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2012-2013 ACFR (July 1 - June 30 Annual Comprehensive Financial Report)CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2013 CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2013 Prepared By FINANCE DEPARTMENT CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2013 TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal ................................................................................................................................. i List of Principal Officials ....................................................................................................................... viii Organizational Chart .............................................................................................................................. ix Certificate of Achievement for Excellence in Financial Reporting (GFOA) ............................................. x FINANCIAL SECTION Independent Auditors’ Report ................................................................................................................. 1 Management’s Discussion and Analysis ................................................................................................. 5 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position ............................................................................................................... 17 Statement of Activities .................................................................................................................... 18 Fund Financial Statements: Balance Sheet – Governmental Funds .......................................................................................... 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ..................................................................................................... 23 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ................................................................................................... 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................... 26 Budgetary Comparison Statement by Department – General Fund .............................................. 27 Budgetary Comparison Statement – Housing Authority PA No. 2 ................................................. 28 Statement of Net Position – Proprietary Funds .............................................................................. 29 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ........................................................................................................................... 31 Statement of Cash Flows – Proprietary Funds ............................................................................... 32 Statement of Fiduciary Net Position - Fiduciary Funds .................................................................. 34 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2013 TABLE OF CONTENTS Page Number Statement of Changes in Fiduciary Net Position - Fiduciary Funds ............................................... 35 Notes to Financial Statements .............................................................................................................. 37 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Non-Major Governmental Funds ....................................................... 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non-Major Governmental Funds ....................................................................... 90 Budgetary Comparison Schedules – Special Revenue Funds State Gas Tax ......................................................................................................................... 97 Library ...................................................................................................................................... 98 Federal Assistance ................................................................................................................... 99 SLEBG ................................................................................................................................... 100 Indian Gaming ........................................................................................................................ 101 Lighting and Landscaping ...................................................................................................... 102 Quimby ................................................................................................................................... 103 Public Safety .......................................................................................................................... 104 Art In Public Places ................................................................................................................ 105 South Coast Air Quality .......................................................................................................... 106 AB 939 ................................................................................................................................... 107 Law Enforcement ................................................................................................................... 108 Proposition 1B Fund ............................................................................................................... 109 Justice Assistance Grant........................................................................................................ 110 Measure A .............................................................................................................................. 111 Transportation Uniform Mitigation Fee ................................................................................... 112 Housing Authority PA No. 1 ................................................................................................... 113 Budgetary Comparison Schedules – Capital Projects Funds Capital Improvement .............................................................................................................. 114 Civic Center ............................................................................................................................ 115 Infrastructure .......................................................................................................................... 116 Transportation ........................................................................................................................ 117 Parks and Recreation ............................................................................................................. 118 Library Development .............................................................................................................. 119 Community Center ................................................................................................................. 120 Street Facility .......................................................................................................................... 121 Park Facility ............................................................................................................................ 122 Fire Facility ............................................................................................................................. 123 Budgetary Comparison Schedules – Debt Service Funds Financing Authority ................................................................................................................ 124 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2013 TABLE OF CONTENTS Page Number Combining Statement of Net Position – Internal Service Funds .................................................. 126 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Internal Service Funds ............................................................................. 127 Combining Statement of Cash Flows – Internal Service Funds ................................................... 128 Combining Statement of Net Position – All Agency Funds .......................................................... 130 Combining Statement of Changes in Assets and Liabilities – All Agency Funds ......................... 131 STATISTICAL SECTION Net Position by Component .......................................................................................................... 134 Changes in Net Position ............................................................................................................... 136 Changes in Net Position – Governmental Activities ..................................................................... 138 Changes in Net Position – Business-type Activities ..................................................................... 141 Fund Balances of Governmental Funds ....................................................................................... 142 Changes in Fund Balances of Governmental Funds .................................................................... 144 Assessed Value and Estimated Actual Value of Taxable Property .............................................. 147 Direct and Overlapping Property Tax Rates ................................................................................. 148 Principal Property Taxpayers ....................................................................................................... 150 Property Tax Levies and Collections ............................................................................................ 151 Ratios of Outstanding Debt by Type............................................................................................. 152 Ratio of General Bonded Debt Outstanding ................................................................................. 154 Direct and Overlapping Debt ........................................................................................................ 155 Legal Debt Margin Information ..................................................................................................... 156 Pledged-Revenue Coverage ........................................................................................................ 158 Demographic and Economic Statistics ......................................................................................... 159 Principal Employers ...................................................................................................................... 160 Full-time City Employees .............................................................................................................. 161 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2013 TABLE OF CONTENTS Page Number Operating Indicators ..................................................................................................................... 162 Capital Asset Statistics ................................................................................................................. 163 Schedule of Insurance in Force .................................................................................................... 164 i ii iii iv v vi vii viii ix x INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and Members of the City Council City of La Quinta, California Report on Financial Statements 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, (the City) as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta, California, as of June 30, 2013, To the Honorable Mayor and Members of the City Council City of La Quinta, California and, the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund and the Housing Authority PA No.2 Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 1 to the financial statements, in 2013 the City adopted new accounting guidance, GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2 To the Ho City of La Other Re In accorda 25, 2013 complianc matters. T reporting over finan accordanc reporting Brea, Cal Novembe onorable Mayo Quinta, Calif porting Requ ance with Go on our consid ce with certa The purpose and complian ncial reportin ce with Gove and complian ifornia er 25, 2013 or and Memb fornia uired by Gov overnment A deration of th ain provisions of that report nce and the r ng or on com ernment Aud nce. bers of the Cit vernment A uditing Stan he City’s inter s of laws, re t is to describ results of that mpliance. Th diting Stand ty Council uditing Sta ndards, we h nal control ov egulations, co e the scope o t testing, and hat report is ards in cons andards have also issu ver financial r ontracts, and of our testing not to provid an integral sidering City’s ued our repor reporting and d grant agree of internal co de an opinion part of an a s internal con rt dated Nove d on our tests ements and ontrol over fin on internal c audit perform ntrol over fin ember s of its other ancial control med in ancial 3 THIS PAGE INTENTIONALLY LEFT BLANK 4 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, 2013. 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 $699,670,000 (net position). Of this amount, $78,649,000 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. Approximately $571,423,000 or 82 percent was invested in capital assets and is not available to meet ongoing obligations. • The governmental activities total net position increased by $11,873,000 and the Business-Type total net position decreased by $369,000 which is attributable to the SilverRock Golf Course. Of the $11,873,000, the restatement of net position represented $3,909,000. This restatement of net position is explained more extensively in this document in Note 18. • As of the close of the current fiscal year, the City of La Quinta’s governmental funds reported combined ending fund balances of $98,753,000 a decrease of $8,378,000 in comparison with the prior year. The primary reason for this decrease is due to the dissolution of the former Redevelopment Agency. • At the end of the current fiscal year, the unassigned General Fund Balance comprised $5,927,000 of the total $92,573,000 General Fund Balance or 6 percent of the total Fund Balance and 17 percent of total General Fund budgeted expenditures. • The total governmental activities debt increased by $1,565,000 during the current fiscal year from $5,378,000 to $6,943,000. This increase is mainly due to the Provident Loan and US Department of Agriculture loans being transferred from the Successor Agency of the Former La Quinta Redevelopment Agency to the City. 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. 5 Government-wide financial statements The government-wide financial statements are designed to provide readers with a broad overview of the City of La Quinta’s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City of La Quinta’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of La Quinta is improving or deteriorating. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., earned but unused vacation leave). Both of the government-wide financial statements mentioned above distinguish functions of the City of La Quinta that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of La Quinta include general government, public safety, community services, community development and public works. The business-type activities of the City of La Quinta include the SilverRock Golf course operations. The government-wide financial statements include not only the City of La Quinta itself (known as the primary government), but also the La Quinta Financing Authority and the La Quinta Housing Authority. Although legally separate entities, they function for all practical purposes as departments of the City of La Quinta, and therefore have been included as an integral part of the primary government. The government-wide financial statements can be found in the table of contents under the Financial Section of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of La Quinta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of La Quinta can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. 6 Governmental funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of La Quinta maintains thirty two (32) individual governmental funds, which are distinguished between major and non-major funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, two (2) capital project funds, and one (1) special revenue fund. These four (4) funds are considered to be major funds. Data from the other twenty seven (27) 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) enterprise fund. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of La Quinta uses an enterprise fund to account for its SilverRock Golf Course operations, which is considered to be a major fund. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of La Quinta’s various 7 functions. The City of La Quinta has three (3) internal service funds to account for its major equipment replacement including vehicles, for its information technology systems, and for its park equipment and facility needs. Because these three services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report The basic proprietary fund financial statements can be found on the pages listed in the table of contents for Proprietary Funds: Statement of Net Position, Statement of Revenues, Expenses and Changes in Fund Net Position, and Statement of Cash Flows. Fiduciary funds Fiduciary funds, also called agency funds, are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of La Quinta’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on the pages listed in the table of contents for Fiduciary Funds: Statement of Fiduciary Net Position – Fiduciary Funds. Notes to the financial statements The notes to the financial statements provide additional information that is essential to obtain a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on the pages listed in the table of contents for Notes to the Basic Financial Statements. Other information In addition to the basic financial statements and accompanying notes, this report also presents the combining statements referred to earlier in connection with non-major governmental funds, internal service funds, and agency funds are presented immediately following the Notes to the Financial Statements. Combining and individual fund statements and schedules can be found in the table of contents under Budgetary Comparison Schedules. 8 Government-wide financial analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of La Quinta, assets exceeded liabilities by $699,670,000 at the close of the most recent fiscal year, which is $11,504,000 more than the previous year. The largest portion of the City of La Quinta’s Net Position, which was 82% this year and 84% last year, reflects its investment in capital assets (e.g., land, buildings; machinery, and equipment). The City of La Quinta uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. However, it should be noted that the resources needed to repay 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 Position 2013 2012 2013 2012 2013 2012 Current and other assets $157,369,797 $137,676,930 $ (4,457,412) $ (4,535,584) $152,912,385 $133,141,346 Capital assets 529,752,387 534,388,479 41,785,179 42,274,767 571,537,566 576,663,246 Total assets 687,122,184 672,065,409 37,327,767 37,739,183 724,449,951 709,804,592 Current liabilities 17,499,856 15,880,753 293,192 210,308 17,793,048 16,091,061 Non-current liabilities 6,942,844 5,377,984 43,736 169,084 6,986,580 5,547,068 Total liabilities 24,442,700 21,258,737 336,928 379,392 24,779,628 21,638,129 Net position: Net investment in capital assets Restricted 49,598,397 26,585,382 - 49,598,397 26,585,382 Unrestricted 83,399,745 89,832,811 (4,750,604) (4,745,892) 78,649,141 85,086,919 Total net position $662,679,484 $650,806,672 $36,990,839 $37,359,791 $699,670,323 $688,166,463 Governmental activities Business-type activities Total 529,681,342 534,388,479 41,741,443 42,105,683 571,422,785 576,494,162 An additional portion of the City of La Quinta's net position (7 percent versus 4 percent in the prior year) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted Net Position - $78,649,000 (11 percent) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of La Quinta is able to report positive balances in all three categories of Net Position, both for the government as a whole, as well as for its separate governmental activities; however, the business type unrestricted Net Position had a deficit in its net position of $4,751,000, which is approximately $5,000 more than the previous year. 9 Governmental activities Governmental activities Net Position increased by $11,873,000 accounting for a 10 percent change in the Net Position from the previous year. Key elements of these changes are as follows: City of La Quinta Changes in Net Position 2013 2012 Change 2013 2012 Change 2013 2012 Change Program revenues: Charges for services $ 2,533,941 $ 2,504,302 $ 29,639 $ 3,736,879 $ 3,871,898 $ (135,019) $ 6,270,820 $ 6,376,200 $ (105,380) Operating grants and contributions 28,068,940 11,289,673 16,779,267 - - - 28,068,940 11,289,673 16,779,267 Capital grants and contributions 4,115,238 9,990,793 (5,875,555) - - - 4,115,238 9,990,793 (5,875,555) General revenues: Property taxes 7,043,604 21,370,476 (14,326,872) - - - 7,043,604 21,370,476 (14,326,872) Other taxes 16,487,958 15,570,619 917,339 - - - 16,487,958 15,570,619 917,339 Investment income 1,605,718 1,925,255 (319,537) 2,225 1,075 1,150 1,607,943 1,926,330 (318,387) Motor vehicle in lieu 3,157,330 3,173,826 (16,496) - - - 3,157,330 3,173,826 (16,496) Extraordinary gain/loss on dissolution of RDA - 158,654,715 (158,654,715) 158,654,715 (158,654,715) Gain (loss) on sale of capital assets (2,189,984) - (2,189,984) - (2,189,984) - (2,189,984) Miscellaneous 28,551 268,644 (240,093) 100,799 - 100,799 129,350 268,644 (139,294) Total revenues 60,851,296 224,748,303 (163,897,007) 3,839,903 3,872,973 (33,070) 64,691,199 228,621,276 (163,930,077) Expenses: - General government 4,511,023 6,183,712 (1,672,689) - - - 4,511,023 6,183,712 (1,672,689) Public safety 21,047,691 20,815,454 232,237 - - - 21,047,691 20,815,454 232,237 Community development 2,274,541 6,378,352 (4,103,811) - - - 2,274,541 6,378,352 (4,103,811) Community services 4,986,104 5,093,402 (107,298) - - - 4,986,104 5,093,402 (107,298) Public works 11,803,133 13,288,521 (1,485,388) - - - 11,803,133 13,288,521 (1,485,388) Interest on long-term debt 447,048 3,021,496 (2,574,448) - - - 447,048 3,021,496 (2,574,448) Golf course - - - 4,208,855 4,085,282 123,573 4,208,855 4,085,282 123,573 Total expenses 45,069,540 54,780,937 (9,711,397) 4,208,855 4,085,282 123,573 49,278,395 58,866,219 (9,587,824) Increase in net position before transfers and restatements Restatements (3,908,944) - (3,908,944) - - - (3,908,944) - (3,908,944) Increase in net position 11,872,812 169,967,366 (158,094,554) (368,952) (212,309) (156,643) 11,503,860 169,755,057 (158,251,197) Net position - 7/1/2012 650,806,672 480,839,306 169,967,366 37,359,791 37,572,100 (212,309) 688,166,463 518,411,406 169,755,057 Net position - 6/30/2013 $ 662,679,484 $ 650,806,672 $ 11,872,812 $ 36,990,839 $ 37,359,791 $ (368,952) $ 699,670,323 $ 688,166,463 $ 11,503,860 Total Revenues: Governmental Business-type activities activities 15,412,804 169,755,057 (154,342,253) 15,781,756 169,967,366 (154,185,610) (368,952) (212,309) (156,643) • Revenues decreased by $163,897,000 with the largest category decreases of $158,655,000 in the extraordinary gain on dissolution of the former Redevelopment Agency that occurred in the previous year and a decrease of $14,327,000 in property taxes. The decreases in revenues were partially offset by an increase in operating grants of $16,779,000. The major reason for the net decrease in property taxes is due to the loss of tax increment as a result of the dissolution of the former redevelopment agency. During Fiscal Year Ended June 30, 2012, the former Redevelopment Agency received tax increment for the first part of that year. The overall decrease in total revenues is primarily due to the redevelopment agency dissolution which resulted in an extraordinary gain in the previous year. • Expenses decreased by $9,711,000 with the two largest category changes being a decrease in the interest on long-term debt category of $2,574,000 and a decrease in the Community Development category of $4,104,000. The decrease 10 in the interest on long-term debt category is primarily the result of the debt of the City transferring to the Successor Agency to the former Redevelopment Agency resulting in less interest expense on debt in the current year. The decrease in the Community Development department is a direct result of the slowdown in the economy. In addition, all departments show reductions in costs in the current year with the exception of Public Safety, which increased by $232,000. This is largely due to the City reorganizing and reducing staff by 17 positions in the current year. • There were no contributions of assets from the governmental activities to the business-type activities. Business-type activities This was the eighth full year of operations for the SilverRock Golf fund since the golf course began early operation in 2005. Net Position decreased by $ (369,000) from the effects of an operating loss. Charges for services primarily consisted of green fees which totaled $3,737,000, and was $135,000 less than the previous year, with golf course expenses of $4,209,000, which was $124,000 more than the previous year. During Fiscal Year 2012-13, no additional advances were required for the golf course operations. The total outstanding advance due to the General Fund from the inception of the Golf Course opening is $5,324,000. 