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2009-2010 ACFR (July 1 - June 30 Annual Comprehensive Financial Report)CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2010 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, 2010 Prepared By FINANCE DEPARTMENT JOHN M. FALCONER Director of Finance CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2010 TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal ........................................................................................................................... i List of Principal Officials ................................................................................................................. vii Organizational Chart ...................................................................................................................... viii Certificate of Achievement for Excellence in Financial Reporting (GFOA) ..................................... ix FINANCIAL SECTION Independent Auditors’ Report ................................................................................................................. 1 Management’s Discussion and Analysis ................................................................................................. 3 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets ................................................................................................................. 17 Statement of Activities .................................................................................................................... 18 Fund Financial Statements: Balance Sheet – Governmental Funds........................................................................................... 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ....................................................................................................... 23 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ................................................................................................... 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................... 26 Budgetary Comparison Statement by Department – General Fund .............................................. 27 Statement of Net Assets – Proprietary Funds ................................................................................ 28 Statement of Revenues, Expenses and Changes in Fund Net Assets – Proprietary Funds ........................................................................................................................... 29 Statement of Cash Flows – Proprietary Funds ............................................................................... 30 Statement of Fiduciary Net Assets - Fiduciary Funds .................................................................... 32 Notes to Financial Statements ........................................................................................................... 33 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2010 TABLE OF CONTENTS (Continued) Page Number COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Non-Major Governmental Funds ....................................................... 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non-Major Governmental Funds ....................................................................... 86 Budgetary Comparison Schedules – Special Revenue Funds State Gas Tax ......................................................................................................................... 95 Library ...................................................................................................................................... 96 Federal Assistance ................................................................................................................... 97 SLEBG ..................................................................................................................................... 98 Indian Gaming .......................................................................................................................... 99 Lighting and Landscape ......................................................................................................... 100 RCTC ..................................................................................................................................... 101 Quimby ................................................................................................................................... 102 Congestion Management Air Quality Fund ............................................................................ 103 Public Safety .......................................................................................................................... 104 Arts In Public Places .............................................................................................................. 105 South Coast Air Quality .......................................................................................................... 106 AB 939.................................................................................................................................... 107 CV Violent Crime Task Force ................................................................................................ 108 Proposition 1B Fund ............................................................................................................... 109 Justice Assistance Grant........................................................................................................ 110 Housing Authority PA No. 1 ................................................................................................... 111 Housing Authority PA No. 2 ................................................................................................... 112 Low/Moderate Income Housing PA No. 1 ............................................................................. 113 Low/Moderate Income Housing PA No. 2 ............................................................................. 114 Budgetary Comparison Schedules – Capital Projects Funds Capital Improvement ............................................................................................................ 115 Infrastructure......................................................................................................................... 116 Transportation....................................................................................................................... 117 Parks and Recreation ........................................................................................................... 118 Civic Center .......................................................................................................................... 119 Library Development ............................................................................................................ 120 Community Center ................................................................................................................ 121 Street Facility ........................................................................................................................ 122 Park Facility .......................................................................................................................... 123 Fire Facility ........................................................................................................................... 124 2004 Low/Mod Bond ............................................................................................................. 125 Redevelopment Agency PA No. 1 – Capital Projects .......................................................... 126 Redevelopment Agency PA No. 2 – Capital Projects .......................................................... 127 Budgetary Comparison Schedules – Debt Service Funds Financing Authority – Debt Service ........................................................................................ 128 Redevelopment Agency PA No. 1 – Debt Service ................................................................. 129 Redevelopment Agency PA No. 2 – Debt Service ................................................................. 130 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2010 TABLE OF CONTENTS (Continued) Page Number Combining Statement of Net Assets – Internal Service Funds .................................................... 132 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets – Internal Service Funds ............................................................................... 133 Combining Statement of Cash Flows – Internal Service Funds ................................................... 134 Combining Balance Sheet – All Agency Funds ............................................................................ 136 Combining Statement of Changes in Assets and Liabilities – All Agency Funds ......................... 137 STATISTICAL SECTION Net Assets by Component ............................................................................................................ 140 Changes in Net Assets ................................................................................................................. 141 Changes in Net Assets – Governmental Activities ....................................................................... 142 Changes in Net Assets – Business-type Activities ....................................................................... 143 Fund Balances of Governmental Funds ....................................................................................... 144 Changes in Fund Balances of Governmental Funds.................................................................... 145 Assessed Value and Estimated Actual Value of Taxable Property .............................................. 146 Assessed Value and Estimated Actual Value of Taxable Property - Redevelopment Agency ............................................................................................................... 147 Direct and Overlapping Property Tax Rates ................................................................................. 148 Principal Property Taxpayers ....................................................................................................... 149 Property Tax Levies and Collections ............................................................................................ 150 Ratios of Outstanding Debt by Type ............................................................................................ 151 Ratio of General Bonded Debt Outstanding ................................................................................. 152 Direct and Overlapping Debt ........................................................................................................ 153 Legal Debt Margin Information ..................................................................................................... 154 Pledged-Revenue Coverage ........................................................................................................ 155 Demographic and Economic Statistics ......................................................................................... 156 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2010 TABLE OF CONTENTS (Continued) Principal Employers ...................................................................................................................... 157 Full-time City Employees .............................................................................................................. 158 Operating Indicators ..................................................................................................................... 159 Capital Asset Statistics ................................................................................................................. 160 Schedule of Insurance in Force .................................................................................................... 161 October 19, 2010 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, 2010. 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, 2010. 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, Financing Authority, Housing Authority. Additional information on these two legally separate entities can be found in the notes to the financial statements. Pursuant to City Ordinance 2.08.060 and 2.12.030, the City Manager and Finance Director are responsible for the preparation of the annual budget for City Council consideration prior to the start of the fiscal year. The annual budget serves as the foundation for the City of La Quinta’s financial planning and control. The budget is prepared by fund, function, department and line item. Department heads may transfer line item resources within a division with the approval of the City Manager. Transfers between divisions and departments need approval from the City Council and the City Manager. Local economy According to the State of California Economic Development Department (EDD), as of June 2010, the total workforce for the City of La Quinta was 14,600 of which 13,500 were employed for a 7.5% unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 14.5% and the statewide unemployment rate of 12.2%. During the last ten years, the City of La Quinta has been in a growth phase with net assessed values increasing from $2.68 billion in Fiscal Year 2000-2001 to $11.86 billion (over 442%). This major increase in assessed value consists primarily of residential development; however, in the last ten years major commercial development has occurred along the Highway 111 corridor. ii 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 297%. Two Departments that have exceeded the average include and Public Safety (353%) and Community Services (339%). In the case of Public Safety, much of the increase is reflected in increased police service personnel. In the case of Community Services, much of the increase can be attributed to adding library and museum services and park maintenance functions to the Department. During the same ten-year period, the City of La Quinta general fund revenues increased 196%. Sources that exceeded the average include intergovernmental (584%), taxes (191%), and interest earnings (143%). 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 (-77%) and charges for services (-76%) from the same period ten years ago. These decreases can be attributed to the rapid slow down to development related activities experienced in the City of La Quinta in Fiscal Years 2008-2009 and Fiscal Year 2009-2010. 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 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 2009-2010 and several large retailers have closed their doors. This has resulted in a reduction in actual tax collections in Fiscal Year 2009-2010 by $900,000. While economists may state that the recession is over, future revenue decline in Fiscal Years 2010-2011 and beyond may be on the horizon given the projected decline in property tax assessment. In Fiscal Years 2008-2009 and 2009- 2010, the City did tighten its fiscal belt at its mid year reviews and will have to continue to monitor and possibly further reduce expenditures in Fiscal Year 2010-2011 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. iii The documents that are generated in this strategic planning process include a presentation of the financial achievements for the past fiscal year, a five-year cash flow projection for each City, Redevelopment Agency and Financing Authority fund, and a financial management strategies and recommendation report for the coming fiscal year. Within the financial strategies and recommendation report, a “build out” analysis is included which estimates the annual General Fund revenue (inflows) and expenditures (outflows) in thirty years. This build out analysis is updated every three years based upon future land use designations, existing land use and population projections. This build out report projects that in twenty (20) years, with an estimated population of 81,771 versus the current 44,421, the annual revenues into the General Fund will be $3,276,000 less than expenditures. With this information provided during the mid-year financial review, the City of La Quinta is attempting to attract revenue-producing businesses and hotels consistent with its land use planning, while at the same time providing current and future residents a level of service that makes them proud to call La Quinta their home. During Fiscal Year 2009-2010, the General Fund balance decreased by $297,000 consisting of revenue decreases primarily in taxes and interest income 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, 2010 was $92.0 million of which $57.9 million versus $46.1 million in Fiscal Year 2008-2009 was nonspendable, $22.3 million versus $23.7 million in Fiscal Year 2008-2009 was committed, $1.5 million versus $3.5 in Fiscal Year 2008-2009 was assigned, and $10.3 million versus $19 million in Fiscal Year 2008-2009 was unassigned. The committed fund balances 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. 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 funded within the five-year horizon and totaled $84.5 million. iv 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. 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 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 on the Washington Street Apartment Project to rehabilitate a 73-unit affordable rental housing project. In addition, the Agency has purchased land near the southeast corner of Highway 111 and Dune Palms Road to construct additional affordable Apartment units. The City has a major public facility expansion underway rebuilding Fire Station 32 at its new location at Avenue 52 and Desert Club which is scheduled to open in late 2010. Once completed, this facility, three times the size of the station it is replacing, will better serve the residents of the La Quinta Cove and surrounding areas. In addition, the City is nearing completion of the final design on the Adams Street Bridge which will span the Whitewater Channel and provide an all-weather crossing at this location. v vi City of La Quinta Directory of Officials June 30, 2010 CITY COUNCIL Don Adolph, Mayor Kristy Franklin, Mayor Pro Tem Linda Evans, Council Member Terry Henderson, Council Member Stanley Sniff, Council Member ADMINISTRATION Thomas P. Genovese, City Manager Doug Evans, Assistant City Manager – Development Services Bret Plumlee, Assistant City Manager – Management Services John M. Falconer, Finance Director Tom Hartung, Building & Safety Director Edie Hylton, Community Services Director Kathy Jenson, City Attorney Les Johnson, Planning Director Tim Jonasson, Public Works Director/City Engineer Veronica Montecino, City Clerk vii Ma y o r a n d C i t y C o u n c i l Re d e v e l o p m e n t A g e n c y B o a r d Fi n a n c i n g A u t h o r i t y B o a r d Ci t y M a n a g e r Ex e c u t i v e A s s i s t a n t Ci t y A t t o r n e y Ci t y C l e r k Ci t y C l e r k De p u t y C i t y C l e r k - T w o P o s i t i o n s Se c r e t a r y Of f i c e A s s i s t a n t - T w o P o s i t i o n s Fi n a n c e Fi s c a l S e r v i c e s Di r e c t o r Ac c o u n t i n g M a n a g e r Fi n a n c i a l S e r v i c e s A s s i s t a n t Se n i o r A c c o u n t T e c h n i c i a n Ac c o u n t T e c h n i c i a n In f o r m a t i o n S e r v i c e s A n a l y s t Se n i o r S e c r e t a r y Se n i o r A c c o u n t C l e r k - T w o P o s i t i o n s De v e l o p m e n t S e r v i c e s As s i s t a n t C i t y M a n a g e r Ec o n o m i c D e v e l o p m e n t P r o j e c t Ma n a g e r - 2 P o s i t i o n s Ma n a g e m e n t A s s i s t a n t Ex e c u t i v e A s s i s t a n t Of f i c e A s s i s t a n t - 1 / 2 P o s i t i o n Ma n a g e m e n t S e r v i c e s As s i s t a n t C i t y M a n a g e r Hu m a n R e s o u r c e s / R i s k M a n a g e r Ma n a g e m e n t A n a l y s t Ma n a g e m e n t A s s i s t a n t Ex e c u t i v e A s s i s t a n t Of f i c e A s s i s t a n t - 1 / 2 P o s i t i o n Co m m u n i t y S e r v i c e s Ad m i n i s t r a t i o n Di r e c t o r Re c r e a t i o n S u p e r v i s o r - 1 1 / 2 T i m e Re c r e a t i o n A c t i v i t i e s C o o r d i n a t o r - 1 / 2 Ti m e Se n i o r S e c r e t a r y Of f i c e A s s i s t a n t Re c r e a t i o n Re c r e a t i o n S u p e r v i s o r - 1 / 2 T i m e Re c r e a t i o n A c t i v i t i e s C o o r d i n a t o r - 1 / 2 Ti m e Se n i o r C e n t e r Re c r e a t i o n S u p e r v i s o r Re c r e a t i o n A c t i v i t i e s C o o r d i n a t o r Of f i c e A s s i s t a n t Pa r k M a i n t e n a n c e & G o l f O p e r a t i o n s Go l f & P a r k / L a n d s c a p e M a n a g e r Ma i n t e n a n c e M a n a g e r - 1 / 4 T i m e Ma i n t e n a n c e F o r e m a n - 1 / 4 T i m e Ma i n t e n a n c e W o r k e r I - 1 / 4 T i m e Pl a n n i n g Ad m i n i s t r a t i o n Di r e c t o r Pl a n n i n g M a n a g e r Ex e c u t i v e S e c r e t a r y Se c r e t a r y Pl a n n i n g Pr i n c i p a l P l a n n e r - 3 P o s i t i o n s As s o c i a t e P l a n n e r - 1 P o s i t i o n s As s i s t a n t P l a n n e r - 2 P o s i t i o n s Pu b l i c W o r k s Ad m i n i s t r a t i o n Di r e c t o r Ma n a g e m e n t A n a l y s t Se n i o r S e c r e t a r y De v e l o p m e n t S e r v i c e s Pr i n c i p a l E n g i n e e r Se n i o r E n g i n e e r As s o c i a t e E n g i n e e r - 2 P o s i t i o n s As s i s t a n t E n g i n e e r I I Co u n t e r T e c h n i c i a n - 2 P o s i t i o n s En g i n e e r i n g S e r v i c e s Pr i n c i p a l E n g i n e e r As s i s t a n t E n g i n e e r I I - 2 P o s i t i o n s As s i s t a n t E n g i n e e r I Tr a f f i c S i g n a l T e c h n i c i a n Ma i n t e n a n c e & O p e r a t i o n s Ma i n t e n a n c e M a n a g e r - 3 / 4 P o s i t i o n Ma i n t e n a n c e F o r e m a n - 2 3 / 4 P o s i t i o n s Ma i n t e n a n c e W o r k e r I I - 4 P o s i t i o n s Ma i n t e n a n c e W o r k e r I - 4 . 7 5 P o s i t i o n s Bu i l d i n g & S a f e t y Ad m i n i s t r a t i o n Di r e c t o r Sp e c i a l P r o j e c t A s s i s t a n t Se n i o r S e c r e t a r y Co d e C o m p l i a n c e Co m m u n i t y S a f e t y M a n a g e r Se n i o r C o d e C o m p l i a n c e O f f i c e r Co d e C o m p l i a n c e O f f i c e r I I - 2 P o s i t i o n s Co d e C o m p l i a n c e O f f i c e r I An i m a l C o n t r o l / C o d e C o m p l i a n c e O f f i c e r I - 2 P o s i t i o n s Co u n t e r T e c h n i c i a n Of f i c e A s s i s t a n t - 1 / 2 p o s i t i o n An i m a l C o n t r o l An i m a l C o n t r o l O f f i c e r I I An i m a l C o n t r o l / C o d e C o m p l i a n c e O f f i c e r I - 2 P o s i t i o n s Bu i l d i n g Bu i l d i n g & S a f e t y M a n a g e r Se n i o r B u i l d i n g I n s p e c t o r Se n i o r P l a n s E x a m i n e r Bu i l d i n g I n s p e c t o r I I - 2 P o s i t i o n s Co u n t e r T e c h n i c i a n - 2 P o s i t i o n s Of f i c e A s s i s t a n t - 1 / 2 P o s i t i o n Ci v i c C e n t e r B u i l d i n g O p e r a t i o n s Fa c i l i t i e s M a i n t e n a n c e C o o r d i n a t o r Fa c i l i t i e s M a i n t e n a n c e W o r k e r Em e r g e n c y S e r v i c e s Em e r g e n c y S e r v i c e s C o o r d i n a t o r Po l i c e Co u n t y C o n t r a c t Ci t y o f L a Q u i n t a , C a l i f o r n i a Or g a n i z a t i o n a l C h a r t Fi s c a l Y e a r 2 0 0 9 / 2 0 1 0 viii ix THIS PAGE INTENTIONALLY LEFT BLANK 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, 2010, 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 these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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, 2010, and the respective changes in financial position and cash flows, where applicable, and the respective budgetary comparison for the General Fund 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 October 8, 2010, 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, CPA Donald L. Parker, CPA Michael K. Chu, CPA David E. Hale, CPA, CFP A Professional Corporation Donald G. Slater, CPA Richard K. Kikuchi, CPA Susan F. Matz, CPA Shelly K. Jackley, CPA 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. October 8, 2010 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, 2010. 