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2010-2011 ACFR (July 1 - June 30 Annual Comprehensive Financial Report)LS*00 E000 CERTIFIED PUBLIC ACCOUNTANTS Lance Sall & Lunghard, LLP 203 North Brea Blvd Suite 203 Brea, CA 92821 41185 Golden Gate Circle Suite 103 Murrieta, CA 92562 CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2011 Prepared By FINANCE DEPARTMENT JOHN M. FALCONER Director of Finance THIS PAGE INTENTIONALLY LEFT BLANK CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2011 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letterof Transmittal........................................................................................................................... i List of Principal Officials................................................................................................................ viii OrganizationalChart........................................................................................................................ ix Certificate of Achievement for Excellence in Financial Reporting(GFOA)......................................x FINANCIAL SECTION Independent Auditor's Report.................................................................................................................1 Management's Discussion and Analysis.................................................................................................3 Basic Financial Statements: Government -Wide Financial Statements: Statementof Net Assets.................................................................................................................17 Statementof 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 .......................27 Budgetary Comparison Statement by Department — General Fund..............................................28 Budgetary Comparison Statement — Low and Moderate Income Housing PA No. 2.....................29 Statement of Net Assets — Proprietary Funds................................................................................30 Statement of Revenues, Expenses and Changes in Fund Net Assets — ProprietaryFunds...........................................................................................................................31 Statement of Cash Flows — Proprietary Funds...............................................................................32 Statement of Fiduciary Net Assets - Fiduciary Funds....................................................................34 Notesto Financial Statements..............................................................................................................35 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2011 TABLE OF CONTENTS COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Non -Major Governmental Funds ......... Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non -Major Governmental Funds ..................... Budgetary Comparison Schedules — Special Revenue Funds StateGas Tax........................................................................... Library........................................................................................ Federal Assistance..................................................................... SLEBG....................................................................................... Lighting and Landscaping.......................................................... Quimby....................................................................................... Congestion Management Air Quality Fund ................................ PublicSafety.............................................................................. Arts In Public Places.................................................................. South Coast Air Quality.............................................................. AB939....................................................................................... Proposition1 B Fund................................................................... Justice Assistance Grant............................................................ Housing Authority PA No. 1....................................................... Housing Authority PA No. 2....................................................... Low/Moderate Income Housing PA No. 1................................. Budgetary Comparison Schedules — Capital Projects Funds Capital Improvement........................................................ CivicCenter...................................................................... 2011 Low/Mod Bond ......................................................... Infrastructure..................................................................... Transportation................................................................... Parks and Recreation....................................................... Library Development........................................................ Community Center............................................................ StreetFacility.................................................................... ParkFacility...................................................................... FireFacility....................................................................... 2004 Low/Mod Bond ......................................................... Redevelopment Agency PA No. 1 — Capital Projects....... Redevelopment Agency PA No. 2 — Capital Projects....... Budgetary Comparison Schedules — Debt Service Funds Redevelopment Agency PA No. 1 — Debt Service...... Redevelopment Agency PA No. 2 — Debt Service...... Financing Authority .................................................... Page Number ...............82 .................98 .................99 ...............100 ...............101 ...............102 ...............103 ...............104 ...............105 ...............106 ...............107 ...............108 ...............109 ...............110 ...............111 ...............112 ...............113 ........114 ........115 ........116 ........117 ........118 ........119 ........120 ........121 ........122 ........123 ........124 ........125 ........126 ........127 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2011 TABLE OF CONTENTS Page 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 NetAssets by Component............................................................................................................140 Changesin 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 - RedevelopmentAgency...............................................................................................................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 Directand 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, 2011 TABLE OF CONTENTS Principal Employers ................... Full-time City Employees........... Operating Indicators .................. Capital Asset Statistics .............. Schedule of Insurance in Force. Page Number 11. 0 . B 1 04 78-49:i C:vi.i.1:. T1 vNfI,IcO (7G0) 777 7 ()00 1_:� Q t � I I(::�i.ii:oiz-vi.� 9` 2-) 3 FAX (7G0) 7 7 7-7101. October 18, 2011 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, 2011. 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, 2011. 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 and Verizon. The City of La Quinta also is financially accountable for a legally separate Redevelopment Agency, Financing Authority, and 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 2011, the total workforce for the City of La Quinta was 14600 of which 13,300 were employed for a 7.6% unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 14.4% and the statewide unemployment rate of 12.1 %. During the last ten years, the City of La Quinta has been in a growth phase with net assessed values increasing from $3.77 billion in Fiscal Year 2001-2002 to $10.33 billion (over 274%). 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. 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, Desert Sands Unified School District, 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 231 %. Two Departments that have exceeded the average include and Public Safety (261 %) and Community Services (242%). 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 187%. Sources that exceeded the average include intergovernmental (354%), and taxes (195%). 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. While the City has experienced record setting growth in the past, the recession of Fiscal Year 2008-2011 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 2010-2011 and several large retailers have closed their doors in recent years. The City has experienced a modest increase in sales tax and transient occupancy tax in Fiscal Year 2010-2011 versus Fiscal Year 2009-2010; however property tax collections still continue to decline in Fiscal Year 2011-2012 from the historic highs of Fiscal Year 2006-2007. While economists may state that the recession is over, future revenue decline in Fiscal Year 2011-2012 and beyond may be on the horizon given the possible continued decline in property tax assessment. Since Fiscal Year 2008-2009, the City has tighten its fiscal belt at its mid year reviews and will have to continue to monitor and possibly further reduce expenditures in Fiscal Year 2011- 2012 given the revenue shortfalls that may continue to occur. This is evidenced by the reduction in staff levels from 105 positions budgeted for in Fiscal Year 2008-2009 to 101 positions in Fiscal Year 2009-2010 and a further reduction to 99 positions in Fiscal Year 2010-2011. Long-term financial planning Each year the City embarks on a strategic planning process which begins in the spring with a discussion of the City Council goals and ends with adoption of the budget in June. The documents that are generated in this strategic planning process include a presentation of the financial achievements for the past fiscal year, a five-year cash flow projection for each City, Redevelopment Agency and Financing Authority fund, and a financial management strategies and recommendation report for the coming fiscal year. 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 37,836, 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 2010-2011, the General Fund balance increased by $1,051,000 consisting of revenue increases from the prior year in most categories except for interest income, which decreased because of a historically low interest rate environment and the repayment of the Redevelopment Agency loans. Most of the General Fund balance increase can be attributed to decreases in expenditures certain divisions — Maintenance/Operations — Streets, Police and Planning & Development Administration. The General Fund balance as of June 30, 2011 was $93.1 million of which $23.8 million versus $57.9 million in Fiscal Year 2009-2010 was nonspendable, $19.3 million versus $22.3 million in Fiscal Year 2009-2010 was committed, $1.5 million versus $1.5 in Fiscal Year 2009-2010 was assigned, and $48.4 million versus $10.3 million in Fiscal Year 2009-2010 was unassigned. The unassigned fund balances include a cash flow reserve of 8.25% of the annual budget and a $7.5 million future operational deficit reserve. 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. 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 following outlines the actions by the State to take funds from the City and the La Quinta Redevelopment Agency to funds its activities: 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 has resulted 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. In The latest takeaway involves the City approving a remittance agreement pursuant to Chapter 3 of Part 1.9 of Division 24 of the Health and Safety Code totaling $18.3 million in Fiscal Year 2011-2012 to pay the State of California. The City has provided data to the State Department of Finance to seek to revise the remittance amount to $17.02 million. The purpose of this payment is to allow the La Quinta Redevelopment Agency to continue to operate as an independent entity. In addition, for every year thereafter, the City is obligated to make payments based upon property tax increment collections, which are estimated to be between $3.2 million and $8.4, through Fiscal Year 2030- 2040. Major Initiatives The La Quinta Redevelopment Agency (Agency) has spent a considerable amount of effort to acquire sites in the Village Area of the City 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 that was completed with the rebuilding of Fire Station 32 at its new location at Avenue 52 and Desert Club. 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 starting construction on the Adams Street Bridge which will span the Whitewater Channel and provide an all-weather crossing at this location. The La Quinta Redevelopment Agency has acquired a 525-acre parcel at Avenue 52 and Jefferson Street for the development of two golf courses, a clubhouse, and future hotel resort development. The first golf course was dedicated in January 2005. The second course, permanent clubhouse, and infrastructure have not proceeded as planned and remain in the planning stages due to the slow down in the economy. The Agency continues to seek quality development opportunities for future hotel(s) on the property to generate additional General Fund revenues. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of La Quinta for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2010. This was the fifteenth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. w The preparation of this report would not have been possible without the efficient and dedicated service of the finance department staff. Credit also must be given to the Mayor and City Council for their support in maintaining the highest standards of professionalism in the management of the City of La Quinta's finances. Respectfully submitted, Thomas P. Genovese John M. Falconer City Manager Finance Director vi i City of La Quinta Directory of Officials June 30, 2011 CITY COUNCIL Don Adolph, Mayor Linda Evans, Mayor Pro Tern Kristy Franklin, 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 um 0 0 0 Z o o 0 C N N •C N C N C> d d C d A a aW od`d � � w a`Q¢ U d Ot � C C C O Q N o_ 0 O 0 U '� ,o O ,C C% N N (O: a0 H R Q N d E o C O E C W O LU O O D. ejf u1 d N E N E N U N C U U 'O .td. c VOI O O T o .a� 10 d o �_ d- `� U N O U O fn m d C y U yy EUa d = d U EO ON.d. y ON ME m d $,L ym C� p)T U U` N' CEEGU Q N O O d U U O Q Q d U O �F- Q w d U Eo V UUU) m aU EoE$c Ud Q$ Amy c??,cdiU v='wrn 2` w _ cn O.E o0o mm act y U P m UdU U O U O.H E o � d W o E E Uu O U - ¢ Q N c d `ors `da c 0 HE H S � Z N c m � ccm m dW'y-n rn N E m Q u U N � (� O O V U c Q C_ ON ¢s �m CN aui m'Z `F NvIU •� 16 U yIn f0 •C 6 C W LL 'U tUi d N U O61 V m> N 2.. T LL LL m d co (> 0 c rn c O C O Zm��N`ma2m�Tyma° O 0 c p �m a x >m'E mEuj omwm $0n (Lon. c �2,u `m ama°m�� man Q O Q C rn Uri Q N U Y 2 y c N N c� N N d U 6- N_ V V w E O 0 i` -60 �mcw O'Ecm Ww dW�—epmmd �. avOm$>o�owd c.0cn w`Ncd"�'m Q R Nd N d 'N h 0) a n d O U U d 10¢W o¢mcE cm HP o c d c U d 22 U O U 0 c 'o U N N d d 0 d d d E � Ed I F- r 6 r g d N N d C d N 6 ya ad�av u o o d y o 0 o c a U d 0 o. o f — n= P d¢jFj oQ a� y0 $� y$b.0 EEE U 100 m0 KE A-_2-6 U d N E N O't0(U d d' d d' N IL IX Certificate of Achievement for Excellence in Financial Reporting Presented to City of La Quinta California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2010 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. 6. OF Tltt �,�` UM1Tf0 STATES y� u 0 CA b NR AIiTMN President Executive Director ��' LSE • CERTIFIED PUBLIC ACCOUNTANTS Brandon W. Burrows, 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 Bryan S. Gruber, CPA INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of 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 City of La Quinta, California, as of and for the year ended June 30, 2011, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of City of La Quinta's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the 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, 2011, and the respective changes in financial position, cash flows, where applicable, and the respective budgetary comparison for the General Fund and Low and Moderate Income Housing PA No. 2 Fund, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. We would like to draw the reader's attention to Note 22 — "California Redevelopment Agency Uncertainty". The note provides information on two bills passed, AB1X26 and 27 which dissolve redevelopment agencies effective October 1, 2011 and provide an option to avoid dissolution by making certain defined payments. In accordance with Government Auditing Standards, we have also issued our report dated September 27, 2011, on our consideration of the City of La Quinta's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison informationas listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic Lance, Sall & 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 CEATIFI€0 PUBLIC ACCOUNTANTS To the Honorable Mayor and Members of the City Council City of La Quinta, California financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of La Quinta's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 9,— 04a, C�o /a Brea, California September 27, 2011 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, 2011. 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 $518,411,000 (net assets). Of this amount, $92,090,000 (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 $29,140,000 and the Business -Type total net assets decreased by $444,000 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 $193,371,000, an increase of $32,239,000 in comparison with the prior year. • At the end of the current fiscal year, the unassigned General Fund Balance comprised $48,140,000 of the total $93,082,000 General Fund Balance or 52 percent and 120 percent of total General Fund budgeted expenditures. • The total debt increased by $28,145,000 during the current fiscal year from $230,831,000 to $258,976,000 through the issue of two (2) new bond issues by the La Quinta Redevelopment Agency and Finance Authority. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of La Quinta's basic financial statements. The City of La Quinta's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide financial statements The government -wide financial statements are designed to provide readers with a broad overview of the City of La Quinta's finances, in a manner similar to a private - sector business. 3 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. 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. 0 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 seven (37) 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, and one (1) special revenue fund. These seven (7) funds are considered to be major funds. Data from the other thirty (30) 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. 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. 5 The basic proprietary fund financial statements can be found on the pages listed in the table of contents for Proprietary Funds: Statement of Net Assets, Statement of Revenues, Expenditures and Changes in Net Assets, and Statement of Cash Flows. Fiduciary funds Fiduciary funds, also called agency funds, are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statement because the resources of those funds are not available to support the City of La Quinta's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on the pages listed in the table of contents for Fiduciary Funds: Statement of Fiduciary Assets and Liabilities — Agency Funds. Notes to the financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on the pages listed in the table of contents for Notes to the Basic Financial Statements. Other information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of La Quinta's General Fund and its budget appropriations. Required supplementary information can be found in the table of contents under the section Required Supplemental Information and includes Notes to the Required Supplementary Information and a General Fund Budgetary Comparison Schedule. The combining statements referred to earlier in connection with non -major 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 $518,411,000 at the close of the most recent fiscal year, which is $29,584,000 less than the previous year. The largest portion of the City of La Quinta's net assets, which was 62% this year and 69% 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. 0 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 Current and other assets Governmental activities 2011 2010 $ 224,830,553 $ 207,301,319 Business -type activities 2011 2010 $ (4,676,580) $ (4,606,437) 2011 $ 220,153,973 Total 2010 $ 202,694,882 Capital assets 530,713,522 565,238,042 42,777,148 42,934,025 573,490,670 608,172,067 Total assets 755,544,075 772,539,361 38,100,568 38,327,588 793,644,643 810,866,949 Current liabilities Non -current liabilities 257,562,497 230,007,350 286,097 54,543 257,848,594 230,061,893 Total liabilities 274,704,769 262,559,786 528,468 311,954 275,233,237 262,871,740 Net assets: Invested in capital assets, net of related debt 276,787,752 336,459,272 42,491,051 42,879,482 319,278,803 379,338,754 Restricted 107,042,126 96,332,870 - - 107,042,126 96,332,870 Unrestricted Total net assets $ 480,839,306 $ 509,979,575 $ 37,572,100 $ 38,015,634 $ 518,411,406 $ 547,995,209 An additional portion of the City of La Quinta's net assets (21 percent versus 18 percent in the prior year) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets - $92,090,000 (18 percent) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of La Quinta is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental activities; however, the business type unrestricted net assets had a deficit of $4,919,000. Governmental activities Governmental activities net assets decreased by $29,140,000 accounting for a 5 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 Governmental Business -type activities activities Total Revenues: 2n11 9n1n Chaney 2n11 2n1n Chaney 7n11 2nin Program revenues: Charaes for services $ 2,463,488 $ 2.566.525 $ (103,037) $ 3,756,615 $ 3,584,996 $ 171,619 $ 6,220,103 $ 6,151,521 Operating grants and contributions 13,152,942 15,363,650 (2,210,708) 13,152,942 15,363,650 Capital grants and contributions 3,157,828 5,974,311 (2,816,483) 3,157,828 5,974,311 General revenues: Property taxes 5,942,353 6,278470 (336,117) 5,942,353 6,278,470 Othertaxes 46,961, 32 48,932:750 (1,970,818) 46,961,932 48,932,750 Investment income 4,693,974 5,362,684 (668,710) 2,125 1,252 873 4,695,099 5,363,936 Motor vehicle in lieu 3,515,395 3,714,437 (199,042) 3,515,395 3,714,437 capital assets 2,330 (2,330) 2,330 Miscellaneous 3,211,584 477,936 2,733,648 3,211,584 477,936 Total revenues 83,099,496 88,673,093 (5,573,597) 3,758,740 3,586,248 172,492 86,858,236 92,259,341 Expenses: General government 11,283,358 34,287,068 (23,003,710) 11,283,358 34,287,068 Public safety 21,070,458 21,274,519 (204,061) 21,070,458 21,274,519 Planning and development 18,715,283 15,923,380 2,791,903 18,715,283 15,923,380 Community services 4,735,964 5,173,326 (437,362) 4,735,964 5,173,326 Public works 10,757,279 12,326,726 (1,569,447) 10,757,279 12,326,726 Capital contributions 31,324,064 31,324,064 31,324,064 Interest on long-term debt 14,353,359 15,330,603 (977,244) 14,353,359 15,330,603 Golf course 4,202,274 4,169,768 32,506 4,202,274 4,169,768 Total expenses 112,239,765 104,315,622 7,924,143 4,202,274 4,169,768 32,506 116,442,039 108,485,390 Increase in net assets before transfers and restatements (29,140,269) (15,642,529) (13,497,740) (443,534) (583,520) 139,986 (29,583,803) (16,226,049) Transfers Contributions 'Restatements - ncrease in net assets Net assets - et assets - • Revenues decreased by $5,401,000 with the largest category decreases of $2,816,000 in capital grants and operating grants and contributions of $2,211,000. The major reason for the decrease in the capital grant contribution account is the decline in infrastructure developer dedications. The overall decrease in operating grants and contributions account can be attributed to three major reasons: 1) in Fiscal Year 2009- 2010 the City received major funding from the Riverside Transportation Commission (RCTC) for the Phase 3 Highway 111 improvements, 2) in Fiscal Year 2009-2010 the City received major funding from the County of Riverside for the Fire Station 32 project; and, 3) the City received more funding in Fiscal Year 2010-2011 from the County of Riverside for Community Development Block Grant (CDBG) for the Village improvement project, Proposition 1 B funding for road improvements to Washington Street, and a one time developer funding payment from Lowes Development toward the SilverRock project. • Expenses increased by $7,957,000 with the two largest category changes being a decrease in the General Government category of $23,004,000 and an increase in the Capital contributions category of $31,324,000. The decrease 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 in Fiscal Year 2009-2010 which was less than the $4.86 million payment in Fiscal Year 2010-2011. The increase in the Capital 0 Contributions costs is primarily the result of the dedication of the Wolff Waters Place Apartments project to the Coachella Valley Housing Coalition ($30,148,000). • There were no contributions in assets from the governmental activities to the business -type activities. Expenses and Program Revenues - Government Activities ❑ Expenses 35,000,000 ❑ Program revenues 31, 324,064 30,000,000 25,000,000 21,070,458 20,000,000 18,715,283 15,000,000 14,353,359 11,283, 358 10, 757,279 10,000,000 8,221,047 4,047,874 6,112,633 4 5,000,000 ,735,964 262,817 129,887 0 0 General Public safety Planning and Community Public works Capital Interest expense government development services conributions Expenses and Program Revenues- Business -type Activities ❑ Expenses 4,300,000 ❑ Program revenues 4,202,274 4,200,000 4,100,000 4,000,000 3,900,000 3,800,000 3,756,615 3,700,000 3,600,000 3,500,000 Golf 9 Business -type activities This was the sixth full year of operations for the SilverRock Golf fund since the golf course began early operation in 2005. Net assets decreased by $(444,000) from the effects of an operating loss. Charges for services primarily consisted of green fees which totaled $3,759,000, and was $172,000 more than the previous year, with golf course expenses of $4,202,000, which was $32,000 more than the previous year. During the year the golf course entered into a three year capital lease to replace golf carts. During Fiscal Year 2010-2011, an additional advance of $113,000 was required for the golf course operations ($88,600 in principal and $24,400 in interest). This brings the total outstanding advance due to the General Fund from the inception of the Golf Course opening to $5,407,000. 