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 the funds. Such information is useful in assessing the City of La Quinta's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of La Quinta's governmental funds reported combined ending fund balances of $98.75 million as follows: 11 Category General Fund Percent All Other Funds Percent Total Funds Percent Nonspendable 65,225,273$ 71%2,086,499$ 33% 67,311,772$ 68% Restricted - 0%17,273,511 279% 17,273,511 18% Committed 20,407,133 22%- 0%20,407,133 21% Assigned 1,013,533 1%- 0%1,013,533 1% Unassigned 5,926,651 6% (13,179,196) -212% (7,252,545) -8% Total 92,572,590$ 6,180,814$ 98,753,404$ Governmental Fund balances Governmental fund balances ended the year totaling $98,753,000, a decrease of $8,378,000 in comparison with the prior years ending balance of $107,132,000. Of this amount $67,312,000 or 68% constitutes non-spendable reserves, which means that these reserves are not available to fund operating expenditures of the organization, $17,273,000 or 17% are restricted fund balances which are the result of external limitations on spending, $20,407,000 or 21% are committed fund balances with has resulted in self-imposed limitations placed upon the funds by the Governing Board responsible for adopting the fund budget, assigned reserves of $1,014,000 consist of carryover appropriations which were budgeted for in Fiscal Year 2012-13, but were unspent and will be budgeted again in the next budget year. The remainder of fund balance or $(7,252,000) million represents unassigned fund balances or the residual net resources after taking into consideration the other classifications. General Fund The general fund is the chief operating fund of the City of La Quinta. At the end of the current fiscal year, unassigned fund balance of the general fund was $5,927,000, while total fund balance reached $92,573,000. 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 257 percent of the total budgeted expenditures. The City of La Quinta’s general fund balance increased by $696,509 in Fiscal Year 2012-2013. Key factors for this increase are as follows: • Actual expenditures were $2,834,000 less than the final budget. Divisions that were significantly under budget for the year were Police ($548,000), Fire ($492,000), Management Services ($228,000), Community Services ($119,000) and Park Maintenance ($138,000). In addition, actual transfers out were $1,394,000 less than budgeted. • Actual revenue collections were $475,000 more than the final adjusted budget. Overall, taxes were $1,801,000 more than budgeted for in Fiscal Year 2012-13, and the actual taxes collected in Fiscal Year 2012-13 ($23,388,712) was $2,092,000 more than the prior year tax actual collections of $21,296,300. Actual transient occupancy tax collections in Fiscal Year 2012-13 were $5,981,000 or $534,000 more than prior 12 year collections. Actual sales tax collections for Fiscal Year 2012-2013 were $8,001,000 or $287,000 more than the $7,714,000 collected in Fiscal Year 2011-12. Motor vehicle in lieu taxes decreased from $3,175,000 in fiscal year 2011-12 to $3,157,000 in 2012-13. Housing Authority PA No. 2 Fund The Housing Authority fund is used to account for the housing activities of the Housing Authority in Project Area No. 2. The primary purpose of this fund is to promote and to provide quality housing in the City. The fund balance increased by $6,937,000 to end the year at $1.1 million. Capital Improvement Fund The Capital Improvement fund is primarily used to record the expenditure of funds for capital projects. The fund had thirty nine (39) active Capital Improvement Projects budgeted during Fiscal Year 2012-13. The three most active projects during the year were the Adams Street Bridge Improvements project ($2,603,000), “A” Street Extension ($1,461,000) and the Coral Mountain Apartments project ($3,909,000). Other major projects budgeted in the future include the Pavement Management and Slurry Seal Program, the Sports Complex Lighting Rehabilitation and Expansion project, and the Americans with Disabilities Act (ADA) Improvements for City owned properties. Civic Center Fund The Civic Center fund is primarily used to collect developer impact fees for the construction of the City Hall expansion and the repayment of a portion of the debt service on the original City Hall construction. The City Hall expansion was completed in Fiscal Year 2007-08 and the final repayment of the original City Hall construction bonds is scheduled in Fiscal Year 2018-19. A $7.3 million advance from the General Fund is outstanding at the end of Fiscal Year 2012-13. Proprietary funds The City of La Quinta's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The financial activities of the City enterprise fund have already been addressed in the discussion of the City of La Quinta’s business-type activities. In addition, the City has three (3) internal service funds to accumulate resources for equipment and vehicle replacement, information technology activities, and for park equipment and facility replacement. General Fund Budgetary Highlights During the year there was a $420,000 increase in appropriations and transfers out between the original ($35,233,000) and final amended budget ($35,653,000). Following are the main components of the changes: 13 • The FY 2012-13 budget included $1,014,000 in carryover appropriations from FY 2011-12. • The Fiscal Year included an additional $2,092,807 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, 2013, amounts to $571,538,000 (net of accumulated depreciation). This investment in capital assets includes land, right of way, buildings and improvements, machinery and equipment, streets and bridges, and construction in progress. The investment in capital assets increased this fiscal year from the purchase of properties which exceeded the depreciation expenses. The following chart lists the asset categories for governmental and business like activities net of depreciation. City of La Quinta Capital Assets (net of depreciation) 2013 2012 2013 2012 2013 2012 Land $ 69,609,372 $ 69,628,685 $36,840,832 $36,840,832 $106,450,204 $106,469,517 Buildings and improvements 47,830,084 50,257,149 4,660,157 4,894,712 52,490,241 55,151,861 Equipment and furniture 546,456 612,134 284,190 539,223 830,646 1,151,356 Vehicles 237,800 328,874 - - 237,800 328 ,875 Infrastructure 392,932,855 398,368,091 - - 411,528,675 413,561,637 Construction in progress 18,595,820 15,193,546 - - - - Total $529,752,387 $534,388,479 $41,785,179 $42,274,767 $571,537,566 $576,663,246 Governmental Business-type Description activities activities Total Major capital asset events during the current fiscal year included the following: Governmental activities • Recording infrastructure improvements, street improvements, street right of way, street sidewalks and curbs and gutters, traffic signals, and street medians; • Completed the Washington Street Dual Left Turn Lane at Avenue 48 totaling $681,500; • Completed Highway 111 Right Turn Lane at Washington in the amount of $4,300; • Completed the Wells Site Mitigation in the amount of $1,266,875; and, 14 • Completed the Senior Center Heating Ventilation and Air Conditioning system in the amount of $141,100. Business-type activities • The Golf Course capital asset balance at June 30, 2013, was $41,785,000 net of accumulated depreciation. The entire decrease of $490,000 was due to annual depreciation of the assets. Additional information on the City of La Quinta’s capital assets can be found in Footnote 7 to the financial statements. Long-term debt At the end of the current fiscal year, the City of La Quinta had total bonded debt outstanding of $6,943,000. Of the total amount, $3,425,000 of this debt amount represents bonds secured solely by specified revenue sources. In addition, $71,000 in a copier lease is outstanding in the governmental funds. City of La Quinta Outstanding Debt 2013 2012 2013 2012 2013 2012 Capital leases $ 71,045 $ 40,088 $ 43,736 $169,084 $ 114,781 $ 209,172 Compensated absences 744,007 941,954 - 744,007 941,954 Post retirement healthcare liability 559,591 459,644 559,591 459,644 General Liability Retrospective Deposit - 41,298 - - 41,298 Loans payable 2,143,201 - - 2,143,201 - Revenue bonds 3,425,000 3,895,000 - 3,425,000 3,895,000 Total $6,942,844 $5,377,984 $ 43,736 $169,084 $6,986,580 $5,547,068 Governmental Business-type Debt type: activities activities Total The total outstanding debt increased by $1,440,000 during Fiscal Year 2012-13. The increases was due to the addition of Loans Payable that was transferred from the Successor Agency to the City. Additional information on the City of La Quinta's long-term debt can be found in notes 8 and 9 of the financial statements. Economic Factors and Next Year's Budgets and Rates These factors were considered in preparing the City of La Quinta’s budget for Fiscal Year 2013-2014: • The City of La Quinta had a 5.6 versus 6.6 percent last year unemployment rate. This rate is significantly lower than the Riverside County and the State-wide unemployment rate. • 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 15 2009-10 to Fiscal Year 2012-2013 assessed values decreased by approximately 12%. • During the current fiscal year, the general fund net gain was $696,500 and $1,014,000 of General fund balance has been assigned for carry over appropriations. • AB1x26 dissolved California Redevelopment Agencies as of January 31, 2012. Due to the loss of Tax Increment, the City’s ability to fund future capital projects has been severely curtailed. • The Fiscal Year 2013-14 General Fund revenue projections include anticipated increases for the City becoming a Transportation Uniform Mitigation Fee (TUMF) collecting organization ($412,500). • The Fiscal Year 2013-14 budget includes Transient Occupancy Tax increases due to more focused and successful enforcement of vacation rentals in the community ($300,000). • The City of La Quinta adopted a balanced general fund budget for Fiscal Year 2013-14. Requests for Information This financial report is designed to provide a general overview of the City of La Quinta’s finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of La Quinta, Robbeyn Bird, Finance Director, 78-495 Calle Tampico, La Quinta, CA, 92253 or by telephone at 760- 777-7150. 16 CITY OF LA QUINTA STATEMENT OF NET POSITION Governmental Business-Type Activities Activities Total Assets: Cash and investments 60,285,917$ 437,557$ 60,723,474$ Receivables: Accounts 207,796 99,163 306,959 Taxes 2,508,084 - 2,508,084 Notes and loans 33,454,586 - 33,454,586 Accrued interest 145,396 397 145,793 Internal balances 5,323,541 (5,323,541) - Prepaid costs 22,096 1,865 23,961 Deposits 18,430 250,000 268,430 Due from other governments 46,813,365 - 46,813,365 Inventories - 77,147 77,147 Land held for resale 8,320,000 - 8,320,000 Long-term retrospective refund 270,586 - 270,586 Capital assets not being depreciated 373,133,986 36,840,832 409,974,818 Capital assets, net of depreciation 156,618,401 4,944,347 161,562,748 Total Assets 687,122,184 37,327,767 724,449,951 Liabilities: Accounts payable 5,581,753 250,751 5,832,504 Accrued liabilities 398,862 2,404 401,266 Accrued interest 63,413 - 63,413 Unearned revenue 343,682 4,537 348,219 Deposits payable 7,715,132 35,500 7,750,632 Due to other governments 3,397,014 - 3,397,014 Noncurrent liabilities: Due within one year 1,269,030 43,736 1,312,766 Due in more than one year 5,673,814 - 5,673,814 Total Liabilities 24,442,700 336,928 24,779,628 Net Position: Net investment in capital assets 529,681,342 41,741,443 571,422,785 Restricted for: Planning and development projects 35,041,886 - 35,041,886 Public safety 258,968 - 258,968 Public works 262,837 - 262,837 Capital projects 1,392,498 - 1,392,498 Debt service 1,015,767 - 1,015,767 Community services 11,626,441 - 11,626,441 Unrestricted 83,399,745 (4,750,604) 78,649,141 Total Net Position 662,679,484$ 36,990,839$ 699,670,323$ JUNE 30, 2013 Primary Government See Notes to Financial Statements 17 CITY OF LA QUINTA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2013 Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government 4,511,023$ 38,812$ 242,150$ -$ Public safety 21,047,691 927,604 4,486,688 289,664 Planning and development 2,274,541 112,695 21,442,706 122,103 Community services 4,986,104 245,392 49,475 - Public works 11,803,133 1,209,438 1,847,921 3,703,471 Interest on long-term debt 447,048 - - - Total Governmental Activities 45,069,540 2,533,941 28,068,940 4,115,238 Business-Type Activities: Golf Course 4,208,855 3,736,879 - - Total Business-Type Activities 4,208,855 3,736,879 - - Total Primary Government 49,278,395$ 6,270,820$ 28,068,940$ 4,115,238$ General Revenues: Taxes: Property taxes, levied for general purpose Transient occupancy taxes Sales taxes Franchise taxes Business licenses taxes Other taxes Motor vehicle in lieu - unrestricted Use of money and property Other Gain on sale of capital asset Extraordinary gain/(loss) Total General Revenues and Extraordinary Items Change in Net Position Net Position at Beginning of Year Restatement of Net Position Net Position at End of Year Program Revenues See Notes to Financial Statements 18 Primary Government Governmental Business-Type Activities Activities Total (4,230,061)$ -$ (4,230,061)$ (15,343,735) - (15,343,735) 19,402,963 - 19,402,963 (4,691,237) - (4,691,237) (5,042,303) - (5,042,303) (447,048) - (447,048) (10,351,421) - (10,351,421) - (471,976) (471,976) - (471,976) (471,976) (10,351,421) (471,976) (10,823,397) 7,043,604 - 7,043,604 5,980,684 - 5,980,684 7,833,545 - 7,833,545 1,669,476 - 1,669,476 292,966 - 292,966 518,778 - 518,778 3,157,330 - 3,157,330 1,605,718 2,225 1,607,943 192,509 100,799 293,308 28,551 - 28,551 (2,189,984) - (2,189,984) 26,133,177 103,024 26,236,201 15,781,756 (368,952) 15,412,804 650,806,672 37,359,791 688,166,463 (3,908,944) - (3,908,944) 662,679,484$ 36,990,839$ 699,670,323$ Net (Expenses) Revenues and Changes in Net Position See Notes to Financial Statements 19 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2013 Special Revenue Funds General Assets: Pooled cash and investments 35,558,278$ 1,105,108$ 2,094,200$ 4,958$ Receivables: Accounts 43,516 43,486 - - Taxes 2,390,117 - - - Notes and loans - 29,224,854 - - Accrued interest 125,760 - - - Prepaid costs 11,786 10,310 - - Deposits 4,830 13,600 - - Due from other governments 46,258,351 - 426,752 - Due from other funds 26,866 - - - Advances to other funds 15,509,691 - - - Land held for resale 8,320,000 - - - Long-term retrospective refund 270,586 - - - Total Assets 108,519,781$ 30,397,358$ 2,520,952$ 4,958$ Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable 3,916,810$ -$ 1,592,617$ -$ Accrued liabilities 382,758 11,642 - - Unearned revenues 45,451 - 231,798 - Deposits payable 6,969,172 28,340 492,433 - Due to other governments 1,143 - - - Due to other funds - - - - Advances from other funds - - - 7,310,447 Total Liabilities 11,315,334 39,982 2,316,848 7,310,447 Deferred Inflows of Resources: Unavailable revenues 4,631,857 29,224,854 294,765 - Total Deferred Inflows of Resources 4,631,857 29,224,854 294,765 - Fund Balances: Nonspendable: Prepaid costs 11,786 10,310 - - Land held for resale 8,320,000 - - - Notes and loans - - - - Advances to other funds 15,509,691 - - - Deposits 4,830 13,600 - - Due from other Governments 41,378,966 - - - Restricted for: Planning and development projects - 1,108,612 - - Public safety - - - - Community services - - - - Public works - - - - Capital Projects - - - - Debt service - - - - Committed to: Capital Projects 2,848,737 - - - Emergency reserve 16,034,995 - - - Post retirement health benefits 1,523,401 - - - Assigned to: Continuing appropriations 1,013,533 - - - Unassigned 5,926,651 - (90,661) (7,305,489) Total Fund Balances 92,572,590 1,132,522 (90,661) (7,305,489) Total Liabilities, Deferred Inflows of Resources, and Fund Balances 108,519,781$ 30,397,358$ 2,520,952$ 4,958$ Capital Projects Funds Housing Authority PA No. 2 Capital Improvement Civic Center See Notes to Financial Statements 20 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2013 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Land held for resale Long-term retrospective refund Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Prepaid costs Land held for resale Notes and loans Advances to other funds Deposits Due from other Governments Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Committed to: Capital Projects Emergency reserve Post retirement health benefits Assigned to: Continuing appropriations Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances Other Total Governmental Governmental Funds Funds 16,603,941$ 55,366,485$ 120,794 207,796 117,967 2,508,084 4,229,732 33,454,586 15,269 141,029 - 22,096 - 18,430 128,262 46,813,365 - 26,866 - 15,509,691 - 8,320,000 - 270,586 21,215,965$ 162,659,014$ 14,320$ 5,523,747$ - 394,400 66,433 343,682 225,187 7,715,132 3,395,871 3,397,014 26,866 26,866 2,875,703 10,186,150 6,604,380 27,586,991 2,167,143 36,318,619 2,167,143 36,318,619 - 22,096 - 8,320,000 2,062,589 2,062,589 - 15,509,691 - 18,430 - 41,378,966 2,621,921 3,730,533 258,968 258,968 11,626,441 11,626,441 262,754 262,754 1,392,581 1,392,581 2,234 2,234 - 2,848,737 - 16,034,995 - 1,523,401 - 1,013,533 (5,783,046) (7,252,545) 12,444,442 98,753,404 21,215,965$ 162,659,014$ See Notes to Financial Statements 21 THIS PAGE INTENTIONALLY LEFT BLANK 22 CITY OF LA QUINTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2013 Fund balances of governmental funds 98,753,404$ Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity.513,303,842 Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable (3,425,000)$ Capital lease payable (71,045) Loans payable (2,143,201) Compensated Absences (735,681) (6,374,927) Governmental funds report all OPEB contributions as expenditures, however in the statement of net position any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as a asset or liability.(559,591) Accrued interest payable for the current portion of interest due on Bonds has not been reported in the governmental funds. (63,413) Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity.36,318,619 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position.21,301,550 Net Position of governmental activities 662,679,484$ 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, 2013 General Revenues: Taxes 23,388,712$ -$ -$ -$ Assessments - - - - Licenses and permits 566,510 - - - Intergovernmental 8,214,465 433,808 3,101,418 - Charges for services 620,410 - - - Use of money and property 211,816 182,706 - - Fines and forfeitures 235,879 - - - Contributions from other agencies - 17,939,498 437,755 - Developer participation - - 446,146 96,322 Miscellaneous 131,408 20,525 - - Total Revenues 33,369,200 18,576,537 3,985,319 96,322 Expenditures: Current: General government 4,378,628 - - 203,557 Public safety 20,110,346 - - - Planning and development 1,440,482 347,971 25,281,358 - Community services 2,919,504 - - - Public works 3,112,474 - - - Capital outlay 116,045 - 8,463,395 - Debt service: Principal retirement 40,088 46,783 - - Interest and fiscal charges 1,236 145,790 - 28,764 Total Expenditures 32,118,803 540,544 33,744,753 232,321 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,250,397 18,035,993 (29,759,434) (135,999) Other Financing Sources (Uses): Transfers in 75,951 - 29,759,434 - Transfers out (700,884) (24,972,905) - - Capital leases 71,045 - - - Proceeds from sale of capital asset - - - - Total Other Financing Sources (Uses)(553,888) (24,972,905) 29,759,434 - Net Change in Fund Balances 696,509 (6,936,912) - (135,999) Fund Balances, Beginning of Year 91,876,081 8,069,434 (90,661) (7,169,490) Fund Balances, End of Year 92,572,590$ 1,132,522$ (90,661)$ (7,305,489)$ Civic Center Housing Authority PA No. 2 Capital Improvement Special Revenue Funds Capital Projects Funds 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, 2013 Revenues: Taxes Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions from other agencies Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Capital leases Proceeds from sale of capital asset Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Other Total Governmental Governmental Funds Funds 117,967$ 23,506,679$ 954,058 954,058 - 566,510 3,715,251 15,464,942 5,403 625,813 1,188,240 1,582,762 - 235,879 - 18,377,253 684,357 1,226,825 103,455 255,388 6,768,731 62,796,109 5,703 4,587,888 57,692 20,168,038 444,957 27,514,768 1,492,032 4,411,536 1,954,896 5,067,370 43,343 8,622,783 470,000 556,871 261,888 437,678 4,730,511 71,366,932 2,038,220 (8,570,823) 5,668 29,841,053 (4,167,264) (29,841,053) - 71,045 121,652 121,652 (4,039,944) 192,697 (2,001,724) (8,378,126) 14,446,166 107,131,530 12,444,442$ 98,753,404$ See Notes to Financial Statements 25 CITY OF LA QUINTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2013 Net change in fund balances - total governmental funds (8,378,126)$ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital outlay 8,912,255$ Depreciation (8,645,018) Contributed capital assets (145,907) Gain/(loss) on sale of capital assets (99,076) 22,254 The issuance of long-term debt liabilities provides current financial resources in the governmental funds, but issuing debt increases the long-term liabilities in the statement of net position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Principal repayments 470,000 Capital lease issued (71,045) General liability retrospective deposit payable 41,298 Capital lease repayments 40,088 Extraordinary gains and losses (2,189,984) Loan repayments 46,783 (1,662,860) Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period.