allocation bonds in the amount of $40,000,000 to finance capital projects benefiting the La Quinta redevelopment Project Area No. 1. The 2002 tax allocation bonds were issued at a discount of $360,000 and issuance costs of $1,250,096. The bonds consist of $6,355,000 of serial bonds and $33,645,000 of term bonds. Interest Rates on serial bonds range from 1.75% and 4.00% and are payable semi-annually on March 1 and September 1 of each year until maturity. Term bonds accrue interest at 5.00% and 5.125% and mature on September 1, 2022 and September 1, 2023. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2009, is $36,425,000 with an unamortized discount of $338,958. The minimum annual requirements to amortize the bond payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 660,000$ 1,807,556$ 2010 - 2011 680,000 1,782,926 2011 - 2012 705,000 1,756,429 2012 - 2013 735,000 1,727,981 2013 - 2014 705,000 1,695,656 2014 - 2019 4,065,000 7,902,281 2019 - 2024 5,190,000 6,749,694 2024 - 2029 6,660,000 5,250,306 2029 - 2034 17,025,000 2,094,459 Totals 36,425,000$ 30,767,288$ Series 2003, Project Area No. 1 On September 1, 2003, the Agency issued tax allocation bonds in the amount of $26,400,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2003 tax allocation bonds were issued at a discount of $277,200 and issuance costs of $629,191. Interest is payable semi-annually on March 1 and September 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. The principal balance of outstanding bonds at June 30, 2009, is $24,285,000 with an unamortized discount of $222,076. 53 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 475,000$ 1,508,106$ 2010 - 2011 505,000 1,481,401 2011 - 2012 530,000 1,453,198 2012 - 2013 560,000 1,423,495 2013 - 2014 590,000 1,392,158 2014 - 2019 3,515,000 6,358,580 2019 - 2024 4,770,000 5,076,104 2024 - 2029 6,485,000 3,303,559 2029 - 2034 6,855,000 917,861 Totals 24,285,000$ 22,914,462$ Pass-through Agreements Payable - Coachella Valley Unified School District An agreement was entered into in 1991 between the Agency, the City of La Quinta and the Coachella Valley Unified School District (District), which provides for the payment to the District a portion of tax increment revenue associated with properties within District confines. Such payments are subordinate to other indebtedness of the Agency incurred in furtherance of the Redevelopment Plan for Project Area No. 1. This tax increment is paid to the District over a payment schedule through August 1, 2012, in amounts ranging from $421,168 to $834,076, for a total amount of $15,284,042. Tax increment payments outstanding at June 30, 2009, totaled $2,874,653. The District agrees to use such funds to provide classroom and other construction costs, site acquisition, school busses, and expansion or rehabilitation of current facilities. The minimum annual requirements to amortize payable to Coachella Valley Unified School District as of June 30, 2009, are as follows: Principal 2009 - 2010 801,688$ 2010 - 2011 817,722 2011 - 2012 834,076 2012 - 2013 421,167 Totals 2,874,653$ Due to County of Riverside - Project Area No. 2 Based on an agreement dated July 5, 1989, between the Agency and the County of Riverside, until the tax increment reaches $5,000,000 annually in Project Area No. 2, the Agency will pay to the County 50% of the County portion of tax increment. At the County’s option, the County’s pass-through portion can be retained by the Agency to finance new County facilities or land costs that benefit the County and serve the La Quinta population. Per the agreement, the Agency must repay all amounts withheld from the County. The tax increment is to be paid to the County in amounts ranging from $100,000 to $250,000 over a payment schedule through June 30, 2015. Interest does not accrue on this obligation. The balance at June 30, 2009, is $1,400,000. 54 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) The minimum annual requirements to amortize amounts due to the County of Riverside as of June 30, 2009, are as follows: Principal 2009 - 2010 200,000$ 2010 - 2011 200,000 2011 - 2012 250,000 2012 - 2013 750,000 Totals 1,400,000$ 1996 Lease Revenue Refunding Bonds On November 15, 1996, the Authority issued $8,790,000 of 1996 Lease Revenue Refunding Bonds to defease the remaining 1991 Local Agency Revenue Bonds in the amount of $8,200,000 and to provide funds for construction of remaining improvements to the La Quinta Civic Center site. The bonds consist of $3,630,000 of serial bonds and $5,150,000 of term bonds. The serial bonds will accrue interest at rates between 3.70% and 5.30% and principal amounts mature between October 1, 1997 and October 1, 2008, in amounts ranging from $285,000 to $380,000. The term bonds accrue interest at a rate of 5.55% and mature on October 1, 2018. A surety agreement has been purchased to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The amount of principal outstanding at June 30, 2009, is $5,160,000. The minimum annual requirements to amortize the bond payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 400,000$ 275,280$ 2010 - 2011 420,000 252,525 2011 - 2012 445,000 228,521 2012 - 2013 470,000 203,130 2013 - 2014 495,000 176,351 2014 - 2019 2,930,000 423,743 Totals 5,160,000$ 1,559,550$ 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 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. 55 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2005. Interest payments range from 3% to 5.25% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2024, September 1, 2029 and September 1, 2034, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2017, September 1, 2025, and September 1, 2030, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The principal balance of outstanding bonds at June 30, 2009, is $84,560,000 with an unamortized premium of $140,587. The minimum annual requirements to amortize the bond payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 1,670,000$ 4,243,331$ 2010 - 2011 1,740,000 4,175,131 2011 - 2012 1,805,000 4,099,719 2012 - 2013 1,890,000 4,016,581 2013 - 2014 1,975,000 3,924,681 2014 - 2019 11,485,000 17,953,106 2019 - 2024 14,830,000 14,520,756 2024 - 2029 19,090,000 10,163,219 2029 - 2034 24,415,000 4,700,072 2034 - 2039 5,660,000 145,039 Totals 84,560,000$ 67,941,635$ Washington Street Apartments In October 2008, the La Quinta 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 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, 2009, is $1,556,283. 56 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) The minimum annual requirements to amortize the loan payable as of June 30, 2009, are as follows: Principal Interest 2009 - 2010 25,325$ 129,149$ 2010 - 2011 27,525 126,949 2011 - 2012 29,917 124,558 2012 - 2013 32,516 121,959 2013 - 2014 35,341 119,134 2014 - 2019 228,453 543,919 2019 - 2022 1,177,206 202,041 Totals 1,556,283$ 1,367,709$ 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 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, 2009, is $751,754. Principal Interest 2009 - 2010 10,583$ 74,699$ 2010 - 2011 11,691 73,591 2011 - 2012 12,915 72,367 2012 - 2013 14,267 71,014 2013 - 2014 15,761 69,520 2014 - 2019 107,303 319,106 2019 - 2024 176,546 249,863 2024 - 2029 290,473 135,936 2029 - 2031 112,215 8,602 Totals 751,754$ 1,074,698$ 57 City of La Quinta Notes to Financial Statements (Continued) Note 8: Changes in Long-Term Liabilities – Business-type Activities Changes in business-type long-term liabilities for the year ended June 30, 2009, were as follows: Balance at July 1, 2008 Additions Deletions Balance at July 1, 2009 Due within one year Golf Course: Capital leases payable $ 681,047 -$ 395,830$ 285,217$ 230,674$ 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. Obligations under capital leases are as follows: National City Golf Finance The present value of the minimum lease payment on golf carts was capitalized at using an incremental borrowing rate of 6.50% at the inception of the lease. The lease is payable in 36 monthly installments of $7,962 which began February 1, 2008.143,382$ The present value of the minimum lease payment on golf equipment was capitalized at $273,642 using an incremental borrowing interest rate of 9.68% at the inception of the lease. The lease is payable in 60 monthly installments of $5,771, which began May 1, 2005.33,670 The present value of the minimum lease payment on golf equipment was capitalized at $543,118 using an incremental borrowing interest rate of 9.0% at the inception of the lease. The lease is payable in 60 monthly installments of $9,318, which began January 1, 2005.55,746 The present value of the minimum lease payment on lawn equipment was capitalized at $90,554 using an incremental borrowing interest rate of 6.99% at the inception of the lease. The lease is payable in 36 monthly installments of $2,796, which began October 1, 2006.8,290 The present value of the minimum lease payment on golf equipment was capitalized at $21,569 using an incremental borrowing interest rate of 7.5% at the inception of the lease. The lease is payable in 48 monthly installments of $522, which began December 1, 2005.2,559 VGM Financial Services The present value of the minimum lease payment on software was capitalized at $63,525 using an incremental borrowing interest rate of 10.74% at the inception of the lease. The lease is payable in 60 monthly installments of $1,373, which began April 1, 2005. 7,985 TFG-California, L.P. The present value of the minimum lease payment on a GPS system was capitalized at $284,650 using an incremental borrowing interest rate of 7.3% at the inception of the lease. The lease is payable in 48 monthly installments of $6,840, which began November 11, 2005.33,585 Total capital leases payable as of June 30, 2009 285,217$ 58 City of La Quinta Notes to Financial Statements (Continued) Note 8: Changes in Long-Term Liabilities – Business-type Activities (Continued) The following schedule summarizes the debt to maturity payments for capital leases: Year Ending June 30, Total 2010 239,666$ 2011 55,731 Total Payments 295,397 Less Amount Representing Interest (10,180) Outstanding Principal 285,217$ Note 9: Pledge Tax Revenues As previously discussed, the City has pledged, as security for bonds it has issued, either directly or through the Financing Authority, a portion of the tax increment revenue (including Low and Moderate Income Housing set-aside) that it receives. These bonds were to provide financing for various capital projects and accomplish Low and Moderate Income Housing projects. The City has committed to appropriate each year, from these resources amounts sufficient to cover the principal and interest requirements on the debt. Total principal and interest remaining on the debt is $398,484,469 with annual debt service requirements as indicated above. For the current year, the total tax increment revenue, net of pass through payments, recognized by the City was $36,781,483 and the debt service obligation on the bonds was $16,630,367. Note 10: Debt Without Governmental Commitment The City of La Quinta sold Improvement Bonds issued pursuant to the California State Improvement Act of 1915. The Bonds are payable from the annual installments collected on the regular property tax bills sent to owners of property having unpaid assessments levied against land benefited by the projects. The bonds are neither general obligations of the City nor any other political subdivision and the full faith and credit of the City is not pledged for repayment thereof, therefore, they are not included in the long-term liabilities in the accompanying financial statements. The City is not liable for repayment of the debt, but is only acting as agent for the property owners in collecting the assessments and forwarding the collections to bondholders. The following is a summary of Improvement Bonds outstanding at June 30, 2009: Proceeds Maturity Date Interest Rate Amount Outstanding at June 30, 2009 Assessment District No. 97-1 705,262$ 9/2/2018 4.10% - 5.20% 410,000$ Assessment District No. 2001-1 2,285,000 9/2/2015 5.00% - 6.60% 940,000 Note 11: Conduit Debt Financing 2002 Series B Multifamily Housing Revenue Bonds In April 2002, the La Quinta Redevelopment 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, 2009, are $2,830,000. The bond is secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bond is not an obligation of the issue, but payable solely from the security. 