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 $193.37 million as follows: Fund balances Category General Fund Percent All Other Funds Percent Total Funds Percent Nonspendable $23,726,331 25% $6,667,365 7% $30,393,696 16% Restricted 169,631 0% 106,872,085 107% 107,042,126 55% Committed 19,276,654 21 % 0 0% 19,276,654 10% Assigned 1,768,494 2% 0 0% 1,768,494 1% Unassigned 48,140,444 52% 1 (13,250,398) -12% 1 34,890,046 17% $93,081,554 $100,289,052 $193,371,016 Total Governmental fund balances ended the year totaling $193,371,000, an increase of $32,239,000 in comparison with the prior years ending balance of $161,132,000. Of this amount $30,394,000 or 16% constitutes nonspendable reserves, which means that these reserves must be maintained intact, $107,042,000 or 55% are restricted fund 10 balances which are the result of external limitations on spending, $19,277,000 or 10% are committed fund balances which has resulted in internally -imposed limitations placed upon the funds by the Governing Board responsible for adopting the fund budget, assigned reserves of $1,768,000 or 1% consist of carryover appropriations which were budgeted for in Fiscal Year 2010-2011 but were unspent and will be budgeted again in the next budget year. The remainder of fund balance of $34,890,000 or 18% 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 $48,140,000, while total fund balance reached $93,082,000. 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 232 percent of the total budgeted expenditures. The City of La Quinta's general fund balance increased by $1,051,000 in Fiscal Year 2010-2011. Key factors for this increase are as follows: Actual expenditures were $3,213,000 less than the final budget. Divisions that were under budget for the year were Street Maintenance ($1,001,000), Police ($703,000), Planning & Development Administration ($200,000), and Capital outlay ($181,000). In addition, actual transfers out were $298,000 less than budgeted. Of this amount, $151,000 was not spent on the "A" Street extension project. This construction project funding will be carried over for completion in Fiscal Year 2011-2012. Actual revenue collections were $484,000 more than the final adjusted budget. Overall, taxes were $478,000 more than budgeted for in Fiscal Year 2010-2011, and the actual taxes collected in Fiscal Year 2010-2011 ($20.32 million) was $590,000 more the prior year tax actual collections of $19.73 million. Actual transient occupancy tax collections in Fiscal Year 2010-2011 were $4,725,000 or $550,000 more than prior year collections. Actual sales tax collections for Fiscal Year 2010-2011 were $7,324,000 or $397,000 more than the $6,927,000 collected in Fiscal Year 2009-2010. Actual property tax collections were $336,000 less than the prior year with $142,000 of the decrease from declining property tax values and $194,000 from a decrease in statutory property taxes. Low and Moderate Income Housing PA No. 2 Fund The fund is used to account for the 20% property tax increment set aside for low and moderate income housing in the La Quinta Redevelopment Agency Project Area No. 2. During Fiscal Year 2010-2011, the fund balance increased by $1.1 million to end the year at $22.9 million. The Fund received less property tax revenues ($4.8 million) in Fiscal Year 2010-2011 versus the prior year ($5.2 million) due to falling property values. 11 Capital Improvement Fund The fund is primarily used to record the expenditure of funds for capital projects. The fund had eighty one (81) active Capital Improvement Projects budgeted for during Fiscal Year 2010-2011. The three most active projects during the year were the Village land acquisition ($8,200,000), well site mitigation payment to the Coachella Valley Water District ($1,267,000) and the Cove Fire Station Number 32 relocation ($1,110,000). Other major projects budgeted in the future include the Adams Street Bridge Improvements, Washington Street Apartments rehabilitation project, and the relocation of the Coachella canal. 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 $7.01 million advance from the General Fund is outstanding at the end of Fiscal Year 2010-2011. 2011 Low & Moderate Income Bond Fund The fund is primarily used to account for the construction of low and moderate income housing projects in the La Quinta Redevelopment Agency area from the proceeds of this bond issue. 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 increased by $13,933,000 in Fiscal Year 2010-2011 to end the year at a $745,000. This is primarily due to a $15,039,000 transfer from the Redevelopment Agency PA No. 1 Capital Projects Fund which was used to repay a $22 million advance from the General Fund and to pay a $4.86 million Supplemental Educational Revenue Augmentation Fund ("SERAF") payment. The Fund received less property tax revenues ($35.2 million) in Fiscal Year 2010-2011 versus the prior year ($38.5 million) due to falling property values. The Project Area 2 Debt Service Fund Balance increased by $5.48 million to leave a surplus of $560,200 at year end. This is primarily due to a $3.7 million transfer from the Redevelopment Agency PA No. 2 Capital Projects Fund. The Fund received less property tax revenues ($19.3 million) in Fiscal Year 2010-2011 than in the prior year ($20.8 million) due to falling property values. 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. 12 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 2010-2011, limited charges for services were made to the General Fund from the Equipment Replacement Fund and the Information Technology Funds, and no charges were made to the Park Equipment and Facility Fund. General Fund Budgetary Highlights During the year there was a $6,006,000 increase in appropriations and transfers out between the original ($34,157,000) and final amended budget ($40,163,000). Following are the main components of the changes: • During the mid -year review, the General Fund budget for various divisions was reduced by $550,000 based upon an estimated decrease of revenues forecasted for Fiscal Year 2010-2011; • The FY 2010-2011 budget included $1,777,000 in carryover appropriations into from FY 2009-2010; • The Fiscal Year 2010-2011 budget included an appropriation of $2,990,000 to pay- off a portion of the outstanding principal on the Civic Center developer impact fee advance -land, • The Fiscal Year included an additional $1,474,000 in appropriations for Capital Projects funded by the General Fund during the year. 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. 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, 2011, amounts to $573,491,000 (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. 13 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) Governmental Business -type activities activities Total 2011 2010 2011 2010 2011 2010 Land buildings an improvements 52,688,147 44,736,121 5,129,267 5,363,822 57,817,414 50,099,943 Equipment and furniture Vehicles o ware - - - - - Infrastructure ons ruc ion in progress oa Major capital asset events during the current fiscal year included the following: Governmental activities • Recording infrastructure improvements, including developer dedications of $3,439,000, to street improvements, street right of way, street sidewalks and curbs and gutters, traffic signals, and street medians; • Completed the Wolff Waters Place Apartments for $30,148,000, which were dedicated to the Coachella Valley Housing Coalition; • Completed the Laguna de la Paz sound wall for $980,000, which was dedicated to the homeowners association; • Completed the construction of the Cove Fire Station 32 ($5,000,000) and the Phase 1 of the Maintenance Yard ($2,864,000); and, • Purchased Village properties for $8,200,000. Business -type activities • The Golf Course entered into a three year lease for golf cart equipment for $332,500 during Fiscal Year 2010-2011. 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 $258,976,000. $138,480,000 of this debt amount represents bonds secured solely by specified revenue sources (i.e., tax allocation bonds); while, $114,340,000 of the debt represents revenue bonds that will be paid from pledged tax 14 increment property tax housing funds. In addition, $286,000 in capital equipment leases is outstanding in connection with SilverRock Golf Course and $78,000 in a copier lease is outstanding in the governmental funds. City of La Quinta Outstanding Debt Debt type: Capital leases Governmental Business -type activities activities 2011 2010 2011 2010 Total 2011 2010 Uornpensated absences Post retirement healthcare liability 337,311 225,979 337,311 225,979 Developer agreement , Pass through agreement 1,255,242 2,072,965 1,255,242 2,072,965 Due to government agencies 1,729,383 2,069,482 1,729,383 2,069,482 Loans payable 1,503,433 1,530,958 1,503,433 1,530,958 lax allocation on s , Revenue bonds , ota The total outstanding debt increased by $28,145,000 during Fiscal Year 2010-2011 with the issue of $6,000,000 in tax allocation bonds and $28,850,000 in revenue bonds. 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 2011-2012: • The City of La Quinta had a 7.6 versus 7.4 percent last year unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 14.4 versus 14.5 percent last year and the statewide unemployment rate of 12.1 versus 12.2 percent last year. • During the last ten years, the City of La Quinta has been in a growth phase with assessed values increasing from $3.77 billion in Fiscal Year 2001-2002 to $10.33 billion or over 274 percent. It is important to note however, that from Fiscal Year 2009-2010 to Fiscal Year 2010-2011 assessed values decreased by $1.53 billion or 12.90%. • During the current fiscal year, the general fund net gain was $1,051,000 and $1,748,000 of General fund balance has been assigned for carry over appropriations. • The State of California Fiscal Year 2010-2011 budget included a State-wide diversion of tax increment funding from Redevelopment Agencies. The La Quinta Redevelopment Agency portion of the Fiscal Year 2010-2011 takeaway was $4,851,000 and in Fiscal Year 2011-2012 $18,315,000 has been appropriated as an alternative voluntary redevelopment program remittance payment. 15 • The Fiscal Year 2011-2012 General Fund advance toward golf course operations has been budgeted at $(8,500). • The City of La Quinta adopted a balanced general fund budget for Fiscal Year 2011- 2012, after applying $3,112,000 in unassigned reserves. Requests for Information This financial report is designed to provide a general overview of the City of La Quinta's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of La Quinta, John Falconer, Finance Director, P.O. Box 1504, La Quinta, CA, 92247 or by telephone at 760-777- 7150. 16 CITY OF LA QUINTA STATEMENT OF NET ASSETS JUNE 30, 2011 Assets: Cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Internal balances Prepaid costs Deposits Due from other governments Inventories Deferred charges Land held for resale Restricted assets: Cash with fiscal agent Net pension asset Capital assets not being depreciated Capital assets, net of depreciation Total Assets Liabilities: Accounts payable Accrued liabilities Accrued interest Unearned revenue Deposits payable Due to other governments Noncurrent liabilities: Due within one year Due in more than one year Total Liabilities Net Assets: Invested in capital assets, net of related debt Restricted for: Planning and development projects Public safety Community services Public works Capital projects Debt service Unrestricted Total Net Assets Primary Government Governmental Business -Type Activities Activities Total $ 144,134,908 $ 367,665 $ 144,502,573 336,512 31,517 368,029 2,010,068 - 2,010,068 6,953,592 - 6,953,592 115,769 233 116,002 5,407,327 (5,407,327) - 33,823 1,865 35,688 15,967 250,000 265,967 6,510,463 - 6,510,463 - 79,467 79,467 4,441,840 - 4,441,840 8,320,000 - 8,320,000 45,298,094 - 45,298,094 1,252,190 - 1,252,190 364,991,161 36,840,832 401,831,993 165,722,361 5,936,316 171,658,677 755,544,075 38,100,568 793,644,643 5,587,805 165,977 5,753,782 556,579 2,162 558,741 3,882,145 - 3,882,145 1,106,744 1,232 1,107,976 5,504,622 73,000 5,577,622 504,377 - 504,377 8,050,994 117,013 8,168,007 249,511,503 169,084 249,680,587 274,704,769 528,468 275,233,237 276,787,752 42,491,051 319,278,803 34,018,930 - 34,018,930 96,364 - 96,364 10,248,314 - 10,248,314 396,355 - 396,355 58,111,106 - 58,111,106 4,171,057 - 4,171,057 97,009,428 (4,918,951) 92,090,477 $ 480,839,306 $ 37,572,100 $ 518,411,406 See Notes to Financial Statements 17 CITY OF LA QUINTA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2011 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 11,283,358 $ 47,696 $ 82,191 $ - Public safety 21,070,458 1,044,399 7,158,785 17,863 Planning and development 18,715,283 74,471 3,874,309 99,094 Community services 4,735,964 210,151 52,666 - Public works 10,757,279 1,086,771 1,984,991 3,040,871 Capital contributions to other agencies 31,324,064 - - - Interest on long-term debt 14,353,359 - - - Total Governmental Activities 112,239,765 2,463,488 13,152,942 3,157,828 Business -Type Activities Golf Course 4,202,274 3,756,615 - - Total Business -Type Activities 4,202,274 3,756,615 - - Total Primary Government $ 116,442,039 $ 6,220,103 $ 13,152,942 $ 3,157,828 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 Total General Revenues Change in Net Assets Net Assets at Beginning of Year Net Assets at End of Year See Notes to Financial Statements 18 Net (Expenses) Revenues and Changes in Net Assets Primary Government Governmental Business -Type Activities Activities Total $ (11,153,471) $ - $ (11,153,471) (12,849,411) - (12,849,411) (14,667,409) - (14,667,409) (4,473,147) - (4,473,147) (4,644,646) - (4,644,646) (31,324,064) - (31,324,064) (14,353,359) - (14,353,359) (93,465,507) - (93,465,507 - (445,659) (445,659) - (445,659) (445,659) (93,465,507) (445,659) (93,911,166) 5,942,353 - 5,942,353 32,569,795 - 32,569,795 4,737,968 - 4,737,968 7,323,835 - 7,323,835 1,607,829 - 1,607,829 285,270 - 285,270 437,235 - 437,235 3,515,395 - 3,515,395 4,693,974 2,125 4,696,099 3,211,584 - 3,211,584 64,325,238 2,125 64,327,363 (29,140,269) (443,534) (29,583,803) 509,979,575 38,015,634 547,995,209 $ 480,839,306 $ 37,572,100 $ 518,411,406 See Notes to Financial Statements 19 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTALFUNDS JUNE 30, 2011 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Land held for resale Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Land held for resale 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: Emergency reserve Post retirement health benefits Assigned to: Continuing appropriations Unassigned Total Fund Balances Total Liabilities and Fund Balances See Notes to Financial Statements Special Revenue Funds Capital Projects Funds Low/Moderate Income Housing Capital General PA No. 2 Improvement Civic Center $ 76,033,303 $ 22,939,847 $ 2,852,560 $ - 83,771 - 1,417 - 1,969,322 1,278 - - - 641,486 - - 70,084 15,926 - - 23,260 - - - 9,967 - - - 4,976,509 - 353,413 - 256,852 24,760 - - 15,373,104 - - - 8,320,000 - - - $ 107,116,172 $ 23,623,297 $ 3,207,390 $ - $ 4,232,310 $ 40,465 $ 1,044,545 $ - 550,462 - - - 4,484,223 641,486 - - 74,363 - 413,850 - 4,663,624 - 594,135 - 29,636 - - - - - - 7,012,033 14,034,618 681,951 2,052,530 7,012,033 23,260 - - - 8,320,000 - - - 15,373,104 - - - 9,967 - - - 22,941,346 - - - - 1,154,860 - 169,631 - - - 18,018,595 - - - 1,258,059 - - - 1,768,494 - - - 48,140,444 - - (7,012,033) 93,081,554 22,941,346 1,154,860 (7,012,033) $ 107,116,172 $ 23,623,297 $ 3,207,390 $ - 20 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2011 (Continued) Capital Projects Funds Debt Service Funds Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Land held for resale Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Land held for resale 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: Emergency reserve Post retirement health benefits Assigned to: Continuing appropriations Unassigned Total Fund Balances Total Liabilities and Fund Balances See Notes to Financial Statements 2011 Low/Mod Redevelopment Redevelopment Bond Agency PA No. 1 Agency PA No. 2 $ - $ 1,132,207 $ 15,101 Other Governmental Funds $ 37,931,285 3,500 - - 247,824 - 27,485 5,112 6,871 - - - 6,312,106 - 379 - 27,066 - - - 10,563 - - - 6,000 - - - 1,180,541 - - - 641,254 - - - 4,569,188 25,535,470 - 600,000 19,162,624 $ 25,538,970 $ 1,160,071 $ 620,213 $ 70,095,322 $ 190,599 2,263 - - 4,230,492 - - - 618,531 - - - 246,863 - 414,728 60,013 - 3,500 - - 919,366 - - - 7,522,932 3,500 414,728 60,013 13,731,046 - - - 10,563 - - - 2,081,614 - - 4,569,188 - - - 6,000 - - - 11,077,584 - - - 96,364 - - - 10,248,314 - - - 396,355 25,535,470 - - 31,420,776 - 745,343 560,200 2,695,883 - - - (6,238,365) 25,535,470 745,343 560,200 56,364,276 $ 25,538,970 $ 1,160,071 $ 620,213 $ 70,095,322 21 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2011 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Land held for resale Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Fund Balances: Nonspendable: Prepaid costs Land held for resale 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: Emergency reserve Post retirement health benefits Assigned to: Continuing appropriations Unassigned Total Fund Balances Total Liabilities and Fund Balances Total Governmental Funds $ 140,904,303 336,512 2,010,068 6,953,592 113,455 33,823 15,967 6,510,463 922,866 19,942,292 8,320,000 45,298,094 $ 231,361,435 $ 5,507,919 552,725 9,356,201 1,106, 744 5,504,622 504,377 922,866 14,534,965 37,990,419 33,823 8,320,000 2,081,614 19,942,292 15,967 34,018,930 96,364 10,248,314 396,355 58,111,106 4,171, 057 18,018,595 1,258,059 1,768,494 34,890,046 193,371,016 $ 231,361,435 See Notes to Financial Statements 22 CITY OF LA QUINTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30, 2011 Fund balances of governmental funds $ 193,371,016 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 474,383,418 Other capital assets 129,513,919 Accumulated depreciation (90,211,797) Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable (252,820,000) Unamortized bond premium/discount 1,127,046 Unamortized cost of issuance 4,441,840 Other long-term liabilities (4,566,311) Compensated absences (956,506) 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. (337,311) 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 . 1,252,190 Accrued interest payable for the current portion of interest due on Bonds has not been reported in the governmental funds. (3,882,145) 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. 9,356,201 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. 20,167,746 Net assets of governmental activities $ 480,839,306 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, 2011 Special Revenue Funds Capital Projects Funds 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: Capital Improvement Civic Center $ 20,321,573 $ 4,837,259 $ - $ - 547,071 - - - 13,034,944 - 1,021,859 - 494,611 - - - 2,998,856 143,643 - - 327,751 - - - - - 159,298 82,191 162,400 8,719 - - 37,887,206 4,989,621 1,181,157 82,191 Low/Moderate Income Housing General PA No. 2 General government 5,215,632 - - 203,798 Public safety 19,826,372 - - - Planning and development 1,543,188 1,002,756 - - Community services 2,455,551 - - - Public works 2,839,580 - - - Capital outlay 32,927 - 21,180,979 - Debt service: Principal retirement 36,331 - 302,895 - Interest and fiscal charges - - 23,870 46,712 Pass -through agreement payments - - - - Total Expenditures 31,949,581 1,002,756 21,507,744 250,510 Excess (Deficiency) of Revenues Over (Under) Expenditures 5,937,625 3,986,865 (20,326,587) (168,319) Other Financing Sources (Uses): Transfers in 115,136 - 21,481,447 2,990,000 Transfers out (5,001,325) (2,870,839) - - Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) (4,886,189) (2,870,839) 21,481,447 2,990,000 Net Change in Fund Balances 1,051,436 1,116,026 1,154,860 2,821,681 Fund Balances, Beginning of Year 92,030,118 21,825,320 - (9,833,714) Fund Balances, End of Year $ 93,081,554 $ 22,941,346 $ 1,154,860 $ (7,012,033) 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, 2011 (Continued) Capital Projects Funds Debt Service Funds Other 2011 Low/Mod Redevelopment Redevelopment Governmental Bond Agency PA No. 1 Agency PA No. 2 Funds Revenues: Taxes $ - $ 35,192,471 $ 19,349,036 $ 8,798,118 Assessments - - - 956,048 Licenses and permits - - - - Intergovernmental - - - 4,948,840 Charges for services - - - 6,807 Use of money and property 12,065 12,802 47,887 1,455,479 Fines and forfeitures - - - - Developer participation - - - 704,316 Miscellaneous - - - 148,644 Total Revenues 12,065 35,205,273 19,396,923 17,018,252 Expenditures: Current: General government - 5,241,338 215,555 9,196 Public safety - - - - Planning and development - - - 5,914,476 Community services - - - 1,692,207 Public works - - - 1,968,480 Capital outlay - - - 73,869 Debt service: Principal retirement - 4,147,722 325,000 2,199,313 Interest and fiscal charges - 8,088,102 1,387,803 4,664,511 Pass -through agreement payments - 19,309,866 16,297,223 - Total Expenditures - 36,787,028 18,225,581 16,522,052 Excess (Deficiency) of Revenues Over (Under) Expenditures 12,065 (1,581,755) 1,171,342 496,200 Other Financing Sources (Uses): Transfers in - 19,478,126 6,255,653 11,336,672 Transfers out (2,694,381) (3,963,138) (1,951,993) (45,170,803) Long-term debt issued 28,850,000 - - 6,000,000 Proceeds from sale of capital asset - - - 8,683,850 Bond discount (308,839) - - (86,207) Bond issuance costs (323,375) - - (108,500) Total Other Financing Sources (Uses) 25,523,405 15,514,988 4,303,660 (19,344,988) Net Change in Fund Balances 25,535,470 13,933,233 5,475,002 (18,848,788) Fund Balances, Beginning of Year - (13,187,890) (4,914,802) 75,213,064 Fund Balances, End of Year $ 25,535,470 $ 745,343 $ 560,200 $ 56,364,276 See Notes to Financial Statements 25 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 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 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 Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Total Governmental Funds $ 88,498,457 956,048 547,071 19,005,643 501,418 4,670,732 327,751 945,805 319,763 115,772,688 10,885,519 19,826,372 8,460,420 4,147,758 4,808,060 21,287,775 7,011,261 14,210,998 35,607,089 126,245,252 (10,472,564) 61,657,034 (61,652,479) 34,850,000 8,683,850 (395,046) (431,875) 42,711,484 32,238,920 161,132,096 $ 193,371,016 See Notes to Financial Statements 26 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, 2011 Net change in fund balances - total governmental funds $ 32,238,920 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: Contributions to other governments (31,324,064) Capital contributions 3,477,897 Loss on disposal of capital assets (18,722,513) Capital outlay 18,303,985 Depreciation expense (7,731,851) The issuance of long-term liabilities provides current financial resources in the governmental funds, but issuing debt increases the long-term liabilities in the Statement of Net Assets. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. New debt issued (34,850,000) Repayment of principal 7,011,261 Amortization of issuance costs, premiums and discounts 603,712 Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 80,848 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. 37,672 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. (111,332) 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. (86,573) 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. 1,103,609 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. 828,160 Change in net assets of governmental activities $ (29,140,269) See Notes to Financial Statements 27 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT BY DEPARTMENT GENERALFUND YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Legislative City Manager Development Services Management Services City Clerk Fiscal Services Central Services Public safety Police Building & Safety Admin. Building Code Compliance Animal Control Civic Center Bldg Fire Emergency Services Planning and development Administration Current Planning Community services Community Services Admin Senior Center Parks & Recreation Park Maintenance Public works Administration Development Services Maintenance/Operations - Street Maintenance/Operations - Lighting Construction Management Capital outlay Debt service: Principal retirement Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $92,030,118 $92,030,118 $92,030,118 $ - 19,524,800 19,843,241 20,321,573 478,332 569,600 519,600 547,071 27,471 8,953,088 13,046,201 13,034,944 (11,257) 490,200 491,900 494,611 2,711 4,045,950 2,955,748 2,998,856 43,108 326,100 326,100 327,751 1,651 89,000 57,241 162,400 105,159 158,800 278,341 115,136 (163,205) 126,187,656 129,548,490 130,032,460 483,970 939,468 662,048 651,060 10,988 320,350 266,717 289,712 (22,995) 1,241,029 1,261,329 1,077,975 183,354 1,192,741 1,949,506 1,806,542 142,964 563,097 525,954 480,096 45,858 802,931 740,556 732,250 8,306 274,300 264,150 177,997 86,153 12,712,089 12,733,306 12,030,307 702,999 277,818 156,311 275,158 (118,847) 806,676 810,976 815,230 (4,254) 940,750 945,750 911,462 34,288 368,990 370,790 356,727 14,063 524,417 485,517 416,980 68,537 4,911,481 4,765,448 4,907,844 (142,396) 155,950 156,550 112,664 43,886 531,300 1,320,130 1,119,878 200,252 548,300 554,700 423,310 131,390 980,935 1,019,572 891,745 127,827 377,425 376,725 352,552 24,173 192,925 193,525 194,087 (562) 932,568 1,137,975 1,017,167 120,808 475,100 504,471 477,731 26,740 669,135 672,335 647,772 24,563 689,041 1,107,747 107,084 1,000,663 755,130 775,877 642,180 133,697 1,147,690 891,611 964,813 (73,202) 40,300 214,286 32,927 181,359 - - 36,331 (36,331) 785,454 5,299,564 5,001,325 298,239 34,157,390 40,163,426 36,950,906 3,212,520 $92,030,266 $89,385,064 $93,081,554 $ 3,696,490 See Notes to Financial Statements 28 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT LOW/MODERATE INCOME HOUSING PA NO. 2 YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Intergovernmental Use of money and property Miscellaneous Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Debt service: Principal retirement Interest and fiscal charges Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 21,825,320 $ 21,825,320 Actual Amounts $ 21,825,320 Variance with Final Budget Positive (Negative) 5,573,400 4,800,480 4,837,259 36,779 498,200 - - - 220,200 54,200 143,643 89,443 4,200 8,719 8,719 - 28,121,320 26,688,719 26,814,941 126,222 1,865,134 2,022,434 1,002,756 1,019,678 39,313 39,313 - 39,313 200,443 200,443 - 200,443 1,951,993 12,785,865 2,870,839 9,915,026 4,056,883 15,048,055 3,873,595 11,174,460 $ 24,064,437 $11,640,664 $ 22,941,346 $ 11,300,682 See Notes to Financial Statements 29 CITY OF LA QUINTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2011 Business -Type Activities - Governmental Enterprise Activities - Funds Internal Golf Course Service Funds Assets: Current: Cash and investments Receivables: Accounts Accrued interest Prepaid costs Deposits Inventories Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Assets: Liabilities: Current: Accounts payable Accrued liabilities Unearned revenues Deposits payable Capital leases payable Total Current Liabilities Noncurrent: Advances from other funds Accrued compensated absences Bonds, notes, and capital leases Total Noncurrent Liabilities Total Liabilities Net Assets: Invested in capital assets, net of related debt Unrestricted Total Net Assets Total Liabilities and Net Assets $ 367,665 $ 3,230,605 31,517 - 233 2,314 1,865 - 250,000 - 79,467 - 730,747 3,232,919 42,777,148 17,027,982 42,777,148 17,027,982 $ 43,507,895 $ 20,260,901 $ 165,977 $ 79,886 2,162 3,854 1,232 - 73,000 - 117,013 - 359,384 83,740 5,407, 327 - - 9,415 169,084 - 5,576,411 9,415 5,935,795 93,155 42,491,051 17,027,982 (4,918,951) 3,139,764 37,572,100 20,167,746 $ 43,507,895 $ 20,260,901 See Notes to Financial Statements 30 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2011 Operating Revenues: Sales and service charges Total Operating Revenues Operating Expenses: Salaries and benefits Fuel and oil Maintenance and parts Contract services Software and supplies Depreciation expense Other Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Interest expense Total Nonoperating Revenues(Expenses) Income (Loss) Before Contributions and Transfers Capital contributions Transfers out Changes in Net Assets Net Assets: Beginning of Year End of Fiscal Year Business -Type Activities - Enterprise Golf Course Governmental Activities - Internal Service Funds $ 3,756,615 $ 30,071 3,756,615 30,071 60,647 110,790 - 102,113 - 141,828 3,547,431 111,653 - 135,315 489,403 792,209 64,923 16,317 4,162,404 1,410,225 (405,789) (1,380,154) 2,125 (39,870) 23,242 (37,745) 23,242 (443,534) (1,356,912) 2,189,627 - (4,555) (443,534) 828,160 38, 015, 634 19, 339, 586 $ 37,572,100 $ 20,167,746 See Notes to Financial Statements 31 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2011 Cash Flows from Operating Activities: Cash received from customers and users Cash received from/(paid to) interfund service provided Cash paid to suppliers for goods and services Cash paid to employees for services Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers out Advance from other funds Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Business -Type Activities - Governmental Enterprise Activities - Funds Internal Golf Course $ 3,733,702 $ 30,071 (1,390) - (3,580,198) (531,391) (60,379) (109,798) 91,735 (611,118) - (4,555) 112,755 - 112,755 (4,555) (332,526) (74,608) 231,554 - (39,870) - (140,842) (74,608) 2,094 23,928 2,094 23,928 65,742 (666,353) 301,923 3,896,958 $ 367,665 $ 3,230,605 See Notes to Financial Statements 32 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2011 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in deposits payable Increase (decrease) in unearned revenue Increase (decrease) in compensated absences Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Capital assets contributed by other funds Business -Type Activities - Enterprise Funds Golf Course Governmental Activities - Internal Service Funds $ (405,789) $ (1,380,154) 489,403 792,209 (19,813) - 42,974 - - 240 (24,208) (24,855) 268 450 12,000 - (3,100) - - 992 497,524 769,036 $ 91,735 $ (611,118) $ 2,189,627 See Notes to Financial Statements 33 CITY OF LA QUINTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2011 Assets: Pooled cash and investments Receivables: Taxes Accrued interest Total Assets Liabilities: Deposits payable Total Liabilities Agency Funds $ 521,192 13,363 354 $ 534,909 $ 534,909 $ 534,909 See Notes to Financial Statements 34 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1: Summary of Significant Accounting Policies a. Reporting Entity The City of La Quinta (City) was incorporated May 1, 1982, under the general laws of the State of California. In November 1996, the City became a charter City. The City operates under the Council — Manager form of government. The City provides many community services including public safety, highway and street maintenance, health and social services, cultural and leisure services, public improvements, planning and zoning services, and community development services. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. As required by generally accepted accounting principles, these financial statements present the government and its component units, which are entities for which the government is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization's governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. All of the City's component units are considered to be blended component units. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are reported with the interfund data of the primary government. The following organizations are considered to be component units of the City: 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. 35 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Summary of Significant Accounting Policies (Continued) City of La Quinta Public Financing Authority The La Quinta Public Financing Authority (Financing Authority) was established pursuant to a Joint Exercise of Powers Agreement dated November 19, 1991, between the City and the Agency. The purpose of the Financing Authority is to provide financing necessary for the construction of various public improvements through the issuance of debt. Although the Financing Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Financing Authority. Separate financial statements of the Financing Authority are not prepared. City of La Quinta Housing Authority The La Quinta Housing Authority (Housing Authority) was established pursuant to California Housing Authorities Law (Health and Safety Code Sections 34200 et seq.) on September 15, 2009. The purpose of the Housing Authority is to provide safe and sanitary housing opportunities for La Quinta residents. Although the Housing Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Housing Authority. Separate financial statements of the Housing Authority are not prepared. b. Government -Wide and Fund Financial Statements The basic financial statements of the City are composed of the following: Government -wide financial statements Fund financial statements Notes to the financial statements 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. 36 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 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. 37 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 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. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets 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. 38 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 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. 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. 39 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Summary of Significant Accounting Policies (Continued) Low/Moderate Income Housing — Project Area No. 2 Fund — This fund is used to account for the required 20% set aside of property tax increments that is legally restricted for increasing and improving housing for low and moderate income households. Capital Improvement Fund — This capital projects fund is used to account for the planning, design and construction of various capital projects throughout the City and the 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. 2011 Low/Mod Bond Fund — To account for the 2011 Tax Allocation bond proceeds that will be used to benefit low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and Project Area No. 2. 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. 40 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 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. 41 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 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 government -wide financial statements and in the fund financial statements of the proprietary funds. Depreciation is charged as an expense against operations and accumulated depreciations is reported on the respective balance sheet. The following schedule summarizes capital asset useful lives: Buildings and improvements 10-30 years Equipment and furniture 3-20 years Vehicles 5-10 years Infrastructure 10-50 years Software 5-10 years Compensated Absences Sick time is vested on a percentage based on number of years employed at the City. Maximum accumulation of sick and vacation is 30 and 40 days, respectively. Upon termination or retirement, permanent employees are entitled to receive compensation at their current base salary for all unused vacation leave. If an employee terminates with a minimum of two years service, the employee is entitled to receive 25% of the value of his unused sick leave. The percentage increases by 25% for each five-year period until the employee is entitled to 75% of the value of his unused sick leave. This will occur upon the completion of ten years of continuous employment. Fund Balance In the fund financial statements, governmental funds report the following fund balance classification: Nonspendable include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation. Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest authority, the City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is by resolution. Assigned include amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed. City Council is authorized to assign amounts to a specific purpose. Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes. 42 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Summary of Significant Accounting Policies (Continued) 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. 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. Budgets were not adopted for the Indian Gaming and Development Agreement funds. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue, and similar governmental funds. Encumbrances outstanding at year-end are reported as 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, 2011, the following funds had deficit fund balances: Major Capital Projects Funds: Civic Center $ (7,012,033) Nonmajor Capital Projects Funds Parks and Recreation (1,360,842) Library Development (1,923,779) Street Facility (2,029,181) Fire Facility (924,563) 43 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 2: Stewardship, Compliance and Accountability (Continued) c. Excess of expenditures over appropriations are as follows: Expenditures for the year ended June 30, 2011, exceeded the appropriations of the General Fund as follows: General Fund: General Government City Manager Public Safety Building & safety admin Building Fire Community Services Parks & Recreation Public Works Construction management Budget Actual Variance $ 266,717 $ 289,712 $ (22,995) 156,311 275,158 (118,847) 810,976 815,230 (4,254) 4,765,448 4,907,844 (142,396) 193,525 194,087 (562) 891,611 964,813 (73,202) III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments Cash and investments as of June 30, 2011, are classified in the accompanying financial statements as follows: Statement of Net Assets: Cash and investments $ 144,502,573 Cash with fiscal agent 45,298,094 Statement of Fiduciary Net Assets: Cash and investments 521.192 Total cash and investments $ 190,321,859 Cash and investments as of June 30, 2011, consist of the following: Cash on hand $ 1,550 Deposits with financial institutions 275,679 Investments 190,044,630 Total cash and investments $ 190,321,859 44 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 3: Cash and Investments (Continued) Investments Authorized by the California Government Code and the Entity's Investment Policy The table below identifies the investment types that are authorized by the California Government Code and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. *Maximum *Maximum Investment Investment Types *Maximum Percentage of In One Authorized by State Law Maturity Portfolio Issuer U.S. Treasury Obligations 10 years None $30 million U.S. Agency Securities 3 years None $30 million Local Agency Bonds 10 years 30% $30 million California Local Agency Obligations 10 years 30% $30 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, 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 Authorized Investment Type Maturity U.S. Treasury Obligations None U.S. Agency Securities None Banker's Acceptance 360 days Commercial Paper 270 days Money Market Mutual Funds N/A Negotiable Certificates of Deposit 360 days Maximum Percentage Allowed None None None None None None 45 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 3: Cash and Investments (Continued) Disclosures Relatina to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of short term and long term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Investment Type U.S. Treasury notes U.S. Treasury bills Certificates of Deposit Federal agency securities: Federal Home Loan Bank Commercial paper Medium term notes State investment pool Held by bond trustee: Money market funds Total Remaining Maturity (in Months) 6 Months 6 Months to 1 Total or Less Year 1 to 3 Years $ 12,036,600 $ 12,036,600 $ - $ - 47,067,510 16,993,710 30,073,800 724,000 480,000 244,000 - 19,998,600 19,998,600 - - 25,015,593 25,015,593 - - 5,061,200 5,061,200 - - 34,843,033 34,843,033 - - 45,298,094 45,298,094 $ 190,044,630 $ 159,726,830 $ 244,000 $ 30,073,800 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 "AX 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, 2011, 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, 2011, the City's investments in external investment pools were unrated. 46 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 3: Cash and Investments (Continued) On Aug. 5, 2011, Standard & Poor's Ratings Services lowered its long-term sovereign credit rating on the United States of America to AA+ from AAA. As a result, on Aug. 8, 2011, Standard & Poor's Ratings Services lowered its issuer credit ratings and related issue ratings on various Federal Home Loan Bank, Federal Farm Credit Bank, Fannie Mae and Freddie Mac to AA+ from AAA. In addition, the ratings on 126 Federal Deposit Insurance Corp. —guaranteed debt issues from 30 financial institutions under the Temporary Liquidity Guarantee Program (TLGP), and four National Credit Union Association -guaranteed debt issues from two corporate credit unions under the Temporary Corporate Credit Union Guarantee Program (TCCUGP) have also been downgraded to AA+ from AAA. The City also invests in LAIF which invests in various underlying securities, including the federal agency securities listed above. While LAIF is not rated, the federal agency securities are, and these have been affected by this rating change as well. 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, 2011, the City had investments in Federal Home Loan Banks that represent 5% or more of total investments. 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. 47 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 3: Cash and Investments (Continued) GASB Statement No. 31 The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards (e.g. mark to market) for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Note 4: Property Taxes Under California law, property taxes are assessed and collected by the counties up to 1 % of assessed value, plus other increases approved by the voters. The property taxes are recorded initially in a pool, and are then allocated to the cities based on complex formulas. Accordingly, the City of La Quinta accrues only those taxes that are received from the County within ninety days after year-end. Lien date January 1 Levy date July 1 Due dates November 1 and February 1 Collection dates December 10 and April 10 The 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 In September 1994, the 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. The balance at June 30, 2011, including matured, unpaid interest of $1,930,492 is $3,965,880. 48 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 5: Notes Receivable (Continued) In July 2010, the Agency entered into an Owner Participation Agreement (OPA) with an 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 auto dealership facility and rehabilitation of an existing dealership facility. In connection with the OPA, Garff has executed a promissory note which is secured by a deed of trust, and an operating covenant. The loan will be repaid by crediting future sales and property tax increment taxes generated on the site until the cumulative taxes collected equals the loan amount. At that time, the note will be cancelled and the operating covenant will terminate. If, after ten years of operation, a shortfall exists between the revenues collected and the outstanding loan amount, the note will be cancelled and the operating covenant will terminate. Further, if at any time through no fault of the dealership certain future events outside of the dealership control occur the note will be cancelled and the operating covenant will terminate. The balance at June 30, 2011, is $2,300,000. In February 2011, the Agency entered into Disposition and Development Agreement with Coral Mountain Partners L.P. ("Coral Mountain") to fund up to $29,000,000 for the construction of a low and moderate income apartment complex with an estimated completion date of the apartment complex of March 2015. The Agency's $29,000,000 loan is evidenced by a Promissory Note executed by Coral Mountain ("Note"). Interest on the outstanding note amount will bear simple interest of 1 %. Principal and interest will be repaid on or before May 1 S` of each year from annual residual receipts as defined in the Note once the project is completed and may be repaid early if the property is refinanced, or if the property is transferred to another entity. As of June 30, 2011, the outstanding principal portion on the Note is $640,090 and the outstanding interest portion is $1,396. Other notes receivable totaled $46,226 at June 30, 2011. 