(9,370) 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.196,560 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.(99,947) Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity.25,380,296 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.332,949 Change in net position of governmental activities 15,781,756$ See Notes to Financial Statements 26 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT BY DEPARTMENT GENERAL FUND YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 91,876,081$ 91,876,081$ 91,876,081$ -$ Resources (Inflows): Taxes 21,554,930 21,587,437 23,388,712 1,801,275 Licenses and permits 631,165 641,165 566,510 (74,655) Intergovernmental 8,846,614 8,918,449 8,214,465 (703,984) Charges for services 743,569 727,769 620,410 (107,359) Use of money and property 694,560 694,560 211,816 (482,744) Fines and forfeitures 307,200 217,200 235,879 18,679 Miscellaneous 118,900 120,900 131,408 10,508 Transfers in 148,308 133,233 75,951 (57,282) Capital leases --71,045 71,045 Amounts Available for Appropriation 124,921,327 124,916,794 125,392,277 475,483 Charges to Appropriation (Outflow): General government Legislative 734,359 745,759 718,631 27,128 City Manager 315,620 392,149 414,113 (21,964) Development Services 1,081,854 1,004,809 933,547 71,262 Management Services 1,109,477 1,146,936 919,434 227,502 City Clerk 530,432 440,953 360,881 80,072 Fiscal Services 807,086 719,279 828,356 (109,077) Central Services 298,829 298,829 203,666 95,163 Public safety Police 12,739,223 12,915,491 12,367,578 547,913 Building & Safety Admin.274,203 236,949 235,985 964 Building & Safety Admin.555,061 522,863 587,382 (64,519) Code Compliance 1,056,153 975,951 888,988 86,963 Animal Control 458,810 424,198 413,411 10,787 Civic Center Bldg 968,845 1,000,915 931,315 69,600 Fire 5,029,690 5,029,690 4,537,279 492,411 Emergency Services 209,222 181,074 148,408 32,666 Planning and development Administration 677,470 855,923 867,693 (11,770) Current Planning 639,204 576,823 566,378 10,445 Low/Mod Housing 6,411 6,411 6,411 - Parks and recreation Community Services Admin 947,903 1,031,615 912,464 119,151 Senior Center 418,464 445,006 393,536 51,470 Parks & Recreation 197,709 180,209 173,953 6,256 Park Maintenance 1,588,598 1,577,412 1,439,551 137,861 Public works Administration 472,951 475,454 515,033 (39,579) Development Services 638,754 645,596 603,461 42,135 Maintenance/Operations - Street 39,796 65,283 393,022 (327,739) Maintenance/Operations - Lighting 495,024 486,975 329,423 157,552 Construction Management 1,378,464 1,083,601 1,271,535 (187,934) Capital outlay 55,300 92,259 116,045 (23,786) Debt service: Principal retirement - - 40,088 (40,088) Interest and fiscal charges --1,236 (1,236) Transfers out 1,508,094 2,094,807 700,884 1,393,923 Total Charges to Appropriations 35,233,006 35,653,219 32,819,687 2,833,532 Budgetary Fund Balance, June 30 89,688,321$ 89,263,575$ 92,572,590$ 3,309,015$ See Notes to Financial Statements 27 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT HOUSING AUTHORITY PA NO. 2 YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 8,069,434$ 8,069,434$ 8,069,434$ -$ Resources (Inflows): Intergovernmental 498,200 498,200 433,808 (64,392) Use of money and property 164,390 164,390 182,706 18,316 Contributions - 18,141,988 17,939,498 (202,490) Miscellaneous 3,700 3,700 20,525 16,825 Amounts Available for Appropriation 8,735,724 26,877,712 26,645,971 (231,741) Charges to Appropriation (Outflow): Planning and development 365,760 365,760 347,971 17,789 Debt service: Principal retirement 46,782 46,782 46,783 (1) Interest and fiscal charges 192,973 192,973 145,790 47,183 Transfers out - 24,972,905 24,972,905 - Total Charges to Appropriations 605,515 25,578,420 25,513,449 64,971 Budgetary Fund Balance, June 30 8,130,209$ 1,299,292$ 1,132,522$ (166,770)$ See Notes to Financial Statements 28 CITY OF LA QUINTA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2013 Business-Type Activities - Enterprise Funds Governmental Activities- Internal Service Funds Assets: Current: Cash and investments 437,557$ 4,919,432 $ Receivables: Accounts 99,163 - Accrued interest 397 4,367 Prepaid costs 1,865 - Deposits 250,000 - Inventories 77,147 - Total Current Assets 866,129 4,923,799 Noncurrent: Capital assets - net of accumulated depreciation 41,785,179 16,448,545 Total Noncurrent Assets 41,785,179 16,448,545 Total Assets 42,651,308$ 21,372,344$ Liabilities and Net Position: Liabilities: Current: Accounts payable 250,751$ 58,006$ Accrued liabilities 2,404 4,462 Unearned revenues 4,537 - Deposits payable 35,500 - Accrued compensated absences - 5,469 Bonds, notes, and capital leases 43,736 - Total Current Liabilities 336,928 67,937 Noncurrent: Advances from other funds 5,323,541 - Accrued compensated absences - 2,857 Total Noncurrent Liabilities 5,323,541 2,857 Total Liabilities 5,660,469 70,794 Net Position: Net investment in capital assets 41,741,443 16,448,547 Unrestricted (4,750,604) 4,853,003 Total Net Position 36,990,839 21,301,550 Total Liabilities and Net Position 42,651,308$ 21,372,344$ Golf Course See Notes to Financial Statements 29 THIS PAGE INTENTIONALLY LEFT BLANK 30 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2013 Business-Type Activities - Enterprise Funds Governmental Activities- Internal Service Funds Operating Revenues: Sales and service charges 3,736,879$ 1,578,926$ Miscellaneous 100,799 - Total Operating Revenues 3,837,678 1,578,926 Operating Expenses: Administration and general 61,800 112,025 Fuel and oil - 83,618 Maintenance and parts - 103,764 Contract services 3,469,910 67,722 Software and supplies - 143,651 Depreciation expense 489,588 774,006 Other 164,607 14,727 Total Operating Expenses 4,185,905 1,299,513 Operating Income (Loss)(348,227) 279,413 Nonoperating Revenues (Expenses): Interest revenue 2,225 22,956 Interest expense (22,950) - Gain (loss) on disposal of capital assets - 5,975 Total Nonoperating Revenues (Expenses)(20,725) 28,931 Income (Loss) Before Contributions (368,952) 308,344 Contributions - 24,605 Changes in Net Position (368,952) 332,949 Net Position: Beginning of Year 37,359,791 20,968,601 End of Fiscal Year 36,990,839$ 21,301,550$ Golf Course See Notes to Financial Statements 31 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2013 Business-Type Activities - Enterprise Funds Governmental Activities- Internal Service Funds Cash Flows from Operating Activities: Cash received from customers and users 3,760,421$ 1,579,166$ Cash received from/(paid to) interfund service provided (2,538) (367,246) Cash paid to suppliers for goods and services (3,558,488) (112,898) Cash paid to employees for services (61,613) - Net Cash Provided (Used) by Operating Activities 137,782 1,099,022 Cash Flows from Non-Capital Financing Activities: Advance to other funds 10,516 - Net Cash Provided (Used) by Non-Capital Financing Activities 10,516 - Cash Flows from Capital and Related Financing Activities: Principal paid on capital debt (125,348) - Interest paid on capital debt (22,950) - Proceeds from sales of capital assets - 5,975 Net Cash Provided (Used) by Capital and Related Financing Activities (148,298) 5,975 Cash Flows from Investing Activities: Interest received 1,956 19,814 Net Cash Provided (Used) by Investing Activities 1,956 19,814 Net Increase (Decrease) in Cash and Cash Equivalents 1,956 1,124,811 Cash and Cash Equivalents at Beginning of Year 435,601 3,794,621 Cash and Cash Equivalents at End of Year 437,557$ 4,919,432$ Golf Course See Notes to Financial Statements 32 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2013 Business-Type Activities - Enterprise Funds Governmental Activities- Internal Service Funds Golf Course Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss)(348,227)$ 279,413$ Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation 489,588 774,007 (Increase) decrease in accounts receivable (76,921) - (Increase) decrease in inventories (9,542) - (Increase) decrease in prepaid expense - 240 Increase (decrease) in accounts payable 83,033 46,235 Increase (decrease) in accrued liabilities 187 514 Increase (decrease) in unearned revenue (336) - Increase (decrease) in compensated absences - (1,387) Total Adjustments 486,009 819,609 Net Cash Provided (Used) by Operating Activities 137,782$ 1,099,022$ Non-Cash Investing, Capital, and Financing Activities: There were no non-cash transactions in the current year. See Notes to Financial Statements 33 CITY OF LA QUINTA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2013 Agency Funds Assets: Pooled cash and investments 589,081$ 175,888$ 59,723,121$ Receivables: Accounts - - 21,000 Taxes 11,613 - - Notes and loans - - 3,563,561 Accrued interest 502 160 8,996 Due from other governments - - 3,395,871 Restricted assets: Cash and investments with fiscal agents - - 43,406,872 Total Assets 601,196$ 176,048 110,119,421 Liabilities: Accounts payable -$ - 24,464 Accrued interest - - 4,284,473 Deposits payable 601,196 - - Due to other governments - - 41,804,608 Long-term liabilities: Due in one year - - 6,190,000 Due in more than one year - - 271,339,821 Total Liabilities 601,196$ - 323,643,366 Net Position: Held in trust for pension 176,048 - Held in trust for other purposes - (213,523,945) Total Net Position 176,048$ (213,523,945)$ Pension Trust Fund Private- Purpose Trust Fund Supplemental Pension Plan Successor Agency of the former RDA See Notes to Financial Statements 34 CITY OF LA QUINTA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2013 Additions: Taxes -$ 19,993,315$ Interest and change in fair value of investments 894 440,513 Total Additions 894 20,433,828 Deductions: Administrative expenses 12,833 589,418 Contractual services - 756,622 Interest expense - 13,995,614 Contributions to City - 18,377,253 Contributions to other governments - 41,378,966 Total Deductions 12,833 75,097,873 Extraordinary gain/(loss)- 2,189,984 Changes in Net Position (11,939) (52,474,061) Net Position - Beginning of the Year 187,987 (156,811,196) Restatements - (4,238,688) Beginning of Fiscal Year, as restated 187,987 (161,049,884) Net Position - End of the Year 176,048$ (213,523,945)$ Pension Trust Fund Private- Purpose Trust Fund Successor Agency of the former RDA Supplemental Pension Plan See Notes to Financial Statements 35 THIS PAGE INTENTIONALLY LEFT BLANK 36 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2013 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1: Summary of Significant Accounting Policies a. Reporting Entity The City of La Quinta (City) was incorporated May 1, 1982, under the general laws of the State of California. In November 1996, the City became a charter City. The City operates under the Council – Manager form of government. The City provides many community services including public safety, highway and street maintenance, health and social services, cultural and leisure services, public improvements, planning and zoning services, and community development services. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. As required by generally accepted accounting principles, these financial statements present the government and its component units, which are entities for which the government is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization’s governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial statements to be misleading or incomplete. All of the City’s component units are considered to be blended component units. Blended component units, although legally separate entities, are, in substance, part of the government’s operations and so data from these units are reported with the interfund data of the primary government. The following organizations are considered to be component units of the City: City of La Quinta Public Financing Authority The La Quinta Public Financing Authority (Financing Authority) was established pursuant to a Joint Exercise of Powers Agreement dated November 19, 1991, between the City and the Former 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 37 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 1: Summary of Significant Accounting Policies (Continued) 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 Government-wide Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not properly included among program revenues are reported instead as general revenues. Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the government-wide financial statements, rather than as other financing sources. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditures. Fund Financial Statements The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial information for fiduciary funds and similar component units. Fiduciary funds of the 38 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 1: Summary of Significant Accounting Policies (Continued) city primarily represent assets held by the City in a custodial capacity for other individuals or organizations. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation Government-wide Financial Statements While separate government-wide and fund financial statements are presented, they are interrelated. The governmental activities column incorporates data from governmental funds and internal service funds, while business-type activities incorporate data from the government's enterprise funds. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Governmental Funds In the fund financial statements, governmental funds are presented using the modified-accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses a 60 day availability period. Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed delivered tax revenues are recognized as revenues in the period in which the underlying exchange transaction on which they are based takes place. Imposed nonexchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets, deferred outflows of resources, current liabilities, and deferred inflows of resources are generally included on their balance sheets. The reported fund balance is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses). Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period. 39 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 1: Summary of Significant Accounting Policies (Continued) Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered “available spendable resources”, since they do not represent net current assets. Recognition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables. Noncurrent portions of other long-term receivables are offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. When both restricted and unrestricted resources are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources. Proprietary Funds The City’s enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets, all deferred outflows of resources, all liabilities, and all deferred inflows of resources (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements, rather than as an Other Financing Source. Amounts paid to reduce long-term indebtedness of the proprietary funds are reported as a reduction of the related liability, rather than as expenditures. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Enterprise Funds are charges to customers for sales and services. Operating expenses for Enterprise Funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 40 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 1: Summary of Significant Accounting Policies (Continued) Fiduciary Funds The pension and private-purpose trust funds are reported using the economic resources measurement focus and the accrual basis of accounting. The agency fund has no measurement focus but utilizes the accrual basis of accounting for reporting its assets and liabilities. d. Major Funds, Internal Service Funds and Fiduciary Fund Types The City’s major governmental funds are as follows: General Fund – This fund is the primary fund of the City and is used to account for all revenue and expenditures of the City not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Manager, City Attorney, Finance, City Clerk, Community Development, Police Services, Public Works, Building and Safety, and Community Services. Housing Authority Project Area No. 2 – To account for the housing activities of the Housing Authority in Project Area 2 which is to promote and provide for quality housing. Revenues will be provided from the receipts and collections of notes and loans. All monies in the Housing Authority must be used in accordance with the applicable housing-related provisions of the Community Redevelopment Law. Capital Improvement Fund – This capital projects fund is used to account for the planning, design and construction of various capital projects throughout the City. Civic Center Fund – To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the Civic Center. The City’s major proprietary fund is as follows: Golf Course – To account for the activities of the SilverRock Golf Resort. Other fund types of the City are as follows: Internal Service Funds: Equipment Replacement Fund – This fund accounts for equipment and vehicle maintenance and replacement services provided to other departments on a cost-reimbursement basis. Information Technology Fund – This fund is used to account for the acquisition for computer equipment, maintenance, and services to support information systems within the City. Costs are reimbursed by the benefiting departments. Park Equipment and Facilities Fund – This fund is used to account for the purchase and replacement of City owned park facility infrastructure. Costs are reimbursed by the benefiting departments. 41 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 1: Summary of Significant Accounting Policies (Continued) Fiduciary Funds: Agency Fund – This fund accounts for assets held by the City as an agency for assessment district bondholders. Pension Trust Fund – This fund accounts for the activities of the Supplemental Pension Savings Plan, which accumulates resources for pension benefit payments to qualified government employees. Private-Purpose Trust Fund – This fund accounts for the assets and liabilities of the former redevelopment agency and is allocated revenue to pay estimated installment payments of enforceable obligations until obligations of the former redevelopment agency are paid in full and assets have been liquidated. e. Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or Equity Investments For financial reporting purposes, investments are adjusted to their fair value. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. Some investments are valued on an unamortized cost basis. For these investments, there is no material difference from fair value. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investment balance. Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary fund’s share in the 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. 42 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 1: Summary of Significant Accounting Policies (Continued) Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The City utilizes the consumption method, in which prepaid items are accounted for in the period that the benefit was received. Capital Assets Capital assets (including infrastructure) are recorded at cost where historical records are available and at an estimated historical cost where no historical records exist. Contributed capital assets are valued at their estimated fair market value at the date of the contribution. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of three years or more. Capital Assets include public domain (infrastructure) consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains. Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government-wide financial statements and in the fund financial statements of the proprietary funds. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective balance sheet. The following schedule summarizes capital asset useful lives: Buildings and improvements 10-30 years Equipment and furniture 3-20 years Vehicles 5-10 years Infrastructure 10-50 years Software 5-10 years Deferred outflows/inflows of resources In addition to assets, the statement of financial position and governmental fund balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position and fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City of La Quinta has no items that qualify for reporting in this category. In addition to liabilities, the statement of financial position and governmental fund balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from three sources: taxes, loans and grants. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 43 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 1: Summary of Significant Accounting Policies (Continued) 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. The General Fund resources are used to pay for the accumulated benefits to employees. Fund Balance In the fund financial statements, governmental funds report the following fund balance classification: Nonspendable includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted includes amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation. Committed includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest authority, the City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is by resolution. Assigned includes amounts that are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed. City Council is authorized to assign amounts to a specific purpose. The City Council authorizes assigned amounts for specific purposes pursuant to the policy-making powers granted through a resolution. Unassigned includes the residual amounts that have not been restricted, committed, or assigned to specific purposes. Fund balance flow assumptions Sometimes the City of La Quinta will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and 44 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 1: Summary of Significant Accounting Policies (Continued) unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. Net position flow assumption Sometimes the City of La Quinta will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. GASB 65 – Change in Accounting Principle The City implemented GASB Statement 65, Items Previously Reported as Assets and Liabilities. GASB 65, among other things, amends prior guidance with respect to the treatment of debt issuance costs. Debt issuance costs should be recognized in the period incurred rather than reported on the statement of net position as deferred charges and recognized systematically over the life of the debt. The accounting changes of this statement should be applied retroactive and therefore the City has reported a restatement of beginning net position for any unamortized debt issuance costs (deferred charges) previously reported on the statement of fiduciary net position to conform. 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 Development Agreement funds. 45 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 2: Stewardship, Compliance and Accountability (Continued) Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue, and similar governmental funds. Encumbrances outstanding at year-end are reported as an unassigned fund balance. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year end are completed. They do not constitute expenditures or estimated liabilities. Budget Basis of Accounting Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). b. At June 30, 2013, the following funds had deficit fund balances: Major Capital Projects Funds: Capital Improvement 90,661$ Civic Center 7,305,489 Nonmajor Special Revenue Funds: Federal Assistance 12,914 Nonmajor Capital Projects Funds: Parks and Recreation 1,052,040 Library Development 1,841,056 Street Facility 2,009,184 Fire Facility 867,852 c. Excess of expenditures over appropriations are as follows: Expenditures for the year ended June 30, 2013, exceeded the appropriations of the General Fund as follows: Budget Actual Variance General Fund: General Government City Manager 392,149$ 414,113$ 21,964$ Fiscal Services 719,279 828,356 109,077 Public Safety Building & Safety Admin.522,863 587,382 64,519 Community Development Administration 855,923 867,693 11,770 Public Works Administration 475,454 515,033 39,579 Maintenance/Operations - Street 65,283 393,022 327,739 Construction management 1,083,601 1,271,535 187,934 46 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments Cash and investments as of June 30, 2013, are classified in the accompanying financial statements as follows: Statement of Net Position: Cash and investments 60,723,474$ Statement of Fiduciary Net Position: Cash and investments 60,488,090 Cash with fiscal agent 43,406,872 Total cash and investments 164,618,436$ Cash and investments as of June 30, 2013, consist of the following: Cash on hand 1,450$ Deposits with financial institutions 441,709 Investments 164,175,277 Total cash and investments 164,618,436$ The California Government Code requires California banks and savings and loan associations to secure a City’s deposits by pledging government securities with a value of 110% of a City’s deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City’s total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an “Agent of Depository” has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency. Cash Deposits At June 30, 2013, the carrying amount of the City’s deposits was $441,709, and the bank balance was $2,017,879. The $1,576,170 difference represents outstanding checks and other reconciling items. Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. 47 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 3: Cash and Investments (Continued) This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy. Investment Types Authorized by State Law *Maximum Maturity *Maximum Percentage of Portfolio *Maximum Investment In One Issuer U.S. Treasury Obligations 10 years None $30 million U.S. Agency Securities 3 years None 30 million Local Agency Bonds 10 years None 30 million California Local Agency Obligations 10 years 30% 30 million Commercial Paper 90 days 15% 5 million Certificates of Deposit 3 years 60% 250,000 Medium-Term Notes 3 years 10% 5 million Money Market Mutual Funds 60 days 20%10% Local Agency Investment Fund (LAIF) N/A 30% 40 million Investment Agreements N/A N/A N/A * Based on state law requirements or investment policy requirements, Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of short term and long term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity: 48 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 3: Cash and Investments (Continued) Total 6 Months or Less 1 to 3 Years 3 to 5 Years Certificates of Deposit 1,429,922$ 241,072$ 718,394$ 470,456$ Federal agency securities: Federal National Mortgage Association 17,741,250 - - 17,741,250 Federal Home Loan Bank 4,969,860 - 4,969,860 - Federal Farm Credit Bank 19,825,800 - 19,825,800 - Rabobank - money market funds 39,955,556 39,955,556 - - State investment pool 36,846,017 36,846,017 - - Held by bond trustee: Money market funds 43,406,872 43,406,872 - - Total 164,175,277$ 120,449,517$ 25,514,054$ 18,211,706$ Investment Type Remaining Maturity (in Months) Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's investment policy limits investments in commercial paper to those rated A-1 and P-1 or higher from Standard and Poor’s (S&P) and 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, 2013, the City had investments with a variety of issuers, all of which were “investment grade” and were legal under state and municipal law. The City's investments in money market mutual funds were all rated “AAA”, federal agency securities were all rated AA+, and commercial paper were rated A-1 by S&P and Moody’s. As of June 30, 2013, the City’s investments in external investment pools were unrated. Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code, except for U.S. Agency Securities and Commercial Paper. As of June 30, 2013, the City had individual investments that represent 5% or more of total investments with Federal Farm Credit Bank and Federal National Mortgage Association. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires 49 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 3: Cash and Investments (Continued) 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. The City has money market accounts (MMA’s) with Rabobank, N.A. These Accounts are the financial obligations of the bank, and are collateralized with government securities at 110% of the balance on deposit. As of June 30, 2013, the City’s investments of $39,955,556 were collateralized in accordance with the California Government Code. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relations to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. GASB Statement No. 31 The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards (e.g. mark to market) for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Note 4: Property Taxes Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes are recorded initially in a pool, and are then allocated to the cities based on complex formulas. Accordingly, the City of La Quinta accrues only those taxes that are received from the County within ninety days after year-end. Lien date January 1 Levy date July 1 Due dates November 1 and February 1 Collection dates December 10 and April 10 Note 5: Notes Receivable In September 1994, the Former Agency sold certain real property to LINC Housing for $2,112,847. The property was used to construct single-family homes and rental units to increase the City's supply of low and moderate income housing. The note bears interest at 6% per annum and is due in full on June 15, 2029. On February 1, 2012, this receivable was 50 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 5: Notes Receivable (Continued) transferred to the Housing Authority Project Area No. 1 which took over the housing function of the Former Agency upon dissolution. The balance at June 30, 2013, including matured, unpaid interest of $2,167,144 is $4,202,532. In February 2011, the Former Agency entered into Disposition and Development Agreement with Coral Mountain Partners L.P. (“Coral Mountain”) to fund up to $29,000,000 for the construction of a low and moderate income apartment complex with an estimated completion date of the apartment complex of March 2014. The Former Agency’s $29,000,000 loan is evidenced by a Promissory Note executed by Coral Mountain (“Note”). Interest on the outstanding note amount will bear simple interest of 1%. Principal and interest will be repaid on or before May 1st of each year from annual residual receipts as defined in the Note once the project is completed and may be repaid early if the property is refinanced, or if the property is transferred to another entity. On February 1, 2012 this receivable was transferred to the Housing Authority Project Area No. 2 which took over the housing function of the Former Agency upon dissolution. As of June 30, 2013, the outstanding principal portion on the Note is $29,000,000 and the outstanding interest portion is $224,854. Other notes receivable as of February 1, 2012, were transferred to the Housing Authority Project Area No. 1 which took over the housing function of the Former Agency upon dissolution that totaled $27,200 at June 30, 2013. Note 6: CJPIA Refund Balances Long-term Receivable Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the Authority. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. CJPIA has temporarily deferred the payment on retrospective deposits owed to the Authority by members. The payment deferral period extends until July 1, 2013, for the Liability program and July 1, 2015, for the Workers’ Compensation program. Retrospective deposit payments are scheduled to resume on these dates. The October 2011 annual retrospective adjustment is included in these balances. The City at June 30, 2013, had a retrospective refund due to the City in the amount of $270,586. During the payment deferral period, members with a retrospective refund balance will receive a portion of the balance as a credit against other charges on the annual contribution invoice. For the 2012-13 coverage year, the refund amount will be 25%. The percentage to be refunded in future years will be set on an annual basis by the Executive Committee of CJPIA. Once the payment deferral period has concluded in each program, subsequent retrospective refund adjustments will be applied in full (100%) as a credit on the annual contribution invoice. More information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA.org. 51 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 7: Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2013, is as follows: Beginning Adjusted Ending Balance at Beginning Balance at July 1, 2012 Adjustments * Balance Additions Deletions Transfers June 30, 2013 Governmental Activities: Capital assets, not being depreciated: Land 69,628,685$ -$ 69,628,685$ -$ 19,313$ - $ 69,609,372$ Right of way 284,904,621 - 284,904,621 24,173 - - 284,928,794 Construction-in-progress 15,193,546 (3,908,944) 11,284,602 7,992,773 - (681,555) 18,595,820 Total Capital Assets, Not Being Depreciated 369,726,852 (3,908,944) 365,817,908 8,016,946 19,313 (681,555) 373,133,986 Capital assets, being depreciated: Buildings and improvements 69,147,713 - 69,147,713 - 84,005 - 69,063,708 Equipment and furniture 2,298,592 - 2,298,592 95,648 104,054 - 2,290,186 Vehicles 1,598,538 - 1,598,538 - - - 1,598,538 Infrastructure 197,144,188 - 197,144,188 142,758 - 681,555 197,968,501 Total Capital Assets, Being Depreciated 270,189,031 - 270,189,031 238,406 188,059 681,555 270,920,933 Less accumulated depreciation: Buildings and improvements 18,890,564 - 18,890,564 2,347,302 4,242 - 21,233,624 Equipment and furniture 1,686,458 - 1,686,458 161,326 104,054 - 1,743,730 Vehicles 1,269,664 - 1,269,664 91,074 - - 1,360,738 Infrastructure 83,680,718 - 83,680,718 6,283,722 - - 89,964,440 Total Accumulated Depreciation 105,527,404 - 105,527,404 8,883,424 108,296 - 114,302,532 Total Capital Assets, Being Depreciated, Net 164,661,627 - 164,661,627 (8,645,018) 79,763 681,555 156,618,401 Governmental Activities Capital Assets, Net 534,388,479$ (3,908,944) 530,479,535 (628,072)$ 99,076 $ - $ 529,752,387$ * See Note 18 for information on adjustment. Depreciation expense was charged to the following functions in the Statement of Activities: General government 116,080$ Public safety 1,148,394 Community services 611,890 Public works 7,007,060 Total governmental activities 8,883,424$ 52 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 7: Capital Assets (Continued) Capital asset activity for business-type activities for the year ended June 30, 2013, is as follows: Beginning Ending Balance at Balance at July 1, 2012 Additions June 30, 2013 Business-Type Activities: Capital assets, not being depreciated: Land 36,840,832$ -$ 36,840,832$ Total Capital Assets, Not Being Depreciated 36,840,832 - 36,840,832 Capital assets, being depreciated: Buildings and improvements 6,636,465 - 6,636,465 Equipment and furniture 2,073,478 - 2,073,478 Vehicles 20,348 - 20,348 Software 20,255 - 20,255 Total Capital Assets, Being Depreciated 8,750,546 - 8,750,546 Less accumulated depreciation: Buildings and improvements 1,741,753 234,555 1,976,308 Equipment and furniture 1,534,256 255,032 1,789,288 Vehicles 20,347 1 20,348 Software 20,255 - 20,255 Total Accumulated Depreciation 3,316,611 489,588 3,806,199 Total Capital Assets, Being Depreciated, Net 5,433,935 (489,588) 4,944,347 Governmental Activities Capital Assets, Net 42,274,767$ (489,588)$ 41,785,179$ Depreciation expense was charged to the following function in the Statement of Activities: Golf Course 489,588$ 53 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 8: Changes in Long-Term Liabilities – Governmental Activities a. Changes in Long-Term Debt The following is a summary of changes in governmental long-term liabilities of the City for the fiscal year ended June 30, 2013: Balance at July 1, 2012 Transfers from the Successor Agency Additions Deletions Balance at June 30, 2013 Due within one year City: Compensated absences payable $ 941,954 $ - 702,482$ 900,429$ 744,007$ 711,011$ Copier Lease Payable 40,088 - 71,045 40,088 71,045 11,918 OPEB Liability 459,644 - 116,408 16,461 559,591 - General liability retrospective deposit payable 41,298 - - 41,298 - - RDA Project Area No. 2: Provident Loan - 1,473,612 - 32,516 1,441,096 35,340 US Department of Agriculture - 716,372 - 14,267 702,105 15,761 Financing Authority: Revenue bonds 3,895,000 - - 470,000 3,425,000 495,000 Total $ 5,377,984 $ 2,189,984 $ 889,935 $ 1,515,059 $ 6,942,844 $ 1,269,030 b. A description of individual issues of debt (excluding defeased bonds) outstanding as of June 30, 2013, is as follows: 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 to $3,417, 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. This was the last year of the lease and the balance was paid in June 2013. The City immediately entered into a new 5-year lease agreement for photocopiers for $71,045 maturing in monthly increments of $1,456, with interest payable monthly at 8.47%. This new lease agreement qualifies as a capital lease for accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments at the inception date. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2013, are as follows: Year Ending June 30, Total 2014 17,477$ 2015 17,477 2016 17,477 2017 17,477 2018 17,477 Total Payments 87,385 Less amount representing interest (16,340) Outstanding Principal 71,045$ 54 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 8: Changes in Long-Term Liabilities – Governmental Activities (Continued) 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, 2013, is $ 3,425,000. On May 10, 2013, Standard and Poor’s Ratings Services (“S&P”) raised its financial strength rating on NPFGC to ‘A’ from ‘BBB.’ On May 21, 2013, Moody’s Investors Service raised its financial strength rating on NPFGC to ‘Baa1’ from ‘Baa2.’ The minimum annual requirements to amortize the bond payable as of June 30, 2013, are as follows: Principal Interest 2014 495,000$ 176,351$ 2015 525,000 148,046 2016 555,000 118,076 2017 585,000 86,441 2018 615,000 53,141 2019-2023 650,000 18,038 Totals 3,425,000$ 600,093$ CJPIA Retrospective Deposit Liability Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the Authority. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. CJPIA has taken the amount owed to the Authority by the City as an offset to the CJPIA General Liability cumulative refund due to the City by the Authority. More 55 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 8: Changes in Long-Term Liabilities – Governmental Activities (Continued) information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA.org. At June 30, 2013, there was no retrospective amount. Loans Washington Street Apartments In October 2008, the former redevelopment agency acquired the Washington Street Apartments for cash and the assumption of the following debt: Provident Bank Loan This loan was originally entered into with the previous owner of the Washington Street Apartments and Provident Bank for $1,696,000 in August 2001 at an 8.36% interest rate. The loan is amortized on a thirty year basis with the outstanding balance due in twenty years or August 2021. The outstanding principal balance in October 2008 when the property was acquired by the former redevelopment agency was $1,572,031. The loan is secured by a deed of trust on the property and is senior to the United States Department of Agriculture (USDA) loan which is also secured by a deed of trust on the property. Repayment of the monthly loan amount of $12,873 is made from tenant rent receipts. The source for the final principal payment due in August 2021 of $1,050,109 will be determined at a future date. The principal balance of this loan at June 30, 2013, is $1,441,096. The minimum annual requirements to amortize the loan payable as of June 30, 2013, are as follows: Principal Interest 2014 35,340$ 119,114$ 2015 38,411 116,064 2016 41,748 112,726 2017 45,375 109,099 2018 49,317 105,157 2019-2022 1,230,905 302,913 Totals 1,441,096$ 865,073$ United States Department of Agriculture (USDA) Rural Development Promissory Note This promissory note was originally entered into with the previous owner of the Washington Street Apartments and USDA – Rural Development for $1,500,000 in November 1980 at a 10.00% interest rate. The note is amortized on a fifty year basis with the outstanding balance due in October 2030. The outstanding principal balance, in October 2008, when the property was acquired by the former redevelopment agency was $760,721. The loan is secured by a deed of trust on the property and is subordinated to the Provident loan which is also secured by a deed of trust on the property. Repayment of the monthly loan amount of $7,107 is made from tenant rent receipts and a rental subsidy from the USDA. Rural Development has agreed to a 9% interest rate subsidy on the Promissory Note as long as the Apartment renters meet certain program eligibility requirements. The principal balance of this note at June 30, 2013, is $702,105. 56 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 8: Changes in Long-Term Liabilities – Governmental Activities (Continued) Principal Interest 2014 15,761$ 69,520$ 2015 17,412 67,870 2016 19,235 66,047 2017 21,249 64,033 2018 23,474 61,807 2019-2023 159,812 266,597 2024-2028 262,940 163,469 2029-2032 182,222 23,684 Totals 702,105$ 783,027$ Compensated absences Compensated absences are described in note 1. The liability is typically liquidated by the general fund. Other Post-Employment Benefits (OPEB) OPEB are described in note 15. The liability is typically liquidated by the general fund. Note 9: Changes in Long-Term Liabilities – Business-type Activities Changes in business-type long-term liabilities for the year ended June 30, 2013, were as follows: Balance at July 1, 2012 Deletions Balance at June 30, 2013 Due within one year Golf Course: Capital leases payable $ 169,084 125,348$ 43,736$ 43,736$ The City of La Quinta entered into several capital lease agreements for the operation of the Silver Rock Golf Resort. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. Obligations under capital leases are as follows: 57 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 9: Changes in Long-Term Liabilities – Business-type Activities (Continued) 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 $11,166 which began February 1, 2011.43,736$ Total capital leases payable as of June 30, 2013 43,736$ The following schedule summarizes the debt to maturity payments for capital leases: Year Ending June 30, Total 2014 44,366$ Total Payments 44,366 Less Amount Representing Interest (630) Outstanding Principal 43,736$ 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, 2013. Proceeds Maturity Date Interest Rate Amount Outstanding at June 30, 2013 Assessment District No. 97-1 705,262$ 9/2/2018 4.10% - 5.60% 240,000$ Assessment District No. 2001-1 2,285,000 9/2/2015 5.00% - 6.60% 325,000 Note 11: Interfund Receivables and Payables The composition of current interfund receivable and payable as of June 30, 2013, are as follows: Non-Major Governmental Total Due From Other Funds General Fund 26,866$ 26,866$ Total:26,866$ 26,866$ Due to Other Funds 58 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 11: Interfund Receivables and Payables (Continued) The interfund balances were made to cover negative cash balances and other temporary loans at June 30, 2013. The composition of non-current interfund receivable and payable as of June 30, 2013, are as follows: Civic Center Non-Major Governmental Golf Course TOTAL Advances to Other Funds General Fund 7,310,447$ 2,875,703$ 5,323,541$ 15,509,691$ Advances From Other Funds a) In September 2006, an advance up to $9,615,094 for the City Hall expansion from the General Fund to the Civic Center Developer Impact Fee Fund was approved. As of June 30, 2013, the Civic Center expansion was completed and the amount of the advance was $7,310,447 outstanding. The advance accrues interest that would have been earned by the Local Agency Investment Fund. b) As of June 30, 2013, the General Fund has advanced to the Golf Course fund $5,323,541. The advances accrue interest at the City’s investment pool rate and are to be repaid by the golf course out of future profits. c) In October 2009, an advance up to $2,033,687 for the Phase 1 of the Corporate Yard from the General Fund to the Street and Park Maintenance Facility Funds was approved. As of June 30, 2013, the amount of the outstanding advance was $2,009,184. The advance accrues interest at the earnings rate of the City’s investment pool fund. d) In February 2003, the Redevelopment Agency Capital Projects PA No. 2 Fund advanced $1,350,131 to the Fire Facility Fund to provide funding for development of the City’s north Fire Station. On March 1, 2012 the outstanding advance of $925,192 was transferred from the Redevelopment Agency to the General Fund with the Redevelopment Agency receiving $925,192 in cash for the outstanding balance. The advance accrues interest equal to the earnings rate of the City’s Investment Pool Funds. As of June 30, 2013, the remaining balance of the advance was $866,519. Note 12: Interfund Transfers General Fund Housing Authority PA 2 Non-Major Governmental Total Transfers In General Fund -$ -$ 75,951$ 75,951$ Capital Improvement 698,884 24,972,905 4,087,645 29,759,434 Non-Major Governmental 2,000 - 3,668 5,668 Total:700,884$ 24,972,905$ 4,167,264$ 29,841,053$ Transfers Out 59 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 12: Interfund Transfers (Continued) a) $75,951 was transferred to the General Fund from various non-major funds to fund various program expenses within the City related to operations and grant funded activities. b) $698,884 was transferred from the General Fund to the Capital Improvement Fund to transfer various capital projects and sales tax rebate agreements. c) $24,972,905 was transferred to the Capital Improvement Fund from the Housing Authority PA No. 2 Fund to fund various capital projects within the project area of the former redevelopment agency. d) $4,087,645 was transferred to Capital Improvement Fund from various non-major funds to fund various capital projects within the City. e) A combined $5,668 was transferred to various non-major funds from the General Fund, Capital Improvement, and other non-major funds to support various administrative operations, capital project, and debt service expenses within the City. IV. OTHER INFORMATION Note 13: Defined Benefit Pension Plan Plan Description The City of La Quinta contributes to the California Public Employees Retirement System (PERS), a cost sharing multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of PERS' annual financial report may be obtained from their executive office: 400 P Street, Sacramento, CA 95814. Funding Policy Participants are required to contribute 8% of their annual covered salary. The City makes the contributions required of City employees on their behalf and for their account. The City is required to contribute at an actuarially determined rate; the current rate is 13.914% of annual covered payroll. The contribution requirements of plan members and the City are established and may be amended by PERS. The contribution requirement of plan member and the City are established and may be amended by CalPERS. Contributions For the year ended June 30, 2013, the City’s contribution of $869,462 was equal to the City’s required and actual contribution. Contributions are made from the General Fund, Golf Course Fund and Information Technology Fund. The required contribution was determined as part of the June 30, 2010, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.75% investment rate of return (net of administrative expenses) and (b) projected annual salary increases that range from 3.55% to 14.45% depending on age, service, and type of employment. Both (a) and (b) include inflation component of 3%. The actuarial value of PERS assets was determined using techniques 60 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 13: Defined Benefit Pension Plan (Continued) that smooth the effects of short-term volatility in the market value of investments over a three- year period. PERS unfunded actuarial accrued liability (or surplus) is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at June 30, 2013, was 18 years. Required Percentage Fiscal Year Contribution Contributed 6/30/2011 801,171$ 100% 6/30/2012 906,917 100% 6/30/2013 869,462 100% Three-Year Trend Information for PERS Note 14: Defined Contribution Plans Plan Description The Supplemental Pension Savings Plan is a defined contribution pension plan established by the City to provide retirement excess benefits to general employees of the City. At June 30, 2013, there was one plan member. There are no required contributions by plan members. During the 2012/13 fiscal year the City made no contributions to fund the Supplemental Pension Savings Plan. Note 15: Post-Employment Health Benefits Plan Description The City of La Quinta provides other postemployment benefits (OPEB) through a single-employer defined benefit healthcare plan by contributing on behalf of all eligible retirees’ $112/month for calendar 2012 and $115/month for calendar 2013, increased in all future years according to the rate of medical inflation. These benefits are provided per contract between the City and the employee associations. A separate financial report is not available for the plan. Funding Policy The contribution requirements of plan members and the City are established and may be amended by the City, City Council and/or the employee association. Currently, contributions are not required from plan members. A contribution was made during 2012-2013 fiscal year for $16,461. 