59 City of La Quinta Notes to Financial Statements (Continued) Note 12: Interfund Receivables and Payables The composition of current interfund receivable and payable as of June 30, 2009, are as follows: Non-Major Governmental TOTAL Due From Other Funds General Fund 18,890$ 18,890$ RDA PA #2 Debt Service 2,143,702 2,143,702 Total:2,162,592$ 2,162,592$ Due to Other Funds The due to the General Fund and RDA PA#2 Debt Service Fund were the results of routine interfund transactions not cleared prior to year-end. The composition of non-current interfund receivable and payable as of June 30, 2009, are as follows: Civic Center RDA PA #1 Debt Service RDA PA #2 Debt Service Golf Course Non-Major Governmental TOTAL Advances to Other Funds General Fund 9,617,167$ 12,000,000$ 19,378,966$ 4,290,475$ 851,084$ 46,137,692$ Redevelopment Agency PA No. 1 Capital Projects - - - - 3,385,401 3,385,401 Non-Major Governmental - - - - 935,718 935,718 Total:9,617,167$ 12,000,000$ 19,378,966$ 4,290,475$ 5,172,203$ 50,458,811$ Advances From Other Funds a) As of June 30, 2009, the amount due to the General Fund from RDA PA No. 1 Debt Service was $12,000,000. This consists of an outstanding advance of $6,000,000 loaned to the Redevelopment Agency with repayment beginning in 2030/31 and accrued interest at 10% per annum. The other outstanding advance of $6,000,000 loaned to the Redevelopment Agency requires repayments beginning in 2030/31 and accrues interest at 7% per annum. b) As of June 30, 2009, the amount due to the General Fund from RDA PA No. 2 Debt Service was $19,378,966. This consists of a $10,000,000 advance loaned to the Redevelopment Agency with repayment beginning in 2035/36 and accrued interest at 10% per annum and a $9,378,966 advance loaned to the Redevelopment Agency accruing interest at 7% on December 4, 2007, with an anticipated repayment date of 2018/2019. c) As of June 30, 2009, the General Fund has advanced to the Golf Course fund $4,290,475. The advances accrue interest at the City’s investment pool rate and are to be repaid by the golf course out of future profits. d) In July 2002, an advance of $4,167,912 was made from the RDA PA No. 1 Capital Projects Fund to provide funding for the development of the publicly owned improvements to the La Quinta Community Park. The advance accrues interest at the earnings rate of the City’s investment pool fund. As of June 30, 2009, the remaining balance of the advance for the La Quinta Community Park is $1,444,775. 60 City of La Quinta Notes to Financial Statements (Continued) Note 12: Interfund Receivables and Payables (Continued) e) In April 2005, another advance of $2,490,273 was made from the RDA PA No. 1 Capital Projects Fund to provide funding for the construction of the public library. The advance accrues interest at the earnings rate of the City’s investment pool fund. The remaining balance of this advance at June 30, 2009, is $1,940,626. f) 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 the development of the City’s north fire station. The advance accrues interest equal to the earning rate of the City’s Investment Pool Funds and is to be repaid by the year 2039. As of June 30, 2009, the remaining balance of the advances is $935,718. g) 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, 2009, the Civic Center expansion was completed and the amount of the advance was $9,617,167 outstanding. The advance accrues interest that would have been earned by the Local Agency Investment Fund. h) In February 2007, an advance up to $1,400,000 for the Museum expansion and Phase II Library improvements from the General Fund to the Library Fund was approved. As of June 30, 2009 the amount of the outstanding advance was $851,084. The advance accrues interest that would have been earned by the Local Agency Investment Fund and will be repaid from future tax increment funds designated for the Library and Museum which are anticipated to be received in the next year. Note 13: Interfund Transfers General Fund Low/ Moderate Income Housing PA #1 Low/ Moderate Income Housing PA #2 RDA PA #1 Capital Projects RDA PA #1 Debt Service RDA PA #2 Debt Service Non-Major Governmental TOTAL TRANSFERS IN General Fund -$ -$ -$ -$ -$ -$ 353,550$ 353,550$ Low/Moderate Income Housing PA #2 - 307,656 - - - - - 307,656 Capital Improvement 1,695,642 - 246,167 2,872,058 - - 17,707,744 22,521,611 RDA PA #1 Capital Projects - - - - 5,000,000 - - 5,000,000 RDA PA #1 Debt Service - 4,444,520 - - - - - 4,444,520 RDA PA #2 Debt Service - - 1,953,599 - - - - 1,953,599 Non-Major Governmental 1,999 - - - 3,966,396 1,953,599 - 5,921,994 Internal Service Fund - - - - - - 25,000 25,000 Total:1,697,641$ 4,752,176$ 2,199,766$ 2,872,058$ 8,966,396$ 1,953,599$ 18,086,294$ 40,527,930$ TRANSFERS OUT The following describes the major transfers in and transfers out included in the financial statements: a) $4,444,520 was transferred from the Low/Moderate Housing Project Area No. 1 Fund to the RDA Project Area No.1 Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. b) $246,168 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the Capital Improvement Fund to pay for various capital projects. $1,953,599 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the RDA Project Area No. 2 Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. 61 City of La Quinta Notes to Financial Statements (Continued) Note 13: Interfund Transfers (Continued) c) $3,966,396 and $1,953,599 was transferred from the RDA Project Area No. 1 and 2 Debt Service Funds, respectively, to the Financing Authority Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. $5,000,000 was transferred from RDA Project Area No. 1 Debt Service Funds to the RDA Capital Projects – PA No. 1 Fund to fund various capital projects within the Project Area. d) $2,872,058 was transferred to the Capital Improvement Fund from the RDA Capital Projects – PA No. 1 Fund to fund various capital projects throughout the City. e) $11,658,462 was transferred to the Capital Improvement Fund from the RDA 2004 Low/Mod Bond Fund for various capital projects funded by bond proceeds. f) $4,444,520 was transferred from the Low/Moderate Housing Project Area No. 1 Fund to the RDA Project Area No. 1 Debt Service Funds to pay for a portion of the 2004 and 1994 bond issues principal and interest. $307,656 was transferred from the Low/Moderate Housing Project Area No. 1 Fund to the Low/Moderate Housing Project Area No. 2 Fund for the Washington Street Apartments Project. g) $1,695,642 was transferred from the General Fund to the Capital Improvement Fund to fund various capital projects and sales rebate agreements. The largest Capital Projects were for the Village Cove Fire Station Phase 1 and for the Ave 58 and Jefferson St street improvement project. The sales tax rebate agreements were with Costco, Kohl’s and the AutoMall developer. h) $1,999 was transferred to the La Quinta Public Safety Officer Fund from the General Fund for public safety officers disabled or killed in the line of duty. IV. OTHER INFORMATION Note 14: Defined Benefit Pension Plan Plan Description The City of La Quinta contributes to the California Public Employees Retirement System (PERS), a cost sharing multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of PERS' annual financial report may be obtained from their executive office: 400 P Street, Sacramento, CA 95814. Funding 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 12.571% of annual covered payroll. The contribution requirements of plan members and the City are established and may be amended by PERS. 62 City of La Quinta Notes to Financial Statements (Continued) Note 14: Defined Benefit Pension Plan (Continued) Annual Pension Cost For 2009, the City's annual pension cost of $973,515 for PERS was equal to the City's required and actual contributions. Required Percentage Fiscal Year Contributions Contributed 6/30/2007 763,527$ 100% 6/30/2008 902,098 100% 6/30/2009 973,515 100% Three-Year Trend Information for PERS Note 15: Post-Employment Health Benefits Plan Description The City provides other postemployment benefits (OPEB) through the California Employers’ Retiree Benefit Fund (CERBT), an agent multiple-employer defined benefit healthcare plan administered by the California Public Employees’ Retirement System (CalPERS), by contributing on behalf of all eligible retirees $97.00/month for calendar 2008 and $101.00/month for calendar 2009, 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. Separate financial statements for the CERBT may be obtained by writing to CalPERS at Lincoln Plaza North 400 Q Street, Sacramento, CA 95814 or by visiting the CalPERS website at www.calpers.ca.gov. Funding Policy The contribution requirements of plan members and the City are established and may be amended by the City, City Council and/or the employee associations. Currently, contributions are not required from plan members. A contribution of $8,877 was made during the 2008-2009 fiscal year to cover current plan premiums. As a result, the City calculated and recorded a Net OPEB Asset, representing the difference between the Annual Required Contribution (ARC) and actual contributions, as presented below: Annual required contribution (ARC)116,821$ Adjustment to ARC - Annual OPEB cost 116,821 Contributions made (8,877) (Decrease) increase in Net OPEB obligation 107,944 Net OPEB obligation (asset) - beginning of year - Net OPEB obligation (asset) - end of year 107,944$ 63 City of La Quinta Notes to Financial Statements (Continued) Note 15: Post-Employment Health Benefits (Continued) The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2008-2009 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) 6/30/2007 N/A N/A N/A N/A 6/30/2008 N/A N/A N/A N/A 6/30/2009 $116,821 $8,877 7.60% $107,944 Funded Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Only one year is presented as this is the first year of the plan. Unfunded UAAL as a Actuarial Actuarial Actuarial Actuarial Percent of Type of Valuation Value of Accrued Accrued Funded Covered Covered Interest Valuation Date Assets Liability Liability Ratio Payroll Payroll Rate Actual 6/30/2009 -$ 590,676$ $590,676 0.0% $7,821,474 7.6% 5.00% Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in the actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2008, actuarial valuation, the level dollar actuarial cost method was used. The actuarial assumptions include a 5.0% investment rate of return, which is a blended rate of the expected long-term investment return on plan assets and on the employer’s own investments calculated based on the funded level of the plan at the valuation date, and annual healthcare cost trend rate of 7%. 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, 2009, was twenty-nine years. The number of active participants is 4. 64 City of La Quinta Notes to Financial Statements (Continued) Note 16: Self Insurance The City is a member of the California Joint Powers Insurance Authority (Insurance Authority). The Insurance Authority is composed of 122 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Insurance Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other coverages. The Insurance Authority’s pool began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a 9-member Executive Committee. Self-Insurance Programs of the Authority General Liability Each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year). After the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made for each open claims year. Claims are pooled separately between police and non-police. Costs are allocated to members by the following methods within each of the four layers of coverage: (1) the first $30,000 of each occurrence is charged directly to the member’s primary deposit; (2) costs from $30,000 to $750,000 and the loss development reserves associated with losses up to $750,000 are pooled based on the member’s share of losses under $30,000; (3) losses from $750,000 to $2,000,000 and the associated loss development reserves are pooled based on payroll; (4a) costs of covered claims from $2,000,000 to $50,000,000 are paid under reinsurance and excess insurance policies (4b) subject to a $3,000,000 annual aggregate deductible (4c) and a quota-sharing agreement whereby the Authority is financially responsible for 40% of losses occurring within the $2,000,000 to $10,000,000 layer. The costs associated with 4a-c are estimated using actuarial models and pre- funded as part of the primary and retrospective deposits. The overall policy limit for each member including all layers of coverage is $50,000,000 per occurrence. Costs of covered claims for subsidence losses are paid by excess insurance with the following sub-limits per member: $25,000,000 per occurrence with a $15,000,000 annual aggregate. Workers Compensation The City also participates in the workers’ compensation pool administered by the Insurance Authority. Each member pays a primary deposit to cover estimated losses for a fiscal year (claims year). After the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made for each open claims year. Claims are pooled separately between public safety and non-public safety. Costs are allocated to members by the following methods within each of the four layers of coverage: (1) the first $50,000 of each loss is charged directly to the member’s primary deposit; (2) losses from $50,000 to $100,000 and the loss development reserve associated with losses up to $100,000 are pooled based on the member’s share of losses under $50,000; (3) losses from $100,000 to $2,000,000 and the loss development reserves associated with those losses are pooled based on payroll; (4) losses from $2,000,000 up to statutory limits are paid under an excess insurance policy. Protection is provided per statutory liability under California Workers’ Compensation law. Employer’s Liability losses are pooled among members to $2,000,000, coverage from $2,000,000 to $4,000,000 is purchased as part of an excess insurance policy, and losses from $4,000,000 to $10,000,000 are pooled among members. 