49 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 6: Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2011, is as follows: Governmental Activities: Capital assets, not being depreciated: Land Right of way Construction -in -progress Total Capital Assets, Not Being Depreciated Capital assets, being depreciated: Buildings and improvements Equipment and furniture Vehicles Infrastructure Total Capital Assets, Being Depreciated Less accumulated depreciation: Buildings and improvements Equipment and furniture Vehicles Infrastructure Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Governmental Activities Capital Assets, Net Beginning Balance at July 1, 2010 Additions $ 76,383,500 283,990,003 43,423,786 $ 604,073 914,618 21,507,743 23,026,434 Ending Balance at Deletions Transfers June 30, 2011 $ 17,243,312 $ 8,395,306 $ 68,139,567 - - 284,904,621 32,438,118 (20,546,438) 11,946,973 49,681,430 (12,151,132) 364,991,161 59,363,601 5,200 605,109 10,519,010 69,282,702 2,227,432 69,408 36,492 - 2,260,348 1,656,948 - - - 1,656,948 186,921,922 966,300 41,546 1,632,122 189,478,798 250,169,903 1,040,908 683,147 12,151,132 262,678,796 14,627,480 2,185,812 218,737 - 16,594,555 1,362,769 200,579 36,492 1,526,856 1,080,196 153,671 - 1,233,867 71,658,705 5,983,998 41,546 77,601,157 88,729,150 8,524,060 296,775 - 96,956,435 161,440,753 (7,483,152) 386,372 12,151,132 165,722,361 $ 565,238,042 $ 15,543,282 $ 50,067,802 $ - $ 530,713,522 50 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 6: Capital Assets (Continued) Depreciation expense was charged to the following functions in the Statement of Activities: General government $ 137,968 Public safety 1,117,370 Planning and development 162,660 Community services 501,939 Public works 6,604,123 Total governmental activities $ 8,524,060 Capital asset activity for business -type activities for the year ended June 30, 2011, is as follows: Business -Type Activities: Capital assets, not being depreciated: Land Total Capital Assets, Not Being Depreciated Capital assets, being depreciated: Buildings and improvements Equipment and furniture Vehicles Software Total Capital Assets, Being Depreciated Less accumulated depreciation: Buildings and improvements Equipment and furniture Vehicles Software Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Governmental Activities Capital Assets, Net Beginning Ending Balance at Balance at July 1, 2010 Additions Deletions June 30, 2011 $ 36,840,832 $ - $ $ 36,840,832 36,840,832 - 36,840,832 6,636,465 - - 6,636,465 2,438,676 332,526 697,724 2,073,478 20,348 - - 20,348 20,255 - - 20,255 9,115,744 332,526 697,724 8,750,546 1,272,643 234,555 - 1,507,198 1,709,306 254,848 697,724 1,266,430 20,347 - - 20,347 20,255 - - 20,255 3,022,551 489,403 697,724 2,814,230 6,093,193 (156,877) - 5,936,316 $ 42,934,025 $ (156,877) $ - $ 42,777,148 Depreciation expense was charged to the following function in the Statement of Activities: Golf Course $ 489,403 51 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 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, 2011: Balance at Balance at Due within one July 1, 2010 Additions Deletions June 30, 2011 year City: Compensated absences payable $ 1,002,601 $ 1,083,324 $ 1,120,004 $ 965,921 $ 965,921 Due to the Coachella Valley Association of Governments 128,311 - 128,311 - - Developer Agreement Payable 174,584 174,584 - - Copier Lease Payable 114,583 - 36,331 78,252 38,164 OPEB Liability 225,979 119,105 - 337,311 - Redevelopment Agency: RDA Project Area No. 1: Tax allocation bonds 130,255,000 - 3,330,000 126,925,000 3,540,000 Pass -through agreements: Coachella Valley Unified School District 2,072,964 - 817,722 1,255,242 834,076 RDA Project Area No. 2: Tax allocation bonds 5,680,000 6,000,000 125,000 11,555,000 130,000 Due to County of Riverside 1,200,000 - 200,000 1,000,000 250,000 Provident Loan 1,530,958 27,525 1,503,433 29,918 US Department of Agriculture 741,171 11,788 729,383 12,915 Financing Authority Revenue bonds 87,650,000 28,850,000 2,160,000 114,340,000 2,250,000 Total $ 230,776,151 $ 36,052,429 $ 8,131,265 258,689,542 $ 8,050,994 Less: Unamortized premiums/discounts (1,127,045) Net Long -Term Debt $ 257,562,497 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, 2011, 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 1-10 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, 2011, the balance was paid off. 52 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) 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, 2011, the City paid the developer $122,250 in sales tax reimbursement and $76,204 since the sales tax generated exceeded the required amount. At June 30, 2011, the balance was paid off. 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. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2011, are as follows: Year Ending June 30, Total 2012 $ 44,358 2013 44,358 Total Payments 88,716 Less amount representing sales tax (6,381) Less amount representing interest (4,083) Outstanding Principal $ 78,252 Tax Allocation Bonds As of June 30, 2011, 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. 53 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) 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, 2011, is $4,775,000. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ 2,305,000 $ 264,443 2012-2013 2,470,000 90,155 Totals $ 4,775,000 $ 354,598 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, 2011, is $15,760,000. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ - $ 819,520 2012-2013 - 819,520 2013-2014 655,000 802,490 2014-2015 690,000 767,520 2015-2016 725,000 730,730 2016-2021 4,235,000 3,031,210 2021-2026 5,460,000 1,777,100 2026-2031 3,995,000 318,630 Totals $ 15,760,000 $ 9,066,720 54 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) Series 1998. Proiect 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. 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, 2011, is $5,555,000. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ 130,000 $ 286,738 2012-2013 140,000 279,819 2013-2014 145,000 272,516 2014-2015 150,000 264,956 2015-2016 160,000 257,013 2016-2021 930,000 1,149,525 2021-2026 1,205,000 872,156 2026-2031 1,555,000 511,744 2031-2036 1,140,000 91,875 Totals $ 5,555,000 $ 3,986,342 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. 55 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) 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, 2011, is $48,000,000 with an unamortized discount of $349,541. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 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 2015-2016 1,730,000 2,226,970 2016-2021 10,025,000 9,714,225 2021-2026 12,805,000 6,854,645 2026-2031 16,425,000 3,147,848 2031-2036 3,805,000 97,028 Totals $ 48,000,000 $ 31,605,096 Series 2002. Proiect 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, 2011, is $35,085,000 with an unamortized discount of $309,481. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 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 2015-2016 770,000 1,622,031 2016-2021 4,485,000 7,475,031 2021-2026 5,730,000 6,198,303 2026-2031 10,380,000 4,379,313 2031-2036 10,840,000 662,406 Totals $ 35,085,000 $ 27,176,806 56 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) Series 2003. Proiect Area No. 1 On September 1, 2003, the Agency issued tax allocation bonds in the amount of $26,400,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2003 tax allocation bonds were issued at a discount of $277,200 and issuance costs of $629,191. Interest is payable semi-annually on March 1 and September 1 of each year, commencing March 1, 2004. Interest payments range from 4.24% to 6.44% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2013 through September 1, 2032, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2004, September 1, 2014, and September 1, 2024, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. The principal balance of outstanding bonds at June 30, 2011, is $23,305,000 with an unamortized discount of $202,975. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 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 2015-2016 660,000 1,316,800 2016-2021 3,970,000 5,891,984 2021-2026 5,390,000 4,438,109 2026-2031 7,340,000 2,414,034 2031-2036 3,645,000 238,441 Totals $ 23,305,000 $ 19,924,955 Series 2011, Project Area No. 2 On June 6, 2011, the Agency issued subordinate taxable tax allocation bonds in the amount of $6,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 2. The 2001 tax allocation bonds were issued at a discount of $86,207 and issuance costs of $108,500. The bonds consist of $190,000 of term bonds that accrue interest at 5.375% and mature on September 1, 2016, $280,000 of term bonds that accrue interest at 7.125% and mature on September 1, 2021, $380,000 of term bonds that accrue interest at 7.600% and mature on September 1, 2026, and $5,150,000 of term bonds that accrue interest at 8.150% and mature on September 1, 2031. The interest and principal on the bonds are payable from pledged tax increment revenues. 57 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2011, is $6,000,000 with an unamortized discount of $86,080. The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ - $ 107,723 2012-2013 35,000 478,768 2013-2014 35,000 476,886 2014-2015 40,000 475,005 2015-2016 40,000 472,855 2016-2021 255,000 2,323,194 2021-2026 355,000 2,216,496 2026-2031 515,000 2,056,974 2031-2036 1,635,000 1,776,702 2036-2041 3,090,000 654,033 Totals $ 6,000,000 $ 11,038,636 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, 2011, totaled $1,255,242. 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, 2011, are as follows: Principal 2011-2012 $ 834,076 2012-2013 421,166 Totals $ 1,255,242 58 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) Due to County of Riverside - Proiect Area No. 2 Based on an agreement dated July 5, 1989, between the Agency and the County of Riverside, until the tax increment reaches $5,000,000 annually in Project Area No. 2, the Agency will pay to the County 50% of the County portion of tax increment. At the County's option, the County's pass -through portion can be retained by the Agency to finance new County facilities or land costs that benefit the County and serve the La Quinta population. Per the agreement, the Agency must repay all amounts withheld from the County. The tax increment is to be paid to the County in amounts ranging from $100,000 to $250,000 over a payment schedule through June 30, 2015. Interest does not accrue on this obligation. The balance at June 30, 2011, is $1,000,000. The minimum annual requirements to amortize amounts due to the County of Riverside as of June 30, 2011, are as follows: Principal 2011-2012 $ 250,000 2012-2013 250,000 2013-2014 250,000 2014-2015 250,000 Totals $ 1,000,000 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, 2011, is $4,340,000. 59 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ 445,000 $ 228,521 2012-2013 470,000 203,130 2013-2014 495,000 176,351 2014-2015 525,000 148,046 2015-2016 555,000 118,076 2016-2021 1,850,000 157,620 Totals $ 4,340,000 $ 1,031,744 2004 Series A Local Aaencv Revenue Bonds On June 29, 2004, the La Quinta Financing Authority issued revenue bonds in the amount of $90,000,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2 and to advance refund the Agency's Redevelopment Project Areas No. 1 and 2, 1995 Housing Tax Allocation Bonds. The 2004 local agency revenue bonds were issued with issuance costs of $2,600,229 and a premium of $476,496. 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, 2011, is $85,150,000 with an unamortized premium of $129,340. .( CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 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 2015-2016 2,175,000 3,714,463 2016-2021 12,715,000 16,686,250 2021-2026 16,430,000 12,885,194 2026-2031 21,055,000 8,149,884 2031-2036 21,030,000 2,222,969 Totals $ 81,150,000 $ 59,523,172 2011 Series A Local Agency Subordinate Taxable Revenue Bonds On June 9, 2011, the La Quinta Financing Authority issued revenue bonds in the amount of $28,850,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2. The 2011 local agency subordinate taxable revenue bonds were issued with issuance costs of $323,375 and a discount of $308,839. Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2011. Interest payments range from 3.750% to 8.185% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2026, September 1, 2031 and September 1, 2036, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2022, September 1, 2027, and September 1, 2032, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. A portion of the proceeds was used to fund the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The principal balance of outstanding bonds at June 30, 2011, is $28,850,000 with an unamortized discount of $308,308. 61 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ - $ 488,648 2012-2013 - 2,171,767 2013-2014 520,000 2,171,767 2014-2015 540,000 2,152,267 2015-2016 565,000 2,127,967 2016-2021 3,340,000 10,117,192 2021-2026 4,685,000 8,774,045 2026-2031 6,780,000 6,681,460 2031-2036 9,930,000 3,530,174 2036-2041 2,490,000 200,943 Totals $ 28,850,000 $ 38,416,230 Washington Street Apartments In October 2008, the Agency acquired the Washington Street Apartments for cash and the assumption of the following debt: Provident Bank Loan This loan was originally entered into with the previous owner of the Washington Street Apartments and Provident Bank for $1,696,000 in August 2001 at an 8.36% interest rate. The loan is amortized on a thirty year basis with the outstanding balance due in twenty years or August 2021. The outstanding principal balance in October 2008 when the property was acquired by the Agency was $1,572,031. The loan is secured by a deed of trust on the property and is senior to the United States Department of Agriculture (USDA) loan which is also secured by a deed of trust on the property. Repayment of the monthly loan amount of $12,873 is made from tenant rent receipts. The source for the final principal payment due in August 2021 of $1,050,109 will be determined at a future date. The principal balance of this loan at June 30, 2011 is $1,503,433. The minimum annual requirements to amortize the loan payable as of June 30, 2011, are as follows: Principal Interest 2011-2012 $ 29,918 $ 124,558 2012-2013 32,515 121,959 2013-2014 35,341 119,134 2014-2015 38,411 116,064 2015-2016 41,748 112,726 2016-2021 269,873 502,499 2021-2026 1,055,627 14,670 Totals $ 1,503,433 $ 1,111,610 62 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) 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, 2011 is $729,383. Principal Interest 2011-2012 $ 12,915 $ 72,367 2012-2013 14,267 71,014 2013-2014 15,761 69,520 2014-2015 17,412 67,870 2015-2016 19,235 66,047 2016-2021 130,952 295,458 2021-2026 215,456 210,953 2026-2031 303,385 73,179 Totals $ 729,383 $ 926,408 Note 8: Changes in Long -Term Liabilities — Business -type Activities Changes in business -type long-term liabilities for the year ended June 30, 2011, were as follows: Balance at Balance at Due within July 1, 2010 Additions Deletions June 30, 2011 one year Golf Course: Capital leases payable $ 54,543 $ 332,526 $ 100,972 $ 286,097 $ 117,013 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. 63 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 8: Changes in Long -Term Liabilities — Business -type Activities (Continued) 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. The lease was paid in full as of June 30, 2011. $ Wells Fargo Financial Leasing, Inc. The present value of the minimum lease payments on golf carts was capitalized using an incremental borrowing rate of 6.90% at the inception of the lease. The lease is payable in 33 monthly installments of $11,166 which began February 1, 2011. 286,097 Total capital leases payable as of June 30, 2011 $ 286,097 The following schedule summarizes the debt to maturity payments for capital leases: Year Ending June 30, Total 2012 $ 133,100 2013 133,100 2014 44,366 Total Payments 310,566 Less Amount Representing Interest (24,469) Outstanding Principal $ 286,097 Note 9: Pledge Tax Revenues As previously discussed, the 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 Agency 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 $449,572,555 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 $32,569,795 and the debt service obligation on the bonds was $16,604,838. 64 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 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, 2011: Amount Outstanding at Proceeds Maturity Date Interest Rate June 30, 2011 Assessment District No. 97-1 $ 705,262 9/2/2018 4.10% - 5.60% $ 325,000 Assessment District No. 2001-1 2,285,000 9/2/2015 5.00% - 6.60% 625,000 Note 11: Conduit Debt Financing 2002 Series B Multifamily Housinq Revenue Bonds In April 2002, the Agency issued $3,000,000 of 2002 Series B Multifamily Housing Revenue Bonds to provide financing for the acquisition, construction and equipping of a multifamily senior rental housing project known as Miraflores Apartments located in the City of La Quinta. The bonds mature on June 1, 2035, and bear interest at 5.5% per annum. Outstanding bonds at June 30, 2011, are $2,750,000. 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, 2011, are as follows: Due to Other Rind-,; Non -Major Governmental Total Due From Other Funds General Fund $ 256,852 $ 256,852 Special Revenue - Low/Moderate Income Housing PA No. 2 24,760 24,760 Capital Projects - Redevelopment Agency PA No. 1 637,754 637,754 Non -Major 3,500 3,500 Total: $ 922,866 $ 922,866 The due to the General Fund, Low/Moderate Income Housing PA No. 2 Fund and the Redevelopment Agency PA No. 1 Fund and Non -major funds were the results of routine interfund transactions not cleared prior to year-end. 65 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 12: Interfund Receivables and Payables (Continued) The composition of non -current interfund receivable and payable as of June 30, 2011, are as follows: Advances From Other Funds Non -Major Civic Center Golf Course Governmental Total Advances to Other Funds General Fund $ 7,012,033 $ 5,407,327 $ 2,953,744 $ 15,373,104 Redevelopment Agency PA No. 1 Capital Projects - - 3,284,621 3,284,621 Non -Major Governmental - - 1,284,567 1,284,567 Total: $ 7,012,033 $ 5,407,327 $ 7,522,932 $ 19,942,292 a) As of June 30, 2011, the General Fund has advanced to the Golf Course fund $5,407,327. The advances accrue interest at the City's investment pool rate and are to be repaid by the golf course out of future profits. b) 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, 2011, the remaining balance of the advance for the La Quinta Community Park is $1,360,842. c) 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, 2011, is $1,923,779. d) 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, 2011, the Civic Center expansion was completed and the amount of the advance was $7,012,033 outstanding. The advance accrues interest that would have been earned by the Local Agency Investment Fund. e) 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, 2011 the amount of the outstanding advance was $2,029,181. The advance accrues interest at the earnings rate of the City's investment pool fund. f) 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 Agency were anticipated. As of June 30, 2011 the outstanding advance between the Housing Authority and the Agency was $4,328. The advance accrues interest at the earnings rate of the City's investment pool fund. g) In June 2011, an advance of $1,276,516 was made from the RDA PA No. 2 Capital Projects Fund to the Transportation Development Fund to provide funding for the Highway 111 median public improvements. The advance accrues interest at 7%. As of June 30, 2011, the remaining balance of the advance is $1,280,239. CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 12: Interfund Receivables and Payables (Continued) h) In February 2003, the Redevelopment Agency Capital Projects PA No. 2 Fund advanced $1,350,131 to the Fire Facility Fund to provide funding for development of the City's north Fire Station. On March 1, 2011 the outstanding advance of $925,192 was transferred from the Agency to the General Fund with the Agency receiving $925,192 in cash for the outstanding balance. The advance accrues interest equal to the earnings rate of the City's Investment Pool Funds. As of June 30, 2011, the remaining balance of the advance is $924,563. Note 13: Interfund Transfers Transfers Out General Fund Low/Moderate Income Housing PA #2 2011 Low/Mod Bond 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 $ - $ - $ - $ - $ - $ - $ 115,136 $ - $ 115,136 Capital I m provement 1,959,325 409,733 - 10,358,708 - - 8,749,126 4,555 21,481,447 Civic Center 2,990,000 - - - - - - - 2,990,000 RDA PA #1 Capital Projects - - - - - - 106,831 - 106,831 RDA PA #1 Debt Service - - - 15,039,191 - - 4,438,935 - 19,478,126 RDA PA #2 Debt Service - 1,951,994 - - - - 4,303,659 - 6,255,653 Non -Major Governmental 52,000 509,112 2,694,381 3,963,138 1,951,993 2,059,217 11,229,841 Total: $ 5,001,325 $ 2,870,839 $ 2,694,381 $ 25,397,899 $ 3,963,138 $ 1,951,993 $ 19,772,904 $ 4,555 $ 61,657,034 a) $1,959,325 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 the Landscape Green Project for Fire Station 70. The sales and transient occupancy tax rebate agreements were the Costco, Kohl's, the Auto Mall developer, Embassy Suites and the Homewood Suites hotel. b) $2,990,000 was transferred from the General Fund to the Civic Center Capital Project Fund for the costs pertaining to the Emergency Operations Center from the recent Civic Center expansion. The funds were received from taxes collected by the County of Riverside for the City of La Quinta. c) $52,000 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. d) $15,039,191 was transferred from the RDA PA No. 1 Capital Projects Funds into the Debt Service PA No. 1 Fund to repay in part the $22,000,000 advance to the City General Fund and the $4,855,193 Supplemental Education Relief Augmentation Fund payment. e) $10,358,708 was transferred to the Capital Improvement Fund from the RDA Capital Projects — PA No. 1 Fund to fund various capital projects throughout the City. $9,500,071 of this amount was for land purchases within the Village area. f) $3,963,138 and $1,951,993 were 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. g) $1,951,994 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the RDA Project Area No. 2 Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service and $ 409,733 was transferred to the Capital Improvement Fund for various capital projects within the project area, including $320,045 for the Coral Mountain Apartment Project. 67 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 13: Interfund Transfers (Continued) h) $509,112 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the Housing Authority Project Area No. 2 Special Revenue Fund for the net assets of the Washington Street Apartments pursuant to direction from the State of California. $2,694,381 was transferred from the 2011 Financing Authority Capital Projects Fund to the Financing Authority Debt Service Fund to maintain the necessary Reserve Cash account balance pursuant to the 2011 Financing Authority bond issue. j) $8,749,126 was transferred to Capital Improvement Fund from various non -major funds to fund various capital projects within the City. 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 10.263% 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 CaIPERS. Annual Pension Cost and Net Pension Asset For 2011, the City's annual pension cost and change in net pension asset for the year ending June 30, 2011, was as follows: Annual required contribution $ 801,171 Interest on net pension asset 60,244 Adjustment to annual required contribution (146,817) Annual pension cost 714,598 Contributions made 801,171 Increase (decrease) in net pension asset (86,573) Net pension obligation (asset) beginning of the year (1,338,763) Net pension obligation (asset) end of the year $ (1,252,190) CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 14: Defined Benefit Pension Plan (Continued) Three -Year Trend Information for PERS Annual Pension Fiscal Year Cost (APC) 6/30/2009 $ 973,515 6/30/2010 953,728 6/30/2011 714,598 Note 15: Post -Employment Health Benefits Plan Description Percentage Net Pension Contributed Obligation (asset) 100% $ - 240% (1,338,763) 89% (1,252,190) The City provides other postemployment benefits (OPEB) through a single -employer defined benefit healthcare plan by contributing on behalf of all eligible retirees' $105/month for calendar 2010 and $108/month for calendar 2011, 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 2010-2011 fiscal year to cover current plan premiums. As a result, the City calculated and recorded a net OPEB obligation, representing the difference between the annual required contribution (ARC) and actual contributions, as presented below: Annual required contribution (ARC) $ 116,821 Interest on net OPEB obligation 11,299 Adjustment to ARC (9,015) Annual OPEB cost 119,105 Contributions made (4,260) (Decrease) increase in net OPEB obligation 114,845 Net OPEB obligation (asset) - beginning of year 222,466 Net OPEB obligation (asset) - end of year $ 337,311 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2010-2011 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) 6/30/2009 $ 116,821 $ 8,877 7.60% $ 107,944 6/30/2010 116,821 3,513 3.01 % 222,466 6/30/2011 116,821 4,260 3.65% 337,311 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 15: Post -Employment Health Benefits (Continued) Type of Valuation Actual 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 Actuarial Actuarial Actuarial Actuarial Valuation Value of Accrued Accrued Date Assets Liability Liability 7/1/2008 $ - $ 590,676 $ 590,676 Actuarial Methods and Assumptions UAAL as a Percent of Funded Covered Covered Ratio Payroll Payroll 0.0% $ 7,821,474 7.6% Interest Rate 5.00% 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, 2011, was twenty-eight 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 121 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 70 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 16: Self Insurance (Continued) Self -Insurance Programs of the Authority A revised cost allocation methodology was introduced in 2010-11, however it retains many elements of the previous cost allocation methodology. Each member pays an annual contribution (formerly called the primary deposit) to cover estimated losses for the coverage period. This initial funding is paid at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage period are closed on a pool -wide basis. This subsequent cost re -allocation among members based on actual claim development can result in adjustments of either refunds or additional deposits required. The total funding requirement for self-insurance programs is estimated using actuarial models and pre -funded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk -sharing pool. Additional information regarding the cost allocation methodology is provided below. General Liability In the liability program claims are pooled separately between police and non -police exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $750,000 up to the reinsurance attachment point of $5 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to $10 million are paid under a reinsurance contract subject to a $2.5 million annual aggregate deductible. Costs of covered claims from $10 million to $15 million are paid under two reinsurance contracts subject to a combined $3 million annual aggregate deductible. On a cumulative basis for all 2010-11 reinsurance contracts the annual aggregate deductible is $5.5 million. (6) Costs of covered claims from $15 million up to $50 million are covered through excess insurance policies. The overall coverage limit for each member including all layers of coverage is $50 million per occurrence. Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a pooled sub -limit of $35 million per occurrence. This $35 million subsidence sub -limit is composed of (a) $5 million retained within the pool's SIR, (b) $10 million in reinsurance and (c) $20 million in excess insurance. The excess insurance layer has a $20 million annual aggregate. 71 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 16: Self Insurance (Continued) Workers Compensation In the workers' compensation program claims are pooled separately between public safety (police and fire) and non-public safety exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $100,000 up to the reinsurance attachment point of $2 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $2 million up to statutory limits are paid under a reinsurance policy. Protection is provided per statutory liability under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $4 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $4 million to $10 million are pooled among members. During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2010-11. Additional Coverage 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. 72 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 17: Construction Commitments The following material construction commitments existed at June 30, 2011: Expenditures Contract to date as of Remaining Project Name Amount June 30, 2011 Commitments Adams Street Bridge Improvements $ 13,088,120 $ 1,933,180 $ 11,154,940 Relocation of Coachella Canal at Silver Rock 11,042,164 56,503 10,985,661 Washington St. Apartment Rehabilitation 10,391,972 76,099 10,315,873 Silver Rock Resort Club House 8,804,110 2,092,239 6,711,871 Community Park Land Acquisition 8,000,000 16,562 7,983,438 Silver Rock Resort Infrastructure 2,732,150 1,521,403 1,210,747 Coral Mountain Apartments 2,421,978 640,090 1,781,888 Dune Palms Road Street Improvements 1,812,199 107,626 1,704,573 A St. Extension & Dune Palms & Retail Ctr Traffic Signal 1,431,670 194,422 1,237,248 Union Home Loans Land Purchase 1,378,380 946 1,377,434 Hwy 11 Median Island Landscape Improvements 1,321,624 124,592 1,197,032 Note 18: Fund Balances The City has the following committed fund balance shown on the balance sheet: Committed to emergency reserve - the City established the amount of 35% of the Fiscal Year 2011-2012 budget plus $4,000,000 which totals $18,018,595 in the General Fund for the year ended June 30, 2011. The funds would be drawn upon pursuant to the Municipal Code Section 2.20 which defines an emergency or disaster to mean the actual or threatened existence of conditions of disaster or of extreme peril to the safety of persons and property within this city caused by such conditions as air pollution, fire, flood, storm, epidemic, riot, earthquake or other conditions, including conditions resulting from war or imminent threat of war but other than conditions resulting from a labor controversy, which conditions are or are likely to be beyond the control of the services, regular personnel, equipment and facilities of the city and which may require the combined forces of other political jurisdictions to combat. Committed to post retirement health benefits - the City has committed a portion of their Unassigned Fund balance for the payment in future years of their Post retirement health benefits. For the year ended June 30, 2011 the City has committed $1,258,059 for this purpose. These committed amounts have been approved by Council based on certain percentages and will be used only in the event of Council approval. Additionally the City has included the following amounts in the unassigned fund balance amount shown on the balance sheet: Cash Flow Reserve - the City established the amount of 8.25% of the Fiscal Year 2011-2012 budget which totals $3,304,383 in the General Fund for the year ended June 30, 2011. Future Operational Deficit - For the future operational deficit, the City has set aside $7,500,000 for the year ended June 30, 2011. 73 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 19: Golf Course Management Agreement The City entered into an agreement with Landmark Golf Management LLC (operator) to manage the golf operations at the city -owned SilverRock Golf Course. The Agreement entered into on April 6, 2004, sets forth a five year term commencing upon the completion of the golf course. On January 14, 2005, the golf course was deemed to be complete and management was turned over to the operator. The contract provides that the operator will manage the day to day operations, hire employees, provide golf pro shop and food services, manage all marketing and promotional activities, prepare the annual budget report for Council consideration, and manage accounting and payroll functions. In addition to the annual payment for management services, the City has advanced the operator $250,000 to pay for golf course expenses. Twice a month the operator submits a request for reimbursement to the City to replenish the City's advance. In addition, the agreement sets forth the establishment of a capital reserve fund of 2% of green fees. For the fiscal year ending June 30, 2011, the Golf Course had an operating loss before contributions and transfers of $443,534. Note 20: 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, 2011, the City made $163,098 in reimbursement payments to the owner leaving an outstanding balance of $237,004. 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, 2011, the City made $343,074 in reimbursement payments to the owner leaving an outstanding balance of $2,667,270. 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, 2011, the City made $136,852 in reimbursement payments to the owner leaving an outstanding balance of $116,806. 74 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 21: Transactions with the State of California SERAF Shift for fiscal year 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. The payment of the SERAF was due on May 10, 2011 for fiscal year 2010-2011 and it was made in the amount of $4,855,193. The legislation allowed this payment to be made from any available monies present in any project area(s). To accomplish the payment, the Agency utilized $4,855,193 from its available resources. Note 22: California Redevelopment Agency Uncertainty On July 18, 2011, the California Redevelopment Association ("CRA") and the League of California Cities ("League") filed a petition for writ of mandate with the California Supreme Court, requesting the Court to declare unconstitutional two bills that were passed as part of the 2011-12 State Budget, AB1X 26 and 27. AB1X 26 dissolves redevelopment agencies effective October 1, 2011. AB1X 27, give redevelopment agencies an option to avoid dissolution if it commits to making defined payments for the benefit of the State, school districts and certain special districts. In 2011-12, these payments amount to a state-wide total of $1.7 billion. In 2012-13 and subsequent years, the payments total $400 million, annually. Each city or county's share of these payments is determined based on its proportionate share of state-wide tax increment. CRA and the League contend that AB1X 26 and 27 are unconstitutional because they violate Proposition 22 which was passed by the voters in November, 2010. The effect of the legislation is to achieve a possible unconstitutional result, the use of redevelopment agencies' tax increment funds to benefit the State and other units of local government, by way of threatening of the dissolution of redevelopment agencies. Therefore, the CRA and the League have requested that the Court issue a stay, suspending the effectiveness of AB1X 26 and 27 until the Court can rule on its constitutionality. CRA and the League also asked the Court to expedite the briefing and hearing of the case so that a decision can be rendered by the Court before January 15, 2012, when the first payments are due. On August 111h, the California Supreme Court agreed to hear the case and granted a partial stay which was subsequently clarified. As of the time of the issuance of this report, the outcome of AB1X 26 and 27 upon the Agency is unknown and consequently the status and even future existence of the Agency is uncertain as such. In accordance with AB1X 27, the Agency has passed a resolution of intent to continue and will be required to make a payment to the State by January 15, 2012 to avoid dissolution. The Department of Finance issued their estimated payment amounts and the Agency filed an appeal regarding the calculation. The estimated payment amount based on the revised calculation is $17,018,721. 75 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 23: Subsequent Events a. Fiscally Responsible Reduction Plan In April 2011, the City Council approved a Fiscally Responsible Reduction Plan (FRRP) in response to the economic downturn and declining revenues. This allowed employees who were be eligible to receive retirement benefits under this plan to retire if they meet the requirements under one of the following tiers: Tier I a) Is classified as a full-time General Employee by the City as of February 15, 2011 b) Has attained sixty (60) years of age as of December 31, 2011 c) Has completed at least ten (10) years of public service as of June 30, 2011 d) Has completed at least five (5) years of service with the City as of June 30, 2011 e) Has terminated employment with the City on or before June 30, 2011 f) Has applied for benefits under this plan g) Has retired under CalPERS effective no later than July 1, 2011 Tier II a) Is classified as a full-time Director by the City (excluding the City Manager) as of February 15, 2011 b) Has attained fifty-five (55) years of age as of December 31, 2011 c) Has completed at least ten (10) years of public service as of June 30, 2011 d) Has completed at least five (5) years of service with the City as of June 30, 2011 e) Has terminated employment with the City on or before June 30, 2011 f) Has applied for benefits under this plan g) Has retired under CalPERS effective no later than July 1, 2011 A total of 9 people participated in the FRRP and were approved by Council for the retirement incentive program through the Public Agency Retirement Systems (PARS). The participants of this program selected from a number of benefit options, the basic program in which one -twelfth (1/12) of six percent (6%) of the individual employee's final pay would be paid over the lifetime of the participant commencing on July 1, 2011. Implementation of the FRRP plan required a one-time payment of $557,315 was made in July 2011 and is classified as a payable as of June 30, 2011. b. Owners Participation Agreement In June 2011, the La Quinta Redevelopment Agency entered into an Owner Participation Agreement (OPA) with an autodealer, Mega Dealer, LLC ("Torre Nissan") that provides for the Agency to provide a rehabilitation loan to Torre Nissan of up to $1,500,000 for the remodeling of the existing dealership and an expansion of the dealership facility to accommodate a new line of electric and commercial vehicles. The new expansion will also include service and parts sales facilitates. In connection with the OPA, Torre Nissan has executed a promissory note, which is secured by a subordinated deed of trust and an operating covenant. Interest on the note shall accrue on the outstanding principal balance at the 1-year LIBOR Rate, adjusted annually on each June 30t". 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 outstanding loan amount. At that time, the note will be cancelled and the operating covenant will terminate. If at any time during the 76 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 23: Subsequent Events (Continued) term of the note Nissan Motor Company ceases to exist, the note will be cancelled and the operating covenant will terminate. At the end of the ten-year operating covenant, the operating covenant will terminate and the note will be cancelled, and any outstanding loan balance will be forgiven. As of June 30, 2011, no payments have been made under this agreement. 77 THIS PAGE INTENTIONALLY LEFT BLANK 78 OTHER GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues (other than expendable trusts and major capital projects) and the related expenditures that are legally required to be accounted for in a separate fund. The City of La Quinta has the following Special Revenue Funds: State Gas Tax Fund — To account for gasoline allocations made by the State of California. These revenues are restricted by the State to expenditures for street -related purposes only. Library Fund — To account for revenues from property tax increment dedicated library services. Federal Assistance Fund — To account for revenues from the Community Development Block Grants received from the Federal Government and the expenditures of those resources. State Law Enforcements Block Grant (SLEBG) Fund — To account for state funded "Citizens for Public Safety" (COPS) program activities, as per Assembly Bill 3229, which supplements frontline police services such as anti -gang community crime prevention. Indian Gaming Fund — To account for contributions for public safety activities to reduce crime and increase public safety. Lighting and Landscape Special Assessment District 89-1 Fund — To account for special assessments levied on real property and the expenditure thereof from City-wide lighting and landscape maintenance and improvements. Quimby Fund — To account for the accumulation of developer fees received under the provisions of the Quimby Act for park development and improvements. Capital projects to be funded from this source will be budgeted and expended in a separate capital projects fund. 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. Proposition 1 B Fund - To account for the revenues and expenditures related to Proposition 1 B monies. 79 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. 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. 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. Redevelopment Agency Project Area No. 1 — 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. 2 - To account for the bond proceeds, interest and other funding that will be used for development, planning, construction and land acquisition. 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. :c THIS PAGE INTENTIONALLY LEFT BLANK m CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2011 Special Revenue Funds Federal State Gas Tax Library Assistance SLEBG Assets: Pooled cash and investments $ 240,125 $ 221,422 $ - $ 46,068 Receivables: Accounts - - - - Taxes - - - - Notes and loans - - - - Accrued interest - 286 - 19 Prepaid costs - - - - Deposits - - - - Due from other governments 132,348 742,231 6,944 25,228 Due from other funds - - - - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 372,473 $ 963,939 $ 6,944 $ 71,315 Liabilities and Fund Balances: Liabilities: Accounts payable - Accrued liabilities - - - - Deferred revenues - - - - Unearned revenues - - - - Deposits payable - - - - Due to other funds - - 6,944 - Advances from other funds - - - - Total Liabilities - - 6,944 - Fund Balances: Nonspendable: Prepaid costs - - - - Notes and loans - - - - Advances to other funds - - - - Deposits - - - - Restricted for: Planning and development projects - - - - Public safety - - - 71,315 Community services - 963,939 - - Public works 372,473 - - - Capital Projects - - - - Debt service - - - - Unassigned - - - - Total Fund Balances 372,473 963,939 - 71,315 Total Liabilities and Fund Balances $ 372,473 $ 963,939 $ 6,944 $ 71,315 82 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2011 (Continued) 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: Special Revenue Funds Congestion Lighting and Management Air Indian Gaming Landscaping Quimby Quality Fund $ 106,005 $ - $ 8,416,866 $ - 55 - 5,970 - 23,882 - 247,974 $ 106,060 $ 23,882 $ 8,422,836 $ 247,974 Accounts payable $ - $- Accrued liabilities - - - - Deferred revenues - - - - Unearned revenues 106,060 - - - Deposits payable - - - - Due to other funds - - - 247,974 Advances from other funds - - - - Total Liabilities 106,060 - - 247,974 Fund Balances: Nonspendable: Prepaid costs - - - - Notes and loans - - - - Advances to other funds - - - - Deposits - - - - Restricted for: Planning and development projects - - - - Public safety - - - - Community services - - 8,422,836 - Public works - 23,882 - - Capital Projects - - - - Debt service - - - - Unassigned - - - - Total Fund Balances - 23,882 8,422,836 - Total Liabilities and Fund Balances $ 106,060 $ 23,882 $ 8,422,836 $ 247,974 83 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2011 Special Revenue Funds Art in Public South Coast Public Safety Places Air Quality AB 939 Assets: Pooled cash and investments $ 25,031 $ 871,021 $ 64,253 $ 1,077,205 Receivables: Accounts - - 12,700 - Taxes - - - - Notes and loans - - - - Accrued interest 18 618 43 771 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 $ 25,049 $ 871,639 $ 76,996 $ 1,077,976 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ 10,100 $ 12,700 $ 2,735 Accrued liabilities - - - - Deferred revenues - - - - Unearned revenues - - - - Deposits payable - - - - Due to other funds - - - - Advances from other funds - - - - Total Liabilities - 10,100 12,700 2,735 Fund Balances: Nonspendable: Prepaid costs - - - - Notes and loans - - - - Advances to other funds - - - - Deposits - - - - Restricted for: Planning and development projects - - 64,296 1,075,241 Public safety 25,049 - - - Community services - 861,539 - - Public works - - - - Capital Projects - - - - Debt service - - - - Unassigned - - - - Total Fund Balances 25,049 861,539 64,296 1,075,241 Total Liabilities and Fund Balances $ 25,049 $ 871,639 $ 76,996 $ 1,077,976 84 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2011 (Continued) 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 Special Revenue Funds Justice Housing Development Assistance Authority PA Agreement Proposition 113 Grant No. 1 $ 200,334 $ 352,184 $ - $ 934,767 - - - 13,542 143 287 - 616 - - 1,934 - $ 200,477 $ 352,471 $ 1,934 $ 948,925 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Accrued liabilities - - - - Deferred revenues - - - - Unearned revenues - 352,471 - - Deposits payable 200,477 - - 19,967 Due to other funds - - 1,934 - Advances from other funds - - - - Total Liabilities 200,477 352,471 1,934 19,967 Fund Balances: Nonspendable: Prepaid costs - - - - Notes and loans - - - - Advances to other funds - - - - Deposits - - - - Restricted for: Planning and development projects - - - 928,958 Public safety - - - - Community services - - - - Public works - - - - Capital Projects - - - - Debt service - - - - Unassigned - - - - Total Fund Balances - - - 928,958 Total Liabilities and Fund Balances $ 200,477 $ 352,471 $ 1,934 $ 948,925 85 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2011 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: Special Revenue Funds Capital Projects Funds Housing Low/Moderate Authority PA Income Housing No. 2 PA No. 1 Infrastructure Transportation $ 597,765 $ 8,474,291 $ 407,512 $ 4,770,929 37,082 - - 160,000 - 6,871 - - - 4,012,106 - - - 5,414 290 2,841 10,563 - - - 6,000 - - - - 3,500 - - - 4,328 - - $ 651,410 $ 12,506,510 $ 407,802 $ 4,933,770 Accounts payable $ - $ 82,824 $ - $ - Accrued liabilities 2,263 - - - Deferred revenues - 1,930,492 - - Unearned revenues - - - 160,000 Deposits payable 26,419 - - - Due to other funds - - - - Advances from other funds 4,328 - - 1,280,239 Total Liabilities 33,010 2,013,316 - 1,440,239 Fund Balances: Nonspendable: Prepaid costs 10,563 - - - Notes and loans - 2,081,614 - - Advances to other funds - 4,328 - - Deposits 6,000 - - - Restricted for: Planning and development projects 601,837 8,407,252 - - Public safety - - - - Community services - - - - Public works - - - - Capital Projects - - 407,802 3,493,531 Debt service - - - - Unassigned - - - - Total Fund Balances 618,400 10,493,194 407,802 3,493,531 Total Liabilities and Fund Balances $ 651,410 $ 12,506,510 $ 407,802 $ 4,933,770 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2011 (Continued) Capital Projects Funds Parks and Library Community Recreation Development Center Street Facility Assets: Pooled cash and investments $ - $ - $ 1,180,203 $ - Receivables: Accounts - - - - Taxes - - - - Notes and loans - - - - Accrued interest - - 839 - 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 $ - $ - $ 1,181,042 $ - Liabilities and Fund Balances: Liabilities: Accounts payable - Accrued liabilities - - - - Deferred revenues - - - - Unearned revenues - - - - Deposits payable - - - - Due to other funds - - - - Advances from other funds 1,360,842 1,923,779 - 2,029,181 Total Liabilities 1,360,842 1,923,779 - 2,029,181 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 - - 1,181,042 - Debt service - - - - Unassigned (1,360,842) (1,923,779) - (2,029,181) Total Fund Balances (1,360,842) (1,923,779) 1,181,042 (2,029,181) Total Liabilities and Fund Balances $ - $ - $ 1,181,042 $ - 87 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2011 Capital Projects Funds Redevelopment 2004 Low/Mod Agency PA No. Park Facility Fire Facility Bond 1 Assets: Pooled cash and investments $ - $ - $ - $ 9,943,802 Receivables: Accounts - - - - Taxes - - - - Notes and loans - - - - Accrued interest - - - 8,549 Prepaid costs - - - - Deposits - - - - Due from other governments - - - - Due from other funds - - - 637,754 Advances to other funds - - - 3,284,621 Restricted assets: Cash and investments with fiscal agents - - 3,331,915 9,204,891 Total Assets $ - $ - $ 3,331,915 $ 23,079,617 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ 53,296 Accrued liabilities - - - - Deferred revenues - - - - Unearned revenues - - - - Deposits payable - - - - Due to other funds - - 24,760 - Advances from other funds - 924,563 - - Total Liabilities - 924,563 24,760 53,296 Fund Balances: Nonspendable: Prepaid costs - - - - Notes and loans - - - - Advances to other funds - - - 3,284,621 Deposits - - - - Restricted for: Planning and development projects - - - - Public safety - - - - Community services - - - - Public works - - - - Capital Projects - - 3,307,155 19,741,700 Debt service - - - - Unassigned - (924,563) - - Total Fund Balances - (924,563) 3,307,155 23,026,321 Total Liabilities and Fund Balances $ - $ - $ 3,331,915 $ 23,079,617 0 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2011 Capital Projects Debt Service Funds Funds Total Redevelopment Financing Governmental Agency PA No. 2 Authority Funds Assets: Pooled cash and investments $ - $ 1,502 $ 37,931,285 Receivables: Accounts 24,500 - 247,824 Taxes - - 6,871 Notes and loans 2,300,000 - 6,312,106 Accrued interest 307 - 27,066 Prepaid costs - - 10,563 Deposits - - 6,000 Due from other governments - - 1,180,541 Due from other funds - - 641,254 Advances to other funds 1,280,239 - 4,569,188 Restricted assets: Cash and investments with fiscal agents 3,931,437 2,694,381 19,162,624 Total Assets $ 7,536,483 $ 2,695,883 $ 70,095,322 Liabilities and Fund Balances: Liabilities: Accounts payable $ 28,944 $ - $ 190,599 Accrued liabilities - - 2,263 Deferred revenues 2,300,000 - 4,230,492 Unearned revenues - - 618,531 Deposits payable - - 246,863 Due to other funds 637,754 - 919,366 Advances from other funds - - 7,522,932 Total Liabilities 2,966,698 - 13,731,046 Fund Balances: Nonspendable: Prepaid costs - - 10,563 Notes and loans - - 2,081,614 Advances to other funds 1,280,239 - 4,569,188 Deposits - - 6,000 Restricted for: Planning and development projects - - 11,077,584 Public safety - - 96,364 Community services - - 10,248,314 Public works - - 396,355 Capital Projects 3,289,546 - 31,420,776 Debt service - 2,695,883 2,695,883 Unassigned - - (6,238,365) Total Fund Balances 4,569,785 2,695,883 56,364,276 Total Liabilities and Fund Balances $ 7,536,483 $ 2,695,883 $ 70,095,322 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Federal State Gas Tax Library Assistance SLEBG 1,101,963 2,230,083 438,031 100,000 (154) 657 - 404 1,101,809 2,230,740 438,031 100,404 - 1,676,226 - - 1,016,184 - - - 1,016,184 1,676,226 85,625 554,514 438,031 100,404 (141,753) - (438,031) (55,061) (141,753) - (438,031) (55,061) (56,128) 554,514 - 45,343 428,601 409,425 - 25,972 $ 372,473 $ 963,939 $ - $ 71,315 .0 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 (Continued) Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Congestion Management Lighting and Air Quality Indian Gaming Landscaping Quimby Fund - 956,048 - - - - - 269,079 - 61,353 - 956,048 61,353 269,079 - 952,296 - - 952,296 3,752 61,353 269,079 - - (2,011,105) (269,079) (2,011,105) (269,079) 3,752 (1,949,752) - 20,130 10,372,588 - $ - $ 23,882 $ 8,422,836 $ - 91 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Art in Public South Coast Public Safety Places Air Quality AB 939 - - 72,352 - 169 5,909 569 8,027 - 52,076 - - 169 57,985 72,921 8,027 - 56,802 192,221 - 15,981 - - 73,869 - - 89,850 56,802 192,221 169 (31,865) 16,119 (184,194) 2,000 - - 50,000 - - (239,956) (125,623) 2,000 - (239,956) (75,623) 2,169 (31,865) (223,837) (259,817) 22,880 893,404 288,133 1,335,058 $ 25,049 $ 861,539 $ 64,296 $ 1,075,241 92 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 (Continued) Special Revenue Funds Justice Housing Development Assistance Authority PA Agreement Proposition 1 B Grant No. 1 Revenues: Taxes $ - $ - $ - $ - Assessments - - - - Intergovernmental - 224,162 20,523 - Charges for services - - - - Use of money and property - 2,105 - 251,940 Developer participation - - - - Miscellaneous - - - 1,302 Total Revenues - 226,267 20,523 253,242 Expenditures: Current: General government - - - - Planning and development - - - 224,592 Community services - - - - Public works - - - - Capital outlay - - - - Debt service: Principal retirement - - - - Interest and fiscal charges - - - - Total Expenditures - - - 224,592 Excess (Deficiency) of Revenues Over (Under) Expenditures - 226,267 20,523 28,650 Other Financing Sources (Uses): Transfers in - - - 781,094 Transfers out - (226,267) (20,523) - Long-term debt issued - - - - Proceeds from sale of capital asset - - - 120,628 Bond discount - - - - Bond issuance costs - - - - Total Other Financing Sources (Uses) - (226,267) (20,523) 901,722 Net Change in Fund Balances - - - 930,372 Fund Balances, Beginning of Year - - - (1,414) Fund Balances, End of Year $ - $ - $ - $ 928,958 93 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 Special Revenue Funds Capital Projects Funds Low/Moderate Housing Income Authority PA Housing PA No.2 No.1 Infrastructure Transportation Revenues: Taxes $ - $ 8,798,118 $ - $ - Assessments - - - - Intergovernmental 492,647 - - - Charges for services - - - - Use of money and property 173,512 42,092 2,763 27,682 Developer participation - - - 225,362 Miscellaneous 3,185 54,157 - 90,000 Total Revenues 669,344 8,894,367 2,763 343,044 Expenditures: Current: General government - - - - Planning and development 318,923 1,628,034 - - Community services - - - - Public works - - - - Capital outlay - - - - Debt service: Principal retirement 39,313 - - - Interest and fiscal charges 200,443 - - 3,723 Total Expenditures 558,679 1,628,034 - 3,723 Excess (Deficiency) of Revenues Over (Under) Expenditures 110,665 7,266,333 2,763 339,321 Other Financing Sources (Uses): Transfers in 509,112 - - - Transfers out - (6,698,698) - (1,401,427) Long-term debt issued - - - - Proceeds from sale of capital asset - 243,222 - - Bond discount Bond issuance costs Total Other Financing Sources (Uses) 509,112 (6,455,476) - (1,401,427) Net Change in Fund Balances 619,777 810,857 2,763 (1,062,106) Fund Balances, Beginning of Year (1,377) 9,682,337 405,039 4,555,637 Fund Balances, End of Year $ 618,400 $ 10,493,194 $ 407,802 $ 3,493,531 94 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 (Continued) Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Capital Projects Funds Parks and Library Community Recreation Development Center Street Facility - - 7,988 - 64,235 25,915 5,402 8,661 64,235 25,915 13,390 8,661 7,307 12,383 - 8,126 7,307 12,383 - 8,126 56,928 13,532 13,390 535 1,606 - - (640,903) (639,297) 56,928 13,532 13,390 (638,762) (1,417,770) (1,937,311) 1,167,652 (1,390,419) $ (1,360,842) $ (1,923,779) $ 1,181,042 $ (2,029,181) 95 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Proceeds from sale of capital asset Bond discount Bond issuance costs Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Capital Projects Funds Redevelopment 2004 Low/Mod Agency PA No. Park Facility Fire Facility Bond 1 - - 6,429 170,584 1,606 15,604 - 305,455 1,606 15,604 6,429 476,039 - - 911,302 4,873 4,873 911.302 1,606 10,731 6,429 (435,263) 106,831 (1,606) - (125,124) (25,397,899) - - 4,875,000 (1,606) - (125,124) (20,416,068) 10,731 (118,695) (20,851,331) (935,294) 3,425,850 43,877,652 $ - $ (924,563) $ 3,307,155 $ 23,026,321 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 Capital Projects Debt Service Funds Funds Total Redevelopment Financing Governmental Agency PA No. 2 Authority Funds Revenues: Taxes $ - $ - $ 8,798,118 Assessments - - 956,048 Intergovernmental - - 4,948,840 Charges for services - 6,807 6,807 Use of money and property 20,925 672,525 1,455,479 Developer participation - - 704,316 Miscellaneous - - 148,644 Total Revenues 20,925 679,332 17,018,252 Expenditures: Current: General government - 9,196 9,196 Planning and development 2,582,602 - 5,914,476 Community services - - 1,692,207 Public works - - 1,968,480 Capital outlay - - 73,869 Debt service: Principal retirement - 2,160,000 2,199,313 Interest and fiscal charges - 4,427,656 4,664,511 Total Expenditures 2,582,602 6,596,852 16,522,052 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,561,677) (5,917,520) 496,200 Other Financing Sources (Uses): Transfers in 1,276,516 8,609,513 11,336,672 Transfers out (7,377,748) - (45,170,803) Long-term debt issued 6,000,000 - 6,000,000 Proceeds from sale of capital asset 3,445,000 - 8,683,850 Bond discount (86,207) - (86,207) Bond issuance costs (108,500) - (108,500) Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year 3,149,061 8,609,513 (19,344,988) 587,384 2,691,993 (18,848,788) 3,982,401 3,890 75,213,064 $ 4,569,785 $ 2,695,883 $ 56,364,276 97 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STATE GAS TAX YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 428,601 $ 428,601 $ 428,601 $ - Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Public works Transfers out Total Charges to Appropriations 1,103,900 1,103,900 1,101,963 (1,937) 100 100 (154) (254) 1,532,601 1,532,601 1,530,410 (2,191) 1,016,184 1,016,184 1,016,184 - - 474,518 141,753 332,765 1,016,184 1,490,702 1,157,937 332,765 Budgetary Fund Balance, June 30 $ 516,417 $ 41,899 $ 372,473 $ 330,574 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 409,425 $ 409,425 $ 409,425 $ - Resources (Inflows): Intergovernmental 2,585,500 2,588,848 2,230,083 (358,765) Use of money and property 5,700 - 657 657 Amounts Available for Appropriation 3,000,625 2,998,273 2,640,165 (358,108) Charges to Appropriation (Outflow): Community services 1,703,490 1,803,838 1,676,226 127,612 Total Charges to Appropriations 1,703,490 1,803,838 1,676,226 127,612 Budgetary Fund Balance, June 30 $ 1,297,135 $ 1,194,435 $ 963,939 $ (230,496) CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FEDERAL ASSISTANCE YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 190,000 431,087 438,031 6,944 190,000 431,087 438,031 6,944 30,000 431,087 438,031 (6,944) 30,000 431,087 438,031 (6,944) Budgetary Fund Balance, June 30 $ 160,000 $ - $ 100 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SLEBG YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 25,972 $ 25,972 $ 25,972 $ - Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 100,000 100,000 100,000 - - 90 404 314 125,972 126,062 126,376 314 100,000 100,090 55,061 45,029 100,000 100,090 55,061 45,029 $ 25,972 $ 25,972 $ 71,315 $ 45,343 101 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIGHTING AND LANDSCAPING YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 20,130 $ 20,130 $ 20,130 $ - Resources (Inflows): Assessments 965,300 965,300 956,048 (9,252) Amounts Available for Appropriation 985,430 985,430 976,178 (9,252) Charges to Appropriation (Outflow): Public works 965,300 965,300 952,296 13,004 Total Charges to Appropriations 965,300 965,300 952,296 13,004 Budgetary Fund Balance, June 30 $ 20,130 $ 20,130 $ 23,882 $ 3,752 102 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE QUIMBY YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 10,372,588 $10,372,588 $ 10,372,588 $ - 4,400 35,000 61,353 26,353 60,000 60,000 - (60,000) 10,436,988 10,467,588 10,433,941 (33,647) 118,511 10,284,761 2,011,105 8,273,656 118,511 10,284,761 2,011,105 8,273,656 Budgetary Fund Balance, June 30 $ 10,318,477 $ 182,827 $ 8,422,836 $ 8,240,009 103 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CONGESTION MANAGEMENT AIR QUALITY FUND YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) - 1,007,105 269,079 (738,026) 1,007,105 269,079 (738,026) - 1,007,105 269,079 738,026 1,007,105 269,079 738,026 104 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 22,880 $ 22,880 $ 22,880 $ - 100 100 169 69 2,000 2,000 2,000 - 24,980 24,980 25,049 69 2,000 2,000 - 2,000 2,000 2,000 - 2,000 $ 22,980 $ 22,980 $ 25,049 $ 2,069 105 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE ART IN PUBLIC PLACES YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Community services Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 893,404 $ 893,404 $ 893,404 $ - 500 3,100 5,909 2,809 30,825 30,825 52,076 21,251 924,729 927,329 951,389 24,060 24,700 24,700 15,981 8,719 251,500 251,500 73,869 177,631 - 200,000 - 200,000 276,200 476,200 89,850 386,350 $ 648,529 $ 451,129 $ 861,539 $ 410,410 110 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SOUTH COAST AIR QUALITY YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 288,133 $ 288,133 $ 288,133 $ - 53,200 57,124 72,352 15,228 200 300 569 269 341,533 345,557 361,054 15,497 48,900 48,900 56,802 (7,902) 4,300 259,206 239,956 19,250 53,200 308,106 296,758 11,348 $ 288,333 $ 37,451 $ 64,296 $ 26,845 107 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE AB 939 YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,335,058 $ 1,335,058 $ 1,335,058 $ - 5,500 4,600 8,027 3,427 - 50,000 50,000 - 1,340,558 1,389,658 1,393,085 3,427 187,709 260,209 192,221 67,988 32,100 32,100 - 32,100 - 194,279 125,623 68,656 219,809 486,588 317,844 168,744 $ 1,120,749 $ 903,070 $ 1,075,241 $ 172,171 108 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PROPOSITION 1 B YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ - $ - $ - $ - Resources (Inflows): Intergovernmental - 576,220 224,162 (352,058) Use of money and property - 1,670 2,105 435 Amounts Available for Appropriation - 577,890 226,267 (351,623) Charges to Appropriation (Outflow): Transfers out - 577,890 226,267 351,623 Total Charges to Appropriations - 577,890 226,267 351,623 Budgetary Fund Balance, June 30 $ - $ - $ - $ - 109 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE JUSTICE ASSISTANCE GRANT YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 24,500 20,523 20,523 - 24,500 20,523 20,523 - 24,500 20,643 20,523 120 24,500 20,643 20,523 120 $ - $ (120) $ - $ 120 110 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 1 YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ (1,414) $ (1,414) $ (1,414) $ - Resources (Inflows): Use of money and property Miscellaneous Transfers in Proceeds from sale of capital asset Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Total Charges to Appropriations 216,000 216,000 251,940 35,940 - - 1,302 1,302 167,075 979,075 781,094 (197,981) - 120,628 120,628 - 381,661 1,314,289 1,153,550 (160,739) 378,600 395,850 224,592 171,258 - 40,000 - 40,000 378,600 435,850 224,592 211,258 Budgetary Fund Balance, June 30 $ 3,061 $ 878,439 $ 928,958 $ 50,519 111 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 2 YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Miscellaneous Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ (1,377) $ (1,377) Actual Amounts $ (1,377) Variance with Final Budget Positive (Negative) - 498,200 492,647 (5,553) - 166,900 173,512 6,612 - 4,200 3,185 (1,015) 25,675 534,787 509,112 (25,675) 24,298 1,202,710 1,177,079 (25,631) 23,500 452,800 318,923 133,877 - 39,313 39,313 - - 200,443 200,443 - 23,500 692,556 558,679 133,877 $ 798 $ 510,154 $ 618,400 $ 108,246 112 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LOW/MODERATE INCOME HOUSING PA NO. 1 YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Miscellaneous Transfers in Proceeds from sale of capital asset Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 9,682,337 $ 9,682,337 $ 9,682,337 $ - 9,912,200 8,802,408 8,798,118 (4,290) 46,800 46,800 42,092 (4,708) - 23,029 54,157 31,128 - 40,000 - (40,000) 150,000 243,222 243,222 - 19,791,337 18,837,796 18,819,926 (17,870) 2,671,705 1,839,329 1,628,034 211,295 4,631,684 8,205,277 6,698,698 1,506,579 7,303,389 10,044,606 8,326,732 1,717,874 Budgetary Fund Balance, June 30 $12,487,948 $ 8,793,190 $10,493,194 $ 1,700,004 113 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ - $ - $ - $ - Resources (Inflows): Intergovernmental Developer participation Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 - 11,849,626 1,021,859 (10,827,767) 111,255 578,077 159,298 (418,779) (6,939,757) 73,048,514 21,481,447 (51,567,067) (6,828,502) 85,476,217 22,662,604 (62,813,613) - 85,149,452 21,180,979 63,968,473 - 326,765 302,895 23,870 - - 23,870 (23,870) - 85,476,217 21,507,744 63,968,473 $ (6,828,502) $ - $ 1,154,860 $ 1,154,860 114 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CIVIC CENTER YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ (9,833,714) $ (9,833,714) $ (9,833,714) $ - Resources (Inflows): Developer participation Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 127,600 127,600 82,191 (45,409) - 2,990,000 2,990,000 - (9,706,114) (6,716,114) (6,761,523) (45,409) 201,758 201,758 203,798 (2,040) 60,100 60,100 46,712 13,388 261,858 261,858 250,510 11,348 $ (9,967,972) $ (6,977,972) $ (7,012,033) $ (34,061) 115 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE 2011 LOW/MOD BOND YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ - $ - $ - $ - Resources (Inflows): Use of money and property Other debts issued Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Bond discount Other uses 1 Total Charges to Appropriations Budgetary Fund Balance, June 30 - 12,065 12,065 - - 28,850,000 28,850,000 - - 28,862,065 28,862,065 - - 2,694,381 2,694,381 - - - 308,839 (308,839) - 643,214 323,375 319,839 - 3,337,595 3,326,595 11,000 $ - $25,524,470 $ 25,535,470 $ 11,000 116 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INFRASTRUCTURE YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 405,039 $ 405,039 $ 405,039 $ - Resources (Inflows): Use of money and property 100 1,450 2,763 1,313 Amounts Available for Appropriation 405,139 406,489 407,802 1,313 Charges to Appropriation (Outflow): Transfers out - 393,074 - 393,074 Total Charges to Appropriations - 393,074 - 393,074 Budgetary Fund Balance, June 30 $ 405,139 $ 13,415 $ 407,802 $ 394,387 117 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE TRANSPORTATION YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Miscellaneous Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Transfers out Total Charges to Appropriations Budget Amounts Original Final $ 4,555,637 $ 4,555,637 Actual Amounts $ 4,555,637 Variance with Final Budget Positive (Negative) 1,700 14,800 27,682 12,882 441,500 341,500 225,362 (116,138) - 90,000 90,000 - 4,998,837 5,001,937 4,898,681 (103,256) - - 3,723 (3,723) 430,000 4,645,436 1,401,427 3,244,009 430,000 4,645,436 1,405,150 3,240,286 Budgetary Fund Balance, June 30 $ 4,568,837 $ 356,501 $ 3,493,531 $ 3,137,030 118 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATION YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Budget Amounts Original Final $ (1,417,770) $ (1,417,770) Actual Amounts $ (1,417,770) Variance with Final Budget Positive (Negative) 89,200 89,200 64,235 (24,965) (1,328,570) (1,328,570) (1,353,535) (24,965) 9,800 9,800 7,307 2,493 9,800 9,800 7,307 2,493 Budgetary Fund Balance, June 30 $ (1,338,370) $ (1,338,370) $ (1,360,842) $ (22,472) 119 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY DEVELOPMENT YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ (1,937,311) $ (1,937,311) $ (1,937,311) $ - Resources (Inflows): Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 35,500 35,500 25,915 (9,585) (1,901,811) (1,901,811) (1,911,396) (9,585) 12,700 12,700 12,383 317 12,700 12,700 12,383 317 $ (1,914,511) $ (1,914,511) $ (1,923,779) $ (9,268) 120 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE COMMUNITY CENTER YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 1,167,652 $ 1,167,652 $ 1,167,652 $ - Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Total Charges to Appropriations 5,800 4,200 7,988 3,788 7,400 7,400 5,402 (1,998) 1,180, 852 1,179,252 1,181, 042 1,790 Budgetary Fund Balance, June 30 $1,180,852 $ 1,179,252 $ 1,181,042 $ 1,790 121 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STREET FACILITY YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Transfers out Total Charges to Appropriations Budget Amounts Original Final $ (1,390,419) $ (1,390,419) Actual Amounts $ (1,390,419) Variance with Final Budget Positive (Negative) 17,800 12,800 8,661 (4,139) 2,917 2,917 1,606 (1,311) (1,369,702) (1,374,702) (1,380,152) (5,450) 13,100 13,100 8,126 4,974 - 641,403 640,903 500 13,100 654,503 649,029 5,474 Budgetary Fund Balance, June 30 $ (1,382,802) $ (2,029,205) $ (2,029,181) $ 24 122 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARK FACILITY YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ - $ - $ - $ Resources (Inflows): Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 2,200 2,200 1,606 (594) 2,200 2,200 1,606 (594) 2,917 2,917 1,606 1,311 2,917 2,917 1,606 1,311 $ (717) $ (717) $ - $ 717 123 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FIRE FACILITY YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Budget Amounts Original Final $ (935,294) $ (935,294) Actual Amounts $ (935,294) Variance with Final Budget Positive (Negative) 29,800 20,800 15,604 (5,196) (905,494) (914,494) (919,690) (5,196) 6,000 6,000 4,873 1,127 6,000 6,000 4,873 1,127 Budgetary Fund Balance, June 30 $ (911,494) $ (920,494) $ (924,563) $ (4,069) 124 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE 2004 LOW/MOD BOND YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 3,425,850 $ 3,425,850 $ 3,425,850 $ - Resources (Inflows): Use of money and property 8,700 8,700 6,429 (2,271) Amounts Available for Appropriation 3,434,550 3,434,550 3,432,279 (2,271) Charges to Appropriation (Outflow): Transfers out - 3,437,765 125,124 3,312,641 Total Charges to Appropriations - 3,437,765 125,124 3,312,641 Budgetary Fund Balance, June 30 $ 3,434,550 $ (3,215) $ 3,307,155 $ 3,310,370 125 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVLOPMENT AGENCY PA NO. 1 - CAPITAL PROJECT YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 43,877,652 $ 43,877,652 $ 43,877,652 $ - Resources (Inflows): Use of money and property Developer participation Transfers in Proceeds from sale of capital asset Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Total Charges to Appropriations 38,600 138,600 170,584 31,984 - 250,000 305,455 55,455 5,000,000 - 106,831 106,831 - 4,875,000 4,875,000 - 48,916,252 49,141,252 49,335,522 194,270 1,088,693 1,027,136 911,302 115,834 4,147,638 47,858,699 25,397,899 22,460,800 5,236,331 48,885,835 26,309,201 22,576,634 Budgetary Fund Balance, June 30 $ 43,679,921 $ 255,417 $ 23,026,321 $ 22,770,904 126 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVLOPMENT AGENCY PA NO. 2 - CAPITAL PROJECT YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Transfers in Other debts issued Proceeds from sale of capital asset Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers out Bond discount Other uses 1 Total Charges to Appropriations Budget Amounts Original Final $ 3,982,401 $ 3,982,401 Actual Amounts $ 3,982,401 Variance with Final Budget Positive (Negative) 11,100 17,660 20,925 3,265 2,000,000 1,276,516 1,276,516 - - 6,000,000 6,000,000 - - 3,445,000 3,445,000 - 5,993,501 14,721,577 14,724,842 3,265 209,461 4,124,661 2,582,602 1,542,059 1,460,154 7,995,408 7,377,748 617,660 - - 86,207 (86,207) - 206,207 108,500 97,707 1,669,615 12,326,276 10,155,057 2,171,219 Budgetary Fund Balance, June 30 $ 4,323,886 $ 2,395,301 $ 4,569,785 $ 2,174,484 127 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 1 - DEBT SERVICE YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Principal retirement Interest and fiscal charges Pass -through agreement payments Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ (13,187,890) $ (13,187,890) Actual Amounts $ (13,187,890) Variance with Final Budget Positive (Negative) 39,648,800 35,209,626 35,192,471 (17,155) - 6,600 12,802 6,202 4,438,934 19,478,126 19,478,126 - 30,899,844 41,506,462 41,495,509 (10,953) 484,400 5,341,793 5,241,338 100,455 4,147,722 4,147,722 4,147,722 - 8,661,435 8,088,102 8,088,102 - 21,920,827 19,372,337 19,309,866 62,471 8,963,138 3,963,138 3,963,138 - 44,177,522 40,913,092 40,750,166 162,926 $ (13,277,678) $ 593,370 $ 745,343 $ 151,973 128 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 2 - DEBT SERVICE YEAR ENDED JUNE 30, 2011 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Principal retirement Interest and fiscal charges Pass -through agreement payments Transfers out Total Charges to Appropriations Budget Amounts Original Final $ (4,914,802) $ (4,914,802) Actual Amounts $ (4,914,802) Variance with Final Budget Positive (Negative) 17,443,113 14,351,237 19,349,036 4,997,799 - 49,600 47,887 (1,713) 1,951,993 6,235,134 6,255,653 20,519 14,480,304 15,721,169 20,737,774 5,016,605 255,100 274,000 215,555 58,445 125,000 325,000 325,000 - 1,949,772 1,387,803 1,387,803 - 18,935,710 15,999,408 16,297,223 (297,815) 3,951,993 1,951,993 1,951,993 - 25,217,575 19,938,204 20,177,574 (239,370) Budgetary Fund Balance, June 30 $ (10,737,271) $ (4,217,035) $ 560,200 $ 4,777,235 129 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FINANCING AUTHORITY YEAR ENDED JUNE 30, 2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 3,890 $ 3,890 $ 3,890 $ - Resources (Inflows): Charges for services Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 15,800 15,800 6,807 (8,993) 672,525 672,525 672,525 - 5,915,131 8,609,513 8,609,513 - 6,607,346 9,301,728 9,292,735 (8,993) 12,800 12,800 9,196 3,604 2,160,000 2,160,000 2,160,000 - 4,427,656 4,427,656 4,427,656 - 6,600,456 6,600,456 6,596,852 3,604 $ 6,890 $ 2,701,272 $ 2,695,883 $ (5,389) 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, 2011 Assets: Current: Cash and investments Receivables: Accrued interest Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Assets: Liabilities: Current: Accounts payable Accrued liabilities Total Current Liabilities Noncurrent: Accrued compensated absences Total Noncurrent Liabilities Total Liabilities Net Assets: Invested in capital assets, net of related debt Unrestricted Total Net Assets Total Liabilities and Net Assets Governmental Activities - Internal Service Funds Park Equipment Information Equipment and Replacement Technology Facilities Totals $ 1,612,086 $ 918,064 $ 700,455 $ 3,230,605 1,151 667 496 2,314 1,613,237 918,731 700,951 3,232,919 930,374 344,180 15,753,428 17,027,982 930,374 344,180 15,753,428 17,027,982 $ 2,543,611 $ 1,262,911 $ 16,454,379 $ 20,260,901 $ 60,074 $ 12,843 $ 6,969 $ 79,886 - 3,854 - 3,854 60,074 16,697 6,969 83,740 - 9,415 - 9,415 - 9,415 - 9,415 60,074 26,112 6,969 93,155 930,374 344,180 15,753,428 17,027,982 1,553,163 892,619 693,982 3,139,764 2,483,537 1,236,799 16,447,410 20,167,746 $ 2,543,611 $ 1,262,911 $ 16,454,379 $ 20,260,901 132 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2011 Governmental Activities - Internal Service Funds Park Equipment Information Equipment and Replacement Technology Facilities Totals Operating Revenues: Sales and service charges $ 27,776 $ 2,295 $ - $ 30,071 Total Operating Revenues 27,776 2,295 - 30,071 Operating Expenses: Salaries and benefits - 110,790 - 110,790 Fuel and oil 102,113 - - 102,113 Maintenance and parts 141,828 - - 141,828 Contract services 14,058 41,047 56,548 111,653 Software and supplies - 135,315 - 135,315 Other - 16,317 - 16,317 Depreciation expense 209,142 110,879 472,188 792,209 Total Operating Expenses 467,141 414,348 528,736 1,410,225 Operating Income (Loss) (439,365) (412,053) (528,736) (1,380,154) Nonoperating Revenues (Expenses): Interest revenue 11,383 6,934 4,925 23,242 Total Nonoperating Revenues (Expenses) 11,383 6,934 4,925 23,242 Income (Loss) Before Contributions and Transfers (427,982) (405,119) (523,811) (1,356,912) Capital contributions 45,000 - 2,144,627 2,189,627 Transfers out - - (4,555) (4,555) Changes in Net Assets (382,982) (405,119) 1,616,261 828,160 Net Assets: Beginning of Year 2,866,519 1,641,918 14,831,149 19,339,586 End of Fiscal Year $ 2,483,537 $ 1,236,799 $ 16,447,410 $ 20,167,746 133 CITY OF LA QUINTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2011 Governmental Activities - Internal Service Funds Park Equipment Information Equipment Replacement Technology and Facilities Totals Cash Flows from Operating Activities: Cash received from customers and users $ 27,776 $ 2,295 $ - $ 30,071 Cash paid to suppliers for goods and services (207,166) (259,012) (65,213) (531,391) Cash paid to employees for services - (109,798) (109,798) Net Cash Provided (Used) by Operating Activities (179,390) (366,515) (65,213) (611,1l Cash Flows from Non -Capital Financing Activities: Cash transfers out Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in compensated absences Total Adjustments Net Cash Provided (Used) by Operating Activities - (4,555) (4,555) (4,555) (4,555) (5,200) (69,408) - (74,608) (5,200) (69,408) - (74,608) 11,564 7,304 5,060 23,928 11,564 7,304 5,060 23,928 (173,026) (428,619) (64,708) (666,353) 1,785,112 1,346,683 765,163 3,896,958 $ 1,612,086 $ 918,064 $ 700,455 $ 3,230,605 $ (439,365) $ (412,053) $ (528,736) $ (1,380,154) 209,142 110,879 472,188 792,209 - 240 - 240 50,833 (67,023) (8,665) (24,855) - 450 - 450 259,975 45,538 463,523 769,036 $ (179,390) $ (366,515) $ (65,213) $ (611,1l Non -Cash Investing, Capital, and Financing Activities: Capital assets contributed by other funds $ 45,000 $ - $ 2,144,627 $ 2,189,627 134 AGENCYFUNDS Agency funds are used to account for assets held by the City as an agent for individual, private organizations and other governmental units. The agency funds and their purposes are as follows: The City of La Quinta has the following agency funds: Assessment District No. 97-1 and 2001-1 — To account for assessments paid to the City for debt service payments on bond issues used to finance sewer improvements. 