61 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 15: Post-Employment Health Benefits (Continued) As a result, the City calculated and recorded a net OPEB obligation, representing the difference between the annual required contribution (ARC) and actual contributions, as presented below: Annual required contribution (ARC)138,992$ Interest on net OPEB obligation 4,596 Adjustment to ARC (27,180) Annual OPEB cost 116,408 Contributions made (16,461) (Decrease) increase in net OPEB obligation 99,947 Net OPEB obligation (asset) - beginning of year 459,644 Net OPEB obligation (asset) - end of year 559,591$ The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2012-2013 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) 6/30/2011 119,105$ 4,260$ 3.58%337,311$ 6/30/2012 128,493 6,160 4.79%459,644 6/30/2013 116,408 16,461 14.14% 559,591 Funded Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The information is as of the latest actuarial valuation information available. Actuarial Actuarial Actuarial Actuarial Percent of Type of Valuation Value of Accrued Accrued Funded Covered Covered Interest Valuation Date Assets Liability Liability Ratio Payroll Payroll Rate Actual 7/1/2008 -$ 590,676$ 590,676$ 0.0% 7,821,474$ 7.6% 5.00% Actual 7/1/2011 - 428,328 428,328 0.0% 7,459,445 5.7% 5.00% 62 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 15: Post-Employment Health Benefits (Continued) Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The required contribution was determined as part of the July 1, 2011, actuarial valuation using the entry age actuarial cost method. The actuarial assumptions included a 5.0% investment rate of return, projected salary increases ranging from 5.0% to 8.0%, a 4.0% per year cost-of-living adjustments. Both include an inflation component of 4%. The actuarial value of assets is set equal to the reported market value of assets. The UAAL is being amortized as a level dollar on an open basis. The remaining amortization period at June 30, 2013, was twenty-six years. The number of active participants is 12. Note 16: Self Insurance The City of La Quinta is a member of the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (Authority). The Authority is composed of 122 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee. General Liability In the liability program claims are pooled separately between police and non-police exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs in excess of $750,000 up to the reinsurance attachment point of $5 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to $10 million are paid under a reinsurance contract subject to a $2.5 million annual aggregate deductible. The $2.5 million annual aggregate deductible is fully covered under a separate policy; as such no portion of it is retained by the Authority. Costs of covered claims from $10 million to $15 million are paid under two reinsurance contracts subject to a combined $3 million annual aggregate deductible. The $3.0 million annual aggregate deductible is fully retained by the Authority. (6) Costs of covered claims from $15 million 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. 63 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 16: Self Insurance (Continued) Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a pooled sub-limit of $25 million per occurrence. This $25 million subsidence sub-limit is composed of (a) $5 million retained within the pool’s SIR, (b) $10 million in reinsurance and (c) $10 million in excess insurance. The excess insurance layer has a $10 million annual aggregate. 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 $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 $5 million is purchased as part of a reinsurance policy, and Employer’s Liability losses from $5 million to $10 million are pooled among members. 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 2012-2013. 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 $65,426,900. During the past three fiscal years none of the above programs of protection have had settlements or judgments that exceed pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. 64 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 17: Commitments and Contingencies The following material construction commitments existed at June 30, 2013: Project Name Contract Amount Expenditures to date as of June 30, 2013 Remaining Commitments Adams Street Bridge Improvements 8,287,990$ 5,246,415$ 3,041,575$ Highway 111 at Washington Street 730,136 - 730,136 Note 18: Net Position and Fund Balances Fund Balance Commitments The City has the following committed fund balance shown on the balance sheet: Committed to emergency reserve - the City established the amount of 35% of the Fiscal Year 2012-2013 budget plus $4,000,000 which totals $16,034,995 in the General Fund for the year ended June 30, 2013. The funds would be drawn upon pursuant to the Municipal Code Section 2.20 which defines an emergency or disaster to mean the actual or threatened existence of conditions of disaster or of extreme peril to the safety of persons and property within this city caused by such conditions as air pollution, fire, flood, storm, epidemic, riot, earthquake or other conditions, including conditions resulting from war or imminent threat of war but other than conditions resulting from a labor controversy, which conditions are or are likely to be beyond the control of the services, regular personnel, equipment and facilities of the city and which may require the combined forces of other political jurisdictions to combat. Committed to post retirement health benefits - the City has committed a portion of fund balance for the payment in future years of their Post retirement health benefits. For the year ended June 30, 2013, the City has committed $1,523,401 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 2012-2013 budget which totals $2,836,820 in the General Fund for the year ended June 30, 2013. Restatements Net Position in the government-wide statements have been restated by $3,908,944 to correct the amount of capitalized expenditures relating to the Coral Mountain Project in the prior years. 65 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 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, 2013, the Golf Course had an operating loss before contributions and transfers of $368,952. 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. On January 17, 2012, the City amended the agreement to extend the termination date by an additional one year period, subject to the $1,000,000 maximum reimbursement. 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, 2013, the City made $1,000,000 in reimbursement payments to the owner leaving no outstanding balance. 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, 2013, the City made $2,118,783 in reimbursement payments to the owner leaving an outstanding balance of $1,881,217. 66 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of La Quinta that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 3, 2011, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 2012-002. After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. The Successor Agency to the former Redevelopment Agency is reported as a fiduciary fund (private purpose trust fund). a. Cash and investments Cash and investments reported in the accompanying financial statements consisted of the following: Cash and investments pooled with the City 59,723,121$ Cash and investments with fiscal agent 43,406,872 103,129,993$ b. Loans Receivable Owner Participation Agreement – Garff Properties, LLC In July 2010, the former redevelopment agency entered into an Owner Participation Agreement (OPA) with an Garff Properties-La Quinta, LLC (“Garff”) that provides for the Former Agency to provide a rehabilitation loan to Garff of up to $2,300,000 for the construction of a new auto dealership facility and rehabilitation of an existing dealership facility. In connection with the OPA, Garff has executed a promissory note which is secured by a deed of trust, and an operating covenant. The loan will be repaid by crediting future sales and property tax increment taxes generated on the site until the cumulative taxes collected equals the loan amount. At that time, the note will be cancelled and the operating covenant will terminate. If, after ten years of operation, a shortfall exists between the revenues collected and the outstanding loan amount, the note will be cancelled and the operating covenant will terminate. Further, if at any time 67 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) 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, 2013, is $2,063,562. Owner Participation Agreement – Torre Nissan In June 2011, the former redevelopment agency entered into an Owner Participation Agreement (OPA) with an autodealer, Mega Dealer, LLC (“Torre Nissan”) that provides for the Agency to provide a rehabilitation loan to Torre Nissan of up to $1,500,000 for the remodeling of the existing dealership and an expansion of the dealership facility to accommodate a new line of electric and commercial vehicles. The new expansion will also include service and parts sales facilitates. In connection with the OPA, Torre Nissan has executed a promissory note, which is secured by a subordinated deed of trust, and in operation of the 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, 2013, construction was in progress and $1,499,999 of the $1,500,000 had been expanded leaving an available balance of $1. c. Due from other Governments La Quinta Community Park In July 2002, an advance of $4,167,912 was made from the former redevelopment agency to provide funding for the development of the publicly owned improvements to the La Quinta Community Park. The advance accrues interest at the earnings rate of the City’s investment pool fund. As of June 30, 2013, the remaining balance of the advance for the La Quinta Community Park is $1,052,040. La Quinta Library In April 2005, another advance of $2,490,273 was made from the former redevelopment agency to provide funding for the construction of the public library. The advance accrues interest at the earnings rate of the City’s investment pool fund. The remaining balance of this advance at June 30, 2013, is $1,841,056. Highway 111 Improvements In June 2012, an advance of $1,276.516 was made from the former redevelopment agency to the City of La Quinta’s Transportation Development Fund to provide funding for the Highway 111 median public improvements. The advance accrues interest at 7%. As of June 30, 2013, the remaining balance of the advance is $502,775. 68 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) d. Long-Term Debt A description of long-term debt outstanding (excluding defeased debt) of the Successor Agency as of June 30, 2013, follows: Balance at July 1, 2012 Transfers to the City * Additions Deletions Balance at June 30, 2013 Due within one year Tax allocation bonds $ 134,810,000 $ - $ - $ 3,940,000 130,870,000$ 3,695,000$ Provident Loan 1,473,612 (1,473,612) - - - - US Department of Agriculture 716,372 (716,372) - - - - City loans - - 41,378,966 - 41,378,966 - Revenue bonds 108,195,000 - - 1,890,000 106,305,000 2,495,000 Unamortized premiums/discounts (1,075,595) - - (51,450)(1,024,145) - Total $ 244,119,389 $ (2,189,984) $ 41,378,966 $ 5,778,550 $ 277,529,821 $ 6,190,000 * The loans were previously reported as enforcable obligations of the Successor Agency. The City determined that these were not enforcable obligations in the current year since the City was receiving federal funding to pay for the loan repayments. Tax Allocation Bonds As of June 30, 2013, the following issuances of Tax Allocation Bonds were outstanding: Series 1998, Project Area No. 1 Tax allocation refunding bonds, Series 1998, in the amount of $15,760,000 were issued by the Former Agency to refund the outstanding aggregate principal amount of the former redevelopment agency’s Tax Allocation Bonds, Series 1991. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. Interest rates on the bonds range from 5.20% to 5.25% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 1. Term Bonds maturing September 1, 2028, are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2013, and on each September 1 thereafter, through September 1, 2028, at a price equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2013, is $ 15,760,000. 69 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2013, are as follows: Principal Interest 2014 655,000$ 802,490$ 2015 690,000 767,520 2016 725,000 730,730 2017 765,000 691,990 2018 800,000 651,300 2019-2023 4,690,000 2,567,500 2024-2028 6,035,000 1,179,750 2029-2032 1,400,000 36,400 Totals 15,760,000$ 7,427,680$ Series 1998, Project Area No. 2 Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the former redevelopment agency to refund the outstanding aggregate principal amount of the Former Agency’s Tax Allocation Bonds, Series 1992. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 2. Interest rates on the bonds range from 3.75% to 5.28% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 2. Term Bonds maturing September 1, 2028 and September 1, 2033, are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2009 and September 1, 2019, respectively, and on each September 1 thereafter at a 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, 2013, is $5,285,000. The minimum annual requirements to amortize the bond payable as of June 30, 2013, are as follows: Principal Interest 2014 145,000$ 272,516$ 2015 150,000 264,956 2016 160,000 257,013 2017 170,000 248,556 2018 175,000 239,716 2019-2023 1,030,000 1,047,784 2024-2028 1,335,000 738,806 2029-2033 1,720,000 339,938 2034-2037 400,000 10,500 Totals 5,285,000$ 3,419,785$ 70 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Series 2001, Project Area No. 1 On August 15, 2001, the former redevelopment agency issued tax allocation bonds in the amount of $48,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2001 tax allocation bonds were issued at a discount of $422,400 and issuance costs of $1,517,325. The bonds consist of $17,280,000 of term bonds that accrue interest at 5.00% and mature on September 1, 2021, and $30,720,000 of term bonds that accrue interest at 5.18% and mature on September 1, 2031. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2013, is $48,000,000 with an unamortized discount of $314,588. The minimum annual requirements to amortize the bond payable as of June 30, 2013, are as follows: Principal Interest 2014 1,565,000$ 2,391,595$ 2015 1,645,000 2,311,345 2016 1,730,000 2,226,970 2017 1,815,000 2,138,345 2018 1,905,000 2,045,345 2019-2023 11,050,000 8,659,885 2024-2028 14,145,000 5,482,373 2029-2032 14,145,000 1,487,798 Totals 48,000,000$ 26,743,656$ Series 2002, Project Area No. 2 On June 12, 2002, the former redevelopment agency issued tax allocation bonds in the amount of $40,000,000 to finance capital projects benefiting the La Quinta redevelopment Project Area No. 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, 2013, is $33,645,000 with an unamortized discount of 280,007. 71 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2013, are as follows: Principal Interest 2014 705,000$ 1,695,656$ 2015 735,000 1,659,656 2016 770,000 1,622,031 2017 810,000 1,582,531 2018 855,000 1,540,906 2019-2023 4,945,000 7,003,781 2024-2028 6,330,000 5,583,175 2029-2033 18,495,000 3,004,659 Totals 33,645,000$ 23,692,395$ Series 2003, Project Area No. 1 On September 1, 2003, the former redevelopment agency issued tax allocation bonds in the amount of $26,400,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2003 tax allocation bonds were issued at a discount of $277,200 and issuance costs of $629,191. Interest is payable semi-annually on March 1 and September 1 of each year, commencing March 1, 2004. Interest payments range from 4.24% to 6.44% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2013 through September 1, 2032, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2004, September 1, 2014, and September 1, 2024, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. The principal balance of outstanding bonds at June 30, 2013, is $22,215,000 with an unamortized discount of $183,871. The minimum annual requirements to amortize the bond payable as of June 30, 2013, are as follows: Principal Interest 2014 590,000$ 1,392,158$ 2015 620,000 1,356,736 2016 660,000 1,316,800 2017 700,000 1,274,368 2018 745,000 1,229,284 2019-2023 4,485,000 5,364,860 2024-2028 6,095,000 3,707,560 2029-2033 8,320,000 1,406,496 Totals 22,215,000$ 17,048,262$ 72 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Series 2011, Project Area No. 2 On June 6, 2011, the former redevelopment agency issued subordinate taxable tax allocation bonds in the amount of $6,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 2. The 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. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2013, is $5,965,000 with an unamortized discount of $79,968. The minimum annual requirements to amortize the bond payable as of June 30, 2013, are as follows: Principal Interest 2014 35,000$ 476,886$ 2015 40,000 475,005 2016 40,000 472,855 2017 40,000 470,705 2018 50,000 468,555 2019-2023 295,000 2,285,775 2024-2028 410,000 2,160,945 2029-2033 600,000 1,970,265 2034-2038 2,790,000 1,464,964 2039-2042 1,665,000 206,190 Totals 5,965,000$ 10,452,145$ Revenue Bonds As of June 30, 2013, the following issuances of Revenue Bonds were outstanding: 2004 Series A Local Agency Revenue Bonds On June 29, 2004, the La Quinta Financing Authority issued revenue bonds in the amount of $90,000,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2 and to advance refund the Agency’s 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. 73 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2005. Interest payments range from 3% to 5.25% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2024, September 1, 2029 and September 1, 2034, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2017, September 1, 2025, and September 1, 2030, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The principal balance of outstanding bonds at June 30, 2013, is $77,455,000 with an unamortized premium of $118,094. The minimum annual requirements to amortize the bond payable as of June 30, 2013, are as follows: Principal Interest 2014 1,975,000$ 3,924,681$ 2015 2,075,000 3,823,431 2016 2,175,000 3,714,463 2017 2,290,000 3,597,256 2018 2,410,000 3,473,881 2019-2023 14,090,000 15,279,906 2024-2028 18,165,000 11,107,313 2029-2033 23,235,000 5,912,966 2034-2037 11,040,000 572,975 Totals 77,455,000$ 51,406,872$ 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 74 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) 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, 2013, is $28,850,000 with an unamortized discount of $283,085. The minimum annual requirements to amortize the bond payable as of June 30, 2013, are as follows: Principal Interest 2014 520,000$ 2,171,767$ 2015 540,000 2,152,267 2016 565,000 2,127,967 2017 590,000 2,099,717 2018 625,000 2,066,677 2019-2023 3,800,000 9,661,240 2024-2028 5,420,000 8,038,565 2029-2033 7,885,000 5,571,830 2034-2037 8,905,000 1,865,785 Totals 28,850,000$ 35,755,815$ Loans from the City of La Quinta The City of La Quinta loaned money to the former Redevelopment Agency to cover operating and capital shortfalls. These loans were paid back to the City during the 2010/11 fiscal year. This repayment was disallowed by the California Department of Finance during their Asset Transfer Review of the former Redevelopment Agency and demanded that this money be remitted to the State for distribution to the effecting taxing entities. The City reversed this transaction and the payable to the State is properly recorded by the Successor Agency as of June 30, 2013. In a letter dated November 6, 2013 the California Department of Finance approved the loans as enforceable obligations to be through Successor Agency property tax. As of June 30, 2013, the amount due to the City of La Quinta was $41,378,966. This consists of an outstanding loan of: 1) $6,000,000 loaned to the former Redevelopment Agency with repayments beginning in 2015/16 and accrues interest at the current Local Agency Investment Fund rate. 2) $6,000,000 loaned to the Redevelopment Agency requires repayments beginning in 2015/16 and accrues interest at the current Local Agency Investment Fund rate. 3) $10,000,000 loaned to the Redevelopment Agency requires repayments beginning in 2015/16 and accrues interest at the current Local Agency Investment Fund rate. 75 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 Note 21: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) 4) $10,000,000 loaned to the former Redevelopment Agency with repayments beginning in 2015/16 and accrues interest at the current Local Agency Investment Fund rate. 5) $9,378,966 loaned to the former Redevelopment Agency for the acquisition of nine acres located on south side of Highway 111 and East of Dune Palms Road with repayments beginning in 2015/16 and accrues interest at the current Local Agency Investment Fund rate. e. Pledged Tax Revenues The City pledged, as security for bonds issued, either directly or through the Financing Authority, a portion of tax increment revenue (including Low and Moderate Income Housing set-aside and pass through allocations) that it receives. The bonds issued were to provide financing for various capital projects, accomplish Low and Moderate Income Housing projects and to defease previously issued bonds. Assembly Bill 1X 26 provided that upon dissolution of the Redevelopment Agency, property taxes allocated to redevelopment agencies no longer are deemed tax increment but rather property tax revenues and will be allocated first to successor agencies to make payments on the indebtedness incurred by the dissolved redevelopment agency. Total principal and interest remaining on the debt is $413,121,610 with annual debt service requirements as indicated below. For the current year, the total property tax revenue recognized by the Successor Agency for the payment of indebtedness incurred was $19,993,315 and the debt service obligation on the bonds was $19,268,806. f. Conduit Debt Financing 2002 Series B Multifamily Housing 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, 2013, are $2,650,000. The bond is secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bond is not an obligation of the issue, but payable solely from the security. g. Insurance The Successor Agency of the former redevelopment agency is covered under the insurance policy of the City of La Quinta at June 30, 2013. h. Restatement of Net Position Net Position in the fiduciary statements have been restated by $4,238,688 to comply with GASB Statement 65, Items Previously Reported as Assets and Liabilities, that was implemented in the current year. GASB 65 amends prior guidance with respect to the treatment of debt issuance costs. Debt issuance costs should be recognized in the period incurred rather than reported on the statement of net position as deferred charges and recognized systematically over the life of the debt. The accounting changes of this statement should be applied retroactive and therefore the Successor Agency has reported a restatement of beginning net position for unamortized debt issuance costs (deferred charges) previously reported on the statement of net position to conform. 