65 City of La Quinta Notes to Financial Statements (Continued) Note 16: Self Insurance (Continued) Environmental Insurance City of La Quinta participates in the pollution legal liability and remediation legal liability insurance which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by City of La Quinta. Coverage is on a claims-made basis. There is a $50,000 deductible. The Authority has a limit of $50,000,000 for the 3-year period from July 1, 2008 through July 1, 2011. Each member of the Authority has a $10,000,000 sub-limit during the 3-year term of the policy. In addition to coverage with the Authority, the City also carries additional coverage for earthquake & flood and real and personal property with Pacific Insurance Co. Coverage is $5,000,000 with a 10% deductible subject to a minimum of $25,000. The total insured value of real and personal property is $20,000,000. An excess earthquake & flood and real and personal property policy is held with Endurance American Specialty Insurance Company. Coverage is $2,500,000 in excess of the $5,000,000 covered by the primary policy. Employee dishonesty, forgery and computer fraud insurance is held with Hartford Insurance Company. Coverage is $1,000,000 with a $5,000 deductible. All risk property insurance, including auto physical damage is held with Lexington Insurance Company. Coverage is up to $10,000,000 per occurrence with various sublimits depending on the property. The total insured value of real and personal property is $63,550,220. During the past three fiscal years none of the above programs of protection have had settlements or judgments that exceed pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. Note 17: Contingencies Various claims and suits have been filed against the City in the normal course of operations. Although the outcome of these lawsuits is not presently determinable, in the opinion of management, the resolution of these matters will not have a material adverse effect on the financial position of the City. Vista Dunes Court Yard Homes In October 2007, the La Quinta Redevelopment Agency entered into an agreement pursuant to which it transferred fee title to a parcel generally located at Adams Street and Miles Avenue (the “Site”) improved with 80 rental apartment units (the “Housing Development”) to National CORE. National CORE, in turn transferred the Site and Housing Development to a limited partnership as a requirement to enter into a 15 year tax credit bond sale. In the future, National CORE is obligated to (1) exercise its option to acquire the Site and Housing Development from the limited partnership at the close of the 15 year tax credit period, as set forth in the partnership agreement, and (2) convey fee title to the Site and Housing Development to the City, as the Agency’s successor, on the 55th anniversary of the permanent loan closing. As of the June 30, 2009, the permanent loan closing has not occurred. 66 City of La Quinta Notes to Financial Statements (Continued) Note 18: Construction Commitments The following material construction commitments existed at June 30, 2009: Project Name Contract Amount Expenditures to date as of June 30, 2009 Remaining Commitments Silver Rock Resort Infrastructure 26,358,941$ $ 1,502,001 24,856,940$ Adams Street Bridge Improvements 12,408,001 376,453 12,031,548 Community Park Land Acquisition 8,000,000 16,562 7,983,438 Silver Rock Resort Entry Feature & Roads 5,994,224 157,818 5,836,406 Cove Fire Station Phase 1 4,215,841 467,336 3,748,505 Maintenance Yard 2,585,690 109,292 2,476,398 Note 19: Unreserved Fund Balances Unreserved fund balances at June 30, 2009, consisted of the following: General Fund Low/Moderate Income Housing PA No. 1 Low/Moderate Income Housing PA No. 2 RDA PA No. 1 Capital Projects Civic Center RDA PA No. 1 Debt Service RDA PA No. 2 Debt Service Other Governmental Funds TOTAL Designated for: Emergency reserves 18,201,948$ -$ -$ -$ -$ -$ -$ -$ 18,201,948$ Cash flows 3,347,602 - - - - - - - 3,347,602 Capital improvements 2,144,085 - - 29,814,165 - - - - 31,958,250 Devt service - - - - - 5,482,142 - - 5,482,142 Carryover appropriations 3,446,533 - - - - - - - 3,446,533 Operations/projects/transfers 18,988,053 4,181,365 19,863,584 - - - - - 43,033,002 Undesignated - - - - (9,617,167) - (3,126,748) 16,360,984 3,617,069 Total unreserved fund balances (deficit)46,128,221$ 4,181,365$ 19,863,584$ 29,814,165$ (9,617,167)$ 5,482,142$ (3,126,748)$ 16,360,984$ 109,086,546$ Note 20: 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, 2009, the Golf Course had an operating loss before contributions and transfers of $1,069,337. 67 City of La Quinta Notes to Financial Statements (Continued) Note 21: Reimbursement Agreements The City entered into a transient occupancy tax (TOT) revenue reimbursement agreement on August 31, 2006, with Village Resort LLC, the owner of an Embassy Suites Hotel. The hotel owner is required to remit on a monthly basis any TOT collected to the City, thirty days after each month. Under terms of the agreement, the City shall make quarterly payments of 40% of any TOT generated from the Hotel in an amount not to exceed $1,000,000 over a five year period. The agreement terminates when either the $1,000,000 limit is reached or in 5 years whichever comes first. In addition, the hotel may not assign or transfer this agreement without the City’s prior written consent, which it may withhold at its discretion. The hotel opened in November 2006. As of June 30, 2009, the City made $153,886 in reimbursement payments to the owner leaving an outstanding balance of $555,585. 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, 2009, the City made $699.912 in reimbursement payments to the owner leaving an outstanding balance of $3,330,088. Note 22: Subsequent Events SERAF Tax Increment Revenue Shift for Fiscal Year 2009-2010 and 2010-2011 On July 23, 2009, the California Legislature passed SB 26, requiring a shift in tax increment revenues during fiscal years 2009 -2010 and 2010-2011 to be deposited into the county “Supplemental” Educational Revenue Augmentation Fund (SERAF) and which is to be distributed to meet the State’s Prop 98 obligations to schools. It is estimated that the Agency’s share of the SERAF shift for fiscal year 2009-2010 and 2010-2011 will amount to approximately $23,560,481 and $4,850,687, respectively. It is anticipated that in October 2009, when this law becomes effective, the California Redevelopment Association and/or its members will file legal action in an attempt to stop these amounts from having to be paid. Local Government Revenues Withheld by the State of California On July 24, 2009, the legislation approved the “borrowing” of up to 8 percent of the local property tax under Proposition 1A (2004). For the City of La Quinta this is estimated to be $964,794. The State of California is required to repay this obligation by June 30, 2013. 68 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. Theses 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. Riverside County Transportation Commission (RCTC) Fund - To account for grant funds related to transportation projects. 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. 69 Coachella Valley Violent Crime Gang Task Force - To account for the revenues and expenditures of this valley-wide crime prevention program with funding coming from the member agencies and grant revenue. Proposition 1B Fund - To account for the revenues and expenditures related to Proposition 1B 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, Civic Center 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. Redevelopment Agency, Capital Projects Fund Area 2 - To account for the bond proceeds, interest and other funding that will be used for development, planning, construction and land acquisition. 2004 Low/Mod Bond Fund – To account for the 2004 revenue bond proceeds that will be used to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and Project Area No. 2. 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. 70 THIS PAGE INTENTIONALLY LEFT BLANK 71 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2009 Assets: Cash and investments 367,840$ -$ -$ -$ Receivables: Accounts - - - - Accrued interest 410 - - 64 Due from other governments 146,428 719,997 - 29,456 Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets 514,678$ 719,997$ -$ 29,520$ Liabilities and Fund Balances: Liabilities: Accounts payable -$ -$ -$ -$ Unearned revenues - - - - Deposits payable - - - - Due to other funds - - - - Advances from other funds - 851,083 - - Total Liabilities - 851,083 - - Fund Balances: Reserved: Reserved for encumbrances - - - - Reserved for advances to other funds - - - - Reserved for debt service - - - - Unreserved: Undesignated 514,678 (131,086) - 29,520 Total Fund Balances 514,678 (131,086) - 29,520 Total Liabilities and Fund Balances 514,678$ 719,997$ -$ 29,520$ State Gas Tax Library Federal Assistance SLEBG Special Revenue Funds 72 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2009 Assets: Cash and investments Receivables: Accounts Accrued interest Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Reserved: Reserved for encumbrances Reserved for advances to other funds Reserved for debt service Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances (Continued) 105,075$ -$ -$ 10,451,278$ - 25,382 - - 203 - - 11,903 - - 18,890 - - - - - - - - - 105,278$ 25,382$ 18,890$ 10,463,181$ -$ -$ -$ -$ 105,278 - - - - - - - - - 18,890 - - - - - 105,278 - 18,890 - - - - - - - - - - - - - - 25,382 - 10,463,181 - 25,382 - 10,463,181 105,278$ 25,382$ 18,890$ 10,463,181$ RCTC Quimby Indian Gaming Lighting and Landscaping Special Revenue Funds 73 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2009 Assets: Cash and investments Receivables: Accounts Accrued interest Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Reserved: Reserved for encumbrances Reserved for advances to other funds Reserved for debt service Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances 20,740$ 925,789$ 279,251$ 1,446,869$ - - 38,822 - 24 961 318 1,643 - - - - - - - - - - - - 20,764$ 926,750$ 318,391$ 1,448,512$ -$ 2,300$ -$ 2,100$ - - - - - - - - - - - - - - - - - 2,300 - 2,100 - - - 2,000 - - - - - - - - 20,764 924,450 318,391 1,444,412 20,764 924,450 318,391 1,446,412 20,764$ 926,750$ 318,391$ 1,448,512$ AB 939 Public Safety Art in Public Places South Coast Air Quality Special Revenue Funds 74 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2009 Assets: Cash and investments Receivables: Accounts Accrued interest Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Reserved: Reserved for encumbrances Reserved for advances to other funds Reserved for debt service Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances (Continued) Capital Projects Funds 197,893$ 188,233$ 606,886$ 407,040$ - - - - 225 226 166 463 - 7,836 - - - - - - - - - - 198,118$ 196,295$ 607,052$ 407,503$ -$ 1,111$ -$ -$ - - 607,052 - 198,118 - - - - - - - - - - - 198,118 1,111 607,052 - - - - - - - - - - - - - - 195,184 - 407,503 - 195,184 - 407,503 198,118$ 196,295$ 607,052$ 407,503$ Infrastructure Development Agreement CV Violent Crime Task Force Proposition 1B Special Revenue Funds 75 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2009 Assets: Cash and investments Receivables: Accounts Accrued interest Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Reserved: Reserved for encumbrances Reserved for advances to other funds Reserved for debt service Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances 5,900,366$ -$ -$ 1,157,584$ - - - - 7,183 - - 1,316 - - - - - - - - - - - - 5,907,549$ -$ -$ 1,158,900$ -$ -$ -$ -$ - - - - - - - - - - - - - 1,444,776 1,940,626 - - 1,444,776 1,940,626 - - - - - - - - - - - - - 5,907,549 (1,444,776) (1,940,626) 1,158,900 5,907,549 (1,444,776) (1,940,626) 1,158,900 5,907,549$ -$ -$ 1,158,900$ Transportation Parks and Recreation Library Development Community Center Capital Projects Funds 76 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2009 Assets: Cash and investments Receivables: Accounts Accrued interest Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Reserved: Reserved for encumbrances Reserved for advances to other funds Reserved for debt service Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances (Continued) 339,235$ 101,641$ -$ -$ - - - - 385 115 - - - - - - - - - - - - - 6,999,121 339,620$ 101,756$ -$ 6,999,121$ -$ -$ -$ -$ - - - - - - - - - - - 2,143,702 - - 935,718 - - - 935,718 2,143,702 - - - - - - - - - - - 6,999,121 339,620 101,756 (935,718) (2,143,702) 339,620 101,756 (935,718) 4,855,419 339,620$ 101,756$ -$ 6,999,121$ 2004 Low/Mod Bond Street Facility Park Facility Fire Facility Capital Projects Funds 77 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2009 Assets: Cash and investments Receivables: Accounts Accrued interest Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Reserved: Reserved for encumbrances Reserved for advances to other funds Reserved for debt service Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances Capital Projects Funds Total Governmental Funds 1,122,857$ 9,706$ 23,628,283$ 21,000 - 85,204 1,252 - 26,857 - - 922,607 935,718 - 935,718 - - 6,999,121 2,080,827$ 9,706$ 32,597,790$ 19,628$ 1,750$ 26,889$ - - 712,330 27,835 - 225,953 - - 2,162,592 - - 5,172,203 47,463 1,750 8,299,967 - - 2,000 935,718 - 935,718 - - 6,999,121 1,097,646 7,956 16,360,984 2,033,364 7,956 24,297,823 2,080,827$ 9,706$ 32,597,790$ Redevelopment Agency PA No. 2 Financing Authority Debt Service Funds 78 THIS PAGE INTENTIONALLY LEFT BLANK 79 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Revenues: Assessments -$ -$ -$ -$ Intergovernmental 1,050,821 2,636,717 26,055 100,306 Charges for services - - - - Use of money and property 5,272 - - 495 Developer participation - - - - Miscellaneous - - - - Total Revenues 1,056,093 2,636,717 26,055 100,801 Expenditures: Current: General government - - - - Public safety - - - - Planning and development - - - - Community services - 1,662,397 - - Public works 722,724 - - - Capital outlay - - - - Debt service: Principal retirement - - - - Interest and fiscal charges - 21,079 - - Total Expenditures 722,724 1,683,476 - - Excess (Deficiency) of Revenues Over (Under) Expenditures 333,369 953,241 26,055 100,801 Other Financing Sources (Uses): Transfers in - - - - Transfers out (96,553) - (26,055) (93,859) Total Other Financing Sources (Uses)(96,553) - (26,055) (93,859) Net Change in Fund Balances 236,816 953,241 - 6,942 Fund Balances, Beginning of Year 277,862 (1,084,327) - 22,578 Fund Balances, End of Year 514,678$ (131,086)$ -$ 29,520$ Special Revenue Funds State Gas Tax Library Federal Assistance SLEBG 80 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Revenues: Assessments Intergovernmental Charges for services 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 (Continued) -$ 927,816$ -$ -$ 210,432 - 2,092,206 - - - - - - - - 182,718 - - - 53,855 - - - - 210,432 927,816 2,092,206 236,573 - - - - - - - - - - - - - - - 32,130 - 934,138 - - - - - - - - - - - - - - - 934,138 - 32,130 210,432 (6,322) 2,092,206 204,443 - - - - (210,432) - (1,773,815) (81,180) (210,432) - (1,773,815) (81,180) - (6,322) 318,391 123,263 - 31,704 (318,391) 10,339,918 -$ 25,382$ -$ 10,463,181$ Special Revenue Funds Indian Gaming Lighting and Landscaping RCTC Quimby 81 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Revenues: Assessments Intergovernmental Charges for services 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 -$ -$ -$ -$ - - 136,201 - - - - - 361 18,852 4,651 25,281 - 105,570 - - - 23,844 - - 361 148,266 140,852 25,281 - - - - - - - - - - 27,711 10,613 - 14,891 - - - - - - - 75,635 - - - - - - - - - - - 90,526 27,711 10,613 361 57,740 113,141 14,668 2,000 - - - - (200,000) (48,203) - 2,000 (200,000) (48,203) - 2,361 (142,260) 64,938 14,668 18,403 1,066,710 253,453 1,431,744 20,764$ 924,450$ 318,391$ 1,446,412$ Special Revenue Funds Public Safety Art in Public Places South Coast Air Quality AB 939 82 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Revenues: Assessments Intergovernmental Charges for services 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 (Continued) Capital Projects Funds -$ -$ -$ -$ - 75,808 624,305 - - - - - - 3,269 5,552 7,083 - - - - - - - - - 79,077 629,857 7,083 - - - - - 41,755 - - - - - - - - - - - - - - - - - - - - - - - - - - - 41,755 - - - 37,322 629,857 7,083 - - - - - - (629,857) - - - (629,857) - - 37,322 - 7,083 - 157,862 - 400,420 -$ 195,184$ -$ 407,503$ Special Revenue Funds Development Agreement CV Violent Crime Task Force Proposition 1B Infrastructure 83 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Revenues: Assessments Intergovernmental Charges for services 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 -$ -$ -$ -$ - - - - - - - - 119,063 - - 20,088 825,304 94,999 42,606 7,884 - - - - 944,367 94,999 42,606 27,972 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 26,201 34,226 - - 26,201 34,226 - 944,367 68,798 8,380 27,972 - - - - (2,930,217) - - - (2,930,217) - - - (1,985,850) 68,798 8,380 27,972 7,893,399 (1,513,574) (1,949,006) 1,130,928 5,907,549$ (1,444,776)$ (1,940,626)$ 1,158,900$ Capital Projects Funds Transportation Parks and Recreation Library Development Community Center 84 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Revenues: Assessments Intergovernmental Charges for services 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 (Continued) -$ -$ -$ -$ - - - - - - - - 5,866 1,752 - 165,610 28,747 2,340 20,423 - - - - - 34,613 4,092 20,423 165,610 - - - - - - - - - - - 2,096,000 - - - - - - - - - - - - - - - - - - 16,507 - - - 16,507 2,096,000 34,613 4,092 3,916 (1,930,390) - - - - (8,165) - - (11,658,462) (8,165) - - (11,658,462) 26,448 4,092 3,916 (13,588,852) 313,172 97,664 (939,634) 18,444,271 339,620$ 101,756$ (935,718)$ 4,855,419$ Capital Projects Funds Street Facility Park Facility Fire Facility 2004 Low/Mod Bond 85 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2009 Revenues: Assessments Intergovernmental Charges for services 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 Total Governmental Funds -$ -$ 927,816$ - - 6,952,851 - 10,041 10,041 37,256 676,450 1,279,619 - - 1,181,728 23 - 23,867 37,279 686,491 10,375,922 - 12,878 12,878 - - 41,755 300,643 - 2,434,967 - - 1,709,418 - - 1,656,862 - - 75,635 - 1,995,000 1,995,000 - 4,601,444 4,699,457 300,643 6,609,322 12,625,972 (263,364) (5,922,831) (2,250,050) - 5,919,994 5,921,994 (329,496) - (18,086,294) (329,496) 5,919,994 (12,164,300) (592,860) (2,837) (14,414,350) 2,626,224 10,793 38,712,173 2,033,364$ 7,956$ 24,297,823$ Debt Service Funds Redevelopment Agency PA No. 2 Financing Authority 86 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STATE GAS TAX YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 277,862$ 277,862$ 277,862$ -$ Resources (Inflows): Intergovernmental 982,800 982,800 1,050,821 68,021 Use of money and property 7,600 6,000 5,272 (728) Amounts Available for Appropriation 1,268,262 1,266,662 1,333,955 67,293 Charges to Appropriation (Outflow): Public works 643,014 29,480 722,724 (693,244) Transfers out 424,393 464,393 96,553 367,840 Total Charges to Appropriations 1,067,407 493,873 819,277 (325,404) Budgetary Fund Balance, June 30 200,855$ 772,789$ 514,678$ (258,111)$ 87 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (1,084,327)$ (1,084,327)$ (1,084,327)$ -$ Resources (Inflows): Intergovernmental 2,628,600 2,628,600 2,636,717 8,117 Amounts Available for Appropriation 1,544,273 1,544,273 1,552,390 8,117 Charges to Appropriation (Outflow): Community services 1,646,385 1,737,206 1,662,397 74,809 Debt service: Interest and fiscal charges 15,000 25,000 21,079 3,921 Total Charges to Appropriations 1,661,385 1,762,206 1,683,476 78,730 Budgetary Fund Balance, June 30 (117,112)$ (217,933)$ (131,086)$ 86,847$ 88 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FEDERAL ASSISTANCE YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental 200,000 346,110 26,055 (320,055) Amounts Available for Appropriation 200,000 346,110 26,055 (320,055) Charges to Appropriation (Outflow): Transfers out 195,000 346,110 26,055 320,055 Total Charges to Appropriations 195,000 346,110 26,055 320,055 Budgetary Fund Balance, June 30 5,000$ -$ -$ -$ 89 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SLEBG YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 22,578$ 22,578$ 22,578$ -$ Resources (Inflows): Intergovernmental 100,000 100,000 100,306 306 Use of money and property 500 500 495 (5) Amounts Available for Appropriation 123,078 123,078 123,379 301 Charges to Appropriation (Outflow): Transfers out 100,400 123,078 93,859 29,219 Total Charges to Appropriations 100,400 123,078 93,859 29,219 Budgetary Fund Balance, June 30 22,678$ -$ 29,520$ 29,520$ 90 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INDIAN GAMING YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental 150,600 212,826 210,432 (2,394) Use of money and property - 2,000 - (2,000) Amounts Available for Appropriation 150,600 214,826 210,432 (4,394) Charges to Appropriation (Outflow): Transfers out 150,600 214,826 210,432 4,394 Total Charges to Appropriations 150,600 214,826 210,432 4,394 Budgetary Fund Balance, June 30 -$ -$ -$ -$ 91 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIGHTING AND LANDSCAPING YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 31,704$ 31,704$ 31,704$ -$ Resources (Inflows): Assessments 927,900 927,900 927,816 (84) Amounts Available for Appropriation 959,604 959,604 959,520 (84) Charges to Appropriation (Outflow): Public works 927,900 927,900 934,138 (6,238) Total Charges to Appropriations 927,900 927,900 934,138 (6,238) Budgetary Fund Balance, June 30 31,704$ 31,704$ 25,382$ (6,322)$ 92 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE RCTC YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (318,391)$ (318,391)$ (318,391)$ -$ Resources (Inflows): Intergovernmental 1,997,700 4,063,268 2,092,206 (1,971,062) Amounts Available for Appropriation 1,679,309 3,744,877 1,773,815 (1,971,062) Charges to Appropriation (Outflow): Transfers out - 3,744,877 1,773,815 1,971,062 Total Charges to Appropriations - 3,744,877 1,773,815 1,971,062 Budgetary Fund Balance, June 30 1,679,309$ -$ -$ -$ 93 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE QUIMBY YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 10,339,918$ 10,339,918$ 10,339,918$ -$ Resources (Inflows): Use of money and property 79,600 200,000 182,718 (17,282) Developer participation 950,000 53,900 53,855 (45) Amounts Available for Appropriation 11,369,518 10,593,818 10,576,491 (17,327) Charges to Appropriation (Outflow): Community services 35,000 67,130 32,130 35,000 Transfers out 457,600 8,995,131 81,180 8,913,951 Total Charges to Appropriations 492,600 9,062,261 113,310 8,948,951 Budgetary Fund Balance, June 30 10,876,918$ 1,531,557$ 10,463,181$ 8,931,624$ 94 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 18,403$ 18,403$ 18,403$ -$ Resources (Inflows): Use of money and property 500 425 361 (64) Transfers in 2,000 2,000 2,000 - Amounts Available for Appropriation 20,903 20,828 20,764 (64) Charges to Appropriation (Outflow): Public safety 2,000 2,000 - 2,000 Total Charges to Appropriations 2,000 2,000 - 2,000 Budgetary Fund Balance, June 30 18,903$ 18,828$ 20,764$ 1,936$ 95 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE ART IN PUBLIC PLACES YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,066,710$ 1,066,710$ 1,066,710$ -$ Resources (Inflows): Use of money and property 5,200 17,200 18,852 1,652 Developer participation 97,500 110,000 105,570 (4,430) Miscellaneous - 24,844 23,844 (1,000) Amounts Available for Appropriation 1,169,410 1,218,754 1,214,976 (3,778) Charges to Appropriation (Outflow): Community services 36,200 36,535 14,891 21,644 Capital outlay 260,000 259,665 75,635 184,030 Transfers out - 400,000 200,000 200,000 Total Charges to Appropriations 296,200 696,200 290,526 405,674 Budgetary Fund Balance, June 30 873,210$ 522,554$ 924,450$ 401,896$ 96 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SOUTH COAST AIR QUALITY YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 253,453$ 253,453$ 253,453$ -$ Resources (Inflows): Intergovernmental 48,900 115,900 136,201 20,301 Use of money and property 7,300 4,500 4,651 151 Amounts Available for Appropriation 309,653 373,853 394,305 20,452 Charges to Appropriation (Outflow): Planning and development 26,600 26,600 27,711 (1,111) Transfers out - 67,000 48,203 18,797 Total Charges to Appropriations 26,600 93,600 75,914 17,686 Budgetary Fund Balance, June 30 283,053$ 280,253$ 318,391$ 38,138$ 97 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE AB 939 YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,431,744$ 1,431,744$ 1,431,744$ -$ Resources (Inflows): Charges for services 100,900 - - - Use of money and property 40,200 27,500 25,281 (2,219) Amounts Available for Appropriation 1,572,844 1,459,244 1,457,025 (2,219) Charges to Appropriation (Outflow): Planning and development - 60,188 10,613 49,575 Total Charges to Appropriations - 60,188 10,613 49,575 Budgetary Fund Balance, June 30 1,572,844$ 1,399,056$ 1,446,412$ 47,356$ 98 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CV VIOLENT CRIME TASK FORCE YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 157,862$ 157,862$ 157,862$ -$ Resources (Inflows): Intergovernmental 78,600 77,989 75,808 (2,181) Use of money and property 5,000 3,500 3,269 (231) Amounts Available for Appropriation 241,462 239,351 236,939 (2,412) Charges to Appropriation (Outflow): Public safety 57,100 52,100 41,755 10,345 Total Charges to Appropriations 57,100 52,100 41,755 10,345 Budgetary Fund Balance, June 30 184,362$ 187,251$ 195,184$ 7,933$ 99 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PROPOSITION 1B YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental 557,171 1,218,713 624,305 (594,408) Use of money and property - 5,090 5,552 462 Amounts Available for Appropriation 557,171 1,223,803 629,857 (593,946) Charges to Appropriation (Outflow): Transfers out 557,171 1,236,742 629,857 606,885 Total Charges to Appropriations 557,171 1,236,742 629,857 606,885 Budgetary Fund Balance, June 30 -$ (12,939)$ -$ 12,939$ 100 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental 2,815,841 12,282,997 2,491,733 (9,791,264) Developer participation 430,000 1,321,633 900,834 (420,799) Transfers in 6,940,584 91,042,439 22,521,610 (68,520,829) Amounts Available for Appropriation 10,186,425 104,647,069 25,914,177 (78,732,892) Charges to Appropriation (Outflow): Capital outlay - 104,398,515 25,665,723 78,732,792 Debt service: Principal retirement - 205,972 205,972 - Interest and fiscal charges - 42,482 42,482 - Total Charges to Appropriations - 104,646,969 25,914,177 78,732,792 Budgetary Fund Balance, June 30 10,186,425$ 100$ -$ (100)$ 101 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INFRASTRUCTURE YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 400,420$ 400,420$ 400,420$ -$ Resources (Inflows): Use of money and property - 6,000 7,083 1,083 Amounts Available for Appropriation 400,420 406,420 407,503 1,083 Charges to Appropriation (Outflow): Transfers out - 397,576 - 397,576 Total Charges to Appropriations - 397,576 - 397,576 Budgetary Fund Balance, June 30 400,420$ 8,844$ 407,503$ 398,659$ 102 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE TRANSPORTATION YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 7,893,399$ 7,893,399$ 7,893,399$ -$ Resources (Inflows): Use of money and property 19,300 143,000 119,063 (23,937) Developer participation 1,015,100 850,000 825,304 (24,696) Amounts Available for Appropriation 8,927,799 8,886,399 8,837,766 (48,633) Charges to Appropriation (Outflow): Transfers out 1,512,370 8,396,155 2,930,217 5,465,938 Total Charges to Appropriations 1,512,370 8,396,155 2,930,217 5,465,938 Budgetary Fund Balance, June 30 7,415,429$ 490,244$ 5,907,549$ 5,417,305$ 103 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATION YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (1,513,574)$ (1,513,574)$ (1,513,574)$ -$ Resources (Inflows): Developer participation 356,800 60,000 94,999 34,999 Amounts Available for Appropriation (1,156,774) (1,453,574) (1,418,575) 34,999 Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges 37,500 37,500 26,201 11,299 Total Charges to Appropriations 37,500 37,500 26,201 11,299 Budgetary Fund Balance, June 30 (1,194,274)$ (1,491,074)$ (1,444,776)$ 46,298$ 104 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CIVIC CENTER YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (9,393,000)$ (9,393,000)$ (9,393,000)$ -$ Resources (Inflows): Developer participation 424,200 100,000 145,087 45,087 Amounts Available for Appropriation (8,968,800) (9,293,000) (9,247,913) 45,087 Charges to Appropriation (Outflow): General government 202,764 202,764 205,776 (3,012) Debt service: Interest and fiscal charges 231,250 231,250 163,478 67,772 Total Charges to Appropriations 434,014 434,014 369,254 64,760 Budgetary Fund Balance, June 30 (9,402,814)$ (9,727,014)$ (9,617,167)$ 109,847$ 105 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY DEVELOPMENT YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (1,949,006)$ (1,949,006)$ (1,949,006)$ -$ Resources (Inflows): Developer participation 142,000 30,000 42,606 12,606 Amounts Available for Appropriation (1,807,006) (1,919,006) (1,906,400) 12,606 Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges 48,750 48,750 34,226 14,524 Total Charges to Appropriations 48,750 48,750 34,226 14,524 Budgetary Fund Balance, June 30 (1,855,756)$ (1,967,756)$ (1,940,626)$ 27,130$ 106 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE COMMUNITY CENTER YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,130,928$ 1,130,928$ 1,130,928$ -$ Resources (Inflows): Use of money and property 39,800 30,000 20,088 (9,912) Developer participation 29,600 5,000 7,884 2,884 Amounts Available for Appropriation 1,200,328 1,165,928 1,158,900 (7,028) Budgetary Fund Balance, June 30 1,200,328$ 1,165,928$ 1,158,900$ (7,028)$ 107 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STREET FACILTY YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 313,172$ 313,172$ 313,172$ -$ Resources (Inflows): Use of money and property 300 5,000 5,866 866 Developer participation 35,300 35,300 28,747 (6,553) Amounts Available for Appropriation 348,772 353,472 347,785 (5,687) Charges to Appropriation (Outflow): Transfers out 2,152,707 2,484,563 8,165 2,476,398 Total Charges to Appropriations 2,152,707 2,484,563 8,165 2,476,398 Budgetary Fund Balance, June 30 (1,803,935)$ (2,131,091)$ 339,620$ 2,470,711$ 108 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARK FACILITY YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 97,664$ 97,664$ 97,664$ -$ Resources (Inflows): Use of money and property 2,000 2,000 1,752 (248) Developer participation 8,800 2,000 2,340 340 Amounts Available for Appropriation 108,464 101,664 101,756 92 Budgetary Fund Balance, June 30 108,464$ 101,664$ 101,756$ 92$ 109 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FIRE FACILITY YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (939,634)$ (939,634)$ (939,634)$ -$ Resources (Inflows): Developer participation 59,600 20,000 20,423 423 Amounts Available for Appropriation (880,034) (919,634) (919,211) 423 Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges 23,125 23,125 16,507 6,618 Transfers out 1,400,000 - - - Total Charges to Appropriations 1,423,125 23,125 16,507 6,618 Budgetary Fund Balance, June 30 (2,303,159)$ (942,759)$ (935,718)$ 7,041$ 110 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE 2004 LOW/MOD BOND YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 18,444,271$ 18,444,271$ 18,444,271$ -$ Resources (Inflows): Use of money and property 102,000 165,000 165,610 610 Amounts Available for Appropriation 18,546,271 18,609,271 18,609,881 610 Charges to Appropriation (Outflow): Planning and development - 3,052,800 2,096,000 956,800 Transfers out - 12,390,202 11,658,462 731,740 Total Charges to Appropriations - 15,443,002 13,754,462 1,688,540 Budgetary Fund Balance, June 30 18,546,271$ 3,166,269$ 4,855,419$ 1,689,150$ 111 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 1 - CAPITAL PROJECTS YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 43,124,188$ 43,124,188$ 43,124,188$ -$ Resources (Inflows): Use of money and property 300,000 763,000 684,429 (78,571) Transfers in 15,000,000 5,000,000 5,000,000 - Amounts Available for Appropriation 58,424,188 48,887,188 48,808,617 (78,571) Charges to Appropriation (Outflow): Planning and development 1,198,868 1,231,198 1,007,276 223,922 Capital outlay 9,000 9,000 - 9,000 Transfers out 85,000 43,013,915 2,872,058 40,141,857 Total Charges to Appropriations 1,292,868 44,254,113 3,879,334 40,374,779 Budgetary Fund Balance, June 30 57,131,320$ 4,633,075$ 44,929,283$ 40,296,208$ 112 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 2 - CAPITAL PROJECTS YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,626,224$ 2,626,224$ 2,626,224$ -$ Resources (Inflows): Use of money and property 84,000 36,000 37,256 1,256 Miscellaneous - - 23 23 Amounts Available for Appropriation 2,710,224 2,662,224 2,663,503 1,279 Charges to Appropriation (Outflow): Planning and development 241,086 430,201 300,643 129,558 Transfers out - 399,896 329,496 70,400 Total Charges to Appropriations 241,086 830,097 630,139 199,958 Budgetary Fund Balance, June 30 2,469,138$ 1,832,127$ 2,033,364$ 201,237$ 113 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FINANCING AUTHORITY - DEBT SERVICE YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 10,793$ 10,793$ 10,793$ -$ Resources (Inflows): Charges for services 15,000 15,000 10,041 (4,959) Use of money and property 675,880 676,450 676,450 - Transfers in 5,919,994 5,919,994 5,919,994 - Amounts Available for Appropriation 6,621,667 6,622,237 6,617,278 (4,959) Charges to Appropriation (Outflow): General government 15,800 15,800 12,878 2,922 Debt service: Principal retirement 1,995,000 1,995,000 1,995,000 - Interest and fiscal charges 4,601,444 4,601,444 4,601,444 - Total Charges to Appropriations 6,612,244 6,612,244 6,609,322 2,922 Budgetary Fund Balance, June 30 9,423$ 9,993$ 7,956$ (2,037)$ 114 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 1 - DEBT SERVICE YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 5,084,497$ 5,084,497$ 5,084,497$ -$ Resources (Inflows): Taxes 21,386,188 16,194,332 17,278,996 1,084,664 Use of money and property 173,600 173,600 220,854 47,254 Transfers in 4,444,479 4,444,479 4,444,520 41 Amounts Available for Appropriation 31,088,764 25,896,908 27,028,867 1,131,959 Charges to Appropriation (Outflow): General government 403,200 563,900 484,171 79,729 Debt service: Principal retirement 3,745,968 3,745,968 3,745,968 - Interest and fiscal charges 8,350,190 8,350,190 8,350,190 - Pass-through agreement payments - - - - Transfers out 18,966,396 8,966,396 8,966,396 - Total Charges to Appropriations 31,465,754 21,626,454 21,546,725 79,729 Budgetary Fund Balance, June 30 (376,990)$ 4,270,454$ 5,482,142$ 1,211,688$ 115 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 2 - DEBT SERVICE YEAR ENDED JUNE 30, 2009 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (4,455,247)$ (4,455,247)$ (4,455,247)$ -$ Resources (Inflows): Taxes 4,242,013 4,219,737 3,597,428 (622,309) Use of money and property - 280,000 269,131 (10,869) Transfers in 1,953,598 1,953,598 1,953,599 1 Amounts Available for Appropriation 1,740,364 1,998,088 1,364,911 (633,177) Charges to Appropriation (Outflow): General government 209,300 250,525 261,348 (10,823) Debt service: Principal retirement 115,000 115,000 315,000 (200,000) Interest and fiscal charges 1,961,712 1,961,712 1,961,712 - Pass-through agreement payments - - - - Transfers out 1,953,599 1,953,599 1,953,599 - Total Charges to Appropriations 4,239,611 4,280,836 4,491,659 (210,823) Budgetary Fund Balance, June 30 (2,499,247)$ (2,282,748)$ (3,126,748)$ (844,000)$ 116 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. 117 CITY OF LA QUINTA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30, 2009 Totals Assets: Current: Cash and investments 2,662,736$ 1,294,017$ 1,650,705$ 5,607,458$ Receivables: Accrued interest 3,018 1,414 1,875 6,307 Total Current Assets 2,665,754 1,295,431 1,652,580 5,613,765 Noncurrent: Capital assets - net of accumulated depreciation 1,209,701 443,790 14,458,372 16,111,863 Total Noncurrent Assets 1,209,701 443,790 14,458,372 16,111,863 Total Assets 3,875,455$ 1,739,221$ 16,110,952$ 21,725,628$ Liabilities and Net Assets: Liabilities: Current: Accounts payable 8,989$ 208$ -$ 9,197$ Accrued liabilities - 3,007 - 3,007 Total Current Liabilities 8,989 3,215 - 12,204 Noncurrent: Accrued compensated absences - 7,561 - 7,561 Total Noncurrent Liabilities - 7,561 - 7,561 Total Liabilities 8,989 10,776 - 19,765 Net Assets: Invested in capital assets, net of related debt 1,209,701 443,790 14,458,372 16,111,863 Unrestricted 2,656,765 1,284,655 1,652,580 5,594,000 Total Net Assets 3,866,466 1,728,445 16,110,952 21,705,863 Total Liabilities and Net Assets 3,875,455$ 1,739,221$ 16,110,952$ 21,725,628$ Governmental Activities - Internal Service Funds Equipment Replacement Information Technology Park Equipment and Facilities 118 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS JUNE 30, 2009 Totals Operating Revenues: Sales and service charges 716,881$ 494,201$ 413,394$ 1,624,476$ Total Operating Revenues 716,881 494,201 413,394 1,624,476 Operating Expenses: Salaries and benefits - 113,131 - 113,131 Fuel and oil 79,531 - - 79,531 Maintenance and parts 101,560 - - 101,560 Contract services 13,730 31,183 90,361 135,274 Software and supplies - 106,209 - 106,209 Depreciation 271,226 104,843 423,559 799,628 Other 15,104 7,324 - 22,428 Total Operating Expenses 481,151 362,690 513,920 1,357,761 Operating Income (Loss)235,730 131,511 (100,526) 266,715 Nonoperating Revenues (Expenses): Interest revenue 48,648 24,805 29,554 103,007 Gain (loss) on disposal of capital assets 21,542 - - 21,542 Total Nonoperating Revenues (Expenses)70,190 24,805 29,554 124,549 Income (Loss) Before Contributions and Transfers 305,920 156,316 (70,972) 391,264 Capital contributions 127,122 16,210 64,645 207,977 Transfers in 25,000 - - 25,000 Changes in Net Assets 458,042 172,526 (6,327) 624,241 Net Assets: Beginning of Year 3,408,424 1,555,919 16,117,279 21,081,622 Changes in Net Assets 458,042 172,526 (6,327) 624,241 End of Fiscal Year 3,866,466$ 1,728,445$ 16,110,952$ 21,705,863$ Governmental Activities - Internal Service Funds Equipment Replacement Information Technology Park Equipment and Facilities 119 CITY OF LA QUINTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2009 Totals Cash Flows from Operating Activities: Cash received from/(paid to) interfund service provided 716,881$ 494,201$ 413,394$ 1,624,476$ Cash paid to suppliers for goods and services (213,755) (156,903) (90,414) (461,072) Cash paid to employees for services - (108,822) - (108,822) Net Cash Provided (Used) by Operating Activities 503,126 228,476 322,980 1,054,582 Cash Flows from Non-Capital Financing Activities: Cash transfers in 25,000 - - 25,000 Net Cash Provided (Used) by Non-Capital Financing Activities 25,000 - - 25,000 Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets (71,395) (65,055) - (136,450) Proceeds from sales of capital assets 21,542 - - 21,542 Net Cash Provided (Used) by Capital and Related Financing Activities (49,853) (65,055) - (114,908) Cash Flows from Investing Activities: Interest received 54,858 27,640 32,689 115,187 Net Cash Provided (Used) by Investing Activities 54,858 27,640 32,689 115,187 Net Increase (Decrease) in Cash and Cash Equivalents 533,131 191,061 355,669 1,079,861 Cash and Cash Equivalents at Beginning of Year 2,129,605 1,102,956 1,295,036 4,527,597 Cash and Cash Equivalents at End of Year 2,662,736$ 1,294,017$ 1,650,705$ 5,607,458$ Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss)235,730$ 131,511$ (100,526)$ 266,715$ Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation 271,226 104,843 423,559 799,628 Increase (decrease) in accounts payable (3,830) (12,187) (53) (16,070) Increase (decrease) in accrued liabilities - 676 - 676 Increase (decrease) in compensated absences - 3,633 - 3,633 Total Adjustments 267,396 96,965 423,506 787,867 Net Cash Provided (Used) by Operating Activities 503,126$ 228,476$ 322,980$ 1,054,582$ Non-Cash Investing, Capital, and Financing Activities: Capital assets contributed by other funds 127,122$ 16,210$ 64,645$ 207,977$ Governmental Activities - Internal Service Funds Equipment Replacement Information Technology Park Equipment and Facilities 120 AGENCY FUNDS Agency funds are used to account for assets held by the City as an agent for an 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. 