135 CITY OF LA QUINTA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2011 Assessment Assessment District No. District No. 97-1 2001-1 Totals Assets: Pooled cash and investments $ 135,326 $ 385,866 $ 521,192 Receivables: Taxes 1,210 12,153 13,363 Accrued interest 92 262 354 Total Assets $ 136,628 $ 398,281 $ 534,909 Liabilities: Deposits payable $ 136,628 $ 398,281 $ 534,909 Total Liabilities $ 136,628 $ 398,281 $ 534,909 136 CITY OF LA QUINTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2011 Balance Balance July 1, 2010 Additions Deductions June 30, 2011 Assessment District No. 97-1 Assets: Pooled cash and investments $ 149,321 $ 63,765 $ 77,760 $ 135,326 Receivables: Taxes 1,419 1,210 1,419 1,210 Accrued interest 109 92 109 92 Total Assets $ 150,849 $ 65,067 $ 79,288 $ 136,628 Liabilities: Deposits payable $ 150,849 $ 63,539 $ 77,760 $ 136,628 Total Liabilities $ 150,849 $ 63,539 $ 77,760 $ 136,628 Assessment District No. 2001-1 Assets: Pooled cash and investments $ 402,387 $ 203,920 $ 220,441 $ 385,866 Receivables: Taxes 12,371 12,153 12,371 12,153 Accrued interest 297 262 297 262 Total Assets $ 415,055 $ 216,335 $ 233,109 $ 398,281 Liabilities: Deposits payable $ 415,055 $ 203,668 $ 220,442 $ 398,281 Total Liabilities $ 415,055 $ 203,668 $ 220,442 $ 398,281 Totals - All Agency Funds Assets: Pooled cash and investments $ 551,708 $ 267,685 $ 298,201 $ 521,192 Receivables: Taxes 13,790 13,363 13,790 13,363 Accrued interest 406 354 406 354 Total Assets $ 565,904 $ 281,402 $ 312,397 $ 534,909 Liabilities: Deposits payable $ 565,904 $ 267,207 $ 298,202 $ 534,909 Total Liabilities $ 565,904 $ 267,207 $ 298,202 $ 534,909 137 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 Financial Trends Page These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. 140 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 CITY OF LA QUINTA Net Assets by Component Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year TABLE 1 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Governmental activities: Invested in capital assets, net of related debt $ 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 $ 276,787,752 Restricted 74,156,691 40,038,313 44,415,966 43,421,857 65,159,623 49,277,895 86,041,189 105,297,168 96,332,870 107,042,126 Unrestricted 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 97,009,428 Total governmental activities net assets $ 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 $ 480,839,306 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 $ 42,491,051 Restricted - - - - - - - - - - Unrestricted (626,658) (1,665,646) (2,385,462) (3,109,524) (3,937,454) (4,863,848) (4,918,951) Total business -type activities net assets $ - $ - $ - $ 40,674,188 $ 40,409,526 $ 40,306,563 $ 39,668,491 $ 38,599,154. $ 38,015,634 $ 37,572,100 Primary government: Invested in capital assets, net of related debt $ 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 $ 319,278,803 Restricted 74,156,691 40,038,313 44,415,966 43,421,857 65,159,623 49,277,895 86,041,189 105,297,168 96,332,870 107,042,126 Unrestricted 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 92,090,477 Total primary government net assets $ 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 $ 518,411,406 Source: City of La Quinta 140 2002 2003 2004 CITY OF LA QUINTA Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) TABLE 2 2005 2006 2007 2008 2009 2010 2011 Expenses: Governmental activities: General government $ 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 $ 11,283,358 Public safety 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 21,070,458 Community services 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 4,735,964 Planning and development 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 18,715,283 Public works 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 10,757,279 Contribution to other agencies - - - - - - - - - 31,324,064 Interest on long-term debt 7,791,752 8,555,401 9,658,779 15,265,051 15,494,656 15,163,422 15,522,441 15,631,438 15,330,603 14,353,359 Total governmental activities expenses 33,512,174 47,497,312 39,212,009 43,384,794 46,129,054 56,719,711 88,166,050 76,431,897 104,315,622 112,239,765 Business -type activities: Golf Course 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 4,202,274 Total business -type activities expenses 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 4,202,274 Total primary government expenses 33,512,174 47,497,312 39,212,009 45,262,085 50,652,200 61,239,884 92,927,631 80,872,443 108,485,390 116,442,039 Program revenues: Governmental activities: Charges for services: General government 253,891 298,749 337,376 445,663 717,849 60,530 8,328 25,053 21,439 47,696 Public safety 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 1,044,399 Planning and development 565,098 611,278 662,737 754,938 1,873,676 169,643 134,211 138,391 69,391 74,471 Community services 170,865 205,806 252,677 252,501 428,947 387,065 374,092 275,178 250,557 210,151 Public works 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 1,086,771 Operating grants and contributions 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 13,152,942 Capital grants and contributions 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 3,157,828 Total govemmental activities program revenues 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 18,774,258 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 3,756,615 Capital grants and contributions 352,687 Total business -type activities program revenues - 1,091,836 3,120,728 3,540,748 4,166,920 3,368,135 3,584,996 3,756,615 Total primary government program revenues 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 22,530,873 (continued) (continued) (continued) (continued) (continued) (continued) (continued) (continued) (continued) (continued) Net revenues (expenses): Governmental activities (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) (93,465,507) Business -type activities (785,455) (1,402,418) (979,425) (594,661) (1,072,411) (584,772) (445,659) Total net revenues (expenses) (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) (93,911,166) General revenues and other changes in net assets: Governmental activities: Taxes: Property taxes 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 5,942,353 Tax increment 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 32,569,795 Sales tax 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 7,323,835 Transient occupancy taxes 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 4,737,968 Franchise taxes 654,696 690,544 895,810 1,185,087 1,044,470 1,259,985 1,748,082 1,533,249 1,585,427 1,607,829 Business license taxes 168,798 186,220 191,062 251,618 276,917 307,032 317,011 285,304 302,223 285,270 Other taxes 311,024 513,934 675,996 1,141,177 1,049,701 872,753 641,705 455,089 461,957 437,235 Investment income 3,006,097 1,353,868 1,738,505 4,336,050 6,319,502 11,854,951 10,230,489 7,387,244 5,362,694 4,693,974 Motor vehicle in lieu, unrestricted 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 3,515,395 Gain (loss) on sale of capital assets (21,397) - - 3,717,470 1,967,292 - 57,346 21,542 2,330 - Miscellaneous 692,691 513,876 1,489,612 2,397,474 1,943,093 2,052,246 1,220,627 118,567 477,936 3,211,584 Transfers - + (41,459,643) + (1,137,203) (874,645) Total governmental activities 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 64,325,238 Business -type activities: Investment income - - - - 553 1,817 4,310 3,074 1,252 2,125 Gain (loss) on sale of capital assets - - - - - - (47,721) - - - Transfers - 41,459,643 + 1,137,203 874,645 Total business -type activities 41,459,643 1,137,756 876,462 (43,411) 3,074 1,252 2,125 Total primary government 33,696,242 36,400,652 42,749,418 54,109,779 67,239,482 81,566,998 79,924,110 68,860,630 64,769,859 64,327,363 Changes in net assets Governmental activities 18,395,502 1,488,700 24,498,469 (1,500,737) 67,704,803 50,889,360 52,265,114 16,919,485 (15,642,529) (29,140,269) Business -type activities 40,674,188 (264,662) (102,963) (638,072) (1,069,337) (583,520) (443,534) Total primary government $ 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) $ (29,583,803) ' The transfer was for land & golf course improvements transferred to the Enterprise Fund. Source: City of La Quinta 141 CITY OF LA QUINTA Table 3 Changes in Net Assets - Governmental Activities Last Ten Fiscal Years (accmal basis of accounting) Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Expenses: General government $ 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 $ 11,283,358 Public safety 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 21,070,458 Community services 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 4,735,964 Planning and development 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 18,715,283 Public works 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 10,757,279 Contribution to other agencies - - - - - - - - - 31,324,064 Interest on long-term debt 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 14,353,359 Total governmental activities expenses 33,512,174 47,497,312 39,212,009 43,384,794 46,129,054 56,719,711 88,166,050 76,431,897 104,315,622 112,239,765 Program revenues: Charges for services: General government 253,891 298,749 337,376 445,663 717,849 60,530 8,328 25,053 21,439 47,696 Public safety 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 1,044,399 Community services 170,865 205,806 252,677 252,501 428,947 387,065 374,092 275,178 250,557 210,151 Planning and development 565,098 611,278 662,737 754,938 1,873,676 169,643 134,211 138,391 69,391 74,471 Public works 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 1,086,771 Operating grants and contributions 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 13,152,942 Capital grants and contributions 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 3,157,828 Total governmental activities program revenues 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 18,774,258 Net program revenues (expenses) (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) (93,465,507) General revenues and other changes in net assets: Taxes: Property taxes 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 5,942,353 Tax increment 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 32,569,795 Sales tax 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 7,323,835 Transient occupancy taxes 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 4,737,968 Franchise tax 654,696 690,544 895,810 1,185,087 1,044,470 1,259,985 1,748,082 1,533,249 1,585,427 1,607,829 Business license taxes 168,798 186,220 191,062 251,618 276,917 307,032 317,011 285,304 302,223 285,270 Othertax 311,024 513,934 675,996 1,141,177 1049701 872,753 641,705 455,089 461,957 437,235 Motor vehicle in lieu, unrestricted 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 3,515,395 Investment income 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 4,693,974 Gain (loss) on sale of capital assets (21,397) - - 3,717,470 1967292 - 57,346 21,542 2,330 - Miscellaneous 692,691 513,876 1,489,612 2,397,474 1943093 2,052,246 1,220,627 118,567 477,936 3,211,584 Transfers (41,459,643) (1,137,203) (874,645) Total governmental activities 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 64,325,238 Changes in net assets - governmental activities $ 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) $ (29,140,269) Source: City of La Quints 142 CITY OF LA QUINTA TABLE 4 Changes in Net Assets - Business -type Activities Last Seven Fiscal Years (accrual basis of accounting) Fiscal Year 2005 2006 2007 2008 2009 2010 2011 Expenses: Golf Course 1,877,291 2 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 4,202,274 Total business -type activities expenses 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 4,202,274 Program revenues: Charges for services: Golf Course 1,091,836 2 3,120,728 3,540,748 3,814,233 3,368,135 3,584,996 3,756,615 Capital grants and contributions - 352,687 Total business -type activities program revenues 1,091,836 3,120,728 3,540,748 4,166,920 3,368,135 3,584,996 3,756,615 Net revenues (expenses) (785,455) (1,402,418) (979,425) (594,661) (1,072,411) (584,772) (445,659) General revenues and other changes in net assets: Investment income 553 1,817 4,310 3,074 1,252 2,125 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 2,125 Changes in net assets - business -type activities 40,674,188 (264,662) 876,462 (638,072) (1,069,337) (583,520) (443,534) The City of La Quinta implemented the business type activities in FY The transfer was for land & golf course improvements transferred to the Enterprise Fund. 2 This was the first full year of operations for the Golf Course Source: City of La Quinta 143 CITY OF LA QUINT, Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) TABLE 5 Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 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 $ 23,260 Land held for resale - - - - - - - - - 8,320,000 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 15,373,104 Deposits 2,175 149,518 1,073 246,858 5,903 4,825 9,830 9,830 9,967 Restricted for: Debt service 1,800,000 - - - - - - - - - 169,631 Committed: 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 18,018,595 Post retirement health benefits - - - 1,258,059 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 1,768,494 Unassigned: 12,958,494 18,795,060 16,061,573 13,579,479 13,308,205 18,239,315 32,741,545 20,423,375 22,335,655 13,525,704 48,140,444 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 $ 93,081,554 All other governmental funds: Nonspendable: Prepaid costs $ 3,515 $ - $ - $ - $ - $ 7,987 $ 7,977 $ 5,353 $ 19,197 $ 7,740 $ 10,563 Land held for resale - - - - - - - - - - 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 2,081,614 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 4,569,188 Deposits - 185,000 - 1,110 - - - 4,540 6,400 6,000 Restricted: Planning and development pi 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 34,018,930 Public safety 72,249 72,255 40,208 8,413 154,115 143,846 153,818 198,943 245,468 48,852 96,364 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 10,248,314 Public works 475,226 401,984 374,700 409,534 256,881 462,171 104,878 309,566 7,539,181 448,731 396,355 Capital Projects 28,959,009 52,445,043 50,673,421 124,658,452 99,186,105 92,112,917 66,225,066 69,626,275 50,556,866 53,123,856 58,111,106 a 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 4,001,426 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) (13,250,398) Total all other governmental fund $ 31745523 $ 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 $100,289,462 The increase was primarily the result of the issuance of the 2004 Financing Authority bonds. 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 GASS 54 not only Fiscal Year 2009-2010 but all nine prior years. The increase was primarily the result of the issuance of the 2011 Financing Authority bonds. Source: City of La Quints 144 CITY OF LA QUINTA TABLE 6 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Revenues: Taxes $ 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 $ 88,498,457 Assessments 757,619 780,259 816,045 825,292 818,526 877,191 909,229 927,816 966,639 956,048 Licenses and permits 1,857,691 1,982,127 3,096,145 3,226,167 5,145,430 2,788,882 2,107,035 871,167 472,409 547,071 Intergovernmental 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 19,005,643 Charges for services 1,757,744 2,302,759 2,619,578 3,402,602 3,367,989 1,821,794 1,334,060 673,779 484,043 501,418 Use of money and property 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 4,670,732 Contributions - - - - - - 37,643,190 240,591 395,823 327,751 Developer participation 2,298,647 3,021,245 5,718,073 6,091,156 12,473,440 5,310,440 6,537,991 2,243,785 273,739 945,805 Miscellaneous 584,197 483,777 1,359,539 528,903 637,054 412,353 629,471 720,185 608,342 319,763 Total revenues 64,987,678 70,554,718 88,623,817 102,290,699 143,404,516 140,922,303 183,288,970 131,216,396 121,844,668 115,772,688 Expenditures Current: General government 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 10,885,519 Public safety 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 19,826,372 Planning and development 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 8,460,420 Community services 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 4,147,758 Public works 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 4,808,060 Capital projects 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 21,287,775 Debt service: Principal retirement 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 7,011,261 Interest and fiscal charges 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 15,037,919 Payment to bond escrow - - 1,591,107 - - - - - - - Payments under pass -through obligat 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 35,607,089 Total expenditures 114,913,074 70,192,981 110,757,923 113,284,100 113,493,227 155,240,087 199,069,689 140,920,884 142,634,007 127,072,173 Excess (deficiency) of revenues over (under) expenditures (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) (11,299,485) Other financing sources (uses): Issuance of tax allocation bonds 88,000,000 - 26,400,000 - - - - - - 6,000,000 Issuance of revenue bonds - 90,000,000 - - - - - - 28,850,000 Payment to bond escrow - (19,955,000) - - - - - - - Transfers in 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 61,657,034 Transfers out (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) (61,652,479) 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 - - 8,683,850 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 43,538,405 Net change in fund balances $ 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) $ 32,238,920 Debt service as a percentage of noncapital expenditures 54.2 % 43.5 % 57.9 % 62.0 % 65.5 % 61.0 % 47.1 % 59.0 % 47.6 % 53.0 Source: City of La Quints 145 CITY OF LA QUINTA TABLE 7 Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in dollars) Entire City (including Redevelopment Agency) Fiscal Year Taxable Ended Less: Assessed Direct June 30 Secured Unsecured Exemptions Value Perent Change 2002 3,162,945,116 30,599,753 (50,149,068) 3,143,395,801 18.87% 2003 3,789,678,041 32,607,713 (54,726,303) 3,767,559,451 19.86% 2004 5,412,382,710 40,940,877 (95,420,075) 5,357,903,512 42.21 % 2005 6,289,493,552 44,014,548 (113,037,003) 6,220,471,097 16.10% 2006 7,856,383,375 72,554,357 (115,071,146) 7,813,866,586 25.62% 2007 9,986,151,525 88,740,840 (99,245,721) 9,975,646,644 27.67% 2008 11,854,669,637 101,433,002 (89,688,505) 11,866,414,134 18.95% 2009 12,410,626,893 113,185,065 (107,777,195) 12,416,034,763 4.63% 2010 11,742,665,902 121,272,880 (110,752,890) 11,753,185,892 -5.34% 2011 10,913,083,169 118,972,704 (161,265,140) 10,870,790,733 -7.51% 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. Source: County of Riverside Auditor -Controller 146 CITY OF LA QUINTA TABLE 8 Assessed Value and Estimated Actual Value of Taxable Property - Redevelopment Agency Last Six Fiscal Years (in dollars) Fiscal Year Ended June 30 Secured Redevelopment Agency Project Area 1 Taxable Less: Assessed Base Taxable Unsecured Exemptions Value Year Increment 2006 $ 3,962,433,928 $ 29,248,534 $ 2007 4,789,836,901 34,084,343 2008 5,223,508,114 34,250,061 2009 5,259,271,091 31,678,492 2010 4,925,639,242 36,169,030 2011 4,527,126,186 35,335,685 (35,653,495) $ 3,956,028,967 (36,081,051) 4,787,840,193 (36,913,004) 5,220,845,171 (36,844,457) 5,254,105,126 (36,077,902) 4,925,730,370 (35,822,516) 4,526,639,355 $ 199,398,233 $ 3,756,630,734 199,398,233 4,588,441,960 199,398,233 5,021,446,938 199,398,233 5,054,706,893 199,398,233 4,726,332,137 199,398,233 4,327,241,122 Redevelopment Agency Project Area 2 Fiscal Year Taxable Ended Less: Assessed Base Taxable June 30 Secured Unsecured Exemptions Value Year Increment 2006 $ 2,132,426,502 $ 32,999,788 $ 2007 2,434,082,787 42,914,862 2008 2,764,306,278 50,616,017 2009 2,843,981,136 62,180,440 2010 2,641,339,455 66,270,232 2011 2,522,266,207 60,448,173 Source: County of Riverside Auditor -Controller (54,125,422) $ 2,111,300,868 $ (53,144,959) 2,423,852,690 (40,774,044) 2,774,148,251 (57,076,727) 2,849,084,849 (60,340,787) 2,647,268,900 (110,797,044) 2,471,917,336 Note: The information was first presented in Fiscal Year 2006. 95,182,755 $ 2,016,118,113 95,182,755 2,328,669,935 95,182,755 2,678,965,496 95,182,755 2,753,902,094 95,182,755 2,552,086,145 95,182,755 2,376,734,581 147 CITY OF LA QUIRTA TABLE 9 Direct and Overapping Property Tax Raa. (Rate par $100 d......ed value) Lest Si, Facet Yee, City Rsdevelopmenl Redevelopment Nan-Proled Mee Project Mee 1 Project Area 2 20061 20011 20081 20091 20101 20111 2008a 2007a 20084 20094 20f04 20114 2.06 a. 2007 a. 20084 20094 20104 20114 Direct Rat..: City of Le Quints 0.0760 0.0760 0.0760 0.0506 0.0506 0.0934 0.0000 0.0000 0.0000 0,0152 0.0036 0.0049 0.0000 0.0000 0.0000 0,0000 0.0000 0.0019 Redevelopment agency Project M.a 1 0.0000 0.0000 0.0000 0,0000 0.0000 0.0000 05830 05880 0.5150 0.5245 0.5432 0.5 W 0.0000 0.0000 0.0000 0.0000 0,0000 0.0000 Redevelopment agency Project Ar.a 2 0.0000 0.00W 0.0000 0.00M 0.0000 0.0000 0.0000 OWN 0,0000 0.0000 0.0000 0.00W 02860 0.2920 02910 0.3193 0,3174 0.3059 C.Myof Ri-ide 0.1960 0.1960 0.1%0 0.2586 02586 0.2318 0.263. 