76 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 i. Extraordinary items Loans included in long-term debt from Provident and US Department of Agriculture in the amount of $2,189,984 were included in the transfer of the assets and liabilities of the former redevelopment agency as of February 1, 2012 due to the dissolution of the Former Redevelopment Agency. During the current year the California Department of Finance disallowed these loans as enforceable obligations and as a result were transferred back to the City. This transaction is shown as an extraordinary loss in the Government Wide Statement of Activities and an extraordinary gain in the Statement of Changes in Fiduciary Net Position. 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. La Quinta Public Safety Officer Fund – To account for contributions to be distributed to public safety officers disabled or killed in the line of duty. Arts in Public Places – To account for development fees paid in lieu of acquisition and installation of approved artworks in a development with expenditures restricted to acquisition, installation, maintenance and repair of artworks at approved sites. South Coast Air Quality Fund – To account for contributions from the South Coast Air Quality Management District. Use is limited to reduction and control of airborne pollutants. AB 939 Fund – To account for the State mandated program to reduce waste sent to the landfills through recycling efforts. Development Agreement Fund – To account for the proceeds of development agreement revenues collected and the related expenditures in accordance with State requirements. Law Enforcement – To account for law enforcement grants. 79 Proposition 1B - To account for the revenues and expenditures related to Proposition 1B monies. Justice Assistance Grant – To account for Federal Bureau of Justice Block Grant program grant funds, which are used to reduce crime and improve public safety. Measure A - To account for the revenues and expenditures related to Measure A monies. Transportation Uniform Mitigation Fee - To account for the revenues and expenditures related to Transportation Uniform Mitigation Fee monies. 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. CAPITAL PROJECT FUNDS Capital projects funds account for the financial resources to be used for the acquisition, construction or improvements of major capital facilities and infrastructure. Infrastructure Fund - To account for the accumulation of resources provided through developer fees for the acquisition, construction or improvement of the City’s infrastructure, prior to adoption of the new Developer Impact Fee Structure on August 16, 1999. This fund accounts for all developer resources received prior to this date, and is budgeted by the Council through adoption of the annual capital improvement program budget. Transportation Fund, Parks and Recreations Fund, Library Development Fund, Community Center Fund, Street Facility Fund, Park Facility Fund, Fire Facility Fund – To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the City’s infrastructure. The Developer Impact Fee was adopted by the City Council on August 16, 1999. Eight new funds have been established to account for the specific impact areas of these fees, and are budgeted by the Council through adoption of the annual Capital Improvement Program budget. DEBT SERVICE FUNDS Debt Service Funds are used to account for the accumulation of resources for, and the payment of, governmental long-term debt principal and interest. La Quinta Financing Authority Fund – To account for rental activity for the Civic Center and rental income used to pay the Financing Authority Civic Center and 2004 Local Agency Revenue Bond debt obligations. 80 THIS PAGE INTENTIONALLY LEFT BLANK 81 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2013 Assets: Pooled cash and investments 41,777$ 2,717,455$ -$ 46,900$ Receivables: Accounts - - - - Taxes - - - - Notes and loans - - - - Accrued interest 39 1,428 - 45 Due from other governments 87,791 - - - Total Assets 129,607$ 2,718,883$ -$ 46,945$ Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable -$ -$ -$ -$ Unearned revenues - - - - Deposits payable - - - - Due to other governments - - - - Due to other funds - - 12,914 - Advances from other funds - - - - Total Liabilities - - 12,914 - Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Nonspendable: Notes and loans - - - - Restricted for: Planning and development projects - - - - Public safety - - - 46,945 Community services - 2,718,883 - - Public works 129,607 - - - Capital Projects - - - - Debt service - - - - Unassigned - - (12,914) - Total Fund Balances 129,607 2,718,883 (12,914) 46,945 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 129,607$ 2,718,883$ -$ 46,945$ Special Revenue Funds State Gas Tax Library Federal Assistance SLEBG 82 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2013 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Notes and loans Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances (CONTINUED) 1,188$ -$ 8,234,366$ 29,243$ - - - - - - - - - - - - - - 7,503 27 - 27,779 - - 1,188$ 27,779$ 8,241,869$ 29,270$ -$ -$ -$ -$ 1,188 - - - - - - - - - - - - 12,619 - - - - - - 1,188 12,619 - - - - - - - - - - - - - - - - - - - - - 29,270 - - 8,241,869 - - 15,160 - - - - - - - - - - - - - - - 15,160 8,241,869 29,270 1,188$ 27,779$ 8,241,869$ 29,270$ Special Revenue Funds Indian Gaming Lighting and Landscaping Quimby Public Safety 83 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2013 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Notes and loans Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances (CONTINUED) 664,962$ 99,303$ 850,062$ 201,827$ - - - - - - - - - - - - 727 83 777 183 - - - - 665,689$ 99,386$ 850,839$ 202,010$ -$ 9,908$ -$ -$ - - - - - - - 201,927 - - - - - - - - - - - - - 9,908 - 201,927 - - - - - - - - - - - - - 89,478 850,839 - - - - - 665,689 - - - - - - - - - - 83 - - - - - - - - 665,689 89,478 850,839 83 665,689$ 99,386$ 850,839$ 202,010$ Special Revenue Funds Art in Public Places South Coast Air Quality AB 939 Development Agreement 84 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2013 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Notes and loans Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances (CONTINUED) 171,411$ 105$ -$ -$ - - - - - - - 117,967 - - - - 160 - - - 12,692 - - - 184,263$ 105$ -$ 117,967$ 1,510$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - - 1,510 - - - - - - - - - - - - - - - - 105 - - 182,753 - - - - - - - - - - 117,967 - - - - - - - - - - - - 182,753 105 - 117,967 184,263$ 105$ -$ 117,967$ Special Revenue Funds Law Enforcement Proposition 1B Justice Assistance Grant Measure A 85 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2013 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Notes and loans Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances 1,850$ 1,648,858$ 23,115$ 656,608$ 7 55,542 - 65,245 - - - - - 4,229,732 - - - 1,424 21 1,752 - - - - 1,857$ 5,935,556$ 23,136$ 723,605$ 1,837$ 1,065$ -$ -$ - - - 65,245 - 23,260 - - - - - 502,775 - - - - - - - - 1,837 24,325 - 568,020 - 2,167,143 - - - 2,167,143 - - - 2,062,589 - - - 1,681,499 - - - - - - - - - - 20 - - - - - 23,136 155,585 - - - - - - - - 20 3,744,088 23,136 155,585 1,857$ 5,935,556$ 23,136$ 723,605$ Special Revenue Funds Capital Project Funds Transportation Uniform Mitigation Fee Housing Authority PA No. 1 Infrastructure Transportation 86 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2013 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Notes and loans Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances (CONTINUED) -$ -$ 1,212,677$ -$ - - - - - - - - - - - - - - 1,100 - - - - - -$ -$ 1,213,777$ -$ -$ -$ -$ -$ - - - - - - - - 1,052,040 1,841,056 - - - - - - - - - 2,009,184 1,052,040 1,841,056 - 2,009,184 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,213,777 - - - - - (1,052,040) (1,841,056) - (2,009,184) (1,052,040) (1,841,056) 1,213,777 (2,009,184) -$ -$ 1,213,777$ -$ Community Center Capital Projects Funds Street Facility Parks and Recreation Library Development 87 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2013 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Notes and loans Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances (CONTINUED) Debt Service Funds Total Governmental Funds -$ -$ 2,234$ 16,603,941$ - - - 120,794 - - - 117,967 - - - 4,229,732 - - - 15,269 - - - 128,262 -$ -$ 2,234$ 21,215,965$ -$ -$ -$ 14,320$ - - - 66,433 - - - 225,187 - - - 3,395,871 - 1,333 - 26,866 - 866,519 - 2,875,703 - 867,852 - 6,604,380 - - - 2,167,143 - - - 2,167,143 - - - 2,062,589 - - - 2,621,921 - - - 258,968 - - - 11,626,441 - - - 262,754 - - - 1,392,581 - - 2,234 2,234 - (867,852) - (5,783,046) - (867,852) 2,234 12,444,442 -$ -$ 2,234$ 21,215,965$ Capital Projects Funds Fire Facility Financing Authority Park Facility 88 THIS PAGE INTENTIONALLY LEFT BLANK 89 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2013 Revenues: Taxes -$ -$ -$ -$ Assessments - - - - Intergovernmental 999,653 2,197,316 52,628 75,000 Charges for services - - - - Use of money and property 129 7,206 - 191 Developer participation - - - - Miscellaneous - - - - Total Revenues 999,782 2,204,522 52,628 75,191 Expenditures: Current: General government - - - - Public safety - - - - Planning and development - - - - Community services - 1,479,616 - - Public works 994,896 - - - Capital outlay - - - - Debt service: Principal retirement - - - - Interest and fiscal charges - - - - Total Expenditures 994,896 1,479,616 - - Excess (Deficiency) of Revenues Over (Under) Expenditures 4,886 724,906 52,628 75,191 Other Financing Sources (Uses): Transfers in - - - - Transfers out - (12,410) (56,660) (54,709) Proceeds from sale of capital asset - - - - Total Other Financing Sources (Uses)- (12,410) (56,660) (54,709) Fund Balances, Beginning of Year 124,721 2,006,387 (8,882) 26,463 Fund Balances, End of Year 129,607$ 2,718,883$ (12,914)$ 46,945$ State Gas Tax Library Federal Assistance SLEBG Special Revenue Funds 90 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2013 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works 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 Proceeds from sale of capital asset Total Other Financing Sources (Uses) Fund Balances, Beginning of Year Fund Balances, End of Year (CONTINUED) -$ -$ -$ -$ - 954,058 - - - - - - - - - - - - 42,163 149 - - - - - - - - - 954,058 42,163 149 - - - - - - - - - - - - - - 2,185 - - 960,000 - - - - - - - - - - - - - - - 960,000 2,185 - - (5,942) 39,978 149 - - - 2,000 - - (88,286) - - - - - - - (88,286) 2,000 - 21,102 8,290,177 27,121 -$ 15,160$ 8,241,869$ 29,270$ Public Safety Special Revenue Funds Indian Gaming Lighting and Landscaping Quimby 91 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2013 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works 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 Proceeds from sale of capital asset Total Other Financing Sources (Uses) Fund Balances, Beginning of Year Fund Balances, End of Year -$ -$ -$ -$ - - - - - 45,622 - - - - - - 4,295 458 4,446 83 49,475 - - - - - - - 53,770 46,080 4,446 83 - - - - - - - - - 35,360 79,457 - 10,231 - - - - - - - 43,343 - - - - - - - - - - - 53,574 35,360 79,457 - 196 10,720 (75,011) 83 - - - - (200,000) - - - - - - - (200,000) - - - 865,493 78,758 925,850 - 665,689$ 89,478$ 850,839$ 83$ Art in Public Places South Coast Air Quality AB 939 Development Agreement Special Revenue Funds 92 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2013 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works 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 Proceeds from sale of capital asset Total Other Financing Sources (Uses) Fund Balances, Beginning of Year Fund Balances, End of Year (CONTINUED) -$ -$ -$ 117,967$ - - - - 48,003 287,307 9,722 - - - - - 839 105 - - - - - - - - - - 48,842 287,412 9,722 117,967 - - - - 57,692 - - - - - - - - - - - - - - - - - - - - - - - - - - - 57,692 - - - (8,850) 287,412 9,722 117,967 - - - - - (287,307) (9,722) - - - - - - (287,307) (9,722) - 191,603 - - - 182,753$ 105$ -$ 117,967$ Special Revenue Funds Proposition 1B Justice Assistance Grant Measure A Law Enforcement 93 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2013 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works 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 Proceeds from sale of capital asset Total Other Financing Sources (Uses) Fund Balances, Beginning of Year Fund Balances, End of Year -$ -$ -$ -$ - - - - - - - - - - - - 20 437,959 73 10,840 - - - 393,617 - 39,147 - 64,308 20 477,106 73 468,765 - - - - - - - - - 330,140 - - - - - - - - - - - - - - - - - - - - - 35,194 - 330,140 - 35,194 20 146,966 73 433,571 - - - - - (309,773) (244,738) (2,899,991) - 121,652 - - - (188,121) (244,738) (2,899,991) - 3,785,243 267,801 2,622,005 20$ 3,744,088$ 23,136$ 155,585$ Infrastructure Transportation Housing Authority PA No. 1 Transportation Uniform Mitigation Fee Special Revenue Funds Capital Projects Funds 94 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2013 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works 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 Proceeds from sale of capital asset Total Other Financing Sources (Uses) Fund Balances, Beginning of Year Fund Balances, End of Year (CONTINUED) -$ -$ -$ -$ - - - - - - - - - - - - - - 6,151 - 136,318 26,674 8,276 16,957 - - - - 136,318 26,674 14,427 16,957 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4,542 7,400 - 8,037 4,542 7,400 - 8,037 131,776 19,274 14,427 8,920 - - - 3,668 - - - - - - - - - - - 3,668 (1,183,816) (1,860,330) 1,199,350 (2,021,772) (1,052,040)$ (1,841,056)$ 1,213,777$ (2,009,184)$ Capital Projects Funds Library Development Community Center Street Facility Parks and Recreation 95 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2013 Revenues: Taxes Assessments Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works 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 Proceeds from sale of capital asset Total Other Financing Sources (Uses) Fund Balances, Beginning of Year Fund Balances, End of Year Debt Service Funds Total Governmental Funds -$ -$ -$ 117,967$ - - - 954,058 - - - 3,715,251 - - 5,403 5,403 3 - 673,130 1,188,240 3,665 49,375 - 684,357 - - - 103,455 3,668 49,375 678,533 6,768,731 - - 5,703 5,703 - - - 57,692 - - - 444,957 - - - 1,492,032 - - - 1,954,896 - - - 43,343 - - 470,000 470,000 - 3,585 203,130 261,888 - 3,585 678,833 4,730,511 3,668 45,790 (300) 2,038,220 - - - 5,668 (3,668) - - (4,167,264) - - - 121,652 (3,668) - - (4,039,944) - (913,642) 2,534 14,446,166 -$ (867,852)$ 2,234$ 12,444,442$ Capital Projects Funds Financing Authority Park Facility Fire Facility 96 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STATE GAS TAX YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 124,721$ 124,721$ 124,721$ -$ Resources (Inflows): Intergovernmental 994,700 994,700 999,653 4,953 Use of money and property 200 200 129 (71) Amounts Available for Appropriation 1,119,621 1,119,621 1,124,503 4,882 Charges to Appropriation (Outflow): Public works 994,900 994,900 994,896 4 Total Charges to Appropriations 994,900 994,900 994,896 4 Budgetary Fund Balance, June 30 124,721$ 124,721$ 129,607$ 4,886$ 97 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,006,387$ 2,006,387$ 2,006,387$ -$ Resources (Inflows): Intergovernmental 2,043,357 2,043,357 2,197,316 153,959 Use of money and property 6,600 6,600 7,206 606 Amounts Available for Appropriation 4,056,344 4,056,344 4,210,909 154,565 Charges to Appropriation (Outflow): Community services 1,696,598 1,725,998 1,479,616 246,382 Transfers out 221,279 221,279 12,410 208,869 Total Charges to Appropriations 1,917,877 1,947,277 1,492,026 455,251 Budgetary Fund Balance, June 30 2,138,467$ 2,109,067$ 2,718,883$ 609,816$ 98 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FEDERAL ASSISTANCE YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (8,882)$ (8,882)$ (8,882)$ -$ Resources (Inflows): Intergovernmental 300,350 300,350 52,628 (247,722) Amounts Available for Appropriation 291,468 291,468 43,746 (247,722) Charges to Appropriation (Outflow): Transfers out 175,000 274,985 56,660 218,325 Total Charges to Appropriations 175,000 274,985 56,660 218,325 Budgetary Fund Balance, June 30 116,468$ 16,483$ (12,914)$ (29,397)$ 99 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SLEBG YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 26,463$ 26,463$ 26,463$ -$ Resources (Inflows): Intergovernmental - 100,000 75,000 (25,000) Use of money and property - - 191 191 Amounts Available for Appropriation 26,463 126,463 101,654 (24,809) Charges to Appropriation (Outflow): Transfers out - 100,000 54,709 45,291 Total Charges to Appropriations - 100,000 54,709 45,291 Budgetary Fund Balance, June 30 26,463$ 26,463$ 46,945$ 20,482$ 100 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INDIAN GAMING YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental 105,844 - - - Amounts Available for Appropriation 105,844 - - - Charges to Appropriation (Outflow): Transfers out 118,308 118,308 - 118,308 Total Charges to Appropriations 118,308 118,308 - 118,308 Budgetary Fund Balance, June 30 (12,464)$ (118,308)$ -$ 118,308$ 101 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIGHTING AND LANDSCAPING YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 21,102$ 21,102$ 21,102$ -$ Resources (Inflows): Assessments 960,000 960,000 954,058 (5,942) Amounts Available for Appropriation 981,102 981,102 975,160 (5,942) Charges to Appropriation (Outflow): Public works 960,000 960,000 960,000 - Total Charges to Appropriations 960,000 960,000 960,000 - Budgetary Fund Balance, June 30 21,102$ 21,102$ 15,160$ (5,942)$ 102 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE QUIMBY YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 8,290,177$ 8,290,177$ 8,290,177$ -$ Resources (Inflows): Use of money and property 20,000 20,000 42,163 22,163 Amounts Available for Appropriation 8,310,177 8,310,177 8,332,340 22,163 Charges to Appropriation (Outflow): Community services - 202,000 2,185 199,815 Transfers out 1,443,380 9,062,080 88,286 8,973,794 Total Charges to Appropriations 1,443,380 9,264,080 90,471 9,173,609 Budgetary Fund Balance, June 30 6,866,797$ (953,903)$ 8,241,869$ 9,195,772$ 103 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 27,121$ 27,121$ 27,121$ -$ Resources (Inflows): Use of money and property 100 100 149 49 Transfers in 2,000 2,000 2,000 - Amounts Available for Appropriation 29,221 29,221 29,270 49 Charges to Appropriation (Outflow): Public safety 2,000 2,000 - 2,000 Total Charges to Appropriations 2,000 2,000 - 2,000 Budgetary Fund Balance, June 30 27,221$ 27,221$ 29,270$ 2,049$ 104 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE ART IN PUBLIC PLACES YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 865,493$ 865,493$ 865,493$ -$ Resources (Inflows): Use of money and property 2,300 2,300 4,295 1,995 Developer participation 97,500 97,500 49,475 (48,025) Amounts Available for Appropriation 965,293 965,293 919,263 (46,030) Charges to Appropriation (Outflow): Community services 24,700 24,700 10,231 14,469 Capital outlay 111,500 111,500 43,343 68,157 Transfers out - 400,000 200,000 200,000 Total Charges to Appropriations 136,200 536,200 253,574 282,626 Budgetary Fund Balance, June 30 829,093$ 429,093$ 665,689$ 236,596$ 105 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SOUTH COAST AIR QUALITY YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 78,758$ 78,758$ 78,758$ -$ Resources (Inflows): Intergovernmental 416,700 416,700 45,622 (371,078) Use of money and property 400 400 458 58 Amounts Available for Appropriation 495,858 495,858 124,838 (371,020) Charges to Appropriation (Outflow): Planning and development 40,200 40,200 35,360 4,840 Transfers out 375,500 375,500 - 375,500 Total Charges to Appropriations 415,700 415,700 35,360 380,340 Budgetary Fund Balance, June 30 80,158$ 80,158$ 89,478$ 9,320$ 106 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE AB 939 YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 925,850$ 925,850$ 925,850$ -$ Resources (Inflows): Use of money and property 4,300 4,300 4,446 146 Amounts Available for Appropriation 930,150 930,150 930,296 146 Charges to Appropriation (Outflow): Planning and development 101,125 108,509 79,457 29,052 Transfers out - 199,490 - 199,490 Total Charges to Appropriations 101,125 307,999 79,457 228,542 Budgetary Fund Balance, June 30 829,025$ 622,151$ 850,839$ 228,688$ 107 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LAW ENFORCEMENT YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 191,603$ 191,603$ 191,603$ -$ Resources (Inflows): Intergovernmental 230,247 230,247 48,003 (182,244) Use of money and property 100 100 839 739 Amounts Available for Appropriation 421,950 421,950 240,445 (181,505) Charges to Appropriation (Outflow): Public safety 68,490 68,490 57,692 10,798 Total Charges to Appropriations 68,490 68,490 57,692 10,798 Budgetary Fund Balance, June 30 353,460$ 353,460$ 182,753$ (170,707)$ 108 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PROPOSITION 1B YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental 293,380 287,307 287,307 - Use of money and property - - 105 105 Amounts Available for Appropriation 293,380 287,307 287,412 105 Charges to Appropriation (Outflow): Transfers out - 287,307 287,307 - Total Charges to Appropriations - 287,307 287,307 - Budgetary Fund