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 $547,995,000 (net assets). Of this amount, $72,324,000 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The governmental activities total net assets decreased by $15,643,000 and the Business-Type total net assets decreased by $584,000 attributable to the SilverRock Golf Course. • As of the close of the current fiscal year, the City of La Quinta’s governmental funds reported combined ending fund balances of $161,132,000, a decrease of $19,296,000 in comparison with the prior year. • At the end of the current fiscal year, the unassigned General Fund Balance comprised $10,279,000 of the total $92,000,000 General Fund Balance or 11 percent and 24 percent of total General Fund budgeted expenditures. • The City of La Quinta’s total debt decreased by $6,645,000 during the current fiscal year from $237,476,000 to $230,831,000 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. 3 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). Both of the government-wide financial statements distinguish functions of the City of La Quinta that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of La Quinta include general government, public safety, community services, planning and development and public works. The business-type activities of the City of La Quinta include the SilverRock Golf course operations. The government-wide financial statements include not only the City of La Quinta itself (known as the primary government), but also the La Quinta Redevelopment Agency, the La Quinta Financing Authority, and the La Quinta Housing Authority. Although legally separate entities they function for all practical purposes as departments of the City of La Quinta, and therefore have been included as an integral part of the primary government. The government-wide financial statements can be found in the table of contents under the Financial Section of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of La Quinta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of La Quinta can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. 4 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 eight (38) individual governmental funds, which are distinguished between major and non-major funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund bal- ances for the general fund, two (2) debt service funds and three (3) capital project funds. These six (6) funds are considered to be major funds. Data from the other thirty two (32) 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. 5 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. 6 The combining statements referred to earlier in connection with non-major govern- mental funds, internal service funds, and agency funds are presented immediately following the required supplementary. Combining and individual fund statements and schedules can be found in the table of contents under Supplementary Schedules. Government-wide financial analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of La Quinta, assets exceeded liabilities by $547,995,000 at the close of the most recent fiscal year, which is $16,226,000 less than the previous year. The largest portion of the City of La Quinta’s net assets, which was 69% this year and 65% last year, reflects its investment in capital assets (e.g., land, buildings; machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. The City of La Quinta uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of La Quinta’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of La Quinta Net Assets 2010 2009 2010 2009 2010 2009 Current and other assets $ 207,301,319 $ 225,009,148 $ (4,606,437) $ (3,721,932) $ 202,694,882 $ 221,287,216 Capital assets 565,238,042 559,028,995 42,934,025 42,821,825 608,172,067 601,850,820 Total assets 772,539,361 784,038,143 38,327,588 39,099,893 810,866,949 823,138,036 Current liabilities 32,552,436 22,137,899 257,411 215,522 32,809,847 22,353,421 Non-current liabilities 230,007,350 236,278,140 54,543 285,217 230,061,893 236,563,357 Total liabilities 262,559,786 258,416,039 311,954 500,739 262,871,740 258,916,778 Net assets: Invested in capital assets, net of related debt Restricted 96,332,870 105,297,168 - - 96,332,870 105,297,168 Unrestricted 77,187,433 96,654,981 (4,863,848) (4,168,128) 72,323,585 92,486,853 Total net assets $ 509,979,575 $ 525,622,104 $ 38,015,634 $ 38,599,154 $ 547,995,209 $ 564,221,258 Governmental activities Business-type activities Total 336,459,272 323,669,955 42,879,482 42,767,282 379,338,754 366,437,237 An additional portion of the City of La Quinta's net assets (18 percent versus 19 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 - $72,324,000 (13 percent) may be used to meet the government's ongoing obligations to citizens and creditors. 7 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 $4,864,000. Governmental activities Governmental activities net assets decreased by $15,643,000 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 2010 2009 Change 2010 2009 Change 2010 2009 Change Program revenues: Charges for services 2,566,525 3,121,276 (554,751) 3,584,996 3,368,135 216,861 6,151,521 6,489,411 (337,890) Operating grants and contributions 15,363,650 10,725,280 4,638,370 - - - 15,363,650 10,725,280 4,638,370 Capital grants and contributions 5,974,311 10,647,270 (4,672,959) - - - 5,974,311 10,647,270 (4,672,959) General revenues: Property taxes 6,278,470 6,653,583 (375,113) - - - 6,278,470 6,653,583 (375,113) Other taxes 48,932,750 50,735,819 (1,803,069) - - - 48,932,750 50,735,819 (1,803,069) Investment income 5,362,684 7,387,244 (2,024,560) 1,252 3,074 (1,822) 5,363,936 7,390,318 (2,026,382) Motor vehicle in lieu 3,714,437 3,940,801 (226,364) - - - 3,714,437 3,940,801 (226,364) Gain (loss) on sale of capital assets 2,330 21,542 (19,212) - 2,330 21,542 (19,212) Miscellaneous 477,936 118,567 359,369 - - - 477,936 118,567 359,369 Total revenues 88,673,093 93,351,382 (4,678,289) 3,586,248 3,371,209 215,039 92,259,341 96,722,591 (4,463,250) Expenses: - General government 34,287,068 7,836,146 26,450,922 - - - 34,287,068 7,836,146 26,450,922 Public safety 21,274,519 19,736,941 1,537,578 - - - 21,274,519 19,736,941 1,537,578 Planning and development 15,923,380 16,162,689 (239,309) - - - 15,923,380 16,162,689 (239,309) Community services 5,173,326 5,963,850 (790,524) - - - 5,173,326 5,963,850 (790,524) Public works 12,326,726 11,100,833 1,225,893 - - - 12,326,726 11,100,833 1,225,893 Interest on long-term debt 15,330,603 15,631,438 (300,835) - - - 15,330,603 15,631,438 (300,835) Golf course - - - 4,169,768 4,440,546 (270,778) 4,169,768 4,440,546 (270,778) Total expenses 104,315,622 76,431,897 27,883,725 4,169,768 4,440,546 (270,778) 108,485,390 80,872,443 27,612,947 Increase in net assets before transfers and restatements Transfers - - - - - - - - - Contributions - - - - - - - - Restatements - - - - - - - - - Increase in net assets (15,642,529) 16,919,485 (32,562,014) (583,520) (1,069,337) 485,817 (16,226,049) 15,850,148 (32,076,197) Net assets - 7/1/2009 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 Net assets - 6/30/2010 509,979,575 525,622,104 (15,642,529) 38,015,634 38,599,154 (583,520) 547,995,209 564,221,258 (16,226,049) activities Total (32,076,197) Revenues: Governmental activities Business-type (16,226,049) 15,850,148 (15,642,529) 485,817 16,919,485 (583,520) (1,069,337) (32,562,014) • Revenues decreased by $4,463,000 with the largest category decreases in capital grants and contributions of $4,673,000 and investment income of $2,026,000. One of the reasons for the decrease in the capital grant contribution account is that development impact fees collections in Fiscal Year 2009-2010 totaled $179,000 and in Fiscal Year 2008-2009 the total was $1,167,000 for a $988,000 decrease. Another reason for the decrease in the capital grant contribution account was that grant revenues from Federal, State, County, and Special Districts for capital projects declined by $2,320,000 from the prior year. Interest income declined from $7,390,000 in Fiscal Year 2008-2009 to $5,364,000 or $2,026,000. The portfolio earned an average interest rate of .51 percent (a little over one half of one percent) in Fiscal Year 2009-2010 versus a 1.72% rate in Fiscal Year 2008-2009. These lower rates were offset slightly by a higher average cash balance of $181 million per month in Fiscal Year 2009-2010 versus $178 million in Fiscal Year 2008-2009. 8 • Expenses increased by $27,613,000 with the two largest category changes being an increase in the General Government category of $26,451,000 and increase in the Public Safety category of $1,538,000. The increase in the General Government category is primarily the result of the $23.5 million Supplemental Educational Augmentation Fund (SERAF) payment made to the County of Riverside as mandated by the State of California. The increase in the Public Safety costs is a result of higher police costs ($600,000) and fire service costs ($500,000) than the prior year. • There were no contributions in assets from the governmental activities to the business-type activities. Expenses and Program Revenues - Government Activities 34,287,068 21,274,519 5,173,326 15,330,60315,846,470 12,326,726 15,923,380 404,5923,728,554 170,140 4,344,070 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 General government Public safety Planning and development Community services Public works Interest expense Expenses Program revenues Expenses and Program Revenues - Business-type Activities 4,169,768 3,584,996 3,200,000 3,300,000 3,400,000 3,500,000 3,600,000 3,700,000 3,800,000 3,900,000 4,000,000 4,100,000 4,200,000 4,300,000 Golf Expenses Program revenues 9 Business-type activities This was the fifth full year of operations for the SilverRock Golf fund since the golf course began early operation in 2005. Net assets decreased by $ (584,000) from the effects of an operating loss. Charges for services primarily consisted of green fees which totaled $3,586,000, and was $215,000 more than the previous year, with golf course expenses of $4,170,000, which was $271,000 less than the previous year. During the year the golf course did not renew an expiring lease for golf course equipment and instead purchased capitalized equipment totaling $660,000. This purchase will lead to future cost savings since lease payments will no longer be necessary for this equipment. During Fiscal Year 2009-2010, an additional advance of $1 million was required for the golf course operations ($981,000 in principal and $19,000 in interest). This brings the total outstanding advance due to the General Fund from the inception of the Golf Course opening to $5,300,000. It is anticipated that these advances will be repaid from future income from SilverRock activities such as transient occupancy tax, sales tax and golf course net income generated on the site in future years. Financial Analysis of the Government's Funds As noted earlier, the City of La Quinta uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds - The focus of the City of La Quinta’s governmental funds is to provide information on near-term inflows, outflows, and balances of fund balances. Such information is useful in assessing the City of La Quinta's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of La Quinta's governmental funds reported combined ending fund balances of $161.1 million as follows: All Total Category General Fund Percent Other Funds Percent Funds Percent Nonspendable $57,916,531 63% $6,396,015 9% $64,312,546 40% Restricted 0 0% 0 0% 0 0% Committed 22,279,588 24% 96,332,870 139% 118,612,458 74% Assigned 1,555,176 2% 0 0% 1,555,176 1% Unassigned 10,278,823 11% (33,626,907) -48% (23,348,084) -15% Total $92,030,118 $69,101,978 $161,132,096 Fund balances 10 Governmental fund balances ended the year totaling $161,132,000, a decrease of $19,296,000 in comparison with the prior years ending balance of $180,428,000. Of this amount $64,313,000 or 40% constitutes nonspendable reserves, which means that these reserves must be maintained intact, $118,613,000 or 74% are committed fund balances with has resulted in self-imposed limitations placed upon the funds by the Governing Board responsible for adopting the fund budget, assigned reserves of $1,555,000 or 1% consist of carryover appropriations which were budgeted for in Fiscal Year 2009-2010 but were unspent and will be budgeted again in the next budget year. The remainder of fund balance or minus $23.3 million represents unassigned fund balances or the residual net resources after taking into consideration the other classifications. General Fund The general fund is the chief operating fund of the City of La Quinta. At the end of the current fiscal year, unassigned fund balance of the general fund was $10,279,000, while total fund balance reached $92,030,000. 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 213 percent of the total budgeted expenditures. The City of La Quinta’s general fund balance decreased by $297,000 in Fiscal Year 2009-2010. Key factors in this slight decrease are as follows: • Actual expenditures were $3,870,000 less than the final budget. Divisions that were under budget for the year were Planning & Development Administration ($747,000), Street Maintenance ($691,000), Police ($430,000), and Fire ($403,000. In addition, actual transfers out were $598,000 less than budgeted with $281,000 of this amount unspent Fire Station 32 construction costs and $129,000 unspent Avenue 54 and Madison Street traffic signal costs. Both of these construction project funding will be carried over for completion in Fiscal Year 2010-2011. • Actual revenue collections were $52,000 more than the final adjusted budget. Overall, taxes were $706,000 more than budgeted for in Fiscal Year 2009-2010, however, the actual taxes collected in Fiscal Year 2009-2010 ($19.7 million) was $1 million less the prior year tax actual collections of $20.7 million. Actual transient occupancy tax collections in Fiscal Year 2009-2010 were $4,175,000 or $305,000 less than prior year collections. Actual sales tax collections for Fiscal Year 2009-2010 were $6,927,000 or $353,000 less than the $7,280,000 collected in Fiscal Year 2008-2009. Other categories that received less than the final budget were intergovernmental ($410,000) and investment income ($188,000). Intergovernmental revenues were less than budgeted because of a decline of $226,000 in motor vehicle in lieu collections and interest income was less because of continuing low interest rate environment on investments. 11 Capital Improvement Fund The fund is primarily used to record the expenditure of funds for capital projects. The fund had seventy three (73) active Capital Improvement Projects budgeted for during Fiscal Year 2009-2010. The three most active projects during the year were the Cove Fire Station 32 Project ($3,467,000), Phase 1 of the Maintenance Yard Improvements ($1,882,000) and the Phase 3 Highway 111 Project ($1,676,000). Other major projects budgeted in the future include SilverRock Resort infrastructure improvements, Adams Street bridge improvements, Community Park land acquisition, and the Washington Street apartment rehabilitation project. 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 $9.83 million advance from the General Fund is outstanding at the end of Fiscal Year 2009-2010. 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. Major capital projects including SilverRock infrastructure improvements, SilverRock main entry road features, permanent SilverRock Clubhouse improvements, and the Coachella Canal relocation have been budgeted for future construction. 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 Project Area 1 Debt Service Fund Balance decreased by $18,670,000 in Fiscal Year 2009-2010 to end the year at a $13.2 million deficit. This is primarily due to a $23.5 million payment to the County of Riverside mandated to be made by the State of California to raise $2.1 billion state-wide over a two year period from Redevelopment Agencies to help the State deal with its own budget shortfalls. During the year, the General Fund advanced $10 million to the Project Area 1 Debt Service Fund, which increased the principal amount due to the General Fund at the end of the year from $12 million to $22 million. The Fund received less property tax revenues ($38.5 million) in Fiscal Year 2009-2010 versus the prior year ($40.5 million) due to falling property values. The Project Area 2 Debt Service Fund Balance decreased by $1.78 million to leave a deficit of $4.9 million at year end. The key factor is that the Fund received less property tax revenues ($20.8 million) in Fiscal Year 2009-2010 than in the prior year ($22.8 million) due to falling property values. 12 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. • As the City continued to experience declining revenues in Fiscal Year 2009-2010, as it had in Fiscal Year 2008-2009, the City transferred $600,000 from the Equipment Replacement and $600,000 from the Park Equipment and Facility Internal Service Funds to the General Fund. In addition to these transfers, no charges for services were made to the General Fund from the Equipment Replacement Fund and the Park Equipment and Facility Fund in Fiscal Year 2009-2010 General Fund Budgetary Highlights During the year there was a $3,901,000 increase in appropriations and transfers out between the original ($39,287,000) and final amended budget ($43,188,000). Following are the main components of the changes: • During the mid-year review, the General Fund budget for various divisions was reduced by $828,000 based upon an estimated decrease of revenues forecasted for Fiscal Year 2009-2010; and, • The FY 2008-2009 budget included carryover encumbrances of $36,000 and $3,447,000 in carryover appropriations into FY 2009-2010. • The Fiscal Year 2009-2010 budget included an appropriation of $1,231,427 to pay- off the CalPERS retirement plan “side fund”. This payment to the retirement system reduced the City future employer retirement rate by 2.221% and is expected to save an estimated $643,000. The budget increases were possible because of additional anticipated revenues and unassigned reserves and the carryover encumbrances and appropriations were possible from available net changes in fund balances. 13 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, 2010, amounts to $608,172,000 (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) 2010 2009 2010 2009 2010 2009 Land $ 76,383,500 $ 75,663,033 $ 36,840,832 $ 36,840,832 $ 113,224,332 $ 112,503,865 Buildings and improvements 44,736,121 45,394,528 5,363,822 5,598,377 50,099,943 50,992,905 Equipment and furniture 864,663 1,002,533 729,370 378,554 1,594,033 1,381,087 Vehicles 576,752 652,497 1 2,036 576,753 654,533 Software - - - 2,026 - 2,026 Infrastructure 399,253,220 393,914,087 - - 399,253,220 393,914,087 Construction in progress 43,423,786 42,402,317 - - 43,423,786 42,402,317 Total $ 565,238,042 $ 559,028,995 $ 42,934,025 $ 42,821,825 $ 608,172,067 $ 601,850,820 Governmental Business-type activities activities Total Major capital asset events during the current fiscal year included the following: Governmental activities • Recording infrastructure improvements, including developer dedications of $4,235,000, to street improvements, street right of way, street sidewalks and curbs and gutters, and street medians; • Completed widening of Highway 111 between the western city limits and Washington Street totaling $1,947,000; • Completed widening of Fred Waring Drive between Washington Street and Palm Royale Drive totaling $1,776,000; and, • Completed construction of the Ave 52 bridge widening project from the Traffic Circle at Jefferson Street to Madison Street $1,999,000. 14 Business-type activities • The Golf Course purchased new maintenance equipment for $660,000 during Fiscal Year 2009-2010 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 $230,776,000. $135,935,000 of this debt amount represents bonds secured solely by specified revenue sources (i.e., tax allocation bonds); while, $87,650,000 of the debt represents revenue bonds that will be paid from pledged tax increment property tax housing funds. In addition, $55,000 in capital equipment leases is outstanding in connection with SilverRock Golf Course and $115,000 in a copier lease is outstanding in the governmental funds. City of La Quinta Outstanding Debt 2010 2009 2010 2009 2010 2009 Capital leases $ 114,583 $ 149,169 $ 54,543 $ 285,217 $ 169,126 $ 434,386 Compensated absences 1,002,601 919,100 - - 1,002,601 919,100 Post retirement healthcare liability 225,979 107,944 225,979 107,944 Developer agreement 174,584 343,814 - - 174,584 343,814 Pass through agreement 2,072,965 2,874,653 - - 2,072,965 2,874,653 Due to government agencies 2,069,482 2,330,065 - - 2,069,482 2,330,065 Loans payable 1,530,958 1,556,283 - - 1,530,958 1,556,283 Tax allocation bonds 135,935,000 139,190,000 - - 135,935,000 139,190,000 Revenue bonds 87,650,000 89,720,000 - - 87,650,000 89,720,000 Total $ 230,776,152 $ 237,191,028 $ 54,543 $ 285,217 $ 230,830,695 $ 237,476,245 Governmental Business-type Debt type: activities activities Total The total outstanding debt decreased by $6,645,000 during Fiscal Year 2009-2010. 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 2010-2011: • The City of La Quinta had a 7.5 versus 7.4 percent last year unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 14.5 versus 14.0 percent last year and the statewide unemployment rate of 12.2 versus 11.6 percent last year. 15 • During the last ten years, the City of La Quinta has been in a growth phase with assessed values increasing from $2.68 billion in Fiscal Year 2000-2001 to $11.86 billion or over 442 percent. It is important to note however, that from Fiscal Year 2008-2009 to Fiscal Year 2009-2010 assessed values decreased by $660 million or 5.34%. • During the current fiscal year, the general fund net loss was $(297,000) and $1,555,000 of General fund balance has been assigned for carry over appropriations. • The State of California Fiscal Year 2009-2010 budget included a State-wide diversion of tax increment funding from Redevelopment Agencies. The La Quinta Redevelopment Agency portion of the Fiscal Year 2009-2010 take-away was $23,560,000 and the Fiscal Year 2010-2011 takeaway has been budgeted at $4,851,000. • The Fiscal Year 2010-2011 General Fund advance toward golf course operations has been budgeted at $107,000. • The City of La Quinta adopted a balanced general fund budget for Fiscal Year 2010- 2011. Requests for Information This financial report is designed to provide a general overview of the City of La Quinta’s finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or re quests for additional financial information should be addressed to the City of La Quinta, John Falconer, Finance Director, P.O. Box 1504, La Quinta, CA, 92247 or by telephone at 760-777- 7150. 