0.2619 0.261. 0,2325 0.2501 02471 0.2617 0.2617 0.2617 02516 0.2531 0.2511 County Free Library 0.13250 0.0250 0.0250 0.0284 0.0284 0.0280 0.02T6 0.0276 0.0276 00277 0.0276 0,0282 0.0280 0.0280 0.0280 OA280 0.0280 ..0286 C.My Structure Fire Protection 0.0540 0.0540 0.0540 0.0610 0.0610 0.0602 0.0595 0.0595 0.0595 0.U595 0.0595 0.0607 0.0603 0.0603 0.0603 00603 0.0603 0.0616 Coach&Ia Volley (CV) Unified School 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0170 0.0150 0.0020 0 0149 0.0167 0,0182 0.0000 0.0000 0.0020 OA000 0.0000 0.0000 Dosed Sands Unifies School 0.4320 01.0 0.4320 0.3765 0.3765 0.3716 0.0160 0.0140 0.0140 0,0695 0.0568 0.0637 0.2000 0.1980 0.1970 0.1860 0.1859 ..1- - C.-Mly College 0.0700 0.0700 0.0700 0.0782 0.0782 0.0772 0.0.. 0.0030 0,0720 0,0177 0.0152 0,0166 0.0420 0.0410 0.- OA386 0.0386 0.0401 Riverside County Once of Education 0.0380 00380 0.0380 0.0426 0.0426 0,0420 0.0.. 0.0030 0.0180 0,0093 0.0027 0.0038 0.0230 0.0220 0.0220 OA210 0.0210 0.0218 Riverside County Regional Pent & Open Space 0...0 0.0040 0...0 0.0000 0.0000 0.0000 0.0000 0.0000 0,0030 0,0000 0.0000 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 0,0035 0.0.. 0.00M 0.0000 0,0008 0.0002 0.0003 0.0000 0.0000 0.0000 OA000 0.0000 0.- CV Mosquito O.D127 0.0127 0.0127 0.0142 0.0142 0.0141 0.0120 0.0120 0.0120 -112 0.0111 0,0112 0.0150 0.0140 0.0140 0,0141 0.0141 0.0141 Dosed Recreation District 0.0192 0.0192 0.0192 0.0215 0.0215 0,0213 0.0010 0.0020 0.0010 0.0044 0.0014 0.0019 0.0060 0.0060 0.0060 OA053 0.0053 00059 CVWater DW,id 0.0250 0.0250 0.0250 0.0284 0.0284 0.0281 0.0130 0.0130 0,0010 0.0127 0.0120 0,0124 0.0770 0.0760 0-0 0,0757 0.0757 0.0740 CV Resource Conservation 0.0003 0.0003 0.0003 0.0004 0..0. 0,0004 0.0.. 0.00M 0.0130 0.0001 0.0000 0.0000 0.0000 0.0000 0.0000 OA000 0.0000 00000 CVWD Di-1 Debt S.m- 0.0118 0.0118 0.0118 0.0000 0.0000 0.0131 0.0000. 0.0000 0,0000 OA000 0.0000 0,0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0005 CVWD Strom Water Unit O.D320 0.0320 0.... 0.0360 0.0360 0.0355 0.0010 0.0010 0.0000 0.0000 0.0000 0.0000 0.0010 0.0010 0.0010 OA000 0.0000 0.0014 Trial Died 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 10000 1.0000 1.0000 Tax Rate Prey 020-005 Overlapping Rates s: 02M5 02M5 02M5 02M5 02"05 City of La Quints C..yof Riverside Riverside County Office d Educaton Riverside County Pension Obligation Dosed Sands Unified 0.0767 0.0761 0.0799 CAM 0.0811 0.1004 Coachella Valley Unified School Dlstrid Coachella Valley Water District 0.0442 OA332 0.0462 0.0464 0.0660 0.0860 Coachella Valley Recreation & Park D-t Dosed Comm College Di-t 0.0199 0.0199 0.0199 0.0199 0.0200 0.0200 Trial Overlapping Rate 0.f409 0.1293 0.1461 0.1462 0.1671 0.2063 Tool Direct and Overlapping Rale 1.1401 1.12B5 1.1453 1.1.2 1.1671 1.2063 NOTE: In 1978, Califmnia voters passed Prop0oflh-13 which sets the property tax mte at a 1.00% feed amouv[ for direct taxes. Thi: L00%i. shared by all taxing agencies for which the sobj- property resides within Source: County Df Riversidefwditor ConVMlera00ice Direct rate from Tax Rate Area (TRA) 020-059 provided by Hel Cmen & Cane and ovedappin9 debt ate. from Califomia Munidpol Statistics Direct are taken from all non -RDA TRA'. provided by Me C-ty of Riverside and do not include ERAF deductions and wedappin9 rates p,ovided by California Municipal Btatist. Direct ate taken horn an analysis by Me City of La Quints Finance o Depad-t stag of all TRA'. the Project area and do nd include Sao ERAF tledudions antl overlapping rates provided by Califomia Municipal -.- Di- Direct refs taken from an analysis dthe TRA Io the Project area and do nd include Sale ERAF tledudions and overlapping rates provided by Cali/omie Municipal Satistics Overapping retes are booed upon a single tax rem area only. Nate: Th. ih-Minn was first presented Io Fscal Year 2006. 020015 020-015 02M89 020089 020-089 020-089 020-144 020-144 020-144 020-144 020-144 020-1. 0OI67 00761 0,0756 0.0199 0.0811 0.1004 0.0167 0,0761 00756 007N 00811 0.1004 0.0199 00208 0.0484 0.0464 0.0660 0.0860 0.0442 0.0332 004M 00464 00660 0.0860 0.0208 0.0199 00199 0,0199 0,02W 0.0200 0.0199 0.0199 O W 99 00199 0.02W 0.0200 0.1175 0.1169 0.1440 0.1462 0.1671 0.2063 0A- 0.1293 0.1.0 0.1462 0.1671 0.2063 1.1175 1.1169 1.1440 1.1463 1.1671 1.2063 1.1409 1.1293 1.- 1.1462 1.1671 1.2063 148 CITY OF LA QUINTA TABLE 10 Principal Property Taxpayers Current Year and Nine Years Ago (in dollars) 2011 2002 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 $ 144,680,362 1 1.33% $ 222,149,917 1 7.07% TD Desert Development 105,099,843 2 0.97% 29,836,141 2 0.95% MSR Resort Golf Course 71,369,895 3 0.66% - - East of Madison LLC 63,614,331 4 0.59% Coral Option I LLC 42,259,153 5 0.39% Inland American La Quinta Pavilion 42,230,554 6 0.39% - WRM La Quinta 37,689,411 7 0.32% - Griffin Ranch 36,725,785 8 0.34% Village Resort 34,403,510 9 0.32% - ND La Quinta Partners 31,884,196 10 0.29% - - Quarry at La Quinta - - 20,974,081 3 0.67% Eagle Hardware and Garden Inc. 20,207,818 4 0.64% RJT Homes - 16,212,028 5 0.52% M & H Realty Partnership II - 13,766,889 6 0.44% Mery Griffin Living Trust - 13,301,949 7 0.42% Walmart Stores - 13,126,931 8 0.42% Landaq Inc. - 12,831,133 9 0.41% Capstone Golf West - - 12,107,513 10 0.39% $ 609,957,040 5.60% $ 374,514,400 11.54% NOTE :The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Coren & Cone 149 CITY OF LA QUINTA Property Tax Levies and Collections Last Six Fiscal Years ( in dollars) Collected within the Fiscal Taxes Levied Fiscal Year of Levy Collections in Year Ended for the Percent Subsequent June 30 Fiscal Year Amount of Levy Years TABLE 11 Total Collections to Date Percent 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% 2011 72,735,079 74,047,640 101.80% 259,209 74,306,849 102.16% 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 information was first presented in Fiscal Year 2006. Source: County of Riverside Auditor Controller's Office 150 CITY OF LA QUINTA TABLE 12 Ratios of Outstanding Debt by Type Last Ten Fiscal Years (in dollars) Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Governmental Activities Reimbursement Agreement $ 528,311 $ 478,311 $ 428,311 $ 378,311 $ 328,311 $ 278,311 $ 228,311 $ 178,311 $ 128,311 $ - Compensated Absences 422,197 462,260 531,553 549.028 608,266 734,055 829,227 919,100 1,002,601 965,921 Capital lease - - - - - - - 149,169 114,583 78,253 USDA Loan - - - - - - - 751,754 741,171 729,480 Provident Savings Loan - - - - - - - 1,556,283 1,530,958 1,503,433 Due to Coachella Valley Unified School District 8,063,172 7,365,254 6,653,377 5,927,263 5,186,627 4,431,178 3,675,731 2,874,653 2,072,965 1,255,243 Due to County of Riverside 2,250,000 2,150,000 2,050,000 1,950,000 1,850,000 1,750,000 1,600,000 1,400,000 1,200,000 1,000,000 Developer Agreement 743,723 684,688 1,010,688 898,141 776,030 643,539 511,048 343,814 174,584 - Tax Allocation Bonds Project Area 1 136,278,708 134,776,344 142,507,628 140,263,659 141,785,000 139,145,000 136,350,000 133,390,000 130,255,000 126,925,000 Tax Allocation Bonds Project Area 2 10,921,128 10,801,820 6,325,000 6,230,000 6,130,000 6,025,000 5,915,000 5,800,000 5,680,000 11,555,000 2004 Local Agency Revenue Bonds - 87,924,343 87,947,058 89,265,000 87,745,000 86,175,000 84,560,000 82,890,000 81,150,000 2011 Local Agency Revenue Bonds - - - - - - 28,850,000 City Hall Lease Revenue Bonds 7,475,000 7,190,000 6,890,000 6,575,000 6,245,000 5,900,000 5,540,000 5,160,000 4,760,000 4,340,000 Unamortized Discount and Issuance Costs - (877,230) (877,230) (841,087) (804,944) (768,801) (1,115,799) Total Governmental 166,682,239 163,908,677 254,320,900 250,718,460 251,297,004 245,774,853 239,983,230 236,278,140 229,781,372 257,236,531 Business -type Activities Capital Leases 801,417 1,090,602 825,848 681,048 285,217 54,543 286,097 Total Business -type activities 801,417 1,090,602 825,848 681,048 285,217 54,543 286,097 Total Primary Government $ 166,682,239 $ 163,908,677 $ 254,320,900 $ 251,519,877 $ 252,387,606 $ 246,600,701 $ 240,664,278 $ 236,563,357 $ 229,835,915 $ 257,522,628 Population - State Department of Finance Janu 28,715 30,452 32,522 36.145 38,340 41,092 42,958 43,778 44,421 37,836 Number of Households 14,127 14,938 15,942 17,549 18,762 20,176 21,058 21,355 23,489 23,528 Median Household Income (2) (2) (2) $ (2) $ 65,906 $ 67,754 $ 74,683 $ 76,227 $ 90,124 $ 104,410 Percentage of Personal Income (2) (2) (2) -200.00% 20.41% 18.04% 15.30% 14.53% 10.86% 10A8% Debt Per Capita $ 5,805 $ 5,383 $ 7,820 $ 6,959 $ 6,583 $ 6,001 $ 5,602 $ 5,404 $ 5,174 $ 6,806 'Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. '1 The debt service payment for the 2004 Lease Revenue Bonds are made from Redevelopment Project Area 1 8 2 low 8 moderate income tax increment. z Information not collected prior to Fiscal Year 2006 151 CITY OF LA QUINTA TABLE 13 Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years (In Dollars) Outstanding General Bonded Debt Fiscal Year City Hall Lease Tax Percent of Per Ended Lease Local Agency Allocation Assessed Median June 30 Obligation Revenue Bonds ' Bonds Total Value' Household Income 2002 $ 7,475,000 $ - $ 147,199,836 $ 154,674,836 4.92% $ 2 2003 7,190,000 - 145,578,164 152,768,164 4.05% 2 2004 6,890,000 87,924,343 148,832,628 243,646,971 4.55% 2 2005 6,575,000 87,947,058 146,493,659 241,015,717 3.87% 2 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 2011 4,340,000 110,000,000 138,480,000 252,820,000 2.33% 2,421 General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). ' Assessed value has been used because the actual value of taxable property is not readily available in the State of California. 2 Information not collected prior to Fiscal Year 2006 Source: City of La Quinta 152 CITY OF LA QUINTA TABLE 14 Direct and Overlapping Debt June 30, 2011 City Assessed Valuation Redevelopment Agency Incremental Valuation Total Assessed Valuation Source: Riverside County Auditor Controller Overlapping Debt Repaid with Property Taxes And Assessments: Desert Community College District Coachella Valley Unified School District Desert Sands Unified School District (DSUSD) Coachella Valley County Water District I.D. No. 55 Coachella Valley County Water District I.D. No. 58 DSUSD Community Facilities District No. 1 City of La Quinta 1915 Act Bonds Coachella Valley Water District Assessment District No. 68 Total overlapping debt repaid with property taxes $ 4,166,815,030 6,703,975,703 $ 10,870,790,733 Estimated Share of Percentage Outstanding Overlapping Applicable' Debt 6/30/11 Debt Overlapping Other Debt including Certifications of Participation (COP) Riverside County General Fund Obligations Riverside County Pension Obligations Riverside County Board of Education COP Coachella Valley Unified School District COP DSUSD COP Coachella Valley County Water District I.D. No. 71 COP Coachella Valley Recreation and Park District COP Total overlapping other debt Total overlapping debt City direct debt Total direct and overlapping debt 8.075% $ 322,389,659 $ 26,032,965 35.254% 112,854,786 39,785,826 7.547% 260,875,460 19,688,271 85.889% 3,270,000 2,808,570 6.396% 1,540,000 98,498 100.000% 1,750,000 1,750,000 100.000% 950,000 950,000 86.247% 1,975,000 1,703,378 705,604,905 92,817,508 1.790% $ 696,634,853 $ 12,469,764 1.790% 366,945,000 6,568,316 1.790% 6,170,000 110,443 35.254% 50,320,000 17,739,813 7.547% 62,005,000 4,679,517 11.706% 2,750,000 321,915 13.342% 2,340,000 312,203 1,187,164,853 42,201,971 1,892,769,758 135,019,479 257,522,628 $ 392,542,107 Notes: For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value. Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. Source: California Municipal Statistics, Inc.- overlapping debt Source: City of La Quinta - City Direct debt 153 Assessed valuation Debt limit percentage Debt limit Total net debt applicable to limit: General obligation bonds Legal debt margin Total debt applicable to the limit as a percentage of debt limit CITY OF LA QUINTA Legal Debt Margin Information Last Ten Fiscal Years Fiscal Year TABLE 15 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $ 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 $ 10,870,790,733 15% 151/ 15% 15% 15% 15% 151/6 15% 15% 151/6 471,509,370 565,133,918 803,685,527 933,070,665 1,172,079,988 1,496,346,997 1,779,962,120 1,862,405,214 1,762,977,884 1,630,618,610 $ 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 $ 1,630,618,610 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%. 0.0% 0.0% 0.0% Section 43605 of the Government Code of the State of California limits the amount of indebtedness for public improvements to 15% of the assessed valuation of all real and personal property of the City. The City of La Quinta has no general bonded indebtedness. Source: City of La Quints Finance Department based upon the Assessed valuation received from the County of Riverside Auditor Controllers Office 154 CITY OF LA QUINTA TABLE 16 Pledged -Revenue Coverage Last Ten Fiscal Years (In Dollars) Tax Allocation Bonds - Project Area 1 Fiscal Year Ended Tax Less: Other Net Tax Debt Service June 30 Increment Debt Payments Increment' Principal Interest Coverage' 2002 $ 17,953,949 $ 10,078,789 $ 7,875,160 $ 1,195,000 $ 3,662,755 1.62 2003 21,086,099 12,121,344 8,964,755 1,260,000 6,044,172 1.23 2004 23,966,954 14,581,305 9,385,649 1,890,000 7,235,893 1.03 2005 27,093,693 16,185,190 10,908,503 2,395,000 7,929,969 1.06 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) 2011 35,192,471 26,129,448 a 9,063,023 3,330,000 6,941,435 0.88 Fiscal Year Ended 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Tax Allocation Bonds - Project Area 2 Tax Less: Other Net Tax Debt Service Increment Debt Payments Increment' Principal $ 8,100,847 $ 7,289,603 $ 811,244 $ 85,000 $ 9,916,962 12,126,671 14,036,962 19,849,893 20,777,158 23,087,750 22,783,714 20,763,180 19,349,036 9,212,788 11,076,008 12,894,804 17,325,411 18,553,875 20,929,512 21,042,814 19,373,073 17,591,754 704,174 1,050,663 1,142,158 2,524,482 2,223,283 2,158,238 1,740,900 1,390,107 1,757,282 90,000 90,000 95,000 100,000 105,000 110,000 115,000 120,000 125,000 Interest 334,249 330,748 327,080 323,264 319,168 314,785 310,135 305,184 299,550 293,272 Coverage' 1.93 1.67 2.52 2.73 6.02 5.30 5.14 4.14 3.31 4.20 2004 Local Agency Revenue Bonds Fiscal Year Ended Tax Less: Other Net Tax Debt Service June 30 Increments Debt Payments Increment Principal Interest Coverage 2005 $ 10,282,664 $ $ 10,282,664 $ - $ 2,990,049 3.44 2006 14,089,024 14,089,024 735,000 4,436,981 2.72 2007 15,701,664 15,701,664 1,520,000 4,402,909 2.65 2008 16,641,016 16,641,016 1,570,000 4,356,806 2.81 2009 15,825,773 15,825,773 1,615,000 4,304,994 2.67 2010 14,820,242 14,820,242 1,670,000 4,243,331 2.51 2011 13,635,377 13,635,377 1,740,000 4,175,131 2.31 Local Agency Revenue Bonds (City Hall Project) Fiscal Year Ended Lease Less: Other Net Lease Debt Service June 30 Revenue Debt Payments Revenue Principal Interest Coverage 2002 $ 682,178 $ $ 682,178 $ 275,000 $ 407,178 1.00 2003 679,435 679,435 285,000 394,435 1.00 2004 680,830 680,830 300,000 380,830 1.00 2005 681,220 681,220 315,000 366,220 1.00 2006 680,575 680,575 330,000 350,575 1.00 2007 678,865 678,865 345,000 333,865 1.00 2008 675,880 675,880 360,000 315,880 1.00 2009 676,450 676,450 380,000 296,450 1.00 2010 675,280 675,280 400,000 275,280 1.00 2011 672,525 672,525 420,000 252,525 1.00 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. ' Tax increment has been reduced by other debt payments, which may or may not be subordinated to Tax Allocation Bonds 2 Lease revenues consist of payments from the City General Fund, Civic Center Development Impact Fee Fund and the Redevelopment Agency Capital Projects Fund s 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. 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. 5 The State of California assessed the La Quinta Redevelopment Agency a supplemental educational relief augmentation fund payment of $4,855,193 in FY 2010/2011 which was paid from Project Area 1 tax increment revenues. 155 CITY OF LA QUINTA TABLE 17 Demographic and Economic Statistics Last Ten Calendar Years Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Year Year Year Year Year Year Year Year Year Year Sources: 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 City Land (Sq Miles) (3) 34.8 34.8 35.1 35.1 35.10 35.10 35.31 35.31 35.31 35.31 Population (1) 28715 30452 32522 36145 38,340 41,092 42,958 43,778 44,421 37,836 (s1 Median Household Income (in dollars) (4) (4) (4) (4) (4) $65,906 $67,754 $74,683 $76,227 $90,124 $104,410 Number of Dwelling Units (3) 14,127 14,938 15,942 17,549 18,762 20,176 21,058 21,355 23,489 23,528 Persons per Household (3) 2.841 2.848 2.848 2.878 2.855 2.846 2.851 2,851 2,865 2.549 Average Income per person per householc (6) (6) (6) (6) (6) $23,084 $23,807 $26,195 $26,737 $31,457 $40,961 Labor Force (2) 12500 13000 13700 14300 14,500 15,300 15,200 14,800 14,600 14,400 Employment (2) 12100 12500 13200 13900 14,100 14,900 14,600 13,700 13,500 13,300 Unemployment Rate (2) 3,20% 3.85% 3,65% 2.80% 2,76% 2.61% 3.95% 7.43% 7,53% 7.64 Median age (4) (4) (4) (4) (4) 36 36.4 36.4 36.4 42.2 41.5 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 Quints Building & Safety and Community Development Departments (4) Desert Wheeler's Newsletter City Overview through 2009; HdLCoren & Cone Companies thereafter - data not available before 2006 (5) The population number was updated based upon the 2010 United States Census (6) The information was not collected before 2006 156 CITY OF LA QUINTA Principal Employers Current Year and Nine Years Ago Employer Activity La Quinta Resort & Club Hotel & Golf Resort Desert Sands Unified School Distict Government Wal-Mart Super Center Retailer Home Depot Retailer Hideaway Golf Resort Lowe's Home Improvement Retailer Tradition Golf Club Grocery Store ND La Quinta Partners LLC Real estate Development City of La Quinta Government Ralphs Grocery Store Stater Brothers Grocery Store Vons Grocery Store Total employment listed Total City Employment - July 1 TABLE 18 2010-2011 2001-2002 Percent of Number of Total Number of Rank Employees Employment Employees Rank 1 1,171 8.80% 1,500 1 2 921 6.92% 550 2 3 358 2.69% 250 3 4 170 1.28% 180 4 5 114 0.86% 6 145 1.09% 150 5 7 101 0.76% 8 90 0.68% 90 10 9 94 0.71% 73 # 9 10 67 0.50% 100 8 - 126 6 - 103 7 3,231 24.29% 3,122 13,300 12,100 "Total Employment" as used above represents the total employment of all employers located within City limits with over 100 employees Source: City of La Quinta 157 CITY OF LA QUINTA TABLE 19 Full-time City Employees by Function Last Ten Fiscal Years Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Ending Ending Ending Ending Ending Ending Ending Ending Ending Ending June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 Function 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Administration 8.00 8.00 8.00 8.00 9.00 10.00 12.00 12.00 13.00 14.00 City Clerk 5.00 5.00 5.00 5.00 5.00 5.00 6.00 6.00 6.00 6.00 Finance 7.00 7.00 8.00 8.00 9.00 9.00 9.00 9.00 9.00 9.00 Community Services 7.00 7.00 7.00 8.00 10.25 10.25 11.25 11.25 10.25 10.25 Building and Safety 19.00 19.00 19.00 21.00 22.00 24.00 25.00 25.00 25.00 24.00 Planning and Development 9.00 9.00 9.00 9.00 12.00 12.00 12.00 12.00 10.00 9.00 Public Works 21.00 21.00 22.00 23.50 26.25 26.25 28.25 29.25 27.25 26.25 Golf Course 0.50 0.50 0.50 0.50 0.50 0.50 0.50 Total 76.00 76.00 78.00 83.00 94.00 97.00 104.00 105.00 101.00 99.00 Source: City of La Quinta NOTE: The City of La Quinta contracts with the County of Riverside for Police Services and with the California Department of Forestry through a contract with the County of Riverside for Fire Services. In addition the City -owned Golf Course is operated by Landmark Golf. These positions have not been included as these positions are not City employees. 158 CITY OF LA QUINTA Operating Indicators by Function Last Six Fiscal Years TABLE 20 2006 2007 2008 2009 2010 2011 Finance: Number of Active Business Licenses 3,208 3,424 3,690 3,523 3,428 3183 Number of Animal Licenses Processed 892 1,022 1,272 1,609 1,768 1619 Number of Accounts Payable Checks Processed 4,696 4,722 4,840 4,819 4,393 4530 Number of investment purchases 39 73 64 36 32 20 Par value of investments $327,417,000 $392,729,000 $424,500,000 $229,969,000 $267,213,000 $186,480,000 Number of cleared checks 5,081 4,837 5,501 5,269 4,984 4912 Number of outgoing bank wires 202 158 136 91 75 87 Public Works: Encroachment permits issued 304 218 110 132 78 104 Request for services 618 419 1152 1931 1306 746 Building & Safety: Permits: Single family Detached 1,044 526 297 129 56 85 Single family Attached 227 38 0 6 12 0 Residential Pool 866 612 331 207 152 148 Wall/Fence 1,502 963 583 299 178 218 Other 1,607 1,404 1,121 908 790 1033 Total Permits 5,246 3,543 2,332 1,549 1,188 1,484 Code Compliance: Animal Control Incidents Handled 1,901 687 2,920 3,630 3,984 4392 Vehicle abatements 909 296 351 346 214 263 Garage Sale Permits 1,190 1,444 1,519 1,535 1,663 1805 Weed abatements 141 76 117 97 125 143 Nuisance abatements 1,611 2,032 2,142 3,130 2,340 2252 Community Services: Library activities: Library Volume 42,050 44,981 66,124 81,124 89,060 92484 Library books checked out 55,002 99,659 117,738 215,843 259,711 263064 Library Cards Issued 5,550 5,325 3,675 3,684 3,547 3822 Number of School Children Visiting Library 745 260 841 1,036 772 1881 Library Volunteer Hours 1,891 1,583 1,951 2,342 2,723 4280 Senior Center: Number of visits 14,305 12,955 14,013 15,739 20,326 18403 Senior Center Volunteer Hours 3,481 4,192 3,332 2,583 3,131 3099 Recreation activities: Participants: Leisure Classes 1,373 1,192 990 1,140 1,437 1512 Special events 4,668 7,809 8,109 11,053 8,795 8933 Adult Sports 3,402 6,827 8,550 10,806 13,364 13092 Golf course: Golf rounds played 38,934 40,548 40,516 39,150 43,779 45269 Average $ Green fee 71.12 76.97 81.09 76.13 71.59 7070 Planning and Development: Number of residential units approved 1,063 534 338 100 255 208 Commercial square footage approved 533,726 124,821 342,502 390,097 6,200 27,526 Source: City of La Quinta Note: Information not collected before 2006 159 CITY OF LA QUINTA TABLE 21 Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Ending Ending Ending Ending Ending Ending Ending Ending Ending Ending June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Public works: Streets (miles) 118.40 118.40 118.40 118.40 118.40 122 127 127 127 127 Bikepaths (miles) 22 22 22 22 22 22 22 22 22 22 Streetlights 1 ' 1 1 1 73 85 85 261 265 265 Traffic signals 2 2 2 2 2 44 45.25 45.25 49 50 50 Traffic signs 2 2 2 2 2 2,799 2,845 2,895 2,899 2,909 2,919 Bridges 2 2 2 2 2 12 12 12 12 12 12 Parks and recreation: Parks 9 9 12 12 12 12 13 13 13 13 Park Acreage 40 40 207 207 207 207 209 209 218 218 Undeveloped Park Acreage 2 2 2 2 2 40 40 40 40 40 40 Senior Center 1 1 1 1 1 1 1 1 1 1 Museum 1 1 1 1 1 1 1 1 1 1 Library 1 1 1 1 1 1 1 1 1 1 Golf Course: Municipal golf courses - - - - 1 1 1 1 1 1 Source: City of La Quinta ' In Fiscal Year ending 2009 street lights at intersections were included for the first time. 2 In Fiscal Year ending 2006 traffic signals , traffic signs, and undeveloped park acreage were included for the first time. 160 Company Name Policy Number Hartford 72BPEEW0254 Lexington 20412656 Lloyds 750020221-L-00 California Joint Powers Insurance Authority California Joint Powers Insurance Authority Alliant PEC0011896301 CITY OF LA QUINTA Schedule of Insurance in Force June 30, 2011 Coverage Employee Dishonesty, Forgery, Computer Fraud All Risk Property Insurance Including Auto Physical Damage, Terrorism, Boiler & Machinery (Excluding Earthquake) Earthquake/Flood Real & Personal Property Including Contingent Tax Interruption Comprehensive General Liability Worker's Compensation Pollution Liability TABLE 22 Limits Term Premium $1,000,000 12/3/10 - 12/3/11 $3,224 64,497,900 7/01/11 - 7/01/12 57,883 20,000,000 2/07/11 - 2/07/12 123,060 $50 Million 7/01/10 - 7101/11 365,209 Single Limit per Occurrence 10,000,000 7101/10 - 7/01/11 109,414 10,000,000 7/01/11 - 7/01/14 26,227 161 THIS PAGE INTENTIONALLY LEFT BLANK 162