Balance, June 30 293,380$ -$ 105$ 105$ 109 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE JUSTICE ASSISTANCE GRANT YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Intergovernmental - 12,033 9,722 (2,311) Amounts Available for Appropriation - 12,033 9,722 (2,311) Charges to Appropriation (Outflow): Transfers out - 12,033 9,722 2,311 Total Charges to Appropriations - 12,033 9,722 2,311 Budgetary Fund Balance, June 30 -$ -$ -$ -$ 110 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE MEASURE A YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Taxes 412,500 - 117,967 117,967 Amounts Available for Appropriation 412,500 - 117,967 117,967 Budgetary Fund Balance, June 30 412,500$ -$ 117,967$ 117,967$ 111 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE TRANSPORTATION UNIFORM MITIGATION FEE YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Taxes - - - - Use of money and property - - 20 20 Amounts Available for Appropriation - - 20 20 Charges to Appropriation (Outflow): Transfers out 412,500 412,500 - 412,500 Total Charges to Appropriations 412,500 412,500 - 412,500 Budgetary Fund Balance, June 30 (412,500)$ (412,500)$ 20$ 412,520$ 112 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 1 YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 3,785,243$ 3,785,243$3,785,243$-$ Resources (Inflows): Use of money and property 243,800 243,800 437,959 194,159 Miscellaneous 125,000 125,000 39,147 (85,853) Transfers in 192,876 192,876 - (192,876) Proceeds from sale of capital asset -- 121,652 121,652 Amounts Available for Appropriation 4,346,919 4,346,919 4,384,001 37,082 Charges to Appropriation (Outflow): Planning and development 419,550 484,500 330,140 154,360 Transfers out - 118,150 309,773 (191,623) Total Charges to Appropriations 419,550 602,650 639,913 (37,263) Budgetary Fund Balance, June 30 3,927,369$ 3,744,269$3,744,088$(181)$ 113 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (90,661)$ (90,661)$ (90,661)$ -$ Resources (Inflows): Intergovernmental - 20,714,717 3,101,418 (17,613,299) Contributions - - 437,755 437,755 Developer participation - 841,244 446,146 (395,098) Transfers in 4,036,253 81,077,876 29,759,434 (51,318,442) Amounts Available for Appropriation 3,945,592 102,543,176 33,654,092 (68,889,084) Charges to Appropriation (Outflow): Planning and development - 25,281,358 25,281,358 - Capital outlay 4,036,253 77,989,932 8,463,395 69,526,537 Total Charges to Appropriations 4,036,253 103,271,290 33,744,753 69,526,537 Budgetary Fund Balance, June 30 (90,661)$ (728,114)$ (90,661)$ 637,453$ 114 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CIVIC CENTER YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (7,169,490)$ (7,169,490)$ (7,169,490)$ -$ Resources (Inflows): Developer participation 127,600 127,600 96,322 (31,278) Amounts Available for Appropriation (7,041,890) (7,041,890) (7,073,168) (31,278) Charges to Appropriation (Outflow): General government 201,939 201,939 203,557 (1,618) Debt service: Interest and fiscal charges 35,000 35,000 28,764 6,236 Total Charges to Appropriations 236,939 236,939 232,321 4,618 Budgetary Fund Balance, June 30 (7,278,829)$ (7,278,829)$ (7,305,489)$ (26,660)$ 115 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INFRASTRUCTURE YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 267,801$ 267,801$ 267,801$ -$ Resources (Inflows): Use of money and property 100 100 73 (27) Amounts Available for Appropriation 267,901 267,901 267,874 (27) Charges to Appropriation (Outflow): Transfers out - 242,074 244,738 (2,664) Total Charges to Appropriations - 242,074 244,738 (2,664) Budgetary Fund Balance, June 30 267,901$ 25,827$ 23,136$ (2,691)$ 116 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE TRANSPORTATION YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,622,005$ 2,622,005$ 2,622,005$ -$ Resources (Inflows): Use of money and property 1,800 1,800 10,840 9,040 Developer participation 441,500 441,500 393,617 (47,883) Miscellaneous 80,000 80,000 64,308 (15,692) Amounts Available for Appropriation 3,145,305 3,145,305 3,090,770 (54,535) Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges 19,500 19,500 35,194 (15,694) Transfers out 345,000 2,746,845 2,899,991 (153,146) Total Charges to Appropriations 364,500 2,766,345 2,935,185 (168,840) Budgetary Fund Balance, June 30 2,780,805$ 378,960$ 155,585$ (223,375)$ 117 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATION YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (1,183,816)$ (1,183,816)$ (1,183,816)$ -$ Resources (Inflows): Developer participation 89,200 89,200 136,318 47,118 Amounts Available for Appropriation (1,094,616) (1,094,616) (1,047,498) 47,118 Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges 6,000 6,000 4,542 1,458 Total Charges to Appropriations 6,000 6,000 4,542 1,458 Budgetary Fund Balance, June 30 (1,100,616)$ (1,100,616)$ (1,052,040)$ 48,576$ 118 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY DEVELOPMENT YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (1,860,330)$ (1,860,330)$ (1,860,330)$ -$ Resources (Inflows): Developer participation 35,500 35,500 26,674 (8,826) Amounts Available for Appropriation (1,824,830) (1,824,830) (1,833,656) (8,826) Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges 9,400 9,400 7,400 2,000 Total Charges to Appropriations 9,400 9,400 7,400 2,000 Budgetary Fund Balance, June 30 (1,834,230)$ (1,834,230)$ (1,841,056)$ (6,826)$ 119 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE COMMUNITY CENTER YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,199,350$ 1,199,350$ 1,199,350$ -$ Resources (Inflows): Use of money and property 6,000 6,000 6,151 151 Developer participation 7,400 7,400 8,276 876 Amounts Available for Appropriation 1,212,750 1,212,750 1,213,777 1,027 Budgetary Fund Balance, June 30 1,212,750$ 1,212,750$ 1,213,777$ 1,027$ 120 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STREET FACILITY YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (2,021,772)$ (2,021,772)$ (2,021,772)$ -$ Resources (Inflows): Developer participation 17,800 17,800 16,957 (843) Transfers in 2,200 2,200 3,668 1,468 Amounts Available for Appropriation (2,001,772) (2,001,772) (2,001,147) 625 Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges 10,000 10,000 8,037 1,963 Total Charges to Appropriations 10,000 10,000 8,037 1,963 Budgetary Fund Balance, June 30 (2,011,772)$ (2,011,772)$ (2,009,184)$ 2,588$ 121 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARK FACILITY YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Use of money and property - - 3 3 Developer participation 2,200 2,200 3,665 1,465 Amounts Available for Appropriation 2,200 2,200 3,668 1,468 Charges to Appropriation (Outflow): Transfers out 2,200 2,200 3,668 (1,468) Total Charges to Appropriations 2,200 2,200 3,668 (1,468) Budgetary Fund Balance, June 30 -$ -$ -$ -$ 122 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FIRE FACILITY YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (913,642)$ (913,642)$ (913,642)$ -$ Resources (Inflows): Developer participation 29,800 29,800 49,375 19,575 Amounts Available for Appropriation (883,842) (883,842) (864,267) 19,575 Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges 4,700 4,700 3,585 1,115 Total Charges to Appropriations 4,700 4,700 3,585 1,115 Budgetary Fund Balance, June 30 (888,542)$ (888,542)$ (867,852)$ 20,690$ 123 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FINANCING AUTHORITY YEAR ENDED JUNE 30, 2013 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,534$ 2,534$ 2,534$ -$ Resources (Inflows): Charges for services 5,000 5,000 5,403 403 Use of money and property 673,130 673,130 673,130 - Amounts Available for Appropriation 680,664 680,664 681,067 403 Charges to Appropriation (Outflow): General government 5,000 5,000 5,703 (703) Debt service: Principal retirement 470,000 470,000 470,000 - Interest and fiscal charges 203,130 203,130 203,130 - Total Charges to Appropriations 678,130 678,130 678,833 (703) Budgetary Fund Balance, June 30 2,534$ 2,534$ 2,234$ (300)$ 124 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. 125 CITY OF LA QUINTA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2013 Totals Assets: Current: Cash and investments 2,437,759$ 1,321,859$ 1,159,814$ 4,919,432$ Receivables: Accrued interest 2,182 1,170 1,015 4,367 Total Current Assets 2,439,941 1,323,029 1,160,829 4,923,799 Noncurrent: Capital assets - net of accumulated depreciation 646,096 191,526 15,610,923 16,448,545 Total Noncurrent Assets 646,096 191,526 15,610,923 16,448,545 Total Assets 3,086,037$ 1,514,555$ 16,771,752$ 21,372,344$ Liabilities and Net Position: Liabilities: Current: Accounts payable 13,471$ 44,535$ -$ 58,006$ Accrued liabilities - 4,462 - 4,462 Accrued compensated absences - 5,469 - 5,469 Total Current Liabilities 13,471 54,466 - 67,937 Noncurrent: Accrued compensated absences - 2,857 - 2,857 Total Noncurrent Liabilities - 2,857 - 2,857 Total Liabilities 13,471 57,323 - 70,794 Net Position: Net investment in capital assets 646,096 191,528 15,610,923 16,448,547 Unrestricted 2,426,470 1,265,704 1,160,829 4,853,003 Total Net Position 3,072,566 1,457,232 16,771,752 21,301,550 Total Liabilities and Net Position 3,086,037$ 1,514,555$ 16,771,752$ 21,372,344$ Governmental Activities - Internal Service Funds Equipment Replacement Information Technology Park Equipment and Facilities 126 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2013 Totals Operating Revenues: Sales and service charges 584,823$ 491,580$ 502,523$ 1,578,926$ Total Operating Revenues 584,823 491,580 502,523 1,578,926 Operating Expenses: Administration and general - 112,025 - 112,025 Fuel and oil 83,618 - - 83,618 Maintenance and parts 103,764 - - 103,764 Contract services 17,476 50,246 - 67,722 Software and supplies - 143,651 - 143,651 Depreciation expense 139,766 84,525 549,715 774,006 Other - 14,727 - 14,727 Total Operating Expenses 344,624 405,174 549,715 1,299,513 Operating Income (Loss)240,199 86,406 (47,192) 279,413 Nonoperating Revenues (Expenses): Interest revenue 11,722 6,180 5,054 22,956 Gain (loss) on disposal of capital assets 5,975 - - 5,975 Total Nonoperating Revenues (Expenses)17,697 6,180 5,054 28,931 Income (Loss) Before Contributions 257,896 92,586 (42,138) 308,344 Contributions 24,605 - - 24,605 Changes in Net Position 282,501 92,586 (42,138) 332,949 Net Position: Beginning of Year 2,790,065 1,364,646 16,813,890 20,968,601 End of Fiscal Year 3,072,566$ 1,457,232$ 16,771,752$ 21,301,550$ Governmental Activities - Internal Service Funds Equipment Replacement Information Technology Park Equipment and Facilities 127 CITY OF LA QUINTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2013 Totals Cash Flows from Operating Activities: Cash received from customers and users 584,823$ 491,820$ 502,523$ 1,579,166$ Cash received from/(paid to) interfund service provided (202,651) (164,595) - (367,246) Cash paid to suppliers for goods and services - (112,898) - (112,898) Net Cash Provided (Used) by Operating Activities 382,172 214,327 502,523 1,099,022 Cash Flows from Capital and Related Financing Activities: Proceeds from sales of capital assets 5,975 - - 5,975 Net Cash Provided (Used) by Capital and Related Financing Activities 5,975 - - 5,975 Cash Flows from Investing Activities: Interest received 10,193 5,368 4,253 19,814 Net Cash Provided (Used) by Investing Activities 10,193 5,368 4,253 19,814 Net Increase (Decrease) in Cash and Cash Equivalents 398,340 219,695 506,776 1,124,811 Cash and Cash Equivalents at Beginning of Year 2,039,419 1,102,164 653,038 3,794,621 Cash and Cash Equivalents at End of Year 2,437,759$ 1,321,859$ 1,159,814$ 4,919,432$ Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss)240,199$ 86,406$ (47,192)$ 279,413$ Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation 139,766 84,526 549,715 774,007 (Increase) decrease in prepaid expense - 240 - 240 Increase (decrease) in accounts payable 2,207 44,028 - 46,235 Increase (decrease) in accrued liabilities - 514 - 514 Increase (decrease) in compensated absences - (1,387) - (1,387) Total Adjustments 141,973 127,921 549,715 819,609 Net Cash Provided (Used) by Operating Activities 382,172$ 214,327$ 502,523$ 1,099,022$ Non-Cash Investing, Capital, and Financing Activities: There were no non-cash transactions in the current year. Governmental Activities - Internal Service Funds Equipment Replacement Information Technology Park Equipment and Facilities 128 AGENCY FUNDS Agency funds are used to account for assets held by the City as an agent for individual, private organizations and other governmental units. The agency funds and their purposes are as follows: The City of La Quinta has the following agency funds: Assessment District No. 97-1 and 2001-1 – To account for assessments paid to the City for debt service payments on bond issues used to finance sewer improvements. 129 CITY OF LA QUINTA COMBINING STATEMENT OF NET POSITION ALL AGENCY FUNDS JUNE 30, 2013 Totals Assets: Pooled cash and investments 143,592$ 445,489$ 589,081$ Receivables: Taxes 987 10,626 11,613 Accrued interest 121 381 502 Total Assets 144,700$ 456,496$ 601,196$ Liabilities: Deposits payable 144,700$ 456,496$ 601,196$ Total Liabilities 144,700$ 456,496$ 601,196$ Assessment District No. 97- 1 Assessment District No. 2001-1 130 CITY OF LA QUINTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2013 Balance Balance 7/1/2012 Additions Deductions 6/30/2013 Assessment District No. 97-1 Assets: Pooled cash and investments 128,183$ 74,347$ 58,938$ 143,592$ Receivables: Taxes - 987 - 987 Accrued interest 39 121 39 121 Total Assets 128,222$ 75,455$ 58,977$ 144,700$ Liabilities: Deposits payable 128,222$ 78,314$ 61,836$ 144,700$ Total Liabilities 128,222$ 78,314$ 61,836$ 144,700$ Assessment District No. 2001-1 Assets: Pooled cash and investments 422,049$ 202,803$ 179,363$ 445,489$ Receivables: Taxes 9,041 10,626 9,041 10,626 Accrued interest 125 380 124 381 Total Assets 431,215$ 213,809$ 188,528$ 456,496$ Liabilities: Deposits payable 431,215$ 226,629$ 201,348$ 456,496$ Total Liabilities 431,215$ 226,629$ 201,348$ 456,496$ Totals - All Agency Funds Assets: Pooled cash and investments 550,232$ 277,150$ 238,301$ 589,081$ Receivables: Taxes 9,041 11,613 9,041 11,613 Accrued interest 164 501 163 502 Total Assets 559,437$ 289,264$ 247,505$ 601,196$ Liabilities: Deposits payable 559,437$ 304,943$ 263,184$ 601,196$ Total Liabilities 559,437$ 304,943$ 263,184$ 601,196$ 131 THIS PAGE INTENTIONALLY LEFT BLANK 132 STATISTICAL SECTION This part of the City of La Quinta’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time.134 Revenue Capacity These schedules obtain information to help the reader assess the government’s most significant local revenue source, the property tax. 147 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. 152 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. 159 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. 162 133 2004 2005 2006 2007 2008 Governmental activities: Net investment in capital assets 249,059,500$ 233,361,129$ 253,559,117$ 300,220,033$ 343,019,328$ Restricted 44,415,966 43,421,857 65,159,623 49,277,895 86,041,189 Unrestricted 45,169,328 60,361,071 86,129,376 106,939,577 79,642,102 Total governmental activities Net Position 338,644,794$ 337,144,057$ 404,848,116$ 456,437,505$ 508,702,619$ Business-type activities: Net investment in capital assets -$ 41,300,846$ 42,075,172$ 42,692,025$ 42,778,015$ Restricted - - - - - Unrestricted - (626,658) (1,665,646) (2,385,462) (3,109,524) Total business-type activities Net Position -$ 40,674,188$ 40,409,526$ 40,306,563$ 39,668,491$ Primary government: Net investment in capital assets 249,059,500$ 274,661,975$ 295,634,289$ 342,912,058$ 385,797,343$ Restricted 44,415,966 43,421,857 65,159,623 49,277,895 86,041,189 Unrestricted 45,169,328 59,734,413 84,463,730 104,554,115 76,532,578 Total primary government Net Position 338,644,794$ 377,818,245$ 445,257,642$ 496,744,068$ 548,371,110$ Source: City of La Quinta CITY OF LA QUINTA Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year 134 TABLE 1 2009 2010 2011 2012 2013 323,669,955$ 336,459,272$ 276,787,752$ 534,388,479$ 529,681,342$ 105,297,168 96,332,870 107,042,126 26,585,382 49,598,397 96,654,981 77,187,433 97,009,428 29,832,811 83,399,745 525,622,104$ 509,979,575$ 480,839,306$ 590,806,672$ 662,679,484$ 42,536,608$ 42,879,482$ 42,491,051$ 42,105,683$ 41,741,443$ - - - - (3,937,454) (4,863,848) (4,918,951) (4,745,892) (4,750,604) 38,599,154$ 38,015,634$ 37,572,100$ 37,359,791$ 36,990,839$ 366,206,563$ 379,338,754$ 319,278,803$ 576,494,162$ 571,422,785$ 105,297,168 96,332,870 107,042,126 26,585,382 49,598,397 92,717,527 72,323,585 92,090,477 25,086,919 78,649,141 564,221,258$ 547,995,209$ 518,411,406$ 628,166,463$ 699,670,323$ Fiscal Year 135 2004 2005 2006 2007 2008 Expenses: Governmental activities: General government 4,319,778$ 3,595,906$ 4,229,871$ 6,284,342$ 6,953,073$ Public safety 10,256,463 8,512,875 9,065,244 12,724,100 13,472,036 Community services 1,446,999 1,157,141 1,426,033 4,299,453 5,797,116 Planning and development 7,526,977 5,752,239 5,906,915 7,736,520 35,323,858 Public works 6,003,013 9,101,582 10,006,335 10,511,874 11,097,526 Contribution to other agencies ----- Interest on long-term debt 9,658,779 15,265,051 15,494,656 15,163,422 15,522,441 Total governmental activities expenses 39,212,009 43,384,794 46,129,054 56,719,711 88,166,050 Business-type activities: Golf Course -1,877,291 4,523,146 4,520,173 4,761,581 Total business-type activities expenses -1,877,291 4,523,146 4,520,173 4,761,581 Total primary government expenses 39,212,009 45,262,085 50,652,200 61,239,884 92,927,631 Program revenues: Governmental activities: Charges for services: General government 337,376 445,663 717,849 60,530 8,328 Public safety 4,004,621 4,438,115 4,168,206 2,659,515 2,050,492 Planning and development 662,737 754,938 1,873,676 169,643 134,211 Community services 252,677 252,501 428,947 387,065 374,092 Public works 1,813,993 2,815,703 3,021,379 2,244,156 1,900,437 Operating grants and contributions 1,799,503 1,935,578 3,603,173 3,796,495 5,905,664 Capital grants and contributions 12,090,143 18,591,423 33,918,901 17,601,131 50,090,419 Total governmental activities program revenues 20,961,050 29,233,921 47,732,131 26,918,535 60,463,643 Business-type activities: Charges for services: Golf Course -1,091,836 3,120,728 3,540,748 3,814,233 Capital grants and contributions ----352,687 Total business-type activities program revenues -1,091,836 3,120,728 3,540,748 4,166,920 Total primary government program revenues 20,961,050 30,325,757 50,852,859 30,459,283 64,630,563 Net revenues (expenses): Governmental activities (18,250,959) (14,150,873)1,603,077 (29,801,176) (27,702,407) Business-type activities -(785,455)(1,402,418)(979,425)(594,661) Total net revenues (expenses)(18,250,959)(14,936,328)200,659 (30,780,601)(28,297,068) General revenues and other changes in Net Position: Governmental activities: Taxes: Property taxes 2,198,141 2,579,245 3,679,079 4,999,051 6,014,305 Tax increment 24,450,337 24,443,112 35,168,329 42,583,031 42,114,893 Sales tax 5,240,037 6,773,566 7,613,075 8,896,716 8,492,213 Transient occupancy taxes 4,261,767 4,831,338 5,437,238 5,448,361 5,327,203 Franchise taxes 895,810 1,185,087 1,044,470 1,259,985 1,748,082 Business license taxes 191,062 251,618 276,917 307,032 317,011 Other taxes 675,996 1,141,177 1,049,701 872,753 641,705 Investment income 1,738,505 4,336,050 6,319,502 11,854,951 10,230,489 Motor vehicle in lieu, unrestricted 1,608,151 2,453,642 2,740,233 3,291,055 3,803,647 Gain (loss) on sale of capital assets -3,717,470 1,967,292 -57,346 Miscellaneous 1,489,612 2,397,474 1,943,093 2,052,246 1,220,627 Extraordinary gain/loss on dissolution of RDA ----- Transfers -#(41,459,643)#(1,137,203)#(874,645)- Total governmental activities 42,749,418 12,650,136 66,101,726 80,690,536 79,967,521 Business-type activities: Investment income --553 1,817 4,310 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) Total primary government 42,749,418 54,109,779 67,239,482 81,566,998 79,924,110 Changes in Net Position Governmental activities 24,498,459 (1,500,737) 67,704,803 50,889,360 52,265,114 Business-type activities -40,674,188 (264,662)(102,963)(638,072) Total primary government 24,498,459$ 39,173,451$ 67,440,141$ 50,786,397$ 51,627,042$ 1 The transfer was for land & golf course improvements transferred to the Enterprise Fund. Source: City of La Quinta Fiscal Year CITY OF LA QUINTA Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) 136 TABLE 2 2009 2010 2011 2012 2013 7,836,146$ 34,287,068$ 11,283,358$ 6,183,712$ 4,511,023$ 19,736,941 21,274,519 21,070,458 20,815,454 21,047,691 14,808,850 15,923,380 4,735,964 5,093,402 4,986,104 7,317,689 5,173,326 18,715,283 6,378,352 2,274,541 11,100,833 12,326,726 10,757,279 13,288,521 11,803,133 -- 31,324,064 -- 15,631,438 15,330,603 14,353,359 3,021,496 447,048 76,431,897 104,315,622 112,239,765 54,780,937 45,069,540 4,440,546 4,169,768 4,202,274 4,085,282 4,208,855 4,440,546 4,169,768 4,202,274 4,085,282 4,208,855 80,872,443 108,485,390 116,442,039 58,866,219 49,278,395 25,053 21,439 47,696 86,869 38,812 1,373,952 1,100,491 1,044,399 1,020,822 927,604 138,391 69,391 74,471 68,470 112,695 275,178 250,557 210,151 247,397 245,392 1,308,702 1,124,647 1,086,771 1,080,744 1,209,438 10,725,280 15,363,650 13,152,942 11,289,673 28,068,940 10,647,270 5,974,311 3,157,828 9,990,793 4,115,238 24,493,826 23,904,486 18,774,258 23,784,768 34,718,119 3,368,135 3,584,996 3,756,615 3,871,898 3,736,879 ----- 3,368,135 3,584,996 3,756,615 3,871,898 3,736,879 27,861,961 27,489,482 22,530,873 27,656,666 38,454,998 (51,938,071) (80,411,136) (93,465,507) (30,996,169) (10,351,421) (1,072,411)(584,772)(445,659)(213,384)(471,976) (53,010,482)(80,995,908)(93,911,166)(31,209,553)(10,823,397) 6,653,583 6,278,470 5,942,353 21,370,476 7,043,604 36,702,197 35,390,317 32,569,795 -- 7,279,513 6,927,388 7,323,835 7,713,741 5,980,684 4,480,467 4,265,438 4,737,968 5,446,883 7,833,545 1,533,249 1,585,427 1,607,829 1,687,440 1,669,476 285,304 302,223 285,270 293,592 292,966 455,089 461,957 437,235 428,963 518,778 7,387,244 5,362,684 4,693,974 1,925,255 1,605,718 3,940,801 3,714,437 3,515,395 3,173,826 3,157,330 21,542 2,330 --28,551 118,567 477,936 3,211,584 268,644 192,509 --- 158,654,715 (2,189,984) ----- 68,857,556 64,768,607 64,325,238 200,963,535 26,133,177 3,074 1,252 2,125 1,075 2,225 ----100,799 ----- 3,074 1,252 2,125 1,075 103,024 68,860,630 64,769,859 64,327,363 200,964,610 26,236,201 16,919,485 (15,642,529) (29,140,269) 169,967,366 15,781,756 (1,069,337)(583,520)(443,534)(212,309)(368,952) 15,850,148$ (16,226,049)$ (29,583,803)$ 169,755,057$ 15,412,804$ 137 Fiscal Year 2004 2005 2006 2007 2008 Expenses: General government 4,319,778$ 3,595,906$ 4,229,871$ 6,284,342$ 6,953,073$ Public safety 10,256,463 8,512,875 9,065,244 12,724,100 13,472,036 Community services 1,446,999 1,157,141 1,426,033 4,299,453 5,797,116 Planning and development 7,526,977 5,752,239 5,906,915 7,736,520 35,323,858 Public works 6,003,013 9,101,582 10,006,335 10,511,874 11,097,526 Contribution to other agencies ----- Interest on long-term debt 9,658,779 15,265,051 15,494,656 15,163,422 15,522,441 Total governmental activities expenses 39,212,009 43,384,794 46,129,054 56,719,711 88,166,050 Program revenues: Charges for services: General government 337,376 445,663 717,849 60,530 8,328 Public safety 4,004,621 4,438,115 4,168,206 2,659,515 2,050,492 Community services 252,677 252,501 428,947 387,065 374,092 Planning and development 662,737 754,938 1,873,676 169,643 134,211 Public works 1,813,993 2,815,703 3,021,379 2,244,156 1,900,437 Operating grants and contributions 1,799,503 1,935,578 