16 CITY OF LA QUINTA STATEMENT OF NET ASSETS Governmental Business-Type Activities Activities Total Assets: Cash and investments 165,248,585$ 301,923$ 165,550,508$ Receivables: Accounts 124,489 11,704 136,193 Taxes 2,118,415 - 2,118,415 Notes and loans 3,920,107 - 3,920,107 Accrued interest 149,469 202 149,671 Internal balances 5,294,572 (5,294,572) - Prepaid costs 17,010 1,865 18,875 Deposits 16,230 250,000 266,230 Due from other governments 8,307,096 - 8,307,096 Inventories - 122,441 122,441 Deferred charges 4,196,372 - 4,196,372 Restricted assets: Cash with fiscal agent 16,570,211 - 16,570,211 Net Pension Asset 1,338,763 - 1,338,763 Capital assets not being depreciated 403,797,289 36,840,832 440,638,121 Capital assets, net of depreciation 161,440,753 6,093,193 167,533,946 Total Assets 772,539,361 38,327,588 810,866,949 Liabilities: JUNE 30, 2010 Primary Government See Notes to Financial Statement Accounts payable 7,499,697 190,185 7,689,882 Accrued liabilities 473,980 1,894 475,874 Accrued interest 3,962,993 - 3,962,993 Unearned revenue 1,306,449 4,332 1,310,781 Deposits payable 5,565,097 61,000 5,626,097 Due to other governments 13,744,220 - 13,744,220 Noncurrent liabilities: Due within one year 7,943,481 54,543 7,998,024 Due in more than one year 222,063,869 - 222,063,869 Total Liabilities 262,559,786 311,954 262,871,740 Net Assets: Invested in capital assets, net of related debt 336,459,272 42,879,482 379,338,754 Restricted for: Planning and development projects 31,032,124 - 31,032,124 Public safety 48,852 - 48,852 Community services 11,675,417 - 11,675,417 Public works 448,731 - 448,731 Capital projects 53,123,856 - 53,123,856 Debt service 3,890 - 3,890 Unrestricted 77,187,433 (4,863,848) 72,323,585 Total Net Assets 509,979,575$ 38,015,634$ 547,995,209$ See Notes to Financial Statement 17 CITY OF LA QUINTA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2010 Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government 34,287,068$ 21,439$ 101,191$ -$ Public safety 21,274,519 1,100,491 9,351,571 66,845 Planning and development 15,923,380 69,391 2,499,150 554,450 Community services 5,173,326 250,557 17,836 - Public works 12,326,726 1,124,647 3,393,902 5,353,016 Interest on long-term debt 15,330,603 - - - Total Governmental Activities 104,315,622 2,566,525 15,363,650 5,974,311 Business-Type Activities: Golf Course 4,169,768 3,584,996 - - Total Business-Type Activities 4,169,768 3,584,996 - - Total Primary Government 108,485,390$ 6,151,521$ 15,363,650$ 5,974,311$ General Revenues: Taxes: Property taxes, levied for general purpose Tax increment Transient occupancy taxes Sales taxes Franchise taxes Business licenses taxes Other taxes Motor vehicle in lieu - unrestricted Use of money and property Other Gain on sale of capital asset Total General Revenues, Contributions, Special Items 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 18 Primary Government Governmental Business-Type Activities Activities Total (34,164,438)$ -$ (34,164,438)$ (10,755,612) - (10,755,612) (12,800,389) - (12,800,389) (4,904,933) - (4,904,933) (2,455,161) - (2,455,161) (15,330,603) - (15,330,603) (80,411,136) - (80,411,136) - (584,772) (584,772) - (584,772) (584,772) (80,411,136) (584,772) (80,995,908) 6,278,470 - 6,278,470 35,390,317 - 35,390,317 4,265,438 - 4,265,438 6,927,388 - 6,927,388 1,585,427 - 1,585,427 302,223 - 302,223 461,957 - 461,957 3,714,437 - 3,714,437 5,362,684 1,252 5,363,936 477,936 - 477,936 2,330 - 2,330 64,768,607 1,252 64,769,859 (15,642,529) (583,520) (16,226,049) 525,622,104 38,599,154 564,221,258 509,979,575$ 38,015,634$ 547,995,209$ Net (Expenses) Revenues and Changes in Net Assets See Notes to Financial Statements 19 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2010 General Assets: Pooled cash and investments 40,664,631$ 4,022,880$ -$ 29,504,571$ Receivables: Accounts 42,500 - - - Taxes 1,910,118 - - - Notes and loans - - - - Accrued interest 54,885 - - 22,764 Prepaid costs 9,030 6,916 - - Deposits 9,830 - - - Due from other governments 6,849,167 461,392 - - Due from other funds 348,071 - - - Advances to other funds 57,897,671 - - 3,355,081 Restricted assets: Cash and investments with fiscal agents - - - 11,000,659 Total Assets 107,785,903$ 4,491,188$ -$ 43,883,075$ Liabilities and Fund Balances: Liabilities: Accounts payable 3,474,762$ 3,819,775$ -$ 5,423$ Accrued liabilities 470,576 - - - Deferred revenues 6,421,194 - - - Unearned revenues 531,814 198,850 - - Redevelopment Agency PA No. 1 Civic Center Capital Improvement Capital Projects Funds Deposits payable 4,846,597 472,563 - - Due to other governments 10,842 - - - Due to other funds - - - - Advances from other funds - - 9,833,714 - Total Liabilities 15,755,785 4,491,188 9,833,714 5,423 Fund Balances: Nonspendable: Prepaid costs 9,030 6,916 - - Notes and loans - - - - Advances to other funds 57,897,671 - - 3,355,081 Deposits 9,830 - - - Restricted for: Planning and development projects - - - - Public safety - - - - Community services - - - - Public works - - - - Capital Projects - - - 40,522,571 Debt service - - - - Committed to: Cash flow reserve 3,246,881 - - - Emergency reserve 17,774,648 - - - Post retirement health benefits 1,258,059 - - - Assigned to: Continuing appropriations 1,555,176 - - - Unassigned 10,278,823 (6,916) (9,833,714) - Total Fund Balances 92,030,118 - (9,833,714) 43,877,652 Total Liabilities and Fund Balances 107,785,903$ 4,491,188$ -$ 43,883,075$ See Notes to Financial Statements 20 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Other Total Governmental Governmental Funds Funds 13,697,886$ 23,114,569$ 50,347,090$ 161,351,627$ - - 81,989 124,489 107,071 59,567 41,659 2,118,415 - - 3,920,107 3,920,107 13,709 16,850 38,261 146,469 - - 824 16,770 - - 6,400 16,230 - - 996,537 8,307,096 - - 2,143,702 2,491,773 - - 938,085 62,190,837 - - 5,569,552 16,570,211 13,818,666$ 23,190,986$ 64,084,206$ 257,254,024$ -$ -$ 94,996$ 7,394,956$ - - - 470,576 - - 1,831,398 8,252,592 - - 575,785 1,306,449 Redevelopment Agency PA No. 1 Redevelopment Agency PA No. 2 Debt Service Funds Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Committed to: Cash flow reserve Emergency reserve Post retirement health benefits Assigned to: Continuing appropriations Unassigned Total Fund Balances Total Liabilities and Fund Balances - - 245,937 5,565,097 5,006,556 8,726,822 - 13,744,220 - - 2,491,773 2,491,773 22,000,000 19,378,966 5,683,585 56,896,265 27,006,556 28,105,788 10,923,474 96,121,928 - - 824 16,770 - - 2,088,709 2,088,709 - - 938,085 62,190,837 - - 6,400 16,230 - - 31,032,124 31,032,124 - - 48,852 48,852 - - 11,675,417 11,675,417 - - 448,731 448,731 - - 12,601,285 53,123,856 - - 3,890 3,890 - - - 3,246,881 - - - 17,774,648 - - - 1,258,059 - - - 1,555,176 (13,187,890) (4,914,802) (5,683,585) (23,348,084) (13,187,890) (4,914,802) 53,160,732 161,132,096 13,818,666$ 23,190,986$ 64,084,206$ 257,254,024$ See Notes to Financial Statements 21 THIS PAGE INTENTIONALLY LEFT BLANK 22 CITY OF LA QUINTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30, 2010 Fund balances of governmental funds 161,132,096$ 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 470,911,924 Other capital assets 161,306,828 Accumulated depreciation (82,536,666) Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable (223,585,000) Unamortized bond premium/discount 768,802 Unamortized cost of issuance 4,196,372 Other long-term liabilities (5,962,572) Compensated absences (994,178) Governmental funds report all OPEB contributions as expenditures, however in the Statement of Net Assets any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as a liability.(225,979) Governmental funds report all Pension contributions as expenditures, however in the Statement of Net Assets any excesses or deficiencies in contributions in relation to the annual contribution are recorded as an asset 1,338,763 Accrued interest payable for the current portion of interest due on Bonds has not been reported in the governmental funds (3,962,993) 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.8,252,592 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 19,339,586 Net assets of governmental activities 509,979,575$ See Notes to Financial Statements 23 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 General Revenues: Taxes 19,730,707$ -$ -$ -$ Assessments - - - - Licenses and permits 472,409 - - - Intergovernmental 12,641,162 758,602 - - Charges for services 478,716 - - - Use of money and property 3,601,495 - - 196,204 Fines and forfeitures 395,823 - - - Developer participation - 52,508 38,884 - Miscellaneous 126,246 - - 325,000 Total Revenues 37,446,558 811,110 38,884 521,204 Expenditures: Current: General government 5,697,766 - 204,362 - Public safety 19,921,752 - - - Planning and development 1,355,177 - - 969,116 Community services 2,773,467 - - - Public works 4,759,642 - - - Capital outlay 111,049 14,366,561 - - Debt service: Principal retirement 34,586 219,230 - - Id f i l h 29 224 1 069 Redevelopment Agency PA No. 1 Civic Center Capital Improvement Capital Projects Funds Interest and fiscal charges - 29,224 51,069 - Pass-through agreement payments - - - - Total Expenditures 34,653,439 14,615,015 255,431 969,116 Excess (Deficiency) of Revenues Over (Under) Expenditures 2,793,119 (13,803,905) (216,547) (447,912) Other Financing Sources (Uses): Transfers in 1,574,071 13,803,905 - - Transfers out (4,664,453) - - (603,719) Total Other Financing Sources (Uses)(3,090,382) 13,803,905 - (603,719) Net Change in Fund Balances (297,263) - (216,547) (1,051,631) Fund Balances, Beginning of Year 92,327,381 - (9,617,167) 44,929,283 Fund Balances, End of Year 92,030,118$ -$ (9,833,714)$ 43,877,652$ See Notes to Financial Statements 24 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Id f i l h Other Total Governmental Governmental Funds Funds 38,517,789$ 20,763,180$ 14,820,242$ 93,831,918$ - - 966,639 966,639 - - - 472,409 - - 6,073,312 19,473,076 - - 5,327 484,043 94,785 94,615 1,351,580 5,338,679 - - - 395,823 - - 182,347 273,739 - - 157,096 608,342 38,612,574 20,857,795 23,556,543 121,844,668 24,056,133 253,227 9,394 30,220,882 - - 195,184 20,116,936 - - 3,704,199 6,028,492 - - 1,431,159 4,204,626 - - 2,103,245 6,862,887 - - 37,300 14,514,910 3,936,688 320,000 2,105,908 6,616,412 82 3 9 19 60 8 4 49 202 1 3 968 Redevelopment Agency PA No. 1 Redevelopment Agency PA No. 2 Debt Service Funds 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 Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year 8,572,395 1,956,078 4,749,202 15,357,968 21,194,350 17,516,544 - 38,710,894 57,759,566 20,045,849 14,335,591 142,634,007 (19,146,992) 811,946 9,220,952 (20,789,339) 4,438,892 1,951,399 8,618,105 30,386,372 (3,961,932) (4,551,399) (15,111,862) (28,893,365) 476,960 (2,600,000) (6,493,757) 1,493,007 (18,670,032) (1,788,054) 2,727,195 (19,296,332) 5,482,142 (3,126,748) 50,433,537 180,428,428 (13,187,890)$ (4,914,802)$ 53,160,732$ 161,132,096$ See Notes to Financial Statements 25 CITY OF LA QUINTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2010 Net change in fund balances - total governmental funds (19,296,332)$ 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 15,067,225 Depreciation expense (8,302,271) 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. Repayment of principal 6,616,412 Amortization of issuance costs, premiums and discounts (81,240) Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period.108,605 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 (82,639) Governmental funds report all contributions in relation to the annual required contribution (ARC) for OPEB as expenditures, however in the Statement of Activities only the ARC is an expense.(118,035) Governmental funds report all contributions in excess to the required contribution for PERS as expenditures, however in the Statement of Activities only the current contribution is an expense.1,338,763 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.(8,526,740) 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 (2,366,277) Change in net assets of governmental activities (15,642,529)$ See Notes to Financial Statements 26 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT BY DEPARTMENT GENERAL FUND YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 92,327,381$ 92,327,381$ 92,327,381$ -$ Resources (Inflows): Taxes 20,799,360 19,025,149 19,730,707 705,558 Licenses and permits 435,600 464,100 472,409 8,309 Intergovernmental 13,417,395 13,050,881 12,641,162 (409,719) Charges for services 452,700 434,700 478,716 44,016 Use of money and property 3,538,400 3,789,983 3,601,495 (188,488) Fines and forfeitures 192,400 399,400 395,823 (3,577) Miscellaneous 94,900 181,400 126,246 (55,154) Transfers in 367,716 1,623,045 1,574,071 (48,974) Amounts Available for Appropriation 131,625,852 131,296,039 131,348,010 51,971 Charges to Appropriation (Outflow): General government Legislative 1,001,595 1,027,415 969,366 58,049 City Manager 430,696 379,309 343,786 35,523 Development Services 1,399,803 1,590,147 1,389,129 201,018 Management Services 1,279,477 1,562,586 1,303,594 258,992 City Clerk 580,851 625,278 556,127 69,151 Fiscal Services 872,880 860,387 880,798 (20,411) Central Services 292,210 282,060 254,966 27,094 Public safety Police 12,539,455 12,582,207 12,151,744 430,463 Building & Safety Admin.240,218 201,373 292,681 (91,308) Building 838,963 916,939 875,157 41,782 Code Compliance 958,895 1,054,785 1,008,700 46,085 Animal Control 371,295 401,854 389,190 12,664 Civic Center Bldg 528,430 538,877 478,842 60,035 Fire 4,885,910 4,968,161 4,565,159 403,002 Emergency Services 148,903 163,225 160,279 2,946 Planning and development Administration 604,904 1,506,121 759,302 746,819 Current Planning 678,891 767,535 595,875 171,660 Community services Community Services Admin 1,006,716 1,430,348 1,242,829 187,519 Senior Center 394,720 419,999 386,702 33,297 Parks & Recreation 198,832 210,498 200,604 9,894 Park Maintenance 975,647 994,754 943,332 51,422 Public works Administration 487,452 540,721 532,277 8,444 Development Services 903,692 952,106 867,588 84,518 Maintenance/Operations - Street 1,026,125 2,236,408 1,545,683 690,725 Maintenance/Operations - Lighting 819,324 839,060 587,034 252,026 Construction Management 881,597 658,162 1,227,060 (568,898) Capital outlay 178,800 181,315 111,049 70,266 Debt service: Principal retirement 34,586 34,586 34,586 - Transfers out 4,726,295 5,262,008 4,664,453 597,555 Total Charges to Appropriations 39,287,162 43,188,224 39,317,892 3,870,332 Budgetary Fund Balance, June 30 92,338,690$ 88,107,815$92,030,118$ 3,922,303$ See Notes to Financial Statements 27 CITY OF LA QUINTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2010 Business-Type Activities - Enterprise Funds Governmental Activities- Internal Service Funds Assets: Current: Cash and investments 301,923 $ 3,896,958 $ Receivables: Accounts 11,704 - Accrued interest 202 3,000 Prepaid costs 1,865 240 Deposits 250,000 - Inventories 122,441 - Total Current Assets 688,135 3,900,198 Noncurrent: Capital assets - net of accumulated depreciation 42,934,025 15,555,956 Total Noncurrent Assets 42,934,025 15,555,956 Total Assets 43,622,160$ 19,456,154$ Liabilities and Net Assets: Liabilities: Current: Accounts payable 190,185$ 104,741$ Accrued liabilities 1,894 3,404 Unearned revenues 4,332 - Deposits payable 61,000 - Capital leases payable 54,543 - Total Current Liabilities 311,954 108,145 Noncurrent: Advances from other funds 5,294,572 - Accrued compensated absences - 8,423 Total Noncurrent Liabilities 5,294,572 8,423 Total Liabilities 5,606,526 116,568 Net Assets: Invested in capital assets, net of related debt 42,879,482 15,555,956 Unrestricted (4,863,848) 3,783,630 Total Net Assets 38,015,634 19,339,586 Total Liabilities and Net Assets 43,622,160$ 19,456,154$ Golf Course See Notes to Financial Statements 28 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2010 Business-Type Activities - Enterprise Funds Governmental Activities- Internal Service Funds Operating Revenues: Sales and service charges 3,584,996 331,044$ Total Operating Revenues 3,584,996 331,044 Operating Expenses: Salaries and benefits 60,239 108,322 Fuel and oil - 92,265 Maintenance and parts - 83,830 Contract services 3,465,058 69,819 Software and supplies - 111,447 Depreciation expense 547,328 770,119 Other 65,074 57,154 Total Operating Expenses 4,137,699 1,292,956 Operating Income (Loss)(552,703) (961,912) Nonoperating Revenues (Expenses): Interest revenue 1,252 24,005 Interest expense (32,069) - Gain (loss) on disposal of capital assets - 2,330 Total Nonoperating Revenues (Expenses)(30,817) 26,335 Income (Loss) Before Contributions and Transfers (583,520) (935,577) Capital contributions - 62,307 Transfers out - (1,493,007) Changes in Net Assets (583,520) (2,366,277) Net Assets: Beginning of Year 38,599,154 21,705,863 End of Fiscal Year 38,015,634$ 19,339,586$ Golf Course See Notes to Financial Statement 29 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2010 Business-Type Activities - Enterprise Funds Governmental Activities- Internal Service Funds Cash Flows from Operating Activities: Cash received from customers and users 3,590,459$ 331,044$ Cash received from/(paid to) interfund service provided (1,390) - Cash paid to suppliers for goods and services (3,547,572) (318,814) Cash paid to employees for services (60,438) (107,460) Net Cash Provided (Used) by Operating Activities (18,941) (95,230) Cash Flows from Non-Capital Financing Activities: Cash transfers out - (1,493,007) Advance from other funds 1,004,097 - Net Cash Provided (Used) by Non-Capital Financing Activities 1,004,097 (1,493,007) Cash Flows from Capital and Related Financing Activities: Golf Course andRelatedF inancing Activities: Acquisition and construction of capital assets (659,528) (151,905) Principal paid on capital debt (230,674) - Interest paid on capital debt (32,069) - Proceeds from sales of capital assets - 2,330 Net Cash Provided (Used) by Capital and Related Financing Activities (922,271) (149,575) Cash Flows from Investing Activities: Interest received 1,281 27,312 Net Cash Provided (Used) by Investing Activities 1,281 27,312 Net Increase (Decrease) in Cash and Cash Equivalents 64,166 (1,710,500) Cash and Cash Equivalents at Beginning of Year 237,757 5,607,458 Cash and Cash Equivalents at End of Year 301,923$ 3,896,958$ See Notes to Financial Statement 30 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2010 Business-Type Activities - Enterprise Funds Governmental Activities- Internal Service Funds Golf Course Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss)(552,703)$ (961,912)$ Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation 547,328 770,119 (Increase) decrease in accounts receivable 3,652 - (Increase) decrease in inventories (59,107) - (Increase) decrease in prepaid expense - (240) Increase (decrease) in accounts payable 28,277 95,544 Increase (decrease) in accrued liabilities (199) 397 Increase (decrease) in deposits payable 12,000 - Increase (decrease) in unearned revenue 1,811 - Increase (decrease) in compensated absences - 862 Total Adjustments 533,762 866,682 Net Cash Provided (Used) by Operating Activities (18 941)$(95 230)$Operating Activities (18,941)$(95,230)$ Non-Cash Investing, Capital, and Financing Activities: Capital assets contributed by other funds -$ 62,307$ See Notes to Financial Statement 31 CITY OF LA QUINTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2010 Agency Funds Assets: Pooled cash and investments 551,708$ Receivables: Taxes 13,790 Accrued interest 406 Total Assets 565,904$ Liabilities: Deposits payable 565,904$ Total Liabilities 565,904$ Total Liabilities and Net Assets 565,904$ See Notes to Financial Statements 32 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 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 financiall y 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 i nterfund 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) JUNE 30, 2010 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. City of La Quinta Housing Authority The La Quinta Housing Authority (Authority) was established pursuant to California Housing Authorities Law (Health and Safety Code Sections 34200 et seq.) on September 15, 2009. The purpose of the Authority is to provide safe and sanitary housing opportunities for La Quinta residents. 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. 34 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 1: Summary of Significant Accounting Policies (Continued) Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as expenditure. Proceeds of long-term debt are recorded as a liability in the government-wide financial statements, rather than as other financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditure. Fund Financial Statements The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the governmental, proprietary, and fiduciary funds are presented after the government-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 310 days. 35 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 1: Summary of Significant Accounting Policies (Continued) Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed delivered tax revenues are recognized as revenues in the period in which the underlying exchange transaction on which they are based takes place. Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. 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. 36 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 1: Summary of Significant Accounting Policies (Continued) Proprietary Funds The City’s enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net assets. Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness of the proprietary funds are reported as a reduction of the related liability, rather than as expenditures. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Enterprise Funds are charges to customers for sales and services. Operating expenses for 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. 37 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 1: Summary of Significant Accounting Policies (Continued) 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. 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. 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. 38 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 1: Summary of Significant Accounting Policies (Continued) e. Assets, Liabilities and Net Assets or Equity Investments For financial reporting purposes, investments are adjusted to their fair value. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. Some investments are valued on an unamortized cost basis. For these investments, there is no material difference from fair value. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investment balance. Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary fund’s share in the cash and investment pool of the City of La Quinta. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the statement of cash flows, the entire balance of cash and investments on the combined balance sheet for the proprietary funds is considered cash and cash equivalents. Inventory Inventory is valued at cost using the first in / first out (FIFO) method. The City uses the consumption method of accounting for inventories. 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. 39 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 1: Summary of Significant Accounting Policies (Continued) Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the 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 The City Council adopts and amends committed fund balance amounts through a resolution. The City Council authorizes assigned amounts for specific purposes pursuant to the policy-making powers granted through a resolution. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted amounts to be used first, then unrestricted. When an expenditure is incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, they are considered to be spent in the order as follows: committed, assigned and then unassigned. 40 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 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, 2010, the following funds had deficit fund balances: Major Capital Projects Funds: Civic Center (9,833,714)$ Major Debt Service Funds: Redevelopment Agency PA No. 1 (13,187,890) Redevelopment Agency PA No. 2 (4,914,802) Nonmajor Special Revenue Funds: Housing Authority PA No. 1 (1,414) Housing Authority PA No. 2 (1,377) Nonmajor Capital Projects Funds: Parks and Recreation (1,417,770) Library Development (1,937,311) Street Facility (1,390,419) Fire Facility (935,294) 41 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 2: Stewardship, Compliance and Accountability (Continued) c. Excess of expenditures over appropriations are as follows: Expenditures for the year ended June 30, 2010, exceeded the appropriations of the General Fund as follows: Budget Actual Variance General Fund: General Government Fiscal services 860,387$ 880,798$ (20,411)$ Public Safety Building & safety admin 201,373 292,681 (91,308) Public Works Construction management 658,162 1,227,060 (568,898) III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments Cash and investments as of June 30, 2010, are classified in the accompanying financial statements as follows: Statement of Net Assets: Cash and investments 165,550,508$ Cash with fiscal agent 16,570,211 Statement of Fiduciary Net Assets: Cash and investments 551,708 Total cash and investments 182,672,427$ Cash and investments as of June 30, 2010, consist of the following: Cash on hand 1,400$ Deposits with financial institutions (1,330,735) Investments 184,001,762 Total cash and investments 182,672,427$ 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. 