121 CITY OF LA QUINTA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2009 Totals Assets: Cash and investments 138,694$ 428,276$ 566,970$ Receivables: Taxes 2,396 8,900 11,296 Accrued interest 157 498 655 Total Assets 141,247$ 437,674$ 578,921$ Liabilities: Deposits payable 141,247$ 437,674$ 578,921$ Total Liabilities 141,247$ 437,674$ 578,921$ Assessment District No. 97-1 Assessment District No. 2001-1 122 CITY OF LA QUINTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2009 Balance Balance July 1, 2008 Additions Deductions June 30, 2009 Assessment District No. 97-1 Assets: Cash and investments 151,036$ 67,058$ 79,400$ 138,694$ Receivables: Taxes 1,567 2,396 1,567 2,396 Accrued interest 553 157 553 157 Total Assets 153,156$ 69,611$ 81,520$ 141,247$ Liabilities: Deposits payable 153,156$ 67,544$ 79,453$ 141,247$ Total Liabilities 153,156$ 67,544$ 79,453$ 141,247$ Assessment District No. 2001-1 Assets: Cash and investments 458,128$ 232,607$ 262,459$ 428,276$ Receivables: Taxes 20,755 8,900 20,755 8,900 Accrued interest 1,696 498 1,696 498 Total Assets 480,579$ 242,005$ 284,910$ 437,674$ Liabilities: Deposits payable 480,579$ 220,044$ 262,949$ 437,674$ Total Liabilities 480,579$ 220,044$ 262,949$ 437,674$ Totals - All Agency Funds Assets: Cash and investments 609,164$ 299,665$ 341,859$ 566,970$ Receivables: Taxes 22,322 11,296 22,322 11,296 Accrued interest 2,249 655 2,249 655 Total Assets 633,735$ 311,616$ 366,430$ 578,921$ Liabilities: Deposits payable 633,735$ 287,588$ 342,402$ 578,921$ Total Liabilities 633,735$ 287,588$ 342,402$ 578,921$ 123 THIS PAGE INTENTIONALLY LEFT BLANK 124 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 Page Financial Trends These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time. 126 Revenue Capacity These schedules obtain information to help the reader assess the government’s most significant local revenue source, the property tax. 132 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. 137 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. 142 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. 145 125 TABLE 1 2001 2002 2003 2004 2005 2006 2007 2008 2009 Governmental activities: Invested in capital assets, net of related debt 217,419,724$ 195,474,945 225,818,022 249,059,500 233,361,129 253,559,117 300,220,033 343,019,328 323,669,955 Restricted 45,438,930 74,156,691 40,038,313 44,415,966 43,421,857 65,159,623 49,277,895 86,041,189 105,297,168 Unrestricted 30,698,622 43,025,999 48,290,000 45,169,328 60,361,071 86,129,376 106,939,577 79,642,102 96,654,981 Total governmental activities net assets 293,557,276$ 312,657,635 314,146,335 338,644,794 337,144,057 404,848,116 456,437,505 508,702,619 525,622,104 Business-type activities: Invested in capital assets, net of related debt -$ - - - 41,300,846 42,075,172 42,692,025 42,778,015 42,767,282 Restricted - - - - - - - - - Unrestricted - - - - (626,658) (1,665,646) (2,385,462) (3,109,524) (4,168,128) Total business-type activities net assets - - - - 40,674,188 40,409,526 40,306,563 39,668,491 38,599,154 Primary government: Invested in capital assets, net of related debt 217,419,724$ 195,474,945 225,818,022 249,059,500 274,661,975 295,634,289 342,912,058 385,797,343 366,437,237 Restricted 45,438,930 74,156,691 40,038,313 44,415,966 43,421,857 65,159,623 49,277,895 86,041,189 105,297,168 Unrestricted 30,698,622 43,025,999 48,290,000 45,169,328 59,734,413 84,463,730 104,554,115 76,532,578 92,486,853 Total primary government net assets 293,557,276$ 312,657,635 314,146,335 338,644,794 377,818,245 445,257,642 496,744,068 548,371,110 564,221,258 Source: City of La Quinta Fiscal Year CITY OF LA QUINTA Net Assets by Component Last Nine Fiscal Years (accrual basis of accounting) 126 TABLE 2 2001 2002 2003 2004 2005 2006 2007 2008 2009 Expenses: Governmental activities: General government 3,146,699$ 3,241,576 3,203,462 4,319,778 3,595,906 4,229,871 6,284,342 6,953,073 7,836,146 Public safety 5,776,628 7,522,532 8,547,005 10,256,463 8,512,875 9,065,244 12,724,100 13,472,036 19,736,941 Community services 940,881 1,411,943 1,321,825 1,446,999 1,157,141 1,426,033 4,299,453 5,797,116 14,808,850 Planning and development 6,146,998 7,110,125 19,083,860 7,526,977 5,752,239 5,906,915 7,736,520 35,323,858 7,317,689 Public works 5,968,911 6,434,239 6,785,759 6,003,013 9,101,582 10,006,335 10,511,874 11,097,526 11,100,833 Interest on long-term debt 5,861,632 7,791,759 8,555,401 9,658,779 15,265,051 15,494,656 15,163,422 15,522,441 15,631,438 Total governmental activities expenses 27,841,749 33,512,174 47,497,312 39,212,009 43,384,794 46,129,054 56,719,711 88,166,050 76,431,897 Business-type activities: Golf Course - - - - 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 Total business-type activities expenses - - - - 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 Total primary government expenses 27,841,749 33,512,174 47,497,312 39,212,009 45,262,085 50,652,200 61,239,884 92,927,631 80,872,443 Program revenues: Governmental activities: Charges for services: General government 214,601 253,891 298,749 337,376 445,663 717,849 60,530 8,328 25,053 Public safety 2,860,434 2,544,528 2,917,866 4,004,621 4,438,115 4,168,206 2,659,515 2,050,492 1,373,952 Planning and development 709,033 565,098 611,278 662,737 754,938 1,873,676 169,643 134,211 138,391 Community services 123,960 170,865 205,806 252,677 252,501 428,947 387,065 374,092 275,178 Public works 1,429,942 1,316,373 1,594,225 1,813,993 2,815,703 3,021,379 2,244,156 1,900,437 1,308,702 Operating grants and contributions 1,601,716 1,699,255 1,797,031 1,799,503 1,935,578 3,603,173 3,796,495 5,905,664 10,725,280 Capital grants and contributions 14,375,463 11,662,424 5,160,405 2 12,090,143 18,591,423 33,918,901 17,601,131 50,090,419 10,647,270 Total governmental activities program revenues 21,315,149 18,212,434 12,585,360 20,961,050 29,233,921 47,732,131 26,918,535 60,463,643 24,493,826 Business-type activities: Charges for services: Golf Course - - - - 1,091,836 3,120,728 3,540,748 3,814,233 3,368,135 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 Total primary government program revenues 21,315,149 18,212,434 12,585,360 20,961,050 30,325,757 50,852,859 30,459,283 64,630,563 27,861,961 (continued) (continued) (continued) (continued) (continued) (continued) (continued) (continued) (continued) Net revenues (expenses): Governmental activities (6,526,600) (15,299,740) (34,911,952) (18,250,959) (14,150,873) 1,603,077 (29,801,176) (27,702,407) (51,938,071) Business-type activities - - - - (785,455) (1,402,418) (979,425) (594,661) (1,072,411) Total net revenues (expenses)(6,526,600) (15,299,740) (34,911,952) (18,250,959) (14,936,328) 200,659 (30,780,601) (28,297,068) (53,010,482) General revenues and other changes in net assets: Governmental activities: Taxes: Property taxes 1,162,634 1,450,196 1,800,616 2,198,141 2,579,245 3,679,079 4,999,051 6,014,305 6,653,583 Tax increment 15,324,183 18,899,329 21,191,832 24,450,337 24,443,112 35,168,329 42,583,031 42,114,893 36,702,197 Sales tax 3,778,583 3,093,588 4,345,381 5,240,037 6,773,566 7,613,075 8,896,716 8,492,213 7,279,513 Transient occupancy taxes 4,249,753 3,967,003 4,036,290 4,261,767 4,831,338 5,437,238 5,448,361 5,327,203 4,480,467 Franchise taxes 625,790 654,696 690,544 895,810 1,185,087 1,044,470 1,259,985 1,748,082 1,533,249 Business license taxes 156,026 168,798 186,220 191,062 251,618 276,917 307,032 317,011 285,304 Other taxes 359,284 311,024 513,934 675,996 1,141,177 1,049,701 872,753 641,705 455,089 Investment income 3,578,206 3,006,097 1,353,868 1,738,505 4,336,050 6,319,502 11,854,951 10,230,489 7,387,244 Motor vehicle in lieu, unrestricted 1,496,620 1,473,217 1,768,091 1,608,151 2,453,642 2,740,233 3,291,055 3,803,647 3,940,801 Gain (loss) on sale of capital assets - (21,397) - - 3,717,470 1,967,292 - 57,346 21,542 Miscellaneous 292,036 692,691 513,876 1,489,612 2,397,474 1,943,093 2,052,246 1,220,627 118,567 Transfers - - - - 1 (41,459,643) 1 (1,137,203) 1 (874,645) - - Total governmental activities 31,023,115 33,695,242 36,400,652 42,749,418 12,650,136 66,101,726 80,690,536 79,967,521 68,857,556 Business-type activities: Investment income - - - - - 553 1,817 4,310 3,074 Gain (loss) on sale of capital assets - - - - - - - (47,721) - Transfers - - - - 1 41,459,643 1 1,137,203 1 874,645 - - Total business-type activities - - - - 41,459,643 1,137,756 876,462 (43,411) 3,074 Total primary government 31,023,115 33,695,242 36,400,652 42,749,418 54,109,779 67,239,482 81,566,998 79,924,110 68,860,630 Changes in net assets Governmental activities 24,496,515 18,395,502 1,488,700 24,498,459 (1,500,737) 67,704,803 50,889,360 52,265,114 16,919,485 Business-type activities - - - - 40,674,188 (264,662) (102,963) (638,072) (1,069,337) Total primary government 24,496,515$ 18,395,502 1,488,700 24,498,459 39,173,451 67,440,141 50,786,397 51,627,042 15,850,148 1 The transfer was for land & golf course improvements transferred to the Enterprise Fund. Fiscal Year CITY OF LA QUINTA Changes in Net Assets Last Nine Fiscal Years (accrual basis of accounting) 127 TABLE 3 2001 2002 2003 2004 2005 2006 2007 2008 2009 Expenses: General government 3,146,699$ 3,241,576 3,203,462 4,319,778 3,595,906 4,229,871 6,284,342 6,953,073 7,836,146 Public safety 5,776,628 7,522,532 8,547,005 10,256,463 8,512,875 9,065,244 12,724,100 13,472,036 19,736,941 Community services 940,881 1,411,943 1,321,825 1,446,999 1,157,141 1,426,033 4,299,453 5,797,116 14,808,850 Planning and development 6,146,998 7,110,125 19,083,860 7,526,977 5,752,239 5,906,915 7,736,520 35,323,858 7,317,689 Public works 5,968,911 6,434,239 6,785,759 6,003,013 9,101,582 10,006,335 10,511,874 11,097,526 11,100,833 Interest on long-term debt 5,861,632 7,791,759 8,555,401 9,658,779 15,265,051 15,494,656 15,163,422 15,522,441 15,631,438 Total governmental activities expenses 27,841,749 33,512,174 47,497,312 39,212,009 43,384,794 46,129,054 56,719,711 88,166,050 76,431,897 Program revenues: Charges for services: General government 214,601 253,891 298,749 337,376 445,663 717,849 60,530 8,328 25,053 Public safety 2,860,434 2,544,528 2,917,866 4,004,621 4,438,115 4,168,206 2,659,515 2,050,492 1,373,952 Community services 123,960 170,865 205,806 252,677 252,501 428,947 387,065 374,092 275,178 Planning and development 709,033 565,098 611,278 662,737 754,938 1,873,676 169,643 134,211 138,391 Public works 1,429,942 1,316,373 1,594,225 1,813,993 2,815,703 3,021,379 2,244,156 1,900,437 1,308,702 Operating grants and contributions 1,601,716 1,699,255 1,797,031 1,799,503 1,935,578 3,603,173 3,796,495 5,905,664 10,725,280 Capital grants and contributions 14,375,463 11,662,424 5,160,405 12,090,143 18,591,423 33,918,901 17,601,131 50,090,419 10,647,270 Total governmental activities program revenues 21,315,149 18,212,434 12,585,360 20,961,050 29,233,921 47,732,131 26,918,535 60,463,643 24,493,826 Net program revenues (expenses) (6,526,600) (15,299,740) (34,911,952) (18,250,959) (14,150,873) 1,603,077 (29,801,176) (27,702,407) (51,938,071) General revenues and other changes in net assets: Taxes: Property taxes 1,162,634 1,450,196 1,800,616 2,198,141 2,579,245 3,679,079 4,999,051 6,014,305 6,653,583 Tax increment 15,324,183 18,899,329 21,191,832 24,450,337 24,443,112 35,168,329 42,583,031 42,114,893 36,702,197 Sales tax 3,778,583 3,093,588 4,345,381 5,240,037 6,773,566 7,613,075 8,896,716 8,492,213 7,279,513 Transient occupancy taxes 4,249,753 3,967,003 4,036,290 4,261,767 4,831,338 5,437,238 5,448,361 5,327,203 4,480,467 Franchise tax 625,790 654,696 690,544 895,810 1,185,087 1,044,470 1,259,985 1,748,082 1,533,249 Business license taxes 156,026 168,798 186,220 191,062 251,618 276,917 307,032 317,011 285,304 Other tax 359,284 311,024 513,934 675,996 1,141,177 1,049,701 872,753 641,705 455,089 Motor vehicle in lieu, unrestricted 1,496,620 1,473,217 1,768,091 1,608,151 2,453,642 2,740,233 3,291,055 3,803,647 3,940,801 Investment income 3,578,206 3,006,097 1,353,868 1,738,505 4,336,050 6,319,502 11,854,951 10,230,489 7,387,244 Gain (loss) on sale of capital assets - (21,397) - - 3,717,470 1,967,292 - 57,346 21,542 Miscellaneous 292,036 692,691 513,876 1,489,612 2,397,474 1,943,093 2,052,246 1,220,627 118,567 Transfers - - - - (41,459,643) (1,137,203) (874,645) - - Total governmental activities 31,023,115 33,695,242 36,400,652 42,749,418 12,650,136 66,101,726 80,690,536 79,967,521 68,857,556 Changes in net assets - governmental activities 24,496,515$ 18,395,502 1,488,700 24,498,459 (1,500,737) 67,704,803 50,889,360 52,265,114 16,919,485 Source: City of La Quinta Fiscal Year CITY OF LA QUINTA Changes in Net Assets - Governmental Activities Last Nine Fiscal Years (accrual basis of accounting) 128 TABLE 4 2005 2006 2007 2008 2009 Expenses: Golf Course 1,877,291 2 4,523,146 4,520,173 4,761,581 4,440,546 Total business-type activities expenses 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 Program revenues: Charges for services: Golf Course 1,091,836 2 3,120,728 3,540,748 3,814,233 3,368,135 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 Net revenues (expenses)(785,455) (1,402,418) (979,425) (594,661) (1,072,411) General revenues and other changes in net assets: Investment income - 553 1,817 4,310 3,074 Gain (loss) on sale of capital assets - - - (47,721) - Transfers - 164,190 874,645 - - Capital contributions 1 41,459,643 973,013 979,425 Total business-type activities 41,459,643 1,137,756 1,855,887 (43,411) 3,074 Changes in net assets - business-type activities 40,674,188 (264,662) 876,462 (638,072) (1,069,337) Fiscal Year CITY OF LA QUINTA Changes in Net Assets - Business-type Activities Last Five Fiscal Years (accrual basis of accounting) The City of La Quinta implemented the business type activities in FY 1 2 This was the first full year of operations for the Golf Course Source: City of La Quinta The transfer was for land & golf course improvements transferred to the Enterprise Fund. The City of La Quinta implemented the business type activities in FY 2004/2005. 