42 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 3: Cash and Investments (Continued) 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 20%10% Local Agency Investment Fund (LAIF) N/A 30% $40 million Investment Agreements N/A N/A N/A * Based on state law requirements or investment policy requirements, 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 are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Maximum 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. 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: 43 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 3: Cash and Investments (Continued) Total 6 Months or Less 6 Months to 1 Year 1 to 3 Years U.S. Treasury obligations 81,934,374$ 69,912,432$ -$ 12,021,942$ Certificates of Deposit 969,000 240,000 729,000 - Federal agency securities: Federal Home Loan Bank 18,997,423 18,997,423 - - Medium term notes 15,179,517 - 10,138,059 5,041,458 State investment pool 50,351,232 50,351,232 - - Held by bond trustee: Money market funds 581,790 581,790 - - U.S. Treasury bills 15,988,426 15,988,426 - - Total 184,001,762$ 156,071,303$ 10,867,059$ 17,063,400$ 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, 2010, the City had investments with a variety of issuers, all of which were “investment grade” and were legal under state and municipal law. The City’s investment in medium term notes were all insured under the U.S Treasury Temporary Loan Guarantee Program (TLGP) and were all rated AA or better by S&P. The City's investments in money market mutual funds were all rated “AAA” by S&P and Moody’s. As of June 30, 2010, 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, 2010, the City had investments in Federal Home Loan Banks (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total investments. 44 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 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 City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relations to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. 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. 45 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 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 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 property are allocated to the City and other districts. The Agency has no power to levy and collect taxes and any legislative property tax shift might reduce the amount of tax revenues that would otherwise be available to pay the principal of, and interest on, debt. Broadened property tax exemptions could have a similar effect. Conversely, an increase in the tax rate or assessed valuation, or any reduction or elimination of present exemptions would increase the amount of tax revenues that would be available to pay principal and interest on debt. Note 5: Notes Receivable Outstanding Balance at June 30, 2010 In September 1994, the Redevelopment Agency sold certain real property to LINC Housing for $2,112,847. The property was used to construct single-family homes and rental units to increase the City's supply of low and moderate income housing. The note bears interest at 6% per annum and is due in full on June 15, 2029.3,866,786$ In December 2000, the Redevelopment Agency entered into an agreement with LINC Housing to receive $9,500,000 as a reimbursement for Agency costs incurred for the construction of infrastructure related to the development of senior apartments. Payments are due to the Agency based on annual positive cash flow generated by the rental of the units. All unpaid principal and interest on the note are due fifty-five years after the completion of the project. Interest on the note accrues at 3% per annum. This loan was forgiven as of June 30, 2010.- Other notes receivable 53,321 Total notes receivable balance at June 30, 2010 3,920,107$ 46 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 6: Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2010, is as follows: Beginning Ending Balance at Balance at July 1, 2009 Additions Deletions Transfers June 30, 2010 Governmental Activities: Capital assets, not being depreciated: Land 75,663,033$ 148,745$ -$ 571,722$ 76,383,500$ Right of way 283,520,060 469,943 - - 283,990,003 Construction-in-progress 42,402,317 14,615,009 5,480,406 (8,113,134) 43,423,786 Total Capital Assets, Not Being Depreciated 401,585,410 15,233,697 5,480,406 (7,541,412) 403,797,289 Capital assets, being depreciated: Buildings and improvements 58,061,983 600,000 - 701,618 59,363,601 Equipment and furniture 2,168,640 68,419 9,627 - 2,227,432 Vehicles 1,578,399 98,893 20,344 - 1,656,948 Infrastructure 176,358,734 3,814,041 90,647 6,839,794 186,921,922 Total Capital Assets, Being Depreciated 238,167,756 4,581,353 120,618 7,541,412 250,169,903 Less accumulated depreciation: Buildings and improvements 12,667,455 1,960,025 - - 14,627,480 Equipment and furniture 1,166,107 206,289 9,627 - 1,362,769 Vehicles 925,902 174,641 20,347 - 1,080,196 Infrastructure 65,964,707 5,693,998 - - 71,658,705 Total Accumulated Depreciation 80,724,171 8,034,953 29,974 - 88,729,150 Total Capital Assets, Being Depreciated, Net 157,443,585 (3,453,600) 90,644 7,541,412 161,440,753 Governmental Activities Capital Assets, Net 559,028,995$ 11,780,097$ 5,571,050$ -$ 565,238,042$ Depreciation expense was charged to the following functions in the Statement of Activities: General government 135,127$ Public safety 1,046,292 Planning and development 923,961 Community services 124,086 Public works 5,805,487 Total governmental activities 8,034,953$ 47 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 6: Capital Assets (Continued) Capital asset activity for business-type activities for the year ended June 30, 2010, is as follows: Beginning Ending Balance at Balance at July 1, 2009 Additions Deletions Transfers June 30, 2010 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 1,779,148 659,528 - - 2,438,676 Vehicles 20,348 - - - 20,348 Software 20,255 - - - 20,255 Total Capital Assets, Being Depreciated 8,456,216 659,528 - - 9,115,744 Less accumulated depreciation: Buildings and improvements 1,038,088 234,555 - - 1,272,643 Equipment and furniture 1,400,594 308,712 - - 1,709,306 Vehicles 18,312 2,035 - - 20,347 Software 18,229 2,026 - - 20,255 Total Accumulated Depreciation 2,475,223 547,328 - - 3,022,551 Total Capital Assets, Being Depreciated, Net 5,980,993 112,200 - - 6,093,193 Governmental Activities Capital Assets, Net 42,821,825$ 112,200$ -$ -$ 42,934,025$ Depreciation expense was charged to the following function in the Statement of Activities: Golf Course 547,328$ 48 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 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, 2010: Beginning Balance at July 1, 2009 Additions Deletions Balance at June 30, 2010 Due within one year City: Compensated absences payable $ 919,100 1,014,832$ 931,331$ 1,002,601$ 1,002,601$ Due to the Coachella Valley Association of Governments 178,311 - 50,000 128,311 50,000 Developer Agreement Payable 343,814 - 169,230 174,584 174,584 Copier Lease Payable 149,169 - 34,586 114,583 44,358 OPEB Liability 107,944 118,035 - 225,979 - Redevelopment Agency: RDA Project Area No. 1: Tax allocation bonds 133,390,000 - 3,135,000 130,255,000 3,330,000 Pass-through agreements payable: Coachella Valley Unified School District 2,874,653 - 801,688 2,072,965 817,722 RDA Project Area No. 2: Tax allocation bonds 5,800,000 - 120,000 5,680,000 125,000 Due to County of Riverside 1,400,000 - 200,000 1,200,000 200,000 Provident Loan 1,556,283 - 25,325 1,530,958 27,525 US Department of Agriculture 751,754 - 10,583 741,171 11,691 Financing Authority: Revenue bonds 89,720,000 - 2,070,000 87,650,000 2,160,000 Total $ 237,191,028 $ 1,132,867 $ 7,547,743 230,776,152 $ 7,943,481 Less: Unamortized premiums/discounts (768,802) Net Long-Term Debt 230,007,350$ 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, 2010, 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, 2010, the balance payable was $128,311. 49 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) The minimum annual requirements to amortize the payable to Coachella Valley Association of Governments as of June 30, 2010, are as follows: Principal 2010-2011 50,000$ 2011-2012 50,000 2012-2013 28,311 Totals 128,311$ 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, 2010, 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, 2010, is $174,584. The minimum annual requirements to amortize the developer agreement payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 174,584$ 23,870$ Totals 174,584$ 23,870$ 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 $3,417 in June 2013, with interest payable monthly at 4.93%. This lease agreement qualifies as a capital lease for accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments at the inception date. 50 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) The minimum future lease obligations and the net present value of the lease payments as of June 30, 2010 are as follows: Year Ending June 30, Total 2011 44,358$ 2012 44,358 2013 44,358 Total Payments 133,074 Less Amount Representing Sales Tax (9,306) Less Amount Representing Interest (9,185) Outstanding Principal 114,583$ Tax Allocation Bonds As of June 30, 2010, 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, 2010, is $6,920,000. The minimum annual requirements to amortize the bond payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 2,145,000$ 426,868 $ 2011-2012 2,305,000 264,443 2012-2013 2,470,000 90,155 Totals 6,920,000$ 781,466$ 51 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 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, 2010, is $15,760,000. The minimum annual requirements to amortize the bond payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 -$ 819,520$ 2011-2012 - 819,520 2012-2013 - 819,520 2013-2014 655,000 802,490 2014-2015 690,000 767,520 2015-2020 4,025,000 3,245,970 2020-2025 5,190,000 2,054,000 2025-2030 5,200,000 557,700 Totals 15,760,000$ 9,886,240$ 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. 52 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 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, 2010, is $5,680,000. The minimum annual requirements to amortize the bond payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 125,000$ 293,272$ 2011-2012 130,000 286,738 2012-2013 140,000 279,819 2013-2014 145,000 272,516 2014-2015 150,000 264,956 2015-2020 885,000 1,196,406 2020-2025 1,145,000 933,844 2025-2030 1,475,000 591,281 2030-2035 1,485,000 160,781 Totals 5,680,000$ 4,279,613$ 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, 2010, is $48,000,000 with an unamortized discount of $367,021. The minimum annual requirements to amortize the bond payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 -$ 2,430,720$ 2011-2012 - 2,430,720 2012-2013 - 2,430,720 2013-2014 1,565,000 2,391,595 2014-2015 1,645,000 2,311,345 2015-2020 9,550,000 10,203,600 2020-2025 12,190,000 7,488,600 2025-2030 15,625,000 3,965,123 2030-2035 7,425,000 383,393 Totals 48,000,000$ 34,035,816$ 53 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 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, 2010, is $35,765,000 with an unamortized discount of $324,221. The minimum annual requirements to amortize the bond payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 680,000$ 1,782,926$ 2011-2012 705,000 1,756,429 2012-2013 735,000 1,727,981 2013-2014 705,000 1,695,656 2014-2015 735,000 1,659,656 2015-2020 4,270,000 7,693,906 2020-2025 5,450,000 6,481,519 2025-2030 8,475,000 4,862,472 2030-2035 14,010,000 1,299,188 Totals 35,765,000$ 28,959,733$ 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. 54 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) The principal balance of outstanding bonds at June 30, 2010, is $23,810,000 with an unamortized discount of $212,524. The minimum annual requirements to amortize the bond payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 505,000$ 1,481,401$ 2011-2012 530,000 1,453,198 2012-2013 560,000 1,423,495 2013-2014 590,000 1,392,158 2014-2015 620,000 1,356,736 2015-2020 3,735,000 6,132,380 2020-2025 5,070,000 4,767,956 2025-2030 6,900,000 2,872,562 2030-2035 5,300,000 526,470 Totals 23,810,000$ 21,406,356$ 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, 2010, totaled $2,874,653. The District agrees to use such funds to provide classroom and other construction costs, site acquisition, school busses, and expansion or rehabilitation of current facilities. The minimum annual requirements to amortize payable to Coachella Valley Unified School District as of June 30, 2010, are as follows: Principal 2010-2011 817,722$ 2011-2012 834,076 2012-2013 421,167 Totals 2,072,965$ 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 55 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) 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, 2010, is $1,200,000. The minimum annual requirements to amortize amounts due to the County of Riverside as of June 30, 2010, are as follows: Principal 2010-2011 200,000$ 2011-2012 250,000 2012-2013 750,000 Totals 1,200,000$ 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, 2010, is $4,760,000. The minimum annual requirements to amortize the bond payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 420,000$ 252,525$ 2011-2012 445,000 228,521 2012-2013 470,000 203,130 2013-2014 495,000 176,351 2014-2015 525,000 148,047 2015-2020 2,405,000 275,696 Totals 4,760,000$ 1,284,270$ 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 56 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2 and to advance refund the Agency’s Redevelopment Project Areas No. 1 and 2, 1995 Housing Tax Allocation Bonds. The 2004 local agency revenue bonds were issued with issuance costs of $2,600,229 and a premium of $476,496. Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2005. Interest payments range from 3% to 5.25% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2024, September 1, 2029 and September 1, 2034, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2017, September 1, 2025, and September 1, 2030, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The principal balance of outstanding bonds at June 30, 2010, is $82,890,000 with an unamortized premium of $134,964. The minimum annual requirements to amortize the bond payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 1,740,000$ 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 2014-2015 2,075,000 3,823,431 2015-2020 12,080,000 17,337,119 2020-2025 15,610,000 13,721,706 2025-2030 20,050,000 9,180,406 2030-2035 25,665,000 3,419,528 Totals 82,890,000$ 63,698,302$ 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 57 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 7: Changes in Long-Term Liabilities – Governmental Activities (Continued) 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, 2010, is $1,530,958. The minimum annual requirements to amortize the loan payable as of June 30, 2010, are as follows: Principal Interest 2010-2011 27,525$ 126,949$ 2011-2012 29,917 124,558 2012-2013 32,516 121,959 2013-2014 35,341 119,134 2014-2015 38,411 116,064 2015-2020 248,301 524,072 2020-2025 1,118,947 105,824 Totals 1,530,958$ 1,238,560$ 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, 2010, is $741,171. Principal Interest 2010-2011 11,691$ 73,591$ 2011-2012 12,915 72,367 2012-2013 14,267 71,014 2013-2014 15,761 69,520 2014-2015 17,412 67,870 2015-2020 118,539 307,870 2020-2025 195,033 231,376 2025-2030 320,890 105,519 2030-2035 34,663 871 Totals 741,171$ 999,998$ 58 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 8: Changes in Long-Term Liabilities – Business-type Activities Changes in business-type long-term liabilities for the year ended June 30, 2010, were as follows: Beginning Balance at July 1, 2009 Additions Deletions Balance at June 30, 2010 Due within one year Golf Course: Capital leases payable $ 285,217 -$ 230,674$ 54,543$ 54,543$ 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 payments on golf carts was capitalized using an incremental borrowing rate of 6.50% at the inception of the lease. The lease is payable in 36 monthly installments of $7,962 which began February 1, 2008.54,543$ Total capital leases payable as of June 30, 2010 54,543 $ The following schedule summarizes the debt to maturity payments for capital leases: Year Ending June 30, Total 2011 54,543$ Total Payments 54,543 Less Amount Representing Interest - Outstanding Principal 54,543$ Note 9: Pledge Tax Revenues As previously discussed, the City’s Redevelopment Agency has pledged, as security for bonds it has issued, either directly or through the Financing Authority, a portion of the tax increment revenue (including Low and Moderate Income Housing set-aside) that it receives. These bonds were to provide financing for various capital projects and accomplish Low and Moderate Income Housing projects. The 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 $381,872,526 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 $35,390,317 and the debt service obligation on the bonds was $16,611,94. 59 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 10: Debt Without Governmental Commitment The City of La Quinta sold Improvement Bonds issued pursuant to the California State Improvement Act of 1915. The Bonds are payable from the annual installments collected on the regular property tax bills sent to owners of property having unpaid assessments levied against land benefited by the projects. The bonds are neither general obligations of the City nor any other political subdivision and the full faith and credit of the City is not pledged for repayment thereof, therefore, they are not included in the long-term liabilities in the accompanying financial statements. The City is not liable for repayment of the debt, but is only acting as agent for the property owners in collecting the assessments and forwarding the collections to bondholders. The following is a summary of Improvement Bonds outstanding at June 30, 2010: Proceeds Maturity Date Interest Rate Amount Outstanding at June 30, 2010 Assessment District No. 97-1 705,262$ 9/2/2018 4.10% - 5.20% 380,000$ Assessment District No. 2001-1 2,285,000 9/2/2015 5.00% - 6.60% 785,000 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, 2010, are $2,790,000. The bond is secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bond is not an obligation of the issue, but payable solely from the security. Note 12: Interfund Receivables and Payables The composition of current interfund receivable and payable as of June 30, 2010, are as follows: Non-Major Governmental TOTAL Due From Other Funds General Fund 348,071$ 348,071$ Non-Major Governmental 2,143,702 2,143,702 Total:2,491,773$ 2,491,773$ Due to Other Funds The due to the General Fund and RDA PA#2 Special Revenue Fund and Non-major funds were the results of routine interfund transactions not cleared prior to year-end. 60 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 12: Interfund Receivables and Payables (Continued) The composition of non-current interfund receivable and payable as of June 30, 2010, 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 9,833,714$ 22,000,000$ 19,378,966$ 5,294,572$ 1,390,419$ 57,897,671$ Redevelopment Agency PA No. 1 Capital Projects - - - - 3,355,081 3,355,081 Non-Major Governmental - - - - 938,085 938,085 Total:9,833,714$ 22,000,000$ 19,378,966$ 5,294,572$ 5,683,585$ 62,190,837$ Advances From Other Funds a) As of June 30, 2010, the amount due to the General Fund from RDA PA No. 1 Debt Service was $ 22,000,000. 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 advances of $16,000,000 loaned to the Redevelopment Agency require repayments beginning in 2030/31 and 2033 and accrues interest at 7% per annum. b) As of June 30, 2010, the amount due to the General Fund from RDA PA No. 2 Debt Serviced 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, 2010, the General Fund has advanced to the Golf Course fund $5,294,572. 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, 2010, the remaining balance of the advance for the La Quinta Community Park is $1,417,770. 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, 2010, is $1,937,311. f) 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, 2010, the Civic Center expansion was completed and the amount of the advance was $9,833,714 outstanding. The advance accrues interest that would have been earned by the Local Agency Investment Fund. 61 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 12: Interfund Receivables and Payables (Continued) g) In October 2009, an advance up to $2,033,687 for the Phase 1 of the Corporate Yard from the General Fund to the Street and Park Maintenance Facility Funds was approved. As of June 30, 2010 the amount of the outstanding advance was $935,295. The advance accrues interest at the earnings rate of the City’s investment pool fund. h) In October 2009, the La Quinta Housing Authority was created to promote affordable housing in the City. Since the Housing Authority had no funds to carry out its purposes, advances between the Housing Authority and the City or the La Quinta Redevelopment Agency were anticipated. As of June 30, 2010 the outstanding advance between the Housing Authority and the La Quinta Redevelopment Agency was $2,790. The advance accrues interest at the earnings rate of the City’s investment pool fund. Note 13: Interfund Transfers General Fund RDA PA #1 Capital Projects RDA PA #1 Debt Service RDA PA #2 Debt Service Non-Major Governmental Internal Service Funds TOTAL TRANSFERS IN General Fund -$ -$ -$ -$ 374,071$ 1,200,000$ 1,574,071$ Capital Improvement 4,662,453 603,719 - - 8,244,726 293,007 13,803,905 RDA PA #1 Debt Service - - - - 4,438,892 - 4,438,892 RDA PA #2 Debt Service - - - - 1,951,399 - 1,951,399 Non-Major Governmental 2,000 - 3,961,932 4,551,399 102,774 - 8,618,105 Total:4,664,453$ 603,719$ 3,961,932$ 4,551,399$ 15,111,862$ 1,493,007$ 30,386,372$ TRANSFERS OUT The following describes the major transfers in and transfers out included in the financial statements: a) $1,695,641 was transferred from the General Fund to the Capital Improvement Fund to transfer various capital projects and sales rebate agreements. The largest capital projects were for the Village Cove Fire Station Phase 1 and for the Ave. 58 and Jefferson St. Street improvement project. The sales tax rebate agreements were the Costco, Kohl’s, and the Auto Mall developer. b) $2,000 was transferred to the La Quinta Public Safety Officer Fund from the General Fund for public safety officers disabled or killed in the line of duty. c) $4,438,892 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 and $708,869 was transferred to the Capital Improvement Fund for various capital projects within the project area. d) $603,719 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) $3,961,932 and $1,951,399 was transferred from the RDA Project Area No.1 and No.2 Debt Service Funds, respectively, to the Financing Authority Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. $2,600,000 was transferred from RDA Project Area No. 2 Debt Service Funds to the RDA Capital Projects PA No.2 Fund to fund various capital projects within the project area. 62 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 13: Interfund Transfers (Continued) f) $7,828,863 was transferred to Capital Improvement Fund from various non-major funds to fund various capital projects within the City. g) $600,000 from the Equipment Replacement Fund and $600,000 from the Park Equipment and Facility Fund were transferred to the General Fund to provide additional financial resources. 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 12.1221% of annual covered payroll. The contribution requirements of plan members and the City are established and may be amended by PERS. In September 2009, the City contributed $1,338,763 to CalPERS to pay off the side fund for the Past Service Cost. This amount will be amortized over the next twelve years. The contribution requirement of plan member and the City are established and may be amended by CalPERS. Annual Pension Cost and Net Pension Obligation For 2010, the City's annual pension cost and change in Net Pension Obligation for the year ending June 30, 2010 were as follows: Annual required contribution 953,728$ Interest on net pension obligation - Adjustment to annual required contribution - Annual pension cost 953,728 Contributions made 2,292,491 Increase (decrease) in net pension obligation (1,338,763) Net pension obligation (asset) beginning of the year - Net pension obligation (asset) end of the year (1,338,763)$ 63 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 14: Defined Benefit Pension Plan (Continued) Required Percentage Net Pension Fiscal Year Contributions Contributed Obligation (asset) 6/30/2008 902,098$ 100%-$ 6/30/2009 973,515 100%- 6/30/2010 953,728 240%(1,338,763) Three-Year Trend Information for PERS Note 15: Post-Employment Health Benefits Plan Description The City provides other postemployment benefits (OPEB) through a single-employer defined benefit healthcare plan by contributing on behalf of all eligible retirees $110/month for calendar 2009 and $105/month for calendar 2010, increased in all future years according to the rate of medical inflation. These benefits are provided per contract between the City and the employee associations. A separate financial report is not available for the plan. Funding Policy The contribution requirements of plan members and the City are established and may be amended by the City, City Council and/or the employee association. Currently, contributions are not required from plan members. There was no contribution made during the 2009-2010 fiscal year to cover current plan premiums. As a result, the City calculated and recorded a Net OPEB Asset, representing the difference between the Annual Required Contribution (ARC) and actual contributions, as presented below: Annual required contribution (ARC)116,821$ Interest on net OPEB obligation 5,397 Adjustment to ARC (4,183) Annual OPEB cost 118,035 Contributions made - (Decrease) increase in Net OPEB obligation 118,035 Net OPEB obligation (asset) - beginning of year 107,944 Net OPEB obligation (asset) - end of year 225,979$ The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2009-2010 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) 6/30/2008 N/A N/A N/A N/A 6/30/2009 116,821$ 8,877$ 7.60%107,944$ 6/30/2010 116,821$ - 0.00%225,979$ 64 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 15: Post-Employment Health Benefits (Continued) Funded Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The information is as of the latest actuarial valuation. 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 7/1/2008 - 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 projected unit credit cost method was used. The actuarial assumptions include a 5.0% investment rate of return, which is a blended rate of the expected long-term investment return on plan assets and on the employer’s own investments calculated based on the funded level of the plan at the valuation date, and annual healthcare cost trend rate of 4%. The actuarial value of assets is set equal to the reported market value of assets. The UAAL is being amortized as a level dollar on an open basis. The remaining amortization period at June 30, 2010, was twenty-nine years. The number of active participants is 4. Note 16: Self Insurance The City is a member of the California Joint Powers Insurance Authority (Insurance Authority). The Insurance Authority is composed of 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. 65 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 16: Self Insurance (Continued) 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 $5,000,000 and the associated loss development reserves are pooled based on payroll; (4a) costs of covered claims from $5,000,000 to $10,000,000 are paid under reinsurance policies and are subject to a $2,500,000 annual aggregate deductible (4b) costs of covered claims from $10,000,000 to $50,000,000 are covered through excess insurance policies; (4c) costs of covered claims for subsidence losses are paid by excess insurance with a sub-limit of $25,000,000 per occurrence per member. This $25,000,000 subsidence sub-limit is composed of $10,000,000 in reinsurance and $15,000,000 in excess insurance. The excess insurance layer has a $15,000,000 annual aggregate. The costs associated with 4a, 4b, and 4c 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. 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. 66 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 16: Self Insurance (Continued) Environmental Insurance The City 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 the City. 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 $65,426,900. During the past three fiscal years none of the above programs of protection have had settlements or judgments that exceed pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. Note 17: Contingencies Various claims and suits have been filed against the City in the normal course of operations. Although the outcome of these lawsuits is not presently determinable, in the opinion of management, the resolution of these matters will not have a material adverse effect on the financial position of the City. Vista Dunes Court Yard Homes In October 2007, the La Quinta Redevelopment Agency entered into an agreement pursuant to which it transferred fee title to a parcel generally located at Adams Street and Miles Avenue (the “Site”) improved with 80 rental apartment units (the “Housing Development”) to National CORE. National COR E, in turn transferred the Site and Housing Development to a limited partnership as a requirement to enter into a 15 year tax credit bond sale. In the future, National CORE is obligated to (1) exercise its option to acquire the Site and Housing Development from the limited partnership at the close of the 15 year tax credit period, as set forth in the partnership agreement, and (2) convey fee title to the Site and Housing Development to the City, as the Agency’s successor, on the 55th anniversary of the permanent loan closing. On July 6, 2009, the permanent loan closing occurred. 67 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 18: Construction Commitments The following material construction commitments existed at June 30, 2010: Project Name Contract Amount Expenditures to date as of June 30, 2009 Remaining Commitments Silver Rock Resort Infrastructure 21,274,573$ $ 13,518 21,261,055$ Adams Street Bridge Improvements 12,031,548 575,553 11,455,995 Community Park Land Acquisition 7,983,438 - 7,983,438 Washington St. Apartment Rehabilitation 7,300,000 21,196 7,278,804 Silver Rock Resort Club House 6,839,264 14,881 6,824,383 Relocation of Coachella Canal at Silver Rock 6,000,000 42,164 5,957,836 Silver Rock Resort Entry Feature & Roads 5,436,406 1,225 5,435,181 Cove Fire Station Phase 1 3,908,665 3,467,258 441,407 Maintenance Yard 2,774,380 1,881,996 892,384 Jefferson St. Landscaping (Vista Grande to Westward Ho)2,274,964 496,403 1,778,561 Note 19: Committed Fund Balances The City has the following committed fund balance shown on the balance sheet: Committed to cash flow reserves, Committed to emergency reserve, and Committed to post retirement health benefits. These committed amounts have been approved by Council based on certain percentages and will be used only in the event of Council approval. For the Committed to cash flow reserve, the City established the amount of 8.25% of the Fiscal Year 2010-2011 budget which totals $3,246,881 in the General Fund for the year ended June 30, 2010. For the Committed to emergency reserve, the City established the amount of 35% of the Fiscal Year 2010-2011 budget plus $4,000,000 which totals $17,774,648 in the General Fund for the year ended June 30, 2010. Also the City has committed a portion of their Unassigned Fund balance for the payment in future years of their Post retirement health benefits. For the year ended June 30, 2010 the City has committed $1,258,059 for this purpose. 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, 2010, the Golf Course had an operating loss before contributions and transfers of $583,520. 68 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 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, 2010, the City made $599,898 in reimbursement payments to the owner leaving an outstanding balance of $400,102. 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, 2010, the City made $989,656 in reimbursement payments to the owner leaving an outstanding balance of $3,010,344. The City entered into a transient occupancy tax (TOT) revenue reimbursement agreement on March 1st, 2010, with LQ Hospitality, LLC, the owner of a Homewood Suites Hotel. The hotel owner is required to remit on a monthly basis any TOT collected to the City, thirty days after each month. Under terms of the agreement, the City shall make quarterly payments of 40% of any TOT generated from the Hotel in an amount not to exceed $300,000 over a two year period. The agreement terminates when either the $300,000 limit is reached or in 2 years whichever comes first. In addition, the hotel may not assign or transfer this agreement without the City’s prior written consent, which it may withhold at its discretion. As of June 30, 2010, the City made $46,342 in reimbursement payments to the owner leaving an outstanding balance of $253,658. Note 22: Transactions with the State of California a. Proposition 1A Borrowing by the State of California Under the provisions of Proposition 1A and as part of the 2009-10 budget package passed by the California state legislature on July 28, 2009, the State of California borrowed 8% of the amount of property tax revenue, including those property taxes associated with the in-lieu motor vehicle license fee, the triple flip in lieu sales tax, and supplemental property tax, apportioned to cities, counties and special districts (excluding redevelopment agencies). The state is required to repay this borrowing plus interest by June 30, 2013. After repayment of this initial borrowing, the California legislature may consider only one additional borrowing within a ten -year period. The amount of this borrowing pertaining to the City of La Quinta was $1,036,084. 69 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 22: Transactions with the State of California (Continued) Authorized with the 2009-10 State budget package, the Proposition 1A Securitization Program was instituted by the California Statewide Communities Development Authority (“California Communities”), a joint powers authority sponsored by the California State Association of Counties and the League of California Cities, to enable local governments to sell their Proposition 1A receivables to California Communities. Under the Securitization Program, California Communities simultaneously purchased the Proposition 1A receivables and issued bonds (“Prop 1A Bonds”) to provide local agencies with cash proceeds in two equal installments, on January 15, 2010 and May 3, 2010. The purchase price paid to the local agencies equaled 100% of the amount of the property tax reduction. All transaction costs of issuance and interest were paid by the State of California. Participating local agencies have no obligation on the bonds and no credit exposure to the State. The City participated in the securitization program and accordingly property taxes have been recorded in the same manner as if the State had not exercised its rights under Proposition 1A. The receivable sale proceeds were equal to the book value and, as a result, no gain or loss was recorded. b. Delay of State Gas Tax Payments In March 2010, the State Legislature passed legislation delaying a variety of State payments to local agencies in response to anticipated State cash flow problems in fiscal year 2010-2011. AB5 8x contains provisions to delay a portion (approximately 60%) of the payments of State Gas Tax monies for the first nine months of 2010-2011 (July 2010 through March 2011) to be paid no later than April 28, 2011. c. SERAF Shift for fiscal year 2009-2010 and 2010-2011 On July 23, 2009, the State adopted legislation, requiring a shift of monies during fiscal years 2009-2010 and 2010-2011 to be deposited into the County “Supplemental” Educational Revenue Augmentation Fund (SERAF). These monies were to be distributed to meet the State’s Prop 98 obligations to schools. The California Redevelopment Association (CRA) and its member agencies filed a legal action in an attempt to stop these amounts from having to be paid; however, in May 2010 the Sacramento Superior Court upheld the legislation. This decision is in the process of being appealed by CRA and its member agencies. Additionally, the question as to the ability of the State to take resources for these purposes will be considered by the voters in November 2010. The payment of the SERAF was due on May 10, 2010 for fiscal year 2009-2010 and it was made in the amount of $23,582,367. The legislation allowed this payment to be made from any available monies present in any project area(s). Subsequent legislation was passed which even allowed the funding for this payment to be borrowed from the Low and Moderate Income Housing Fund with appropriate findings from its legislative body. Any amounts borrowed from Low and Moderate Income Housing (including any suspended set-aside amounts) are to be repaid by June 30, 2015. If those amounts are not repaid, by that date, then the set-aside percentage to Low and Moderate Income Housing will increase from 20% to 25% for the remainder of the life of the Agency. To accomplish the payment, the Agency utilized a $10,000,000 advance from General Fund Reserves, $10,000,000 that was previously budgeted to be transferred to the Project Area No. 1 Capital Project Fund that was not done, and the remaining $3,582,367 was a transfer from the Project Area No. 1 Capital Project to the Project Area No. 1 Debt Service fund for the payment. No Low and Moderate Income Housings Funds were utilized to make the fiscal year 2009-2010 SERAF payment. 70 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2010 Note 22: Transactions with the State of California (Continued) It is estimated that the Agency’s share of the SERAF shift for fiscal year 2010-2011 will amount to approximately $4,850,687 and this amount will be payable in May 2011 if the appeal and/or the voter question above are not successful. Note 23: Subsequent Event In July 2010, the La Quinta Redevelopment Agency entered into an Owner Participation Agreement (OPA) with an autodealer, Garff Properties-La Quinta, LLC (“Garff”) that provides for the Agency to provide a rehabilitation loan to Garff of up to $2,300,000 for the construction of a new dealership facility and rehabilitation of an existing dealership facility. In connection with the OPA, Garff has executed a promissory note which is secured by a deed of trust, and an operating covenant. The loan will be repaid by crediting future sales and property tax increment taxes generated on the site until the cumulative taxes collected equals the loan amount. At that time, the note will be cancelled and the operating covenant will terminate. If, after ten years of operation, a shortfall exists between the revenues collected and the outstanding loan amount, the note will be cancelled and the operating covenant will terminate. Further, if at any time through no fault of the dealership certain future events outside of the dealership control occur the note will be cancelled and the operating covenant will terminate. 71 THIS PAGE INTENTIONALLY LEFT BLANK 72 OTHER GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues (other than expendable trusts and major capital projects) and the related expenditures that are legally required to be accounted for in a separate fund. The City of La Quinta has the following Special Revenue Funds: State Gas Tax Fund – To account for gasoline allocations made by the State of California. These revenues are restricted by the State to expenditures for street-related purposes only. Library Fund – To account for revenues from property tax increment dedicated library services. Federal Assistance Fund – To account for revenues from the Community Development Block Grants received from the Federal Government and the expenditures of those resources. State Law Enforcements Block Grant (SLEBG) Fund – To account for state funded “Citizens for Public Safety” (COPS) program activities, as per Assembly Bill 3229, which supplements frontline police services such as anti-gang community crime prevention. Indian Gaming Fund – To account for contributions for public safety activities to reduce crime and increase public safety. Lighting and Landscape Special Assessment District 89-1 Fund – To account for special assessments levied on real property and the expenditure thereof from City-wide lighting and landscape maintenance and improvements. 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. Congestion Management Air Quality Fund – To account for grant funds related to improving air quality. La Quinta Public Safety Officer Fund – To account for contributions to be distributed to public safety officers disabled or killed in the line of duty. Arts in Public Places – To account for development fees paid in lieu of acquisition and installation of approved artworks in a development with expenditures restricted to acquisition, installation, maintenance and repair of artworks at approved sites. South Coast Air Quality Fund – To account for contributions from the South Coast Air Quality Management District. Use is limited to reduction and control of airborne pollutants. AB 939 Fund – To account for the State mandated program to reduce waste sent to the landfills through recycling efforts. Development Agreement Fund – To account for the proceeds of development agreement revenues collected and the related expenditures in accordance with State requirements. 73 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. Justice Assistance Grant – To account for Federal Bureau of Justice Block Grant program grant funds, which are used to reduce crime and improve public safety. Housing Authority PA No.1 – To account for the housing activities of the Housing Authority in Project Area 1 which is to promote and provide for quality housing. Housing Authority PA No.2 – To account for the housing activities of the Housing Authority in Project Area 2 which is to promote and provide for quality housing. Low / Moderate Income Housing – 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 PROJECT FUNDS Capital projects funds account for the financial resources to be used for the acquisition, construction or improvements of major capital facilities and infrastructure. Infrastructure Fund - To account for the accumulation of resources provided through developer fees for the acquisition, construction or improvement of the City’s infrastructure, prior to adoption of the new Developer Impact Fee Structure on August 16, 1999. This fund accounts for all developer resources received prior to this date, and is budgeted by the Council through adoption of the annual capital improvement program budget. Transportation Fund, Parks and Recreations Fund, Library Development Fund, Community Center Fund, Street Facility Fund, Park Facility Fund, Fire Facility Fund – To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the City’s infrastructure. The Developer Impact Fee was adopted by the City Council on August 16, 1999. Eight new funds have been established to account for the specific impact areas of these fees, and are budgeted by the Council through adoption of the annual Capital Improvement Program budget. 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. 74 THIS PAGE INTENTIONALLY LEFT BLANK 75 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments 248,485$ -$ -$ 199$ Receivables: Accounts - - - - Taxes - - - - Notes and loans - - - - Accrued interest 91 - - - Prepaid costs - - - - Deposits - - - - Due from other governments 180,025 483,298 21,048 25,773 Due from other funds - - - - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets 428,601$ 483,298$ 21,048$ 25,972$ Liabilities and Fund Balances: Li biliti State Gas Tax Library Federal Assistance SLEBG Special Revenue Funds Liabilities: Accounts payable -$ -$ -$ -$ Deferred revenues - - - - Unearned revenues - - - - Deposits payable - - - - Due to other funds - 73,873 21,048 - Advances from other funds - - - - Total Liabilities - 73,873 21,048 - Fund Balances: Nonspendable: Prepaid costs - - - - Notes and loans - - - - Advances to other funds - - - - Deposits - - - - Restricted for: Planning and development projects - - - - Public safety - - - 25,972 Community services - 409,425 - - Public works 428,601 - - - Capital Projects - - - - Debt service - - - - Unassigned - - - - Total Fund Balances 428,601 409,425 - 25,972 Total Liabilities and Fund Balances 428,601$ 483,298$ 21,048$ 25,972$ 76 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Li biliti (Continued) -$ -$ -$ 10,364,601$ - - - - - - - - - - - - - - - 7,987 - - - - - - - - - 20,130 84,837 - - - - - - - - - - - - - -$ 20,130$ 84,837$ 10,372,588$ Lighting and Landscaping RCTC Quimby Indian Gaming Special Revenue Funds Liabilities: Accounts payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances -$ -$ -$ -$ - - - - - - - - - - - - - - 84,837 - - - - - - - 84,837 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10,372,588 - 20,130 - - - - - - - - - - - - - - - 20,130 - 10,372,588 -$ 20,130$ 84,837$ 10,372,588$ 77 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Li biliti -$ 22,862$ 892,719$ 274,800$ - - - - - - - - - - - - - 18 685 220 - - - - - - - - 155,895 - - 13,113 - - - - - - - - - - - - 155,895$ 22,880$ 893,404$ 288,133$ South Coast Air Quality Congestion Management Air Quality Fund Public Safety Art in Public Places Special Revenue Funds Liabilities: Accounts payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances -$ -$ -$ -$ - - - - - - - - - - - - 155,895 - - - - - - - 155,895 - - - - - - - - - - - - - - - - - - - - - - 288,133 - 22,880 - - - - 893,404 - - - - - - - - - - - - - - - - - - 22,880 893,404 288,133 155,895$ 22,880$ 893,404$ 288,133$ 78 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Li biliti (Continued) 1,339,019$ 198,966$ -$ 575,344$ - - - - - - - - - - - - 1,039 153 - 441 - - - - - - - - - - - - - - - - - - - - - - - - 1,340,058$ 199,119$ -$ 575,785$ AB 939 Development Agreement CV Violent Crime Task Force Proposition 1B Special Revenue Funds Liabilities: Accounts payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances 5,000$ -$ -$ -$ - - - - - - - 575,785 - 199,119 - - - - - - - - - - 5,000 199,119 - 575,785 - - - - - - - - - - - - - - - - 1,335,058 - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,335,058 - - - 1,340,058$ 199,119$ -$ 575,785$ 79 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Li biliti -$ -$ -$ 7,575,402$ - - - 12,844 - - - 26,768 - - - 3,920,107 - - - 5,059 - - - - - - - - 12,418 - - - - - - - - - - 2,791 - - - - 12,418$ -$ -$ 11,542,971$ Housing Authority PA No. 1 Housing Authority PA No. 2 Low/Moderate Income Housing PA No. 1 Justice Assistance Grant Special Revenue Funds Liabilities: Accounts payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances -$ -$ -$ 10,970$ - - - 1,831,398 - - - - - - - 18,266 12,418 - - - - 1,414 1,377 - 12,418 1,414 1,377 1,860,634 - - - - - - - 2,088,709 - - - 2,791 - - - - - - - 7,590,837 - - - - - - - - - - - - - - - - - - - - - (1,414) (1,377) - - (1,414) (1,377) 