129 TABLE 5 2001 2002 2003 2004 2005 2006 2007 2008 2009 General fund: Reserved 11,746,211$ 12,897,893 21,099,910 29,210,757 32,412,590 23,210,506 28,388,633 45,441,896 46,199,160 Unreserved 23,878,259 27,981,710 26,584,773 25,494,479 31,514,377 53,058,618 56,251,887 47,010,123 46,128,221 Total general fund 35,624,470$ 40,879,603 47,684,683 54,705,236 63,926,967 76,269,124 84,640,520 92,452,019 92,327,381 All other governmental funds: Reserved 13,480,545$ 45,508,787 38,404,982 98,476,000 1 99,751,862$ 95,515,445 31,211,751 11,568,126 25,142,722 Unreserved, reported in: Special revenue funds 6,352,995 12,107,305 9,382,431 9,286,459 19,267,394 36,475,093 27,770,552 32,419,068 37,849,825 Capital projects funds 18,712,013 12,423,247 16,368,205 28,600,240 1,831,415 6,499,827 58,370,198 55,831,061 22,745,150 Debt service funds (6,800,030) (5,622,884) (6,182,506) (11,099,245) (7,236,054) 738,590 10,634 (4,445,109) 2,363,350 Total all other governmental funds 31,745,523$ 64,416,455 57,973,112 125,263,454 120,850,671 139,228,955 117,363,135 95,373,146 88,101,047 1 The increase was primarily the result of the issuance of the 2004 Financing Authority bonds. Source: City of La Quinta Fiscal Year CITY OF LA QUINTA Fund Balances of Governmental Funds Last Nine Fiscal Years (modified accrual basis of accounting) 130 TABLE 6 2001 2002 2003 2004 2005 2006 2007 2008 2009 Revenues: Taxes 36,605,534$ 43,011,931 50,326,811 58,301,082 68,175,347 89,704,947 100,103,324 105,870,933 99,816,072 Special assessments 782,610 757,619 780,259 816,045 825,292 818,526 877,191 909,229 927,816 Licenses and permits 2,057,423 1,857,691 1,982,127 3,096,145 3,226,167 5,145,430 2,788,882 2,107,035 871,167 Intergovernmental 9,400,340 9,583,451 7,194,521 11,858,627 10,242,876 18,585,468 14,803,971 15,382,135 18,679,355 Charges for services 1,998,589 1,757,744 2,302,759 2,619,578 3,402,602 3,367,989 1,821,794 1,334,060 673,779 Use of money and property 5,960,995 5,136,398 4,463,219 4,854,728 9,798,356 12,671,662 14,804,348 12,874,926 7,043,646 Contributions - - - - - - - 37,643,190 240,591 Developer fees 2,592,398 2,298,647 3,021,245 5,718,073 6,091,156 12,473,440 5,310,440 6,537,991 2,243,785 Other 502,717 584,197 483,777 1,359,539 528,903 637,054 412,353 629,471 720,185 Total revenues 59,900,606 64,987,678 70,554,718 88,623,817 102,290,699 143,404,516 140,922,303 183,288,970 131,216,396 Expenditures Current: General government 3,275,624 3,161,596 3,344,407 4,099,376 3,970,921 4,644,954 6,150,699 7,367,144 7,230,436 Public safety 5,636,154 7,610,308 8,344,428 9,672,708 12,364,583 13,029,187 15,685,493 17,181,775 18,946,866 Planning and development 6,344,764 10,693,374 7,804,294 7,480,421 5,719,373 5,847,563 28,994,177 15,374,160 7,261,835 Community services 817,460 1,067,837 993,964 1,025,397 1,104,509 1,248,308 4,027,302 5,336,757 4,698,985 Public works 2,613,928 2,897,312 3,685,050 4,536,589 6,206,769 6,987,014 6,755,507 6,563,494 6,324,055 Capital projects 14,456,314 57,342,978 16,057,578 43,331,919 40,012,387 25,445,550 36,420,417 82,883,317 32,363,859 Debt service: Principal retirement 4,510,420 11,453,487 2,931,952 3,610,538 3,793,660 4,777,748 5,647,940 5,949,311 6,319,580 Interest and fiscal charges 5,942,929 7,017,016 9,469,314 13,961,721 14,355,577 15,554,612 15,059,977 15,424,708 15,348,598 Payment to bond escrow - - - 1,591,107 - - - Payments under pass-through obligat 10,949,381 13,669,166 17,561,994 21,448,147 25,756,321 35,958,291 36,498,575 42,989,023 42,426,670 Total expenditures 54,546,974 114,913,074 70,192,981 110,757,923 113,284,100 113,493,227 155,240,087 199,069,689 140,920,884 Excess (deficiency) of revenues over (under) expenditures 5,353,632 (49,925,396) 361,737 (22,134,106) (10,993,401) 29,911,289 (14,317,784) (15,780,719) (9,704,488) Other financing sources (uses): Issuance of tax allocation bonds - 88,000,000 - 26,400,000 - - - - - Issuance of revenue bonds - - 90,000,000 - - - - - Payment to bond escrow - - (19,955,000) - - - - - Transfers in 17,911,515 64,255,590 23,887,256 154,613,662 49,248,081 35,828,335 60,954,576 88,604,682 40,502,929 Transfers out (17,911,515) (65,255,590) (23,887,256) (154,613,662) (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 - 146,603 - - 8,566,295 8,209,396 124,097 158,061 - Total other financing sources (uses)- 87,146,603 - 96,445,000 8,566,295 8,045,206 124,097 1,602,229 2,307,751 Net change in fund balances 5,353,632$ 37,221,207 361,737 74,310,894 (2,427,106)$ 37,956,495 (14,193,687) (14,178,490) (7,396,737) Debt service as a percentage of noncapital expenditures 49.1% 54.2% 43.5% 57.9% 62.0% 65.5% 61.0% 47.1% 59.0% Source: City of La Quinta Fiscal Year CITY OF LA QUINTA Changes in Fund Balances of Governmental Funds Last Nine Fiscal Years (modified accrual basis of accounting) 131 TABLE 7 Fiscal Year Taxable Ended Less: Assessed Direct June 30 Secured Unsecured Exemptions Value Perent Change 2000 2,674,887,437 18756736 -38580062 2,655,064,111 N/A 2001 2,665,520,656 18,712,736 (39,914,784) 2,644,318,608 -0.40% 2002 3,162,945,116 30,599,753 (50,149,068) 3,143,395,801 18.87% 2003 3,789,678,041 32,607,713 (54,726,303) 3,767,559,451 19.86% 2004 5,412,382,710 40,940,877 (95,420,075) 5,357,903,512 42.21% 2005 6,289,493,552 44,014,548 (113,037,003) 6,220,471,097 16.10% 2006 7,856,383,375 72,554,357 (115,071,146) 7,813,866,586 25.62% 2007 9,986,151,525 88,740,840 (99,245,721) 9,975,646,644 27.67% 2008 11,854,669,637 101,433,002 (89,688,505) 11,866,414,134 18.95% 2009 12,410,626,893 113,185,065 (107,777,195) 12,416,034,763 4.63% Source: County of Riverside Auditor-Controller Entire City (including Redevelopment Agency) CITY OF LA QUINTA Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in dollars) NOTE: In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. 132 TABLE 8 Fiscal Year Taxable Ended Less: Assessed Base Taxable June 30 Secured Unsecured Exemptions Value Year Increment 2006 3,962,433,928 29,248,534 (35,653,495) 3,956,028,967 199,398,233 3,756,630,734 2007 4,789,836,901 34,084,343 (36,081,051) 4,787,840,193 199,398,233 4,588,441,960 2008 5,223,508,114 34,250,061 (36,913,004) 5,220,845,171 199,398,233 5,021,446,938 2009 5,259,271,091 31,678,492 (36,844,457) 5,254,105,126 199,398,233 5,054,706,893 Fiscal Year Taxable Ended Less: Assessed Base Taxable June 30 Secured Unsecured Exemptions Value Year Increment 2006 2,132,426,502 32,999,788 (54,125,422) 2,111,300,868 95,182,755 2,016,118,113 2007 2,434,082,787 42,914,862 (53,144,959) 2,423,852,690 95,182,755 2,328,669,935 2008 2,764,306,278 50,616,017 (40,774,044) 2,774,148,251 95,182,755 2,678,965,496 2009 2,843,981,136 62,180,440 (57,076,727) 2,849,084,849 95,182,755 2,753,902,094 Source: County of Riverside Auditor-Controller Redevelopment Agency Project Area 2 Redevelopment Agency Project Area 1 CITY OF LA QUINTA Assessed Value and Estimated Actual Value of Taxable Property - Redevelopment Agency Last Four Fiscal Years (in dollars) 133 TABLE 9 2006 1 2007 1 2008 1 2009 1 2006 3 2007 3 2008 4 2009 4 2006 3 2007 3 2008 4 2009 4 Direct Rates: City of La Quinta 0.0760 0.0760 0.0760 0.0506 0.0000 0.0000 0.0000 0.5213 0.0000 0.0000 0.0000 0.0016 Redevelopment agency Project Area 1 0.0000 0.0000 0.0000 0.0000 0.5830 0.5880 0.5150 0.0000 0.0000 0.0000 0.0000 0.0000 Redevelopment agency Project Area 2 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.2860 0.2920 0.2910 0.0000 County of Riverside 0.1960 0.1960 0.1960 0.2586 0.3470 0.3460 0.3460 0.2500 0.3470 0.3470 0.3470 0.2501 County Free Library 0.0250 0.0250 0.0250 0.0284 0.0010 0.0010 0.0010 0.0280 0.0010 0.0010 0.0010 0.0285 County Structure Fire Protection 0.0540 0.0540 0.0540 0.0610 0.0030 0.0020 0.0020 0.0601 0.0020 0.0020 0.0020 0.0614 Coachella Valley (CV) Unified School 0.0000 0.0000 0.0000 0.0000 0.0170 0.0150 0.0020 0.0149 0.0000 0.0000 0.0020 0.3090 Desert Sands Unified School 0.4320 0.4320 0.4320 0.3765 0.0160 0.0140 0.0140 0.0695 0.2000 0.1980 0.1970 0.1920 Desert Community College 0.0700 0.0700 0.0700 0.0782 0.0030 0.0030 0.0720 0.0177 0.0420 0.0410 0.0410 0.0400 Riverside County Office of Education 0.0380 0.0380 0.0380 0.0426 0.0030 0.0030 0.0180 0.0093 0.0230 0.0220 0.0220 0.0217 Riverside County Regional Park & Open Space 0.0040 0.0040 0.0040 0.0000 0.0000 0.0000 0.0030 0.0000 0.0000 0.0000 0.0000 0.0000 CV Public Cemetery 0.0032 0.0032 0.0032 0.0035 0.0000 0.0000 0.0000 0.0008 0.0000 0.0000 0.0000 0.0001 CV Mosquito 0.0127 0.0127 0.0127 0.0142 0.0120 0.0120 0.0120 0.0112 0.0150 0.0140 0.0140 0.0141 Desert Recreation District 0.0192 0.0192 0.0192 0.0215 0.0010 0.0020 0.0010 0.0044 0.0060 0.0060 0.0060 0.0058 CV Water District 0.0250 0.0250 0.0250 0.0284 0.0130 0.0130 0.0010 0.0127 0.0770 0.0760 0.0760 0.0742 CV Resource Conservation 0.0003 0.0003 0.0003 0.0004 0.0000 0.0000 0.0130 0.0001 0.0000 0.0000 0.0000 0.0000 CVWD District 1 Debt Service 0.0118 0.0118 0.0118 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0004 CVWD Storm Water Unit 0.0320 0.0320 0.0320 0.0360 0.0010 0.0010 0.0000 0.0000 0.0010 0.0010 0.0010 0.0011 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 Tax Rate Area 020-005 020-005 020-005 020-005 020-015 020-015 020-089 020-089 020-144 020-144 020-144 020-144 Overlapping Rates 5: City of La Quinta County of Riverside Riverside County Office of Education Riverside County Pension Obligation Desert Sands Unified 0.0767 0.0761 0.0799 0.0799 0.0767 0.0761 0.0756 0.0799 0.0767 0.0761 0.0756 0.0799 Coachella Valley Unified School District Coachella Valley Water District 0.0442 0.0332 0.0462 0.0464 0.0199 0.0208 0.0484 0.0464 0.0442 0.0332 0.0484 0.0464 Coachella Valley Recreation & Park District Desert Comm College District 0.0199 0.0199 0.0199 0.0199 0.0208 0.0199 0.0199 0.0199 0.0199 0.0199 0.0199 0.0199 Total Overlapping Rate 0.1409 0.1293 0.1461 0.1462 0.1175 0.1169 0.1440 0.1462 0.1409 0.1293 0.1440 0.1462 Total Direct and Overlapping Rate 1.1401 1.1285 1.1453 1.1462 1.1175 1.1169 1.1440 1.1462 1.1409 1.1293 1.1440 1.1462 Source: County of Riverside Auditor Controller's Office 1 2 3 4 5 CITY OF LA QUINTA Direct and Overlapping Property Tax Rates (Rate per $100 of assessed value) Last Four Fiscal Year Direct rate from Tax Rate Area (TRA) 020-059 provided by Hdl Coren & Cone and overlapping debt rates from California Municipal Statistics Direct rate taken from all non-RDA TRA's provided by the County of Riverside and do not include ERAF deductions and overlapping rates provided by California Municipal Statistics City Non-Project Area Direct rate taken from an analysis by the City of La Quinta Finance Department staff of all TRA's in the Project area and do not include State ERAF deductions and overlapping rates provided by California Municipal Statistics Direct rate taken from an analysis of the TRA in the Project area and do not include State ERAF deductions and overlapping rates provided by California Municipal Statistics Overlapping rates are based upon a single tax rate area only. Redevelopment Project Area 2 Redevelopment Project Area 1 134 TABLE 10 Percent of Percent of Total City Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value KSL Desert Resort, Inc 351,987,688$ 1 2.83% 234,840,723 1 8.85% TD Desert Development 123,545,144 2 1.00% 31,304,041 3 1.18% East of Madison 63,848,760 3 0.51%-- Sams Real Estate Trust/Wal Mart 50,062,387 4 0.40% 12,506,912 10 0.47% ND La Quinta Partners 42,929,365 5 0.35%-- Coral Option I LLC 41,623,109 6 0.34%-- Griffin Ranch 40,240,602 7 0.32%-- Village Resort 33,809,065 8 0.27%-- Inland American LQ Pavillion 32,260,312 9 0.26%-- Toll California V 32,130,633 10 0.26%-- Sunrise Desert Partners -- 58,121,909 2 2.19% La Quinta Golf Properties -- 17,334,631 4 0.65% Eagle Hardware and Garden Inc.-- 14,718,050 5 0.55% Capital Pacific Holdings -- 13,312,797 6 0.50% M & H Realty Partners II -- 13,018,671 7 0.49% Merv Griffin Trust -- 12,513,569 8 0.47% Tradition Club Associates -- 12,513,272 9 0.47% 812,437,065$ 6.54%420,184,575 15.82% NOTE :The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Coren & Cone CITY OF LA QUINTA 2009 2000 Current Year and Nine Years Ago Principal Property Taxpayers (in dollars) 135 TABLE 11 Property Tax Levies and Collections Fiscal Taxes Levied Collections in Year Ended for the Percent Subsequent Percent June 30 Fiscal Year Amount of Levy Years Amount 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% Source: County of Riverside Auditor Controller's Office Collected within the Fiscal Year of Levy Total Collections to Date CITY OF LA QUINTA Last Four Fiscal Years ( in dollars) NOTE: The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also in amounts collected by the City and Redevelopment Agency that were passed-through to other agencies. 