9,682,337 12,418$ -$ -$ 11,542,971$ 80 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Li biliti (Continued) Special Revenue Funds 19,678,116$ 404,728$ 4,552,226$ -$ 48,145 - - - 14,891 - - - - - - - 15,405 311 3,411 - 824 - - - 6,400 - - - - - - - 2,143,702 - - - - - - - - - - - 21,907,483$ 405,039$ 4,555,637$ -$ Infrastructure Transportation Parks and Recreation Low/Moderate Income Housing PA No. 2 Capital Projects Funds Liabilities: Accounts payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances 53,611$ -$ -$ -$ - - - - - - - - 28,552 - - - - - - - - - - 1,417,770 82,163 - - 1,417,770 824 - - - - - - - - - - - 6,400 - - - 21,818,096 - - - - - - - - - - - - - - - - 405,039 4,555,637 - - - - - - - - (1,417,770) 21,825,320 405,039 4,555,637 (1,417,770) 21,907,483$ 405,039$ 4,555,637$ -$ 81 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Li biliti -$ 1,166,754$ -$ -$ - - - - - - - - - - - - - 898 - - - - - - - - - - - - - - - - - - - - - - - - - - -$ 1,167,652$ -$ -$ Community Center Street Facility Park Facility Library Development Capital Projects Funds Liabilities: Accounts payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances -$ -$ -$ -$ - - - - - - - - - - - - - - - - 1,937,311 - 1,390,419 - 1,937,311 - 1,390,419 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,167,652 - - - - - - (1,937,311) - (1,390,419) - (1,937,311) 1,167,652 (1,390,419) - -$ 1,167,652$ -$ -$ 82 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Li biliti (Continued) -$ -$ 3,048,979$ 3,890$ - - 21,000 - - - - - - - - - - - 2,543 - - - - - - - - - - - - - - - - - - - 935,294 - - 5,569,552 - - -$ 5,569,552$ 4,007,816$ 3,890$ Financing Authority 2004 Low/Mod Bond Redevelopment Agency PA No. 2 Fire Facility Debt Service FundsCapital Projects Funds Liabilities: Accounts payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances -$ -$ 25,415$ -$ - - - - - - - - - - - - - 2,143,702 - - 935,294 - - - 935,294 2,143,702 25,415 - - - - - - - - - - - 935,294 - - - - - - - - - - - - - - - - - - - - - - 3,425,850 3,047,107 - - - - 3,890 (935,294) - - - (935,294) 3,425,850 3,982,401 3,890 -$ 5,569,552$ 4,007,816$ 3,890$ 83 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Li biliti Total Governmental Funds 50,347,090$ 81,989 41,659 3,920,107 38,261 824 6,400 996,537 2,143,702 938,085 5,569,552 64,084,206$ Liabilities: Accounts payable Deferred revenues Unearned revenues Deposits payable Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Notes and loans Advances to other funds Deposits Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities and Fund Balances 94,996$ 1,831,398 575,785 245,937 2,491,773 5,683,585 10,923,474 824 2,088,709 938,085 6,400 31,032,124 48,852 11,675,417 448,731 12,601,285 3,890 (5,683,585) 53,160,732 64,084,206$ 84 THIS PAGE INTENTIONALLY LEFT BLANK 85 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes -$ -$ -$ -$ Assessments - - - - Intergovernmental 1,108,080 2,082,803 90,818 100,000 Charges for services - - - - Use of money and property 519 - - 819 Developer participation - - - - Miscellaneous - - - - Total Revenues 1,108,599 2,082,803 90,818 100,819 Expenditures: Current: General government - - - - Public safety - - - - Planning and development - - - - Community services - 1,415,034 - - Public works 1,131,354 - - - Ci t l t l Special Revenue Funds State Gas Tax Library Federal Assistance SLEBG Capital outlay - - - - Debt service: Principal retirement - - - - Interest and fiscal charges - 2,258 - - Total Expenditures 1,131,354 1,417,292 - - Excess (Deficiency) of Revenues Over (Under) Expenditures (22,755) 665,511 90,818 100,819 Other Financing Sources (Uses): Transfers in - - - - Transfers out (63,322) (125,000) (90,818) (104,367) Total Other Financing Sources (Uses)(63,322) (125,000) (90,818) (104,367) Net Change in Fund Balances (86,077) 540,511 - (3,548) Fund Balances, Beginning of Year 514,678 (131,086) - 29,520 Fund Balances, End of Year 428,601$ 409,425$ -$ 25,972$ 86 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes 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 Ci t l t l (Continued) -$ -$ -$ -$ - 966,639 - - 104,705 - 1,737,375 - - - - - - - - 52,498 - - - 25,479 - - - - 104,705 966,639 1,737,375 77,977 - - - - - - - - - - - - - - - - - 971,891 - - Special Revenue Funds Indian Gaming Lighting and Landscaping RCTC Quimby 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 - - - - - - - - - - - - - 971,891 - - 104,705 (5,252) 1,737,375 77,977 - - - - (104,705) - (1,737,375) (168,570) (104,705) - (1,737,375) (168,570) - (5,252) - (90,593) - 25,382 - 10,463,181 -$ 20,130$ -$ 10,372,588$ 87 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes 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 Ci t l t l -$ -$ -$ -$ - - - - 155,895 - - 79,438 - - - - - 116 4,543 1,514 - - 16,836 - - - 1,000 - 155,895 116 22,379 80,952 - - - - - - - - - - - 22,359 - - 16,125 - - - - - 37 300 Special Revenue Funds Congestion Management Air Quality Fund Public Safety Art in Public Places South Coast Air Quality 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 - - 37,300 - - - - - - - - - - - 53,425 22,359 155,895 116 (31,046) 58,593 - 2,000 - - (155,895) - - (88,851) (155,895) 2,000 - (88,851) - 2,116 (31,046) (30,258) - 20,764 924,450 318,391 -$ 22,880$ 893,404$ 288,133$ 88 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes 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 Ci t l t l (Continued) -$ -$ -$ -$ - - - - - - - 31,267 - - - - 7,000 - - 2,956 - - - - - - - - 7,000 - - 34,223 - - - - - - 195,184 - 107,633 - - - - - - - - - - - Special Revenue Funds AB 939 Development Agreement CV Violent Crime Task Force Proposition 1B 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 - - - - - - - - - - - - 107,633 - 195,184 - (100,633) - (195,184) 34,223 - - - - (10,721) - - (34,223) (10,721) - - (34,223) (111,354) - (195,184) - 1,446,412 - 195,184 - 1,335,058$ -$ -$ -$ 89 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes 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 Ci t l t l -$ -$ -$ 9,629,447$ - - - - 84,249 - - - - - - - - - - 280,021 - - - - - - - 105,300 84,249 - - 10,014,768 - - - - - - - - - 1,414 1,377 1,433,064 - - - - - - - - Special Revenue Funds Justice Assistance Grant Housing Authority PA No. 1 Housing Authority PA No. 2 Low/Moderate Income Housing PA No. 1 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 - - - - - - - - - - - - - 1,414 1,377 1,433,064 84,249 (1,414) (1,377) 8,581,704 - - - - (84,249) - - (5,147,760) (84,249) - - (5,147,760) - (1,414) (1,377) 3,433,944 - - - 6,248,393 -$ (1,414)$ (1,377)$ 9,682,337$ 90 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes 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 Ci t l t l (Continued) Special Revenue Funds 5,190,795$ -$ -$ -$ - - - - 498,682 - - - - - - - 263,002 2,039 24,049 - - - 79,352 34,790 31,250 - 19,546 - 5,983,729 2,039 122,947 34,790 - - - - - - - - 1,329,025 - - - - - - - - - - - Capital Projects Funds Low/Moderate Income Housing PA No. 2 Infrastructure Transportation Parks and Recreation 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 - - - - 35,908 - - - 203,848 - - 7,784 1,568,781 - - 7,784 4,414,948 2,039 122,947 27,006 - - - - (2,476,949) (4,503) (1,474,859) - (2,476,949) (4,503) (1,474,859) - 1,937,999 (2,464) (1,351,912) 27,006 19,887,321 407,503 5,907,549 (1,444,776) 21,825,320$ 405,039$ 4,555,637$ (1,417,770)$ 91 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes 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 Ci t l t l -$ -$ -$ -$ - - - - - - - - - - - - - 5,866 477 160 13,846 2,886 2,795 858 - - - - 13,846 8,752 3,272 1,018 - - - - - - - - - - - - - - - - - - - - Capital Projects Funds Library Development Community Center Street Facility Park Facility 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 - - - - - - - - 10,531 - 1,089 - 10,531 - 1,089 - 3,315 8,752 2,183 1,018 - - 102,774 - - - (1,834,996) (102,774) - - (1,732,222) (102,774) 3,315 8,752 (1,730,039) (101,756) (1,940,626) 1,158,900 339,620 101,756 (1,937,311)$ 1,167,652$ (1,390,419)$ -$ 92 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes 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 Ci t l t l (Continued) -$ -$ -$ -$ - - - - - - - - - - - 5,327 - 14,464 16,256 675,281 5,505 - - - - - - - 5,505 14,464 16,256 680,608 - - - 9,394 - - - - - 618,000 191,327 - - - - - - - - - Debt Service Funds Fire Facility 2004 Low/Mod Bond Redevelopment Agency PA No. 2 Financing Authority Capital Projects Funds 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 - - - - - - - 2,070,000 5,081 - - 4,518,611 5,081 618,000 191,327 6,598,005 424 (603,536) (175,071) (5,917,397) - - 2,600,000 5,913,331 - (826,033) (475,892) - - (826,033) 2,124,108 5,913,331 424 (1,429,569) 1,949,037 (4,066) (935,718) 4,855,419 2,033,364 7,956 (935,294)$ 3,425,850$ 3,982,401$ 3,890$ 93 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Revenues: Taxes 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 Ci t l t l Total Governmental Funds 14,820,242$ 966,639 6,073,312 5,327 1,351,580 182,347 157,096 23,556,543 9,394 195,184 3,704,199 1,431,159 2,103,245 37 300Capital 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 37,300 2,105,908 4,749,202 14,335,591 9,220,952 8,618,105 (15,111,862) (6,493,757) 2,727,195 50,433,537 53,160,732$ 94 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STATE GAS TAX YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 514,678$ 514,678$ 514,678$ -$ Resources (Inflows): Intergovernmental 953,800 983,595 1,108,080 124,485 Use of money and property 5,400 1,500 519 (981) Amounts Available for Appropriation 1,473,878 1,499,773 1,623,277 123,504 Charges to Appropriation (Outflow): Public works 1,131,354 1,131,354 1,131,354 - Transfers out - 537,840 63,322 474,518 Total Charges to Appropriations 1,131,354 1,669,194 1,194,676 474,518 Budgetary Fund Balance, June 30 342,524$ (169,421)$ 428,601$ 598,022$ 95 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (131,086)$ (131,086)$ (131,086)$ -$ Resources (Inflows): Intergovernmental 2,549,700 2,549,700 2,082,803 (466,897) Use of money and property 2,800 2,800 - (2,800) Amounts Available for Appropriation 2,421,414 2,421,414 1,951,717 (469,697) Charges to Appropriation (Outflow): Community services 1,720,350 1,720,350 1,415,034 305,316 Debt service: Interest and fiscal charges - 4,000 2,258 1,742 Transfers out - 125,000 125,000 - Total Charges to Appropriations 1,720,350 1,849,350 1,542,292 307,058 Budgetary Fund Balance, June 30 701,064$ 572,064$ 409,425$ (162,639)$ 96 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FEDERAL ASSISTANCE YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental 230,000 363,555 90,818 (272,737) Amounts Available for Appropriation 230,000 363,555 90,818 (272,737) Charges to Appropriation (Outflow): Transfers out 230,000 347,730 90,818 256,912 Total Charges to Appropriations 230,000 347,730 90,818 256,912 Budgetary Fund Balance, June 30 -$ 15,825$ -$ (15,825)$ 97 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SLEBG YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 29,520$ 29,520$ 29,520$ -$ Resources (Inflows): Intergovernmental 100,000 100,000 100,000 - Use of money and property - 100 819 719 Amounts Available for Appropriation 129,520 129,620 130,339 719 Charges to Appropriation (Outflow): Transfers out 100,000 129,544 104,367 25,177 Total Charges to Appropriations 100,000 129,544 104,367 25,177 Budgetary Fund Balance, June 30 29,520$ 76$ 25,972$ 25,896$ 98 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INDIAN GAMING YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental 120,000 120,000 104,705 (15,295) Use of money and property 300 150 - (150) Amounts Available for Appropriation 120,300 120,150 104,705 (15,445) Charges to Appropriation (Outflow): Transfers out 120,300 120,300 104,705 15,595 Total Charges to Appropriations 120,300 120,300 104,705 15,595 Budgetary Fund Balance, June 30 -$ (150)$ -$ 150$ 99 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIGHTING AND LANDSCAPE YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 25,382$ 25,382$ 25,382$ -$ Resources (Inflows): Assessments 947,800 947,800 966,639 18,839 Amounts Available for Appropriation 973,182 973,182 992,021 18,839 Charges to Appropriation (Outflow): Public works 979,504 973,182 971,891 1,291 Total Charges to Appropriations 979,504 973,182 971,891 1,291 Budgetary Fund Balance, June 30 (6,322)$ -$ 20,130$ 20,130$ 100 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE RCTC YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental - 1,970,763 1,737,375 (233,388) Amounts Available for Appropriation - 1,970,763 1,737,375 (233,388) Charges to Appropriation (Outflow): Transfers out - 1,970,763 1,737,375 233,388 Total Charges to Appropriations - 1,970,763 1,737,375 233,388 Budgetary Fund Balance, June 30 -$ -$ -$ -$ 101 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE QUIMBY YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 10,463,181$10,463,181$10,463,181$ -$ Resources (Inflows): Use of money and property 15,600 40,000 52,498 12,498 Developer participation - - 25,479 25,479 Amounts Available for Appropriation 10,478,781 10,503,181 10,541,158 37,977 Charges to Appropriation (Outflow): Transfers out 704,366 9,617,963 168,570 9,449,393 Total Charges to Appropriations 704,366 9,617,963 168,570 9,449,393 Budgetary Fund Balance, June 30 9,774,415$ 885,218$ 10,372,588$ 9,487,370$ 102 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CONGESTION MANAGEMENT AIR QUALITY FUND YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental - 1,163,000 155,895 (1,007,105) Amounts Available for Appropriation - 1,163,000 155,895 (1,007,105) Charges to Appropriation (Outflow): Transfers out - 1,163,000 155,895 1,007,105 Total Charges to Appropriations - 1,163,000 155,895 1,007,105 Budgetary Fund Balance, June 30 -$ -$ -$ -$ 103 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 20,764$ 20,764$ 20,764$ -$ Resources (Inflows): Use of money and property 200 100 116 16 Transfers in 2,000 2,000 2,000 - Amounts Available for Appropriation 22,964 22,864 22,880 16 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 20,964$ 20,864$ 22,880$ 2,016$ 104 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE ART IN PUBLIC PLACES YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 924,450$ 924,450$ 924,450$ -$ Resources (Inflows): Use of money and property 3,800 3,800 4,543 743 Developer participation 33,525 33,525 16,836 (16,689) Miscellaneous - 1,000 1,000 - Amounts Available for Appropriation 961,775 962,775 946,829 (15,946) Charges to Appropriation (Outflow): Community services 36,200 36,200 16,125 20,075 Capital outlay 260,000 603,030 37,300 565,730 Transfers out - 200,000 - 200,000 Total Charges to Appropriations 296,200 839,230 53,425 785,805 Budgetary Fund Balance, June 30 665,575$ 123,545$ 893,404$ 769,859$ 105 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SOUTH COAST AIR QUALITY YEAR ENDED JUNE 30, 2010 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 96,900 96,900 79,438 (17,462) Use of money and property 2,800 1,350 1,514 164 Amounts Available for Appropriation 418,091 416,641 399,343 (17,298) Charges to Appropriation (Outflow): Planning and development 324,582 26,600 22,359 4,241 Transfers out 48,000 345,982 88,851 257,131 Total Charges to Appropriations 372,582 372,582 111,210 261,372 Budgetary Fund Balance, June 30 45,509$ 44,059$ 288,133$ 244,074$ 106 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE AB 939 YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,446,412$ 1,446,412$ 1,446,412$ -$ Resources (Inflows): Use of money and property 14,000 5,000 7,000 2,000 Amounts Available for Appropriation 1,460,412 1,451,412 1,453,412 2,000 Charges to Appropriation (Outflow): Planning and development 108,482 151,982 107,633 44,349 Capital outlay 80,000 - - - Transfers out - 205,000 10,721 194,279 Total Charges to Appropriations 188,482 356,982 118,354 238,628 Budgetary Fund Balance, June 30 1,271,930$1,094,430$ 1,335,058$ 240,628$ 107 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CV VIOLENT CRIME TASK FORCE YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 195,184$ 195,184$ 195,184$ -$ Resources (Inflows): Intergovernmental 61,400 - - - Use of money and property 1,900 - - - Amounts Available for Appropriation 258,484 195,184 195,184 - Charges to Appropriation (Outflow): Public safety 46,100 205,000 195,184 9,816 Total Charges to Appropriations 46,100 205,000 195,184 9,816 Budgetary Fund Balance, June 30 212,384$ (9,816)$ -$ 9,816$ 108 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PROPOSITION 1B YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental - 606,885 31,267 (575,618) Use of money and property - 2,000 2,956 956 Amounts Available for Appropriation - 608,885 34,223 (574,662) Charges to Appropriation (Outflow): Transfers out - 609,841 34,223 575,618 Total Charges to Appropriations - 609,841 34,223 575,618 Budgetary Fund Balance, June 30 -$ (956)$ -$ 956$ 109 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE JUSTICE ASSISTANCE GRANT YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental 69,416 86,303 84,249 (2,054) Use of money and property - 50 - (50) Amounts Available for Appropriation 69,416 86,353 84,249 (2,104) Charges to Appropriation (Outflow): Transfers out 69,416 86,303 84,249 2,054 Total Charges to Appropriations 69,416 86,303 84,249 2,054 Budgetary Fund Balance, June 30 -$ 50$ -$ (50)$ 110 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 1 YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Charges to Appropriation (Outflow): Planning and development - 25,750 1,414 24,336 Total Charges to Appropriations - 25,750 1,414 24,336 Budgetary Fund Balance, June 30 -$ (25,750)$ (1,414)$ 24,336$ 111 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 2 YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Charges to Appropriation (Outflow): Planning and development - 25,750 1,377 24,373 Total Charges to Appropriations - 25,750 1,377 24,373 Budgetary Fund Balance, June 30 -$ (25,750)$ (1,377)$ 24,373$ 112 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LOW/MODERATE INCOME HOUSING PA NO. 1 YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 6,248,393$ 6,248,393$ 6,248,393$ -$ Resources (Inflows): Taxes 10,833,900 9,623,500 9,629,447 5,947 Use of money and property 293,700 293,700 280,021 (13,679) Miscellaneous - 19,444 105,300 85,856 Proceeds from sale of capital asset 150,000 150,000 - (150,000) Amounts Available for Appropriation 17,525,993 16,335,037 16,263,161 (71,876) Charges to Appropriation (Outflow): Planning and development 2,338,821 1,756,051 1,433,064 322,987 Transfers out 4,478,892 5,228,892 5,147,760 81,132 Total Charges to Appropriations 6,817,713 6,984,943 6,580,824 404,119 Budgetary Fund Balance, June 30 10,708,280$9,350,094$ 9,682,337$ 332,243$ 113 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LOW/MODERATE INCOME HOUSING PA NO. 2 YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 19,887,321$ 19,887,321$19,887,321$ -$ Resources (Inflows): Taxes 5,668,000 5,411,100 5,190,795 (220,305) Intergovernmental 498,200 498,200 498,682 482 Use of money and property 335,000 265,000 263,002 (1,998) Miscellaneous 4,200 29,200 31,250 2,050 Amounts Available for Appropriation 26,392,721 26,090,821 25,871,050 (219,771) Charges to Appropriation (Outflow): Planning and development 1,490,972 1,717,730 1,329,025 388,705 Debt service: Principal retirement 35,996 35,996 35,908 88 Interest and fiscal charges 203,760 203,760 203,848 (88) Transfers out 11,705,921 12,177,388 2,476,949 9,700,439 Total Charges to Appropriations 13,436,649 14,134,874 4,045,730 10,089,144 Budgetary Fund Balance, June 30 12,956,072$11,955,947$21,825,320$ 9,869,373$ 114 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental - 11,930,113 758,602 (11,171,511) Developer participation - 490,108 52,508 (437,600) Transfers in 27,381,609 87,010,557 13,803,905 (73,206,652) Amounts Available for Appropriation 27,381,609 99,430,778 14,615,015 (84,815,763) Charges to Appropriation (Outflow): Capital outlay - 99,477,324 14,366,561 85,110,763 Debt service: Principal retirement - 248,454 219,230 29,224 Interest and fiscal charges - - 29,224 (29,224) Total Charges to Appropriations - 99,725,778 14,615,015 85,110,763 Budgetary Fund Balance, June 30 27,381,609$(295,000)$ -$ 295,000$ 115 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INFRASTRUCTURE YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 407,503$ 407,503$ 407,503$ -$ Resources (Inflows): Use of money and property 100 1,700 2,039 339 Amounts Available for Appropriation 407,603 409,203 409,542 339 Charges to Appropriation (Outflow): Transfers out - 397,576 4,503 393,073 Total Charges to Appropriations - 397,576 4,503 393,073 Budgetary Fund Balance, June 30 407,603$ 11,627$ 405,039$ 393,412$ 116 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE TRANSPORTATION YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 5,907,549$5,907,549$ 5,907,549$ -$ Resources (Inflows): Use of money and property 6,000 20,000 24,049 4,049 Developer participation 382,400 115,800 79,352 (36,448) Miscellaneous - - 19,546 19,546 Amounts Available for Appropriation 6,295,949 6,043,349 6,030,496 (12,853) Charges to Appropriation (Outflow): Transfers out 2,246,624 5,699,192 1,474,859 4,224,333 Total Charges to Appropriations 2,246,624 5,699,192 1,474,859 4,224,333 Budgetary Fund Balance, June 30 4,049,325$344,157$ 4,555,637$ 4,211,480$ 117 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATION YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (1,444,776)$ (1,444,776)$ (1,444,776)$ -$ Resources (Inflows): Developer participation 111,500 53,520 34,790 (18,730) Amounts Available for Appropriation (1,333,276) (1,391,256) (1,409,986) (18,730) Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges - 15,000 7,784 7,216 Total Charges to Appropriations - 15,000 7,784 7,216 Budgetary Fund Balance, June 30 (1,333,276)$ (1,406,256)$ (1,417,770)$ (11,514)$ 118 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CIVIC CENTER YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (9,617,167)$ (9,617,167)$ (9,617,167)$ -$ Resources (Inflows): Developer participation 140,400 59,700 38,884 (20,816) Amounts Available for Appropriation (9,476,767) (9,557,467) (9,578,283) (20,816) Charges to Appropriation (Outflow): General government 202,764 202,764 204,362 (1,598) Debt service: Interest and fiscal charges - 92,500 51,069 41,431 Total Charges to Appropriations 202,764 295,264 255,431 39,833 Budgetary Fund Balance, June 30 (9,679,531)$ (9,852,731)$ (9,833,714)$ 19,017$ 119 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY DEVELOPMENT YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (1,940,626)$ (1,940,626)$ (1,940,626)$ -$ Resources (Inflows): Developer participation 44,400 21,300 13,846 (7,454) Amounts Available for Appropriation (1,896,226) (1,919,326) (1,926,780) (7,454) Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges - 19,500 10,531 8,969 Total Charges to Appropriations - 19,500 10,531 8,969 Budgetary Fund Balance, June 30 (1,896,226)$ (1,938,826)$ (1,937,311)$ 1,515$ 120 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE COMMUNITY CENTER YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,158,900$1,158,900$ 1,158,900$ -$ Resources (Inflows): Use of money and property 11,700 5,000 5,866 866 Developer participation 9,300 4,440 2,886 (1,554) Amounts Available for Appropriation 1,179,900 1,168,340 1,167,652 (688) Budgetary Fund Balance, June 30 1,179,900$1,168,340$ 1,167,652$ (688)$ 121 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STREET FACILITY YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 339,620$ 339,620$ 339,620$ -$ Resources (Inflows): Use of money and property - 500 477 (23) Developer participation 14,700 4,020 2,795 (1,225) Transfers in - 102,539 102,774 235 Amounts Available for Appropriation 354,320 446,679 445,666 (1,013) Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges - 4,250 1,089 3,161 Transfers out - 2,476,398 1,834,996 641,402 Total Charges to Appropriations - 2,480,648 1,836,085 644,563 Budgetary Fund Balance, June 30 354,320$ (2,033,969)$ (1,390,419)$ 643,550$ 122 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARK FACILITY YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 101,756$ 101,756$ 101,756$ -$ Resources (Inflows): Use of money and property 1,000 160 160 - Developer participation 2,800 1,320 858 (462) Amounts Available for Appropriation 105,556 103,236 102,774 (462) Charges to Appropriation (Outflow): Transfers out - 102,539 102,774 (235) Total Charges to Appropriations - 102,539 102,774 (235) Budgetary Fund Balance, June 30 105,556$ 697$ -$ (697)$ 123 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FIRE FACILITY YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (935,718)$ (935,718)$ (935,718)$ -$ Resources (Inflows): Developer participation 26,500 8,400 5,505 (2,895) Amounts Available for Appropriation (909,218) (927,318) (930,213) (2,895) Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges - 9,250 5,081 4,169 Total Charges to Appropriations - 9,250 5,081 4,169 Budgetary Fund Balance, June 30 (909,218)$ (936,568)$ (935,294)$ 1,274$ 124 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE 2004 LOW/MOD BOND YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 4,855,419$4,855,419$ 4,855,419$ -$ Resources (Inflows): Use of money and property 17,500 20,000 14,464 (5,536) Amounts Available for Appropriation 4,872,919 4,875,419 4,869,883 (5,536) Charges to Appropriation (Outflow): Planning and development - 824,000 618,000 206,000 Transfers out - 901,740 826,033 75,707 Total Charges to Appropriations - 1,725,740 1,444,033 281,707 Budgetary Fund Balance, June 30 4,872,919$3,149,679$ 3,425,850$ 276,171$ 125 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVLOPMENT AGENCY PA NO. 1 YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 44,929,283$44,929,283$44,929,283$ -$ Resources (Inflows): Use of money and property 194,500 199,139 196,204 (2,935) Miscellaneous - - 325,000 325,000 Transfers in 10,000,000 - - - Amounts Available for Appropriation 55,123,783 45,128,422 45,450,487 322,065 Charges to Appropriation (Outflow): Planning and development 1,076,940 1,175,628 969,116 206,512 Transfers out 6,085,000 42,429,881 603,719 41,826,162 Total Charges to Appropriations 7,161,940 43,605,509 1,572,835 42,032,674 Budgetary Fund Balance, June 30 47,961,843$1,522,913$ 43,877,652$ 42,354,739$ 126 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVLOPMENT AGENCY PA NO. 2 YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,033,364$ 2,033,364$ 2,033,364$ -$ Resources (Inflows): Use of money and property 41,400 20,650 16,256 (4,394) Transfers in - 2,600,000 2,600,000 - Amounts Available for Appropriation 2,074,764 4,654,014 4,649,620 (4,394) Charges to Appropriation (Outflow): Planning and development 242,721 323,079 191,327 131,752 Transfers out 3,303,371 3,440,121 475,892 2,964,229 Total Charges to Appropriations 3,546,092 3,763,200 667,219 3,095,981 Budgetary Fund Balance, June 30 (1,471,328)$890,814$ 3,982,401$ 3,091,587$ 127 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FINANCING AUTHORITY YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 7,956$ 7,956$ 7,956$ -$ Resources (Inflows): Charges for services 15,000 15,000 5,327 (9,673) Use of money and property 675,280 675,280 675,281 1 Transfers in 5,913,331 5,913,331 5,913,331 - Amounts Available for Appropriation 6,611,567 6,611,567 6,601,895 (9,672) Charges to Appropriation (Outflow): General government 15,800 15,800 9,394 6,406 Debt service: Principal retirement 2,070,000 2,070,000 2,070,000 - Interest and fiscal charges 4,518,611 4,518,611 4,518,611 - Total Charges to Appropriations 6,604,411 6,604,411 6,598,005 6,406 Budgetary Fund Balance, June 30 7,156$ 7,156$ 3,890$ (3,266)$ 128 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 1 YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 5,482,142$5,482,142$ 5,482,142$ -$ Resources (Inflows): Taxes 43,335,700 38,494,000 38,517,789 23,789 Use of money and property 42,700 75,000 94,785 19,785 Transfers in 4,438,892 4,438,892 4,438,892 - Amounts Available for Appropriation 53,299,434 48,490,034 48,533,608 43,574 Charges to Appropriation (Outflow): General government 508,200 24,066,767 24,056,133 10,634 Debt service: Principal retirement 3,936,688 3,936,688 3,936,688 - Interest and fiscal charges 8,164,062 8,572,395 8,572,395 - Pass-through agreement payments 23,920,933 22,724,933 21,194,350 1,530,583 Transfers out 13,961,932 3,961,932 3,961,932 - Total Charges to Appropriations 50,491,815 63,262,715 61,721,498 1,541,217 Budgetary Fund Balance, June 30 2,807,619$(14,772,681)$ (13,187,890)$ 1,584,791$ 129 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 2 YEAR ENDED JUNE 30, 2010 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (3,126,748)$(3,126,748)$ (3,126,748)$ -$ Resources (Inflows): Taxes 22,671,800 21,644,500 20,763,180 (881,320) Use of money and property 140,000 100,000 94,615 (5,385) Transfers in 1,951,399 1,951,399 1,951,399 - Amounts Available for Appropriation 21,636,451 20,569,151 19,682,446 (886,705) Charges to Appropriation (Outflow): General government 268,000 255,100 253,227 1,873 Debt service: Principal retirement 120,000 120,000 320,000 (200,000) Interest and fiscal charges 1,956,078 1,956,078 1,956,078 - Pass-through agreement payments 19,253,381 18,291,681 17,516,544 775,137 Transfers out 1,951,399 4,551,399 4,551,399 - Total Charges to Appropriations 23,548,858 25,174,258 24,597,248 577,010 Budgetary Fund Balance, June 30 (1,912,407)$(4,605,107)$ (4,914,802)$ (309,695)$ 130 INTERNAL SERVICE FUNDS Internal service funds are used to account for activities involved in rendering services to departments within the City. Costs of materials and services used are accumulated in this fund and charged to the user departments as such goods are delivered or services rendered. The City of La Quinta has the following Internal Service Funds: Equipment Replacement Fund – used to account for the ultimate replacement of City owned and operated vehicles and equipment Information Technology Fund – used to account for the purchase and replacement of information systems. Park Equipment and Facilities Fund – used to account for the purchase and replacement of City owned park facility infrastructure. 131 CITY OF LA QUINTA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30, 2010 Totals Assets: Current: Cash and investments 1,785,112$ 1,346,683$ 765,163$ 3,896,958$ Receivables: Accrued interest 1,332 1,037 631 3,000 Prepaid costs - 240 - 240 Total Current Assets 1,786,444 1,347,960 765,794 3,900,198 Noncurrent: Capital assets - net of accumulated depreciation 1,089,316 385,651 14,080,989 15,555,956 Total Noncurrent Assets 1,089,316 385,651 14,080,989 15,555,956 Total Assets 2,875,760$ 1,733,611$ 14,846,783$ 19,456,154$ Liabilities and Net Assets: Liabilities: Current: Accounts payable 9,241$ 79,866$ 15,634$ 104,741$ Accrued liabilities - 3,404 - 3,404 Total Current Liabilities 9,241 83,270 15,634 108,145 Noncurrent: Accrued compensated absences - 8,423 - 8,423 Total Noncurrent Liabilities - 8,423 - 8,423 Total Liabilities 9,241 91,693 15,634 116,568 Net Assets: Invested in capital assets, net of related debt 1,089,316 385,651 14,080,989 15,555,956 Unrestricted 1,777,203 1,256,267 750,160 3,783,630 Total Net Assets 2,866,519 1,641,918 14,831,149 19,339,586 Total Liabilities and Net Assets 2,875,760$ 1,733,611$ 14,846,783$ 19,456,154$ Governmental Activities - Internal Service Funds Equipment Replacement Information Technology Park Equipment and Facilities See Notes to Financial Statement 132 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2010 Totals Operating Revenues: Sales and service charges -$ 331,044$ -$ 331,044$ Total Operating Revenues - 331,044 - 331,044 Operating Expenses: Salaries and benefits - 108,322 - 108,322 Fuel and oil 92,265 - - 92,265 Maintenance and parts 83,830 - - 83,830 Contract services 15,572 38,613 15,634 69,819 Software and supplies - 111,447 - 111,447 Other 1,975 55,179 - 57,154 Depreciation expense 234,684 111,152 424,283 770,119 Total Operating Expenses 428,326 424,713 439,917 1,292,956 Operating Income (Loss)(428,326) (93,669) (439,917) (961,912) Nonoperating Revenues (Expenses): Interest revenue 10,642 7,142 6,221 24,005 Gain (loss) on disposal of capital assets 2,330 - - 2,330 Total Nonoperating Revenues (Expenses)12,972 7,142 6,221 26,335 Income (Loss) Before Contributions and Transfers (415,354) (86,527) (433,696) (935,577) Capital contributions 15,407 - 46,900 62,307 Transfers out (600,000) - (893,007) (1,493,007) Changes in Net Assets (999,947) (86,527) (1,279,803) (2,366,277) Net Assets: Beginning of Year 3,866,466 1,728,445 16,110,952 21,705,863 End of Fiscal Year 2,866,519$ 1,641,918$ 14,831,149$ 19,339,586$ Governmental Activities - Internal Service Funds Equipment Replacement Information Technology Park Equipment and Facilities See Notes to Financial Statement 133 CITY OF LA QUINTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2010 Totals Cash Flows from Operating Activities: Cash received from customers and users -$ 331,044$ -$ 331,044$ Cash paid to suppliers for goods and services (193,390) (125,424) - (318,814) Cash paid to employees for services - (107,460) (107,460) Net Cash Provided (Used) by Operating Activities (193,390) 98,160 - (95,230) Cash Flows from Non-Capital Financing Activities: Cash transfers out (600,000) - (893,007) (1,493,007) Net Cash Provided (Used) by Non-Capital Financing Activities (600,000) - (893,007) (1,493,007) Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets (98,892) (53,013) - (151,905) Proceeds from sales of capital assets 2,330 - - 2,330 Net Cash Provided (Used) by Capital and Related Financing Activities (96,562) (53,013) - (149,575) Cash Flows from Investing Activities: Interest received 12,328 7,519 7,465 27,312 Net Cash Provided (Used) by Investing Activities 12,328 7,519 7,465 27,312 Net Increase (Decrease) in Cash and Cash Equivalents (877,624) 52,666 (885,542) (1,710,500) Cash and Cash Equivalents at Beginning of Year 2,662,736 1,294,017 1,650,705 5,607,458 Cash and Cash Equivalents at End of Year 1,785,112$ 1,346,683$ 765,163$ 3,896,958$ Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss)(428,326)$ (93,669)$ (439,917)$ (961,912)$ Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation 234,684 111,152 424,283 770,119 (Increase) decrease in prepaid expense - (240) - (240) Increase (decrease) in accounts payable 252 79,658 15,634 95,544 Increase (decrease) in accrued liabilities - 397 - 397 Increase (decrease) in compensated absences - 862 - 862 Total Adjustments 234,936 191,829 439,917 866,682 Net Cash Provided (Used) by Operating Activities (193,390)$ 98,160$ -$ (95,230)$ Non-Cash Investing, Capital, and Financing Activities: Capital assets contributed by other funds 15,407$ -$ 46,900$ 62,307$ Governmental Activities - Internal Service Funds Equipment Replacement Information Technology Park Equipment and Facilities See Notes to Financial Statement 134 AGENCY FUNDS Agency funds are used to account for assets held by the City as an agent for individual, private organizations and other governmental units. The agency funds and their purposes are as follows: The City of La Quinta has the following agency funds: Assessment District No. 97-1 and 2001-1 – To account for assessments paid to the City for debt service payments on bond issues used to finance sewer improvements. 135 CITY OF LA QUINTA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2010 Totals Assets: Pooled cash and investments 149,321$ 402,387$ 551,708$ Receivables: Taxes 1,419 12,371 13,790 Accrued interest 109 297 406 Total Assets 150,849$ 415,055$ 565,904$ Deposits payable 150,849$ 415,055$ 565,904$ Total Liabilities 150,849$ 415,055$ 565,904$ Assessment District No. 97-1 Assessment District No. 2001-1 See Notes to Financial Statements 136 CITY OF LA QUINTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2010 Balance Balance July 1, 2009 Additions Deductions June 30, 2010 Assessment District No. 97-1 Assets: Pooled cash and investments 138,694$ 65,950$ 55,323$ 149,321$ Receivables: Taxes 2,396 1,419 2,396 1,419 Accrued interest 157 109 157 109 Total Assets 141,247$ 67,478$ 57,876$ 150,849$ Liabilities: Deposits payable 141,247$ 64,925$ 55,323$ 150,849$ Total Liabilities 141,247$ 64,925$ 55,323$ 150,849$ Assessment District No. 2001-1 Assets: Pooled cash and investments 428,276$ 200,954$ 226,843$ 402,387$ Receivables: Taxes 8,900 12,371 8,900 12,371 Accrued interest 498 297 498 297 Total Assets 437,674$ 213,622$ 236,241$ 415,055$ Liabilities: Deposits payable 437,674$ 203,969$ 226,588$ 415,055$ Total Liabilities 437,674$ 203,969$ 226,588$ 415,055$ Totals - All Agency Funds Assets: Pooled cash and investments 566,970$ 266,904$ 282,166$ 551,708$ Receivables: Taxes 11,296 13,790 11,296 13,790 Accrued interest 655 406 655 406 Total Assets 578,921$ 281,100$ 294,117$ 565,904$ Liabilities: Deposits payable 578,921$ 268,894$ 281,911$ 565,904$ Total Liabilities 578,921$ 268,894$ 281,911$ 565,904$ See Notes to Financial Statements 137 THIS PAGE INTENTIONALLY LEFT BLANK 138 STATISTICAL SECTION This part of the City of La Quinta’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. Contents 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. 146 Debt Capacity These schedules present information to help the reader assess the ability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. 151 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities that take place. 156 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs. 159 139 TABLE 1 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Governmental activities: Invested in capital assets, net of related debt 217,419,724$ 195,474,945 225,818,022 249,059,500 233,361,129 253,559,117 300,220,033 343,019,328 323,669,955 336,459,272 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 96,332,870 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 77,187,433 Total governmental activities net assets 293,557,276$ 312,657,635 314,146,335 338,644,794 337,144,057 404,848,116 456,437,505 508,702,619 525,622,104 509,979,575 Business-type activities: Invested in capital assets, net of related debt -$ - - - 41,300,846 42,075,172 42,692,025 42,778,015 42,536,608 42,879,482 Restricted - - - - - - - - - - Unrestricted - - - - (626,658) (1,665,646) (2,385,462) (3,109,524) (3,937,454) (4,863,848) Total business-type activities net assets - - - - 40,674,188 40,409,526 40,306,563 39,668,491 38,599,154 38,015,634 Primary government: Invested in capital assets, net of related debt 217,419,724$ 195,474,945 225,818,022 249,059,500 274,661,975 295,634,289 342,912,058 385,797,343 366,206,563 379,338,754 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 96,332,870 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 92,717,527 72,323,585 Total primary government net assets 293,557,276$ 312,657,635 314,146,335 338,644,794 377,818,245 445,257,642 496,744,068 548,371,110 564,221,258 547,995,209 Source: City of La Quinta Fiscal Year CITY OF LA QUINTA (accrual basis of accounting) Last Ten Fiscal Years Net Assets by Component 140 TABLE 2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 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 34,287,068 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 21,274,519 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 15,923,380 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 5,173,326 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 12,326,726 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 15,330,603 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 76,431,897 104,315,622 Business-type activities: Golf Course - - -- 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 Total business-type activities expenses - - - - 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 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 80,872,443 108,485,390 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 21,439 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 1,100,491 Planning and development 709,033 565,098 611,278 662,737 754,938 1,873,676 169,643 134,211 138,391 69,391 Community services 123,960 170,865 205,806 252,677 252,501 428,947 387,065 374,092 275,178 250,557 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 1,124,647 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 15,363,650 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 5,974,311 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 23,904,486 Business-type activities: Charges for services: Golf Course - - - - 1,091,836 3,120,728 3,540,748 3,814,233 3,368,135 3,584,996 Capital grants and contributions - - - - - - - 352,687 - - Total business-type activities program revenues - - - - 1,091,836 3,120,728 3,540,748 4,166,920 3,368,135 3,584,996 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 27,489,482 (continued) (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) (80,411,136) Business-type activities - - - - (785,455) (1,402,418) (979,425) (594,661) (1,072,411) (584,772) 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) (80,995,908) General revenues and other changes in net assets: Governmental activities: Fiscal Year CITY OF LA QUINTA Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) 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 6,278,470 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 35,390,317 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 6,927,388 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 4,265,438 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 1,585,427 Business license taxes 156,026 168,798 186,220 191,062 251,618 276,917 307,032 317,011 285,304 302,223 Other taxes 359,284 311,024 513,934 675,996 1,141,177 1,049,701 872,753 641,705 455,089 461,957 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 5,362,684 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 3,714,437 Gain (loss) on sale of capital assets - (21,397) - - 3,717,470 1,967,292 - 57,346 21,542 2,330 Miscellaneous 292,036 692,691 513,876 1,489,612 2,397,474 1,943,093 2,052,246 1,220,627 118,567 477,936 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 64,768,607 Business-type activities: Investment income - - - - - 553 1,817 4,310 3,074 1,252 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 1,252 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 64,769,859 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 (15,642,529) Business-type activities - - - - 40,674,188 (264,662) (102,963) (638,072) (1,069,337) (583,520) 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 (16,226,049) 1 The transfer was for land & golf course improvements transferred to the Enterprise Fund. Source: City of La Quinta 141 Table 3 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 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 34,287,068 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 21,274,519 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 15,923,380 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 5,173,326 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 12,326,726 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 15,330,603 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 76,431,897 104,315,622 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 21,439 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 1,100,491 Community services 123,960 170,865 205,806 252,677 252,501 428,947 387,065 374,092 275,178 250,557 Planning and development 709,033 565,098 611,278 662,737 754,938 1,873,676 169,643 134,211 138,391 69,391 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 1,124,647 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 15,363,650 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 5,974,311 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 23,904,486 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) (80,411,136) 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 6,278,470 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 35,390,317 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 6,927,388 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 4,265,438 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 1,585,427 Business license taxes 156,026 168,798 186,220 191,062 251,618 276,917 307,032 317,011 285,304 302,223 Other tax 359,284 311,024 513,934 675,996 1,141,177 1049701 872,753 641,705 455,089 461,957 Motor vehicle in lieu, unrestricted 1,496,620 1,473,217 1,768,091 1,608,151 2,453,642 2740233 3,291,055 3,803,647 3,940,801 3,714,437 Investment income 3,578,206 3,006,097 1,353,868 1,738,505 4,336,050 6319502 11,854,951 10,230,489 7,387,244 5,362,684 Gain (loss) on sale of capital assets - (21,397) - - 3,717,470 1967292 - 57,346 21,542 2,330 Miscellaneous 292,036 692,691 513,876 1,489,612 2,397,474 1943093 2,052,246 1,220,627 118,567 477,936 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 64,768,607 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 (15,642,529) Source: City of La Quinta Fiscal Year CITY OF LA QUINTA (accrual basis of accounting) Last Ten Fiscal Years Changes in Net Assets - Governmental Activities 142 TABLE 4 2005 2006 2007 2008 2009 2010 Expenses: Golf Course 1,877,291 2 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 Total business-type activities expenses 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 Program revenues: Charges for services: Golf Course 1,091,836 2 3,120,728 3,540,748 3,814,233 3,368,135 3,584,996 Capital grants and contributions - - - 352,687 - - Total business-type activities program revenues 1,091,836 3,120,728 3,540,748 4,166,920 3,368,135 3,584,996 Net revenues (expenses)(785,455) (1,402,418) (979,425) (594,661) (1,072,411) (584,772) General revenues and other changes in net assets: Investment income - 553 1,817 4,310 3,074 1,252 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 1,252 Changes in net assets - business-type activities 40,674,188 (264,662) 876,462 (638,072) (1,069,337) (583,520) 1 2 The transfer was for land & golf course improvements transferred to the Enterprise Fund. Fiscal Year CITY OF LA QUINTA Changes in Net Assets - Business-type Activities Last Six Fiscal Years (accrual basis of accounting) The City of La Quinta implemented the business type activities in FY 2004/2005. 2 This was the first full year of operations for the Golf Course Source: City of La Quinta The City of La Quinta implemented the business type activities in FY 2004/2005. 143 TABLE 5 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 General fund: Nonspendable: Prepaid costs 271,065$ 226,485 17,515 292,816 507,931 503,642 11,774 10,601 12,424 9,030 Notes and loans Advances to other funds 11,472,971 12,521,890 21,081,322 28,671,083 31,904,659 22,700,961 27,597,329 45,264,966 46,137,692 57,897,671 Deposits 2,175 149,518 1,073 246,858 5,903 4,825 9,830 9,830 Committed: Cash flow reserve 1,800,000 1,800,000 1,800,300 2,175,000 2,608,786 3,041,984 3,470,309 3,689,359 3,347,602 3,246,881 Emergency reserve 9,119,765 9,186,650 10,523,200 11,915,000 15,067,577 16,905,386 18,722,524 19,651,824 18,201,948 17,774,648 Post retirement health benefits 1,258,059 Capital Projects 589,875 10,877,058 482,718 2,100,000 2,144,085 Educational purposes 1,000,000 750,000 500,000 250,000 Library 11,981 Economic development 467,072 4,967,072 2,327,430 1,911,131 Assigned: Continuing appropriations 1,069,667 1,319,787 2,257,200 2,835,297 3,485,747 1,555,176 Unassigned:12,958,494 16,995,060 14,261,273 11,404,479 10,699,419 15,197,331 29,271,236 16,734,016 18,988,053 10,278,823 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 92,030,118 All other governmental funds: Nonspendable: Prepaid costs 3,515$ 7,987 7,977 5,353 19,197 7,740 Notes and loans 2,861,382 2,136,111 2,117,586 2,123,425 2,117,873 2,112,597 2,081,645 2,076,063 2,067,028 2,088,709 Advances to other funds 551,038 1,288,863 3,811,874 5,336,158 7,061,027 5,365,097 4,823,543 4,402,213 4,321,119 4,293,166 Deposits 185,000 1,110 4,540 6,400 Restricted: Planning and development projects 6,099,522 8,150,707 7,903,406 7,518,862 16,144,465 26,172,191 15,297,481 21,906,749 25,807,752 31,032,124 Public safety 72,249 72,255 40,208 8,413 154,115 143,846 153,818 198,843 245,468 48,852 Community services 505,277 1,043,757 996,814 1,359,723 2,889,245 9,696,885 12,214,375 11,406,628 11,387,631 11,675,417 Public works 475,226 401,984 374,700 409,534 256,881 462,171 104,878 309,566 7,539,181 448,731 Capital Projects 28,959,009 52,445,043 50,673,421 124,658,452 1 99,186,105 92,112,917 66,225,066 69,626,275 50,556,856 53,123,856 Debt service 9,909 4,996,086 2,273,588 4,093,123 4,605,101 10,288,494 24,309,220 5,094,635 5,490,098 3,890 Assigned: Continuing appropriations 2,000 - Unassigned:(7,791,604) (6,118,351) (10,403,485) (20,244,236) (18,801,305) (7,133,230) (7,854,868) (19,653,179) (19,339,823) (33,626,907) Total all other governmental funds 31,745,523$ 64,416,455 57,973,112 125,263,454 113,614,617 139,228,955 117,363,135 95,373,146 88,101,047 69,101,978 1 The increase was primarily the result of the issuance of the 2004 Financing Authority bonds. 