136 TABLE 12 Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended 2006 2007 2008 2009 Governmental Activities Reimbursement Agreement 328,311$ 278,311$ 228,311$ 178,311$ Compensated Absences 608,266 734,055 829,227 919,100 Capital lease - - - 149,169 USDA Loan - - - 751,754 Provident Savings Loan - - - 1,556,283 Due to Coachella Valley Unified School District 5,186,627 4,431,178 3,675,731 2,874,653 Due to County of Riverside 1,850,000 1,750,000 1,600,000 1,400,000 Developer Agreement 776,030 643,539 511,048 343,814 Tax Allocation Bonds Project Area 1 141,785,000 139,145,000 136,350,000 133,390,000 Tax Allocation Bonds Project Area 2 6,130,000 6,025,000 5,915,000 5,800,000 2004 Local Agency Revenue Bonds 1 89,265,000 87,745,000 86,175,000 84,560,000 City Hall Lease Revenue Bonds 6,245,000 5,900,000 5,540,000 5,160,000 Unamortized Discount and Issuance Costs (877,230) (877,230) (841,087) (804,944) Total Governmental 251,297,004 245,774,853 239,983,230 236,278,140 Business-type Activities Capital Leases 1,090,602 825,848 681,048 285,217 Total Business-type activities 1,090,602 825,848 681,048 285,217 Total Primary Government 252,387,606$ 246,600,701$ 240,664,278$ 236,563,357$ Population - State Department of Finance January 1 38,340 41,092 42,958 43,778 Number of Households 18,762 20,176 21,058 21,355 Median Household Income 65,906$ 67,754$ 74,683$ 76,227$ Percentage of Personal Income 20.41%18.04% 15.30% 14.53% Debt Per Capita 6,583$ 6,001$ 5,602$ 5,404$ 1 The debt service payment for the 2004 Lease Revenue Bonds are made from Redevelopment Project Area 1 & 2 low & moderate income tax increment. CITY OF LA QUINTA Ratios of Outstanding Debt by Type Last Four Fiscal Years (in dollars) Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 137 TABLE 13 Fiscal Year City Hall Lease 2004 Tax Percent of Per Ended Lease Local Agency Allocation Assessed Median June 30 Obligation Revenue Bonds 1 Bonds Total Value 1 Household Income 2006 6,245,000 89,265,000 147,915,000 243,425,000 2.44% 3,694$ 2007 5,900,000 87,745,000 145,170,000 238,815,000 2.01% 3,525$ 2008 5,540,000 86,175,000 142,265,000 233,980,000 1.88%3,133$ 2009 5,160,000 84,560,000 139,190,000 228,910,000 1.84%3,003$ General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). 1 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 Outstanding General Bonded Debt CITY OF LA QUINTA Ratio of General Bonded Debt Outstanding Last Four Fiscal Years (In Dollars) 138 TABLE 14 City Assessed Valuation 4,607,425,776$ Redevelopment Agency Incremental Valuation 7,808,608,987 Total Assessed Valuation 12,416,034,763$ Source: Riverside County Auditor Controller Estimated Share of Percentage Outstanding Overlapping Applicable 1 Debt 6/30/09 Debt Overlapping Debt Repaid with Property Taxes And Assessments: Desert Community College District 7.870% 325,869,507$ 25,645,930 Coachella Valley Unified School District 31.509% 92,297,458 29,082,006 Desert Sands Unified School District (DSUSD)7.801% 296,353,845 23,118,563 Coachella Valley County Water District I.D. No. 55 84.351%4,170,000 3,517,437 Coachella Valley County Water District I.D. No. 58 6.628%1,960,000 129,909 DSUSD Community Facilities District No. 1 100.000%1,885,000 1,885,000 City of La Quinta 1915 Act Bonds 100.000%1,350,000 1,350,000 Coachella Valley Water District Assessment District No. 68 86.247%2,185,000 1,884,497 Total overlapping debt repaid with property taxes 726,070,810 86,613,342 Overlapping Other Debt including Certifications of Participation (COP) Riverside County General Fund Obligations 1.680% 760,794,659$ 12,781,350 Riverside County Pension Obligations 1.680% 382,090,000 6,419,112 Riverside County Board of Education COP 1.680%8,270,000 138,936 Coachella Valley Unified School District COP 31.464% 52,945,000 16,658,615 DSUSD COP 7.801%72,505,000 5,656,115 Coachella Valley County Water District I.D. No. 71 COP 11.581%5,240,000 606,844 Coachella Valley Recreation and Park District COP 13.222%2,455,000 324,600 Total overlapping other debt 1,284,299,659 42,585,572 Total overlapping debt 1,284,299,659$ 129,198,914 City direct debt 236,563,357 Total direct and overlapping debt 365,762,271$ Notes: 1 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 CITY OF LA QUINTA Direct and Overlapping Debt June 30, 2009 139 TABLE 15 2001 2002 2003 2004 2005 2006 2007 2008 2009 Assessed valuation 2,644,318,608$ 3,143,395,801 3,767,559,451 5,357,903,512 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%15%15%15%15% Debt limit 396,647,791 471,509,370 565,133,918 803,685,527 933,070,665 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 396,647,791$ 471,509,370 565,133,918 803,685,527 933,070,665 1,172,079,988 1,496,346,997 1,779,962,120 1,862,405,214 Total debt applicable to the limit as a percentage of debt limit 0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0% The City of La Quinta has no general bonded indebtedness. Last Nine Fiscal Years ( in dollars ) 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. Fiscal Year Source: City of La Quinta Finance Department based upon the Assessed valuation received from the County of Riverside Auditor Controllers Office CITY OF LA QUINTA Legal Debt Margin Information 140 TABLE 16 Fiscal Year Ended Tax Less: Other Net Tax June 30 Increment Debt Payments Increment 1 Principal Interest Coverage 1 2006 36,506,201 20,638,731 15,867,470 2,500,000 7,805,905 1.54 2007 42,029,503 20,820,149 21,209,354 2,640,000 7,658,900 2.06 2008 43,476,312 25,383,713 18,092,599 2,795,000 7,500,553 1.76 2009 40,519,380 25,046,356 15,473,024 2,960,000 7,330,188 1.50 Fiscal Year Ended Tax Less: Other Net Tax June 30 Increment Debt Payments Increment 1 Principal Interest Coverage 1 2006 19,849,893 17,325,411 2,524,482 100,000 319,168 6.02 2007 20,777,158 18,553,875 2,223,283 105,000 314,785 5.30 2008 23,087,750 20,929,512 2,158,238 110,000 310,135 5.14 2009 22,783,714 21,042,814 1,740,900 115,000 305,184 4.14 Fiscal Year Ended Tax Less: Other Net Tax June 30 Increment 3 Debt Payments Increment Principal Interest Coverage 2006 14,089,024 - 14,089,024 735,000 4,436,981 2.72 2007 15,701,664 - 15,701,664 1,520,000 4,402,909 2.65 2008 16,641,016 - 16,641,016 1,570,000 4,356,806 2.81 2009 15,825,773 - 15,825,773 1,615,000 4,304,994 2.67 Fiscal Year Ended Lease Less: Other Net Lease June 30 Revenue 2 Debt Payments Revenue Principal Interest Coverage 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 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 2 Lease revenues consist of payments from the City General Fund, Civic Center Development Impact Fee Fund and the Redevelopment Agency Capital Projects Fund 3 Tax increment revenues from both Project Area 1 and Project Area 2 Low & Moderate Income Funds are used to pay the annual debt service payments. 2004 Local Agency Revenue Bonds Debt Service 1 Tax increment has been reduced by other debt payments, which may or may not be subordinated to Tax Allocation Bonds Tax Allocation Bonds - Project Area 1 Debt Service Debt Service Local Agency Revenue Bonds (City Hall Project) Tax Allocation Bonds - Project Area 2 Debt Service CITY OF LA QUINTA Pledged-Revenue Coverage Last Four Fiscal Years (In Dollars) 141 TABLE 17 Calendar Calendar Calendar Calendar Year Year Year Year 2006 2007 2008 2009 City Land (Sq Miles) (3) 35.1 35.1 35.31 35.31 Population (1) 38,340 41,092 42,958 43,778 Median Household Income (in dollars) (4) $65,906 $67,754 $74,683 $76,227 Number of Dwelling Units (3) 18,762 20,176 21,058 21,355 Persons per Household (3) 2.855 2.846 2.851 2.851 Average Income per person per household $23,084 $23,807 $26,195 $26,737 Labor Force (2) 14,500 15,300 15,200 14,800 Employment (2) 14,100 14,900 14,600 13,700 Unemployment Rate (2) 2.76% 2.61% 3.95% 7.43% Median age (4) 36 36.4 36.4 36.4 Sources: (1) State of California Department of Finance - January 1 of each year (2) State of California Economic Development Department website (3) City of La Quinta Building & Safety and Community Development Departments (4) Desert Wheeler's Newsletter City Overview CITY OF LA QUINTA Demographic and Economic Statistics Last Four Calendar Years 142 TABLE 18 Percent of Number of Total Number of Employer Activity Rank Employees Employment Employees Rank Desert Sands Unified School Distict Government 1 2,415 17.63%525 3 La Quinta Resort & Club Hotel & Golf Resort 2 1,210 8.83%1,500 1 Wal-Mart Super Center Retailer 3 463 3.38%280 4 Rancho La Quinta Golf Resort 4 200 1.46%150 6 Home Depot Retailer 5 190 1.39%185 5 Imperial Irrigation District Public Utility 6 164 1.20%- Costco Retailer 7 157 1.15%- Lowe's Home Improvement 2 Retailer 8 140 1.02%125 8 Target Retailer 9 125 0.91% Stater Brothers Grocery Store 10 120 0.88%150 6 Vons Grocery Store --103 9 City of La Quinta Government 11 107 -74 11 Ralphs Grocery Store --100 10 PGA West Golf Resort -1,100 2 Total employment listed 5,291 37.84%4,292 Total City Employment - July 1 13,700 11,400 1 "Total Employment" as used above represents the total employment of all employers located within City limits with over 100 employees Source: 2008-2009 Muniservices, LLC and 1999-2000 City of La Quinta 1 The total City employment and % applicable for 2000 was not available 2 Lowe's Hardware acquired Eagle Hardware 2008-2009 1999-2000 CITY OF LA QUINTA Principal Employers Current Year and Nine Years Ago 143 TABLE 19 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Ending Ending Ending Ending Ending June 30 June 30 June 30 June 30 June 30 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 Public Works 23.50 26.25 26.25 28.25 29.25 Golf Course 0.50 0.50 0.50 0.50 0.50 Total 83.00 94.00 97.00 104.00 105.00 Source: City of La Quinta NOTE: The City of La Quinta contracts with the County of Riverside for Police Services and with the California Department of Forestry through a contract with the County of Riverside for Fire Services. In addition the City-owned Golf Course is operated by Landmark Golf. These positions have not been included as these positions are not City employees. CITY OF LA QUINTA Full-time City Employees by Function Last Five Fiscal Years 144 TABLE 20 2006 2007 2008 2009 Finance: Number of Active Business Licenses 3,208 3,424 3,690 3,523 Number of Animal Licenses Processed 892 1,022 1,272 1,609 Number of Accounts Payable Checks Processed 4,696 4,722 4,840 4,819 Number of investment purchases 39 73 64 36 Par value of investments $327,417,000 $392,729,000 $424,500,000 $229,969,000 Number of cleared checks 5,081 4,837 5,501 5,269 Number of outgoing bank wires 202 158 136 91 Public Works: Encroachment permits issued 304 218 110 132 Request for services 618 419 1152 1931 Building & Safety: Permits: Single family Detached 1,044 526 297 129 Single family Attached 227 38 0 6 Residential Pool 866 612 331 207 Wall/Fence 1,502 963 583 299 Other 1,607 1,404 1,121 908 Total Permits 5,246 3,543 2,332 1,549 Code Compliance: Animal Control Incidents Handled 1,901 687 2,920 3,630 Vehicle abatements 909 296 351 346 Garage Sale Permits 1,190 1,444 1,519 1,535 Weed abatements 141 76 117 97 Nuisance abatements 1,611 2,032 2,142 3,130 Community Services: Library activities: Library Volume 42,050 44,981 66,124 81,124 Library books checked out 55,002 99,659 117,738 215,843 Library Cards Issued 5,550 5,325 3,675 3,684 Number of School Children Visiting Library 745 260 841 1,036 Library Volunteer Hours 1,891 1,583 1,951 2,342 Senior Center: Number of visits 14,305 12,955 14,013 15,739 Senior Center Volunteer Hours 3,481 4,192 3,332 2,583 Recreation activities: Participants: Leisure Classes 1,373 1,192 990 1,140 Special events 4,668 7,809 8,109 11,053 Adult Sports 3,402 6,827 8,550 10,806 Golf course: Golf rounds played 38,934 40,548 40,516 39,150 Average $ Green fee 71.12 76.97 81.09 76.13 Planning and Development: Number of residential units approved 1,063 534 338 100 Commercial square footage approved 533,726 124,821 342,502 390,097 Source: City of La Quinta CITY OF LA QUINTA Operating Indicators by Function Last Four Fiscal Years 145 TABLE 21 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Ending Ending Ending Ending June 30 June 30 June 30 June 30 2006 2007 2008 2009 Public works: Streets (miles)118.40 122 127 127 Bikepaths (miles)22.00 22 22 22 Streetlights 1 73 85 85 261.00 Traffic signals 44 45.25 45.25 49 Traffic Signs 2,799 2,845 2,895 2,899 Bridges 12 12 12 12 Parks and recreation: Parks 12 12 13 13 Park Acreage 207 207 209 209 Undeveloped Park Acreage 40 40 40 40 Senior Center 1 1 1 1 Museum 1 1 1 1 Library 1 1 1 1 Golf Course: Municipal golf courses 1 1 1 1 Source: City of La Quinta 1 In Fiscal Year ending 2009 street lights at intersections were included for the first time. CITY OF LA QUINTA Capital Asset Statistics by Function Last Four Fiscal Years 146 TABLE 22 Company Name Policy Number Coverage Limits Term Premium Hartford 72BPEEW0254 Employee Dishonesty,$1,000,000 12/3/08 - 09 $3,013 Forgery, Computer Fraud Lexington 5467276 All Risk Property Insurance 63,550,220 07/01/08 -7/01/09 59,258 Including Auto Physical Damage (Excluding Earthquake) Pacific Ins RV0004288 Earthquake;20,000,000 02/07/09 - 10 160,387 Nat'l Fire & Marine CV0004288 Real & Personal Property Lloyds 04-20221100 Including Contingent Tax Interruption Travelers Ins Co 213450M0084 Boiler & Machinery 57,728,500 2/7/08-7/1/09 1,579 Earned prem California Comprehensive General $50 Million 07/01/08 -7/01/09 281,125 Joint Powers Liability Single Limit per Occurrence Insurance Authority California Worker's Compensation 10,000,000 07/01/08 -7/01/09 172,941 Joint Powers Insurance Authority California Environmental & Liability 10,000,000 07/01/08 -7/01/09 19,215 Joint Powers Insurance Authority CITY OF LA QUINTA Schedule of Insurance in Force June 30, 2009 147 THIS PAGE INTENTIONALLY LEFT BLANK 148