2 In Fiscal Year 2009-2010, the City implemented GASB 54 which changed the reporting requirements for fund balances in the financial statements This table has been updated to reflect the impact of GASB 54 not only Fiscal Year CITY OF LA QUINTA Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Source: City of La Quinta balances in the financial statements.This table has been updated to reflect the impact of GASB 54 not only Fiscal Year 2009-2010 but all nine prior years. 144 TABLE 6 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 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 93,831,918 Special assessments 782,610 757,619 780,259 816,045 825,292 818,526 877,191 909,229 927,816 966,639 Licenses and permits 2,057,423 1,857,691 1,982,127 3,096,145 3,226,167 5,145,430 2,788,882 2,107,035 871,167 472,409 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 19,473,076 Charges for services 1,998,589 1,757,744 2,302,759 2,619,578 3,402,602 3,367,989 1,821,794 1,334,060 673,779 484,043 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 5,338,679 Contributions - - - - - - - 37,643,190 240,591 395,823 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 2,243,785 273,739 Other 502,717 584,197 483,777 1,359,539 528,903 637,054 412,353 629,471 720,185 608,342 Total revenues 59,900,606 64,987,678 70,554,718 88,623,817 102,290,699 143,404,516 140,922,303 183,288,970 131,216,396 121,844,668 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 30,220,882 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 20,116,936 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 6,028,492 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 4,204,626 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 6,862,887 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 14,514,910 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 6,616,412 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 15,357,968 Payment to bond escrow - - - 1,591,107 - - - Payments under pass-through obli 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 38,710,894 Total expenditures 54,546,974 114,913,074 70,192,981 110,757,923 113,284,100 113,493,227 155,240,087 199,069,689 140,920,884 142,634,007 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) (20,789,339) 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 30,386,372 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) (28,893,365) 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 Fiscal Year CITY OF LA QUINTA Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 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 1,493,007 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) (19,296,332) 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% 47.6% Source: City of La Quinta 145 TABLE 7 Fiscal Year Taxable Ended Less: Assessed Direct June 30 Secured Unsecured Exemptions Value Perent Change 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 0 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% 2010 11,742,665,902 121,272,880 (110,752,890) 11,753,185,892 -5.34% CITY OF LA QUINTA Entire City (including Redevelopment Agency) Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in dollars) Source: County of Riverside Auditor-Controller 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. 146 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 2010 4,925,639,242 36,169,030 (36,077,902) 4,925,730,370 199,398,233 4,726,332,137 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 CITY OF LA QUINTA Assessed Value and Estimated Actual Value of Taxable Property - Redevelopment Agency Redevelopment Agency Project Area 2 Redevelopment Agency Project Area 1 Last Five Fiscal Years (in dollars) 2009 2,843,981,136 62,180,440 (57,076,727) 2,849,084,849 95,182,755 2,753,902,094 2010 2,641,339,455 66,270,232 (60,340,787) 2,647,268,900 95,182,755 2,552,086,145 Source: County of Riverside Auditor-Controller 147 TABLE 9 2006 1 2007 1 2008 1 2009 1 2010 1 2006 3 2007 3 2008 4 2009 4 2010 4 2006 3 2007 3 2008 4 2009 4 2010 4 Direct Rates: City of La Quinta 0.0760 0.0760 0.0760 0.0506 0.0506 0.0000 0.0000 0.0000 0.0152 0.0036 0.0000 0.0000 0.0000 0.0000 0.0000 Redevelopment agency Project Area 1 0.0000 0.0000 0.0000 0.0000 0.0000 0.5830 0.5880 0.5150 0.5245 0.5432 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 0.0000 0.0000 0.2860 0.2920 0.2910 0.3193 0.3174 County of Riverside 0.1960 0.1960 0.1960 0.2586 0.2586 0.2639 0.2619 0.2619 0.2325 0.2501 0.2617 0.2617 0.2617 0.2516 0.2537 County Free Library 0.0250 0.0250 0.0250 0.0284 0.0284 0.0276 0.0276 0.0276 0.0277 0.0276 0.0280 0.0280 0.0280 0.0280 0.0280 County Structure Fire Protection 0.0540 0.0540 0.0540 0.0610 0.0610 0.0595 0.0595 0.0595 0.0595 0.0595 0.0603 0.0603 0.0603 0.0603 0.0603 Coachella Valley (CV) Unified School 0.0000 0.0000 0.0000 0.0000 0.0000 0.0170 0.0150 0.0020 0.0149 0.0167 0.0000 0.0000 0.0020 0.0000 0.0000 Desert Sands Unified School 0.4320 0.4320 0.4320 0.3765 0.3765 0.0160 0.0140 0.0140 0.0695 0.0568 0.2000 0.1980 0.1970 0.1860 0.1859 Desert Community College 0.0700 0.0700 0.0700 0.0782 0.0782 0.0030 0.0030 0.0720 0.0177 0.0152 0.0420 0.0410 0.0410 0.0386 0.0386 Riverside County Office of Education 0.0380 0.0380 0.0380 0.0426 0.0426 0.0030 0.0030 0.0180 0.0093 0.0027 0.0230 0.0220 0.0220 0.0210 0.0210 Riverside County Regional Park & Open Space 0.0040 0.0040 0.0040 0.0000 0.0000 0.0000 0.0000 0.0030 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 CV Public Cemetery 0.0032 0.0032 0.0032 0.0035 0.0035 0.0000 0.0000 0.0000 0.0008 0.0002 0.0000 0.0000 0.0000 0.0000 0.0000 CV Mosquito 0.0127 0.0127 0.0127 0.0142 0.0142 0.0120 0.0120 0.0120 0.0112 0.0111 0.0150 0.0140 0.0140 0.0141 0.0141 Desert Recreation District 0.0192 0.0192 0.0192 0.0215 0.0215 0.0010 0.0020 0.0010 0.0044 0.0014 0.0060 0.0060 0.0060 0.0053 0.0053 CV Water District 0.0250 0.0250 0.0250 0.0284 0.0284 0.0130 0.0130 0.0010 0.0127 0.0120 0.0770 0.0760 0.0760 0.0757 0.0757 CV Resource Conservation 0.0003 0.0003 0.0003 0.0004 0.0004 0.0000 0.0000 0.0130 0.0001 0.0000 0.0000 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 0.0000 0.0000 0.0000 0.0000 CVWD Storm Water Unit 0.0320 0.0320 0.0320 0.0360 0.0360 0.0010 0.0010 0.0000 0.0000 0.0000 0.0010 0.0010 0.0010 0.0000 0.0000 Total Direct Rate 0.9992 0.9992 0.9992 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Tax Rate Area 020-005 020-005 020-005 020-005 020-005 020-015 020-015 020-089 020-089 020-089 020-144 020-144 020-144 020-144 020-144 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 0.0811 0.0767 0.0761 0.0756 0.0799 0.0811 0.0767 0.0761 0.0756 0.0799 0.0811 Coachella Valley Unified School District Coachella ValleyWater District 0 0442 0 0332 0 0462 0 0464 0 0660 0 0199 0 0208 0 0484 0 0464 0 0660 0 0442 0 0332 0 0484 0 0464 0 0660 CITY OF LA QUINTA Direct and Overlapping Property Tax Rates (Rate per $100 of assessed value) Last Five Fiscal Year Redevelopment Project Area 2 Redevelopment Project Area 1 City Non-Project Area Coachella ValleyWater District 0.0442 0.0332 0.0462 0.0464 0.0660 0.0199 0.0208 0.0484 0.0464 0.0660 0.0442 0.0332 0.0484 0.0464 0.0660 Coachella Valley Recreation & Park District Desert Comm College District 0.0199 0.0199 0.0199 0.0199 0.0200 0.0208 0.0199 0.0199 0.0199 0.0200 0.0199 0.0199 0.0199 0.0199 0.0200 Total Overlapping Rate 0.1409 0.1293 0.1461 0.1462 0.1671 0.1175 0.1169 0.1440 0.1462 0.1671 0.1409 0.1293 0.1440 0.1462 0.1671 Total Direct and Overlapping Rate 1.1401 1.1285 1.1453 1.1462 1.1671 1.1175 1.1169 1.1440 1.1463 1.1671 1.1409 1.1293 1.1440 1.1462 1.1671 Source: County of Riverside Auditor Controller's Office 1 2 3 4 5 Overlapping rates are based upon a single tax rate area only. Direct rate taken from an analysis of the TRA in the Project area and do not include State ERAF deductions and overlapping rates provided by California Municipal Statistics Direct rate from Tax Rate Area (TRA) 020-059 provided by Hdl Coren & Cone and overlapping debt rates from California Municipal Statistics Direct rate taken from an analysis by the City of La Quinta Finance Department staff of all TRA's in the Project area and do not include State ERAF deductions and overlapping rates provided by California Municipal Statistics Direct rate taken from all non-RDA TRA's provided by the County of Riverside and do not include ERAF deductions and overlapping rates provided by California Municipal Statistics NOTE: In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount for direct taxes. This 1.00% is shared by all taxing agencies for which the subject property resides within. 148 TABLE 10 Percent of Percent of Total City Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value KSL Desert Resort, Inc 204,496,893$ 1 1.74% 228,137,968 1 8.63% TD Desert Development 107,930,953 2 0.92% 36,130,189 2 1.37% MSR Resort Golf Course 98,061,022 3 0.83%-- East of Madison LLC 67,038,913 4 0.57%-- Walmart Real Estate Business Trust 50,781,966 5 0.43%-- Coral Option I LLC 42,590,434 6 0.36%-- ND La Quinta Partners 41,789,035 7 0.36%-- Griffin Ranch 38,378,266 8 0.33%-- WRM La Quinta 37,778,949 9 0.29%-- Village Resort 34,485,244 10 0.29%-- Quarry at La Quinta --20,544,413 3 0.78% Country Club Properties --16,323,124 4 0.62% Eagle Hardware and Garden Inc.--16,142,128 5 0.61% Reilly Homes Madison --14,652,580 6 0.55% 2010 2001 Current Year and Nine Years Ago Principal Property Taxpayers (in dollars) CITY OF LA QUINTA y ,, Advanced Development Corporation --14,379,156 7 0.54% Brookfield Heritage Inc --13,529,591 8 0.51% M & H Realty Partnership II --13,279,041 9 0.50% Merv Griffin Living Trust --12,763,836 10 0.48% 723,331,675$ 6.12%385,882,026 14.59% NOTE :The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Coren & Cone 149 TABLE 11 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% 2010 78,621,410 80,651,874 102.58% 434,643 81,086,517 103.14% Source: County of Riverside Auditor Controller's Office CITY OF LA QUINTA Collected within the Fiscal Year of Levy Total Collections to Date Property Tax Levies and Collections Last Five Fiscal Years ( in dollars) NOTE: The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed-through to other agencies. NOTE: The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed-through to other agencies. 150 TABLE 12 Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended 2006 2007 2008 2009 2010 Governmental Activities Reimbursement Agreement 328,311$ 278,311$ 228,311$ 178,311$ 128,311$ Compensated Absences 608,266 734,055 829,227 919,100 1,002,601 Capital lease - - - 149,169 114,583 USDA Loan - - - 751,754 741,171 Provident Savings Loan - - - 1,556,283 1,530,958 Due to Coachella Valley Unified School District 5,186,627 4,431,178 3,675,731 2,874,653 2,072,965 Due to County of Riverside 1,850,000 1,750,000 1,600,000 1,400,000 1,200,000 Developer Agreement 776,030 643,539 511,048 343,814 174,584 Tax Allocation Bonds Project Area 1 141,785,000 139,145,000 136,350,000 133,390,000 130,255,000 Tax Allocation Bonds Project Area 2 6,130,000 6,025,000 5,915,000 5,800,000 5,680,000 2004 Local Agency Revenue Bonds 1 89,265,000 87,745,000 86,175,000 84,560,000 82,890,000 City Hall Lease Revenue Bonds 6,245,000 5,900,000 5,540,000 5,160,000 4,760,000 Unamortized Discount and Issuance Costs (877,230) (877,230) (841,087) (804,944) (768,801) Total Governmental 251,297,004 245,774,853 239,983,230 236,278,140 229,781,372 Business-type Activities Capital Leases 1,090,602 825,848 681,048 285,217 54,543 Total Business-type activities 1,090,602 825,848 681,048 285,217 54,543 Total Primary Government 252,387,606$ 246,600,701$ 240,664,278$ 236,563,357$ 229,835,915$ Population - State Department of Finance January 1 38,340 41,092 42,958 43,778 44,421 Number of Households 18,762 20,176 21,058 21,355 21,699 Median Household Income 65,906$ 67,754$ 74,683$ 76,227$ 90,124$ Percentage of Personal Income 20 41%18 04%15 30%14 53%11 75% Ratios of Outstanding Debt by Type Last Five Fiscal Years (in dollars) CITY OF LA QUINTA Percentage ofPersonalIncome 20.41%18.04%15.30%14.53%11.75% Debt Per Capita 6,583$ 6,001$ 5,602$ 5,404$ 5,174$ 1 The debt service payment for the 2004 Lease Revenue Bonds are made from Redevelopment Project Area 1 & 2 low & moderate income tax increment. Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 151 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 3.12% 3,694$ 2007 5,900,000 87,745,000 145,170,000 238,815,000 2.39%3,525$ 2008 5,540,000 86,175,000 142,265,000 233,980,000 1.97%3,133$ 2009 5,160,000 84,560,000 139,190,000 228,910,000 1.84%3,003$ 2010 4,760,000 82,890,000 135,935,000 223,585,000 1.90%2,481$ 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 Five Fiscal Years (In Dollars) 152 TABLE 14 City Assessed Valuation 4,474,767,610$ Redevelopment Agency Incremental Valuation 7,278,418,282 Total Assessed Valuation 11,753,185,892$ Source: Riverside County Auditor Controller Estimated Share of Percentage Outstanding Overlapping Applicable 1 Debt 6/30/10 Debt Overlapping Debt Repaid with Property Taxes And Assessments: Desert Community College District 8.105% 323,954,507$ 26,256,513 Coachella Valley Unified School District 34.620% 115,202,921 39,883,251 Desert Sands Unified School District (DSUSD)7.605% 278,387,325 21,171,356 Coachella Valley County Water District I.D. No. 55 86.023%3,730,000 3,208,658 Coachella Valley County Water District I.D. No. 58 6.536%1,755,000 114,707 DSUSD Community Facilities District No. 1 100.000%1,820,000 1,820,000 City of La Quinta 1915 Act Bonds 100.000%1,165,000 1,165,000 Coachella Valley Water District Assessment District No. 68 86.247%2,110,000 1,819,812 Total overlapping debt repaid with property taxes 728,124,753 95,439,297 Overlapping Other Debt including Certifications of Participation (COP) Riverside County General Fund Obligations 1.827% 736,427,761$ 13,454,535 Riverside County Pension Obligations 1.827% 375,100,000 6,853,077 Riverside County Board of Education COP 1.827%7,240,000 132,275 Direct and Overlapping Debt June 30, 2010 CITY OF LA QUINTA Riverside County Board of Education COP 1.827%7,240,000 132,275 Coachella Valley Unified School District COP 34.620% 51,680,000 17,891,616 DSUSD COP 7.605%65,970,000 5,017,019 Coachella Valley County Water District I.D. No. 71 COP 11.790%4,025,000 474,548 Coachella Valley Recreation and Park District COP 13.466%2,400,000 323,184 Total overlapping other debt 1,242,842,761 44,146,254 Total overlapping debt 1,242,842,761$ 139,585,551 City direct debt 229,835,915 Total direct and overlapping debt 369,421,466$ 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 153 TABLE 15 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 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 11,753,185,892 Debt limit percentage 15%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 1,762,977,884 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 1,762,977,884 Total debt applicable to the limi as a percentage of debt limit 0.0%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. CITY OF LA QUINTA Legal Debt Margin Information Last Ten Fiscal Years Source: City of La Quinta Finance Department based upon the Assessed valuation received from the County of Riverside Auditor Controllers Office 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 154 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 2010 38,517,789 47,006,738 4 (8,488,949) 3,135,000 7,144,062 (0.83) 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 2010 20,763,180 19,373,073 1,390,107 120,000 299,550 3.31 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 Pledged-Revenue Coverage Last Five Fiscal Years (In Dollars) CITY OF LA QUINTA Tax Allocation Bonds - Project Area 1 Debt Service Debt Service Tax Allocation Bonds - Project Area 2 Debt Service 2004 Local Agency Revenue Bonds 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 2010 14,820,242 - 14,820,242 1,670,000 4,243,331 2.51 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 2010 675,280 - 675,280 400,000 275,280 1.00 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Debt Service 1 Tax increment has been reduced by other debt payments, which may or may not be subordinated to Tax Allocation Bonds 4 The State of California assessed the La Quinta Redevelopment Agency a supplemental educational relief augmentation fund payment of $23,582,367 in FY 2009/2010 which was paid from Project Area 1 tax increment revenues. This payment was funded by a $10 million loan from the General Fund to the Agency, $10 million from the Debt service Fund and $3,582,367 from the RDA Project Area 1 Capital Projects Fund. If this payment would not have been made the coverage ratio would have been 1.47. Local Agency Revenue Bonds (City Hall Project) 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. 155 TABLE 17 Calendar Calendar Calendar Calendar Calendar Year Year Year Year Year 2006 2007 2008 2009 2010 City Land (Sq Miles)(3)35.10 35.10 35.31 35.31 35.31 Population (1)38,340 41,092 42,958 43,778 44,421 Median Household Income (in dollars)(4)$65,906 $67,754 $74,683 $76,227 $90,124 Number of Dwelling Units (3)18,762 20,176 21,058 21,355 21,699 Persons per Household (3)2.855 2.846 2.851 2.851 2.865 Average Income per person per household $23,084 $23,807 $26,195 $26,737 $31,457 Labor Force (2)14,500 15,300 15,200 14,800 14,600 Employment (2)14,100 14,900 14,600 13,700 13,500 Unemployment Rate (2)2.76% 2.61% 3.95% 7.43%7.53% Median age (4)36 36.4 36.4 36.4 42.2 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 through 2009; HdLCoren & Cone Companies thereafter (4) Desert Wheeler's Newsletter City Overview through 2009; HdLCoren & Cone Companies thereafter Demographic and Economic Statistics Last Five Calendar Years CITY OF LA QUINTA 156 TABLE 18 Percent of Number of Total Number of Employer Activity Rank Employees Employment Employees Rank La Quinta Resort & Club Hotel & Golf Resort 1 1,500 11.11%1,500 1 PGA West Golf Resort 2 1,200 8.89%1,100 2 Desert Sands Unified School Distict Government 3 764 5.66%550 3 Wal-Mart Super Center Retailer 4 350 2.59%250 4 Home Depot Retailer 5 210 1.56%180 5 Hideaway Golf Resort 6 150 1.11%- Lowe's Home Improvement Retailer 7 150 1.11%150 6 ND La Quinta Partners LLC Real estate Developmen 8 150 1.11% Stater Brothers Grocery Store 9 130 0.96%126 7 Tradition Golf Club Grocery Store 10 101 0.75%103 8 Vons Grocery Store --103 8 Ralphs Grocery Store --100 9 City of La Quinta Government 13 -73 10 Rancho La Quinta Golf Resort -150 6 Total employment listed 4,705 34.85%4,385 Total City Employment - July 1 13,500 11,600 "Total Employment" as used above represents the total employment of all employers located within City limits with over 100 employees Source: 2009-2010 Willdan Financial and 2000-2001 City of La Quinta CAFR 2009-2010 2000-2001 CITY OF LA QUINTA Principal Employers Current Year and Nine Years Ago 157 TABLE 19 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Ending Ending Ending Ending Ending Ending June 30 June 30 June 30 June 30 June 30 June 30 Function 2005 2006 2007 2008 2009 2010 Administration 8.00 9.00 10.00 12.00 13.00 14.00 City Clerk 5.00 5.00 5.00 6.00 6.00 6.00 Finance 8.00 9.00 9.00 9.00 9.00 9.00 Community Services 8.00 10.25 10.25 11.25 10.25 10.25 Building and Safety 21.00 22.00 24.00 25.00 25.00 24.00 Planning and Development 9.00 12.00 12.00 12.00 10.00 9.00 Public Works 23.50 26.25 26.25 28.25 27.25 26.25 Golf Course 0.50 0.50 0.50 0.50 0.50 0.50 Total 83.00 94.00 97.00 104.00 101.00 99.00 Source: City of La Quinta by Function Last Six Fiscal Years Full-time City Employees 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 158 TABLE 20 2006 2007 2008 2009 2010 Finance: Number of Active Business Licenses 3,208 3,424 3,690 3,523 3,428 Number of Animal Licenses Processed 892 1,022 1,272 1,609 1,768 Number of Accounts Payable Checks Processed 4,696 4,722 4,840 4,819 4,393 Number of investment purchases 39 73 64 36 32 Par value of investments $327,417,000 $392,729,000 $424,500,000 $229,969,000 $267,213,000 Number of cleared checks 5,081 4,837 5,501 5,269 4,984 Number of outgoing bank wires 202 158 136 91 75 Public Works: Encroachment permits issued 304 218 110 132 78 Request for services 618 419 1152 1931 1306 Building & Safety: Permits: Single family Detached 1,044 526 297 129 56 Single family Attached 227 38 0 6 12 Residential Pool 866 612 331 207 152 Wall/Fence 1,502 963 583 299 178 Other 1,607 1,404 1,121 908 790 Total Permits 5,246 3,543 2,332 1,549 1,188 Code Compliance: Animal Control Incidents Handled 1,901 687 2,920 3,630 3,984 Vehicle abatements 909 296 351 346 214 Garage Sale Permits 1,190 1,444 1,519 1,535 1,663 Weed abatements 141 76 117 97 125 Nuisance abatements 1,611 2,032 2,142 3,130 2,340 Community Services: Library activities: Library Volume 42,050 44,981 66,124 81,124 89,060 Library books checked out 55,002 99,659 117,738 215,843 259,711 Library Cards Issued 5,550 5,325 3,675 3,684 3,547 Number of School Children Visiting Library 745 260 841 1,036 772 Library Volunteer Hours 1,891 1,583 1,951 2,342 2,723 Senior Center: Number of visits 14,305 12,955 14,013 15,739 20,326 Senior Center Volunteer Hours 3,481 4,192 3,332 2,583 3,131 Recreation activities: Participants: Leisure Classes 1,373 1,192 990 1,140 1,437 Special events 4,668 7,809 8,109 11,053 8,795 Adult Sports 3,402 6,827 8,550 10,806 13,364 Golf course: Golf rounds played 38,934 40,548 40,516 39,150 43,779 Average $ Green fee 71.12 76.97 81.09 76.13 71.59 Planning and Development: Number of residential units approved 1,063 534 338 100 255 Commercial square footage approved 533,726 124,821 342,502 390,097 6,200 Source: City of La Quinta CITY OF LA QUINTA Operating Indicators by Function Last Five Fiscal Years 159 TABLE 21 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 2006 2007 2008 2009 2010 Public works: Streets (miles)118.40 122 127 127 127 Bikepaths (miles)22.00 22 22 22 22 Streetlights 1 73 85 85 261 265 Traffic signals 44 45.25 45.25 49 50 Traffic Signs 2,799 2,845 2,895 2,899 2,909 Bridges 12 12 12 12 12 Parks and recreation: Parks 12 12 13 13 13 Park Acreage 207 207 209 209 218 Undeveloped Park Acreage 40 40 40 40 40 Senior Center 1 1 1 1 1 Museum 1 1 1 1 1 Library 1 1 1 1 1 Golf Course: Municipal golf courses 1 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. Capital Asset Statistics CITY OF LA QUINTA by Function Last Five Fiscal Years 160 TABLE 22 Company Name Policy Number Coverage Limits Term Premium Hartford 72BPEEW0254 Employee Dishonesty,$1,000,000 12/3/09 - 12/3/10 $3,013 Forgery, Computer Fraud Lexington 20412656 All Risk Property Insurance 63,806,700 7/01/09 - 7/01/10 50,433 Including Auto Physical Damage, Terrorism, Boiler & Machinery (Excluding Earthquake) Lloyds 750020221-L-00 Earthquake/Flood 20,000,000 2/07/10 - 2/07/11 125,951 Real & Personal Property Including Contingent Tax Interruption California Comprehensive General $50 Million 7/01/09 - 7/01/10 365,209 Joint Powers Liability Single Limit per Occurrence Insurance Authority California Worker's Compensation 10,000,000 7/01/09 - 7/01/10 106,288 Joint Powers Insurance Authority Alliant PEC0011896301 Pollution Liability 10,000,000 7/01/08 - 7/01/11 19,215 Schedule of Insurance in Force June 30, 2010 CITY OF LA QUINTA 161 THIS PAGE INTENTIONALLY LEFT BLANK 162