3,603,173 3,796,495 5,905,664 Capital grants and contributions 12,090,143 18,591,423 33,918,901 17,601,131 50,090,419 Total governmental activities program revenues 20,961,050 29,233,921 47,732,131 26,918,535 60,463,643 Net program revenues (expenses)(18,250,959) (14,150,873) 1,603,077 (29,801,176) (27,702,407) General revenues and other changes in net position: Taxes: Property taxes 2,198,141 2,579,245 3,679,079 4,999,051 6,014,305 Tax increment 24,450,337 24,443,112 35,168,329 42,583,031 42,114,893 Sales tax 5,240,037 6,773,566 7,613,075 8,896,716 8,492,213 Transient occupancy taxes 4,261,767 4,831,338 5,437,238 5,448,361 5,327,203 Franchise tax 895,810 1,185,087 1,044,470 1,259,985 1,748,082 Business license taxes 191,062 251,618 276,917 307,032 317,011 Other tax 675,996 1,141,177 1,049,701 872,753 641,705 Motor vehicle in lieu, unrestricted 1,608,151 2,453,642 2,740,233 3,291,055 3,803,647 Investment income 1,738,505 4,336,050 6,319,502 11,854,951 10,230,489 Gain (loss) on sale of capital assets - 3,717,470 1,967,292 -57,346 Miscellaneous 1,489,612 2,397,474 1,943,093 2,052,246 1,220,627 Extraordinary gain/loss on dissolution of RDA ----- Transfers -(41,459,643)(1,137,203)(874,645)- Total governmental activities 42,749,418 12,650,136 66,101,726 80,690,536 79,967,521 Changes in net position - governmental activities 24,498,459$ (1,500,737)$ 67,704,803$ 50,889,360$ 52,265,114$ Source: City of La Quinta CITY OF LA QUINTA Changes in Net Position - Governmental Activities Last Ten Fiscal Years (accrual basis of accounting) 138 Table 3 2009 2010 2011 2012 2013 7,836,146$ 34,287,068$ 11,283,358$ 6,183,712$ 4,511,023$ 19,736,941 21,274,519 21,070,458 20,815,454 21,047,691 14,808,850 15,923,380 4,735,964 5,093,402 4,986,104 7,317,689 5,173,326 18,715,283 6,378,352 2,274,541 11,100,833 12,326,726 10,757,279 13,288,521 11,803,133 -- 31,324,064 -- 15,631,438 15,330,603 14,353,359 3,021,496 447,048 76,431,897 104,315,622 112,239,765 54,780,937 45,069,540 25,053 21,439 47,696 86,869 38,812 1,373,952 1,100,491 1,044,399 1,020,822 927,604 275,178 250,557 210,151 247,397 245,392 138,391 69,391 74,471 68,470 112,695 1,308,702 1,124,647 1,086,771 1,080,744 1,209,438 10,725,280 15,363,650 13,152,942 11,289,673 28,068,940 10,647,270 5,974,311 3,157,828 9,990,793 4,115,238 24,493,826 23,904,486 18,774,258 23,784,768 34,718,119 (51,938,071) (80,411,136) (93,465,507) (30,996,169) (10,351,421) 6,653,583 6,278,470 5,942,353 21,370,476 7,043,604 36,702,197 35,390,317 32,569,795 -- 7,279,513 6,927,388 7,323,835 7,713,741 5,980,684 4,480,467 4,265,438 4,737,968 5,446,883 7,833,545 1,533,249 1,585,427 1,607,829 1,687,440 1,669,476 285,304 302,223 285,270 293,592 292,966 455,089 461,957 437,235 428,963 518,778 3,940,801 3,714,437 3,515,395 3,173,826 3,157,330 7,387,244 5,362,684 4,693,974 1,925,255 1,605,718 21,542 2,330 --28,551 118,567 477,936 3,211,584 268,644 192,509 --- 158,654,715 (2,189,984) ----- 68,857,556 64,768,607 64,325,238 200,963,535 26,133,177 16,919,485$ (15,642,529)$(29,140,269)$ 169,967,366$15,781,756$ 139 THIS PAGE INTENTIONALLY LEFT BLANK 140 TABLE 4 2005 2006 2007 2008 2009 2010 2011 2012 2013 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 4,085,282 4,208,855 Total business-type activities expenses 1,877,291 4,523,146 4,520,173 4,761,581 4,440,546 4,169,768 4,202,274 4,085,282 4,208,855 Program revenues: Charges for services: Golf Course 1,091,836 2 3,120,728 3,540,748 3,814,233 3,368,135 3,584,996 3,756,615 3,871,898 3,736,879 Capital grants and contributions - - - 352,687 - - - - - Total business-type activities program revenues 1,091,836 3,120,728 3,540,748 4,166,920 3,368,135 3,584,996 3,756,615 3,871,898 3,736,879 Net revenues (expenses)(785,455) (1,402,418) (979,425) (594,661) (1,072,411) (584,772) (445,659) (213,384) (471,976) General revenues and other changes in Net Position: Investment income - 553 1,817 4,310 3,074 1,252 2,125 1,075 2,225 Investment expense - - - - - - - - - Gain (loss) on sale of capital assets - - - - (47,721) - - - - - Insurance Recoveries - - - - - - - - 100,799 Transfers - 164,190 874,645 - - - - - - Capital contributions 41,459,643 1 973,013 979,425 - - - - - - Total business-type activities 41,459,643 1,137,756 1,855,887 (43,411) 3,074 1,252 2,125 1,075 103,024 40,674,188 (264,662) 876,462 (638,072) (1,069,337) (583,520) (443,534) (212,309) (368,952) 1 2 This was the first full year of operations for the Golf Course Source: City of La Quinta (accrual basis of accounting) The transfer was for land & golf course improvements transferred to the Enterprise Fund. Changes in Net Position - business-type activities Fiscal Year CITY OF LA QUINTA Changes in Net Position - Business-type Activities Last Nine Fiscal Years The City of La Quinta implemented the business type activities in FY 2004/2005. 141 2004 2005 2006 2007 2008 General fund: Nonspendable: Prepaid costs 292,816$ 507,931$ 503,642$ 11,774$ 10,601$ Land held for resale - - - - - Notes and loans - - - - - Advances to other funds 28,671,083 31,904,659 22,700,961 27,597,329 45,264,966 Deposits 246,858 5,903 4,825 Due from Other Governments Restricted for: Debt service - - - - - Committed: Emergency reserve 11,915,000 15,067,577 16,905,386 18,722,524 19,651,824 Post retirement health benefits - - - - - Capital Projects - 589,875 10,877,058 482,718 2,100,000 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 Unassigned:13,579,479 13,308,205 18,239,315 32,741,545 20,423,375 Total general fund 54,705,236$ 63,926,967$ 76,269,124$ 84,640,520$ 92,452,019$ All other governmental funds: Nonspendable: Prepaid costs -$ -$ 7,987$ 7,977$ 5,353$ Land held for resale - - - - - Notes and loans 2,123,425 2,117,873 2,112,597 2,081,645 2,076,063 Advances to other funds 5,336,158 7,061,027 5,365,097 4,823,543 4,402,213 Deposits - 1,110 - - - Restricted: Planning and development projects 7,518,862 16,144,465 26,172,191 15,297,481 21,906,749 Public safety 8,413 154,115 143,846 153,818 198,843 Community services 1,359,723 2,889,245 9,696,885 12,214,375 11,406,628 Public works 409,534 256,881 462,171 104,878 309,566 Capital Projects 124,658,452 1 99,186,105 92,112,917 66,225,066 69,626,275 Debt service 4,093,123 4,605,101 10,288,494 24,309,220 5,094,635 Assigned: Continuing appropriations - - - - - Unassigned:(20,244,236) (18,801,305) (7,133,230) (7,854,868) (19,653,179) Total all other governmental funds 125,263,454$ 113,614,617$ 139,228,955$ 117,363,135$ 95,373,146$ The increase was primarily the result of the issuance of the 2004 Financing Authority bonds. The increase was primarily the result of the issuance of the 2011 Financing Authority bonds. Source: City of La Quinta CITY OF LA QUINTA Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) In Fiscal Year 2009-2010, the City implemented GASB 54 which changed the reporting requirements for fund balances in the financial statements. This table has been updated to reflect the impact of GASB 54 not only for Fiscal Year 2009-10 but for all prior years. Fiscal Year 142 TABLE 5 2009 2010 2011 2012 2013 12,424$ 9,030$ 23,260$ 27,481$ 11,786$ - - 8,320,000 8,320,000 8,320,000 - - - - - 46,137,692 57,897,671 15,373,104 15,417,929 15,509,691 9,830 9,830 9,967 118,516 4,830 41,378,966 - - 169,631 173,426 - 18,201,948 17,774,648 18,018,595 17,516,295 16,034,995 - 1,258,059 1,258,059 1,523,401 1,523,401 2,144,085 - - - 2,848,737 - - - - - - - - - - - - - - - 3,485,747 1,555,176 1,768,494 1,657,694 1,013,533 22,335,655 13,525,704 48,140,444 47,121,339 5,926,651 92,327,381$ 92,030,118$ 93,081,554$ 91,876,081$ 92,572,590$ 19,197$ 7,740$ 10,563$ -$ -$ - - - - - 2,067,028 2,088,709 2,081,614 2,092,086 2,086,499 4,321,119 4,293,166 4,569,188 - - 4,540 6,400 6,000 - - 25,807,752 31,032,124 34,018,930 10,767,199 3,730,533 245,468 48,852 96,364 245,187 258,968 11,387,631 11,675,417 10,248,314 11,162,057 11,626,441 7,539,181 448,731 396,355 145,823 262,754 50,556,856 53,123,856 58,111,106 3 4,089,156 1,392,581 5,490,098 3,890 4,001,426 2,534 2,234 2,000 - - - - (19,339,823) (33,626,907) (13,250,398) (13,248,593) (13,179,196) 88,101,047$ 69,101,978$ 100,289,462$ 15,255,449$ 6,180,814$ CITY OF LA QUINTA Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 143 2004 2005 2006 2007 2008 Revenues: Taxes 58,301,082$ 68,175,347$ 89,704,947$ 100,103,324$ 105,870,933$ Assessments 816,045 825,292 818,526 877,191 909,229 Licenses and permits 3,096,145 3,226,167 5,145,430 2,788,882 2,107,035 Intergovernmental 11,858,627 10,242,876 18,585,468 14,803,971 15,382,135 Charges for services 2,619,578 3,402,602 3,367,989 1,821,794 1,334,060 Use of money and property 4,854,728 9,798,356 12,671,662 14,804,348 12,874,926 Contributions - - - - 37,643,190 Developer participation 5,718,073 6,091,156 12,473,440 5,310,440 6,537,991 Miscellaneous 1,359,539 528,903 637,054 412,353 629,471 Total revenues 88,623,817 102,290,699 143,404,516 140,922,303 183,288,970 Expenditures Current: General government 4,099,376 3,970,921 4,644,954 6,150,699 7,367,144 Public safety 9,672,708 12,364,583 13,029,187 15,685,493 17,181,775 Planning and development 7,480,421 5,719,373 5,847,563 28,994,177 15,374,160 Community services 1,025,397 1,104,509 1,248,308 4,027,302 5,336,757 Public works 4,536,589 6,206,769 6,987,014 6,755,507 6,563,494 Capital projects 43,331,919 40,012,387 25,445,550 36,420,417 82,883,317 Debt service: Principal retirement 3,610,538 3,793,660 4,777,748 5,647,940 5,949,311 Interest and fiscal charges 13,961,721 14,355,577 15,554,612 15,059,977 15,424,708 Payment to bond escrow 1,591,107 - - - - Payments under pass-through obligations 21,448,147 25,756,321 35,958,291 36,498,575 42,989,023 Total expenditures 110,757,923 113,284,100 113,493,227 155,240,087 199,069,689 Excess (deficiency) of revenues over (under) expenditures (22,134,106) (10,993,401) 29,911,289 (14,317,784) (15,780,719) Other financing sources (uses): Issuance of tax allocation bonds 26,400,000 - - - - Issuance of revenue bonds 90,000,000 - - - - Payment to bond escrow (19,955,000) - - - - Transfers in 154,613,662 49,248,081 35,828,335 60,954,576 88,604,682 Transfers out (154,613,662) (49,248,081) (35,992,525) (60,954,576) (87,342,608) Other debts issued - - - - - Capital leases - - - - 182,094 Proceeds from sale of capital assets - 8,566,295 8,209,396 124,097 158,061 Total other financing sources (uses)96,445,000 8,566,295 8,045,206 124,097 1,602,229 Extraordinary gain/loss on dissolution of redevelopment agency - - - - - Net change in fund balances 74,310,894$ (2,427,106)$ 37,956,495$ (14,193,687)$ (14,178,490)$ Debt service as a percentage of noncapital expenditures(a)57.9% 62.0% 65.5% 61.0% 47.1% (a) The capitalizable expenditure was derived from the Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Source: City of La Quinta Fiscal Year Last Ten Fiscal Years (modified accrual basis of accounting) CITY OF LA QUINTA Changes in Fund Balances of Governmental Funds 144 TABLE 6 2009 2010 2011 2012 2013 99,816,072$ 93,831,918$ 88,498,457$ 53,632,023$ 23,506,679$ 927,816 966,639 956,048 950,292 954,058 871,167 472,409 547,071 482,831 566,510 18,679,355 19,473,076 19,005,643 15,875,582 15,464,942 673,779 484,043 501,418 635,111 625,813 7,043,646 5,338,679 4,670,732 1,914,518 1,582,762 240,591 395,823 327,751 303,773 18,377,253 2,243,785 273,739 945,805 903,144 1,226,825 720,185 608,342 319,763 276,327 491,267 131,216,396 121,844,668 115,772,688 74,973,601 62,796,109 7,230,436 30,220,882 10,885,519 4,881,922 4,587,888 18,946,866 20,116,936 19,826,372 19,669,517 20,168,038 7,261,835 6,028,492 8,460,420 4,314,646 27,514,768 4,698,985 4,204,626 4,147,758 4,086,686 4,411,536 6,324,055 6,862,887 4,808,060 6,192,733 5,067,370 32,363,859 14,514,910 21,287,775 13,335,989 8,622,783 6,319,580 6,616,412 7,011,261 7,066,726 556,871 15,348,598 15,357,968 15,037,919 6,701,079 437,678 - - - - - 42,426,670 38,710,894 35,607,089 16,755,441 - 140,920,884 142,634,007 127,072,173 83,004,739 71,366,932 (9,704,488) (20,789,339) (11,299,485) (8,031,138) (8,570,823) - - 6,000,000 - - - - 28,850,000 - - - - - - - 40,502,929 30,386,372 61,657,034 12,554,752 29,841,053 (40,527,930) (28,893,365) (61,652,479) (12,580,120) (29,841,053) 2,332,752 - - - - - - - - 71,045 - - 8,683,850 875,275 121,652 2,307,751 1,493,007 43,538,405 849,907 192,697 - - - (79,058,255) - (7,396,737)$ (19,296,332)$ 32,238,920$ (86,239,486)$ (8,378,126)$ 59.0% 47.6% 53.0%43.8%1.6% d Balances of Governmental Funds. 145 THIS PAGE INTENTIONALLY LEFT BLANK 146 TABLE 7 Fiscal Year Taxable Ended Less:Assessed Direct June 30 Secured Unsecured Exemptions Value Rate 2004 5,412,382,710$ 40,940,877$ (95,420,075)$ 5,357,903,512$ 0.8300 2005 6,289,493,552 44,014,548 (113,037,003) 6,220,471,097 0.8091 2006 7,856,383,375 72,554,357 (115,071,146) 7,813,866,586 0.9992 2007 9,986,151,525 88,740,840 (99,245,721) 9,975,646,644 0.9992 2008 11,854,669,637 101,433,002 (89,688,505) 11,866,414,134 0.9992 2009 12,410,626,893 113,185,065 (107,777,195) 12,416,034,763 1.0000 2010 11,742,665,902 121,272,880 (110,752,890) 11,753,185,892 1.0000 2011 10,913,083,169 118,972,704 (161,265,140) 10,870,790,733 1.0000 2012 10,400,897,792 107,421,771 (176,887,605) 10,331,431,958 1.0000 2013 10,345,371,473 108,971,608 (179,344,969) 10,274,998,112 1.0000 Source: HDL Coren CITY OF LA QUINTA Entire City (including Redevelopment Agency) Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in dollars) NOTE: In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. 147 2006 1 2007 1 2008 1 2009 1 2010 1 2011 1 2012 1 2013 1 2006 3 2007 3 2008 4 2009 4 2010 4 2011 4 2012 4 Direct Rates: City of La Quinta 0.0760 0.0760 0.0760 0.0506 0.0506 0.0734 0.0760 0.0760 0.0000 0.0000 0.0000 0.0152 0.0036 0.0049 0.0524 Redevelopment agency Project Area 1 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.5830 0.5880 0.5150 0.5245 0.5432 0.5310 0.0000 Redevelopment agency Project Area 2 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 County of Riverside 0.1960 0.1960 0.1960 0.2586 0.2586 0.2318 0.1957 0.1958 0.2639 0.2619 0.2619 0.2325 0.2501 0.2471 0.2683 County Free Library 0.0250 0.0250 0.0250 0.0284 0.0284 0.0280 0.0252 0.0253 0.0276 0.0276 0.0276 0.0277 0.0276 0.0282 0.0294 County Structure Fire Protection 0.0540 0.0540 0.0540 0.0610 0.0610 0.0602 0.0544 0.0544 0.0595 0.0595 0.0595 0.0595 0.0595 0.0607 0.0633 Coachella Valley (CV) Unified School 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.4322 0.4322 0.0170 0.0150 0.0020 0.0149 0.0167 0.0182 0.0000 Desert Sands Unified School 0.4320 0.4320 0.4320 0.3765 0.3765 0.3716 0.0000 0.0000 0.0160 0.0140 0.0140 0.0695 0.0568 0.0637 0.3905 Desert Community College 0.0700 0.0700 0.0700 0.0782 0.0782 0.0772 0.0698 0.0698 0.0030 0.0030 0.0720 0.0177 0.0152 0.0166 0.0812 Riverside County Office of Education 0.0380 0.0380 0.0380 0.0426 0.0426 0.0420 0.0380 0.0380 0.0030 0.0030 0.0180 0.0093 0.0027 0.0038 0.0442 Riverside County Regional Park & Open Space 0.0040 0.0040 0.0040 0.0000 0.0000 0.0000 0.0040 0.0039 0.0000 0.0000 0.0030 0.0000 0.0000 0.0000 0.0000 CV Public Cemetery 0.0032 0.0032 0.0032 0.0035 0.0035 0.0035 0.0032 0.0031 0.0000 0.0000 0.0000 0.0008 0.0002 0.0003 0.0037 CV Mosquito 0.0127 0.0127 0.0127 0.0142 0.0142 0.0141 0.0127 0.0127 0.0120 0.0120 0.0120 0.0112 0.0111 0.0112 0.0148 Desert Recreation District 0.0192 0.0192 0.0192 0.0215 0.0215 0.0213 0.0192 0.0192 0.0010 0.0020 0.0010 0.0044 0.0014 0.0019 0.0223 CV Water District 0.0250 0.0250 0.0250 0.0284 0.0284 0.0281 0.0254 0.0254 0.0130 0.0130 0.0010 0.0127 0.0120 0.0124 0.0295 CV Resource Conservation 0.0003 0.0003 0.0003 0.0004 0.0004 0.0004 0.0003 0.0003 0.0000 0.0000 0.0130 0.0001 0.0000 0.0000 0.0004 CVWD District 1 Debt Service 0.0118 0.0118 0.0118 0.0000 0.0000 0.0131 0.0118 0.0118 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 CVWD Storm Water Unit 0.0320 0.0320 0.0320 0.0360 0.0360 0.0355 0.0321 0.0321 0.0010 0.0010 0.0000 0.0000 0.0000 0.0000 0.0000 Total Direct Rate 0.9992 0.9992 0.9992 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Tax Rate Area 020-005 020-005 020-005 020-005 020-005 020-005 020-005 020-005 020-015 020-015 020-089 020-089 020-089 020-089 020-089 Overlapping Rates 5: City of La Quinta County of Riverside Riverside County Office of Education Riverside County Pension Obligation Desert Sands Unified 0.0767 0.0761 0.0799 0.0799 0.0811 0.1004 0.0757 0.0767 0.0761 0.0756 0.0799 0.0811 0.1004 0.0757 Coachella Valley Unified School District Coachella Valley Water District 0.0442 0.0332 0.0462 0.0464 0.0660 0.0860 0.0862 0.0199 0.0208 0.0484 0.0464 0.0660 0.0860 0.0862 Coachella Valley Recreation & Park District Desert Comm College District 0.0199 0.0199 0.0199 0.0199 0.0200 0.0200 0.0079 0.0208 0.0199 0.0199 0.0199 0.0200 0.0200 0.0079 Total Overlapping Rate 0.1409 0.1293 0.1461 0.1462 0.1671 0.2063 0.1698 0.1175 0.1169 0.1440 0.1462 0.1671 0.2063 0.1698 Total Direct and Overlapping Rate 1.1401 1.1285 1.1453 1.1462 1.1671 1.2063 1.1697 1.1175 1.1169 1.1440 1.1463 1.1671 1.2063 1.1698 Source: County of Riverside Auditor Controller's Office 1 2 3 4 5 Overlapping rates are based upon a single tax rate area only. Note: The information was first presented in Fiscal Year 2006. Project Area 1 Redevelopment CITY OF LA QUINTA Direct and Overlapping Property Tax Rates (Rate per $100 of assessed value) Last Eight Fiscal Years Direct rate taken from an analysis of the TRA in the Project area and do not include State ERAF deductions and overlapping rates provided by California Municipal Statistics Direct rate from Tax Rate Area (TRA) 020-059 provided by Hdl Coren & Cone and overlapping debt rates from California Municipal Statistics Direct rate taken from an analysis by the City of La Quinta Finance Department staff of all TRA's in the Project area and do not include State ERAF deductions and overlapping rates provided by California Municipal Statistics Direct rate taken from all non-RDA TRA's provided by the County of Riverside and do not include ERAF deductions and overlapping rates provided by California Municipal Statistics City Non-Project Area NOTE: In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount for direct taxes. This 1% is shared by all taxing agencies for which the subject property resides within. 148 TABLE 8 2006 3 2007 3 2008 4 2009 4 2010 4 2011 4 2012 4 0.0000 0.0000 0.0000 0.0000 0.0000 0.0019 0.0499 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.2860 0.2920 0.2910 0.3193 0.3174 0.3059 0.0000 0.2617 0.2617 0.2617 0.2516 0.2537 0.2511 0.2553 0.0280 0.0280 0.0280 0.0280 0.0280 0.0286 0.0280 0.0603 0.0603 0.0603 0.0603 0.0603 0.0616 0.0602 0.0000 0.0000 0.0020 0.0000 0.0000 0.0000 0.0000 0.2000 0.1980 0.1970 0.1860 0.1859 0.1930 0.3716 0.0420 0.0410 0.0410 0.0386 0.0386 0.0401 0.0772 0.0230 0.0220 0.0220 0.0210 0.0210 0.0218 0.0420 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0001 0.0035 0.0150 0.0140 0.0140 0.0141 0.0141 0.0141 0.0140 0.0060 0.0060 0.0060 0.0053 0.0053 0.0059 0.0212 0.0770 0.0760 0.0760 0.0757 0.0757 0.0740 0.0281 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0004 0.0000 0.0000 0.0000 0.0000 0.0000 0.0005 0.0131 0.0010 0.0010 0.0010 0.0000 0.0000 0.0014 0.0355 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 020-144 020-144 020-144 020-144 020-144 020-144 020-144 0.0767 0.0761 0.0756 0.0799 0.0811 0.1004 0.0757 0.0442 0.0332 0.0484 0.0464 0.0660 0.0860 0.0862 0.0199 0.0199 0.0199 0.0199 0.0200 0.0200 0.0079 0.1409 0.1293 0.1440 0.1462 0.1671 0.2063 0.1698 1.1409 1.1293 1.1440 1.1462 1.1671 1.2063 1.1698 Project Area 2 Redevelopment 149 TABLE 9 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 151,877,857$ 1 1.40%230,492,822$ 1 4.85% TD Desert Development 100,155,108 2 0.92%43,414,117 2 0.51% MSR Resort Golf Course 61,124,895 3 0.56% East of Madison LLC 45,365,091 4 0.42%- Inland American La Quinta Pavilion 43,399,514 5 0.40%- Coral Option I LLC 42,836,010 6 0.39%35,192,155 4 0.51% IOTA Griffin LLC 35,412,485 7 0.00%- WRM La Quinta 30,170,000 8 0.28% Walmart Stores 28,668,169 9 0.26% Village Resort 24,486,681 10 0.23% ND La Quinta Partners - 39,494,958 3 0.44% Toll California V 34,068,168 5 0.72% Quarry at La Quinta Inc 28,630,587 6 0.33% Aventine Development --20,675,000 7 0.33% Prestwick Development --16,915,476 8 0.32% M and H Realty Partners II --15,053,730 9 0.31% Merv Griffin 13,545,073 10 0.31% 563,495,810$ 4.86%477,482,086$ 8.63% Source: HdL Coren & Cone CITY OF LA QUINTA 2013 2004 Current Year and Ten Years Ago Principal Property Taxpayers (in dollars) 150 TABLE 10 Fiscal Taxes Levied Collections in Year Ended for the Percent Subsequent Percent June 30 Fiscal Year Amount of Levy Years Amount of Levy 2006 61,420,601$ 73,097,362$ 119.01% 2,092,062$ 75,189,424$ 122.42% 2007 74,170,170 83,797,365 112.98% 1,802,076 85,599,441 115.41% 2008 83,018,429 87,804,912 105.77% 3,216,547 91,021,459 109.64% 2009 83,934,188 86,721,572 103.32% 1,471,940 88,193,512 105.07% 2010 78,621,410 80,651,874 102.58% 434,643 81,086,517 103.14% 2011 72,735,079 74,047,640 101.80% 259,209 74,306,849 102.16% 2012 73,462,430 38,125,919 51.90% - 38,125,919 51.90% 2013 5,753,420 6,925,637 120.37%- 6,925,637 120.37% Note: The information was first presented in Fiscal Year 2006. Source: County of Riverside Auditor Controller's Office CITY OF LA QUINTA Collected within the Fiscal Year of Levy Total Collections to Date Property Tax Levies and Collections Last Eight Fiscal Years ( in dollars) NOTE: The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed-through to other agencies. Effective February 1, 2012, AB1x26 dissolved the Redevelopment Agencies throughout the State of California which resulted in the reduction of amounts collected during Fiscal Year 2011-2012 and Fiscal Year 2012-2013. 151 2004 2005 2006 2007 2008 Governmental Activities Reimbursement Agreement 428,311$ 378,311$ 328,311$ 278,311$ 228,311$ Capital lease - - - - - USDA Loan - - - - - Provident Savings Loan - - - - - Due to Coachella Valley Unified School District 6,653,377 5,927,263 5,186,627 4,431,178 3,675,731 Due to County of Riverside 2,050,000 1,950,000 1,850,000 1,750,000 1,600,000 Developer Agreement 1,010,688 898,141 776,030 643,539 511,048 Tax Allocation Bonds Project Area 1 142,507,628 140,263,659 141,785,000 139,145,000 136,350,000 Tax Allocation Bonds Project Area 2 6,325,000 6,230,000 6,130,000 6,025,000 5,915,000 2004 Local Agency Revenue Bonds 1 87,924,343 87,947,058 89,265,000 87,745,000 86,175,000 2011 Local Agency Revenue Bonds 1 - - - City Hall Lease Revenue Bonds 6,890,000 6,575,000 6,245,000 5,900,000 5,540,000 Unamortized Discount and Issuance Costs (877,230) (877,230) (841,087) Total Governmental 253,789,347 250,169,432 250,688,738 245,040,798 239,154,003 Business-type Activities Capital Leases - 801,417 1,090,602 825,848 681,048 Total Business-type activities - 801,417 1,090,602 825,848 681,048 Total Primary Government 253,789,347$ 250,970,849$ 251,779,340$ 245,866,646$ 239,835,051$ Population - State Department of Finance January 1 32,522 36,145 38,340 41,092 42,958 Number of Households 15,942 17,549 18,762 20,176 21,058 Median Household Income (2) (2)$ 65,906$ 67,754$ 74,683$ Percentage of Personal Income (2) -200.00%20.36%17.99%15.25% Debt Per Capita 7,804$ 6,943$ 6,567$ 5,983$ 5,583$ 'Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 1 The debt service payment for the 2004 Lease Revenue Bonds are made from Redevelopment Project Area 1 & 2 low & moderate income tax increment. 2 Information not collected prior to Fiscal Year 2006 Fiscal Year Ended (in dollars) CITY OF LA QUINTA Ratios of Outstanding Debt by Type Last Ten Fiscal Years 152 TABLE 11 2009 2010 2011 2012 2013 178,311$ 128,311$ -$ -$ -$ 149,169 114,583 78,253 40,090 71,045 751,754 741,171 729,480 - 702,105 1,556,283 1,530,958 1,503,433 - 1,441,096 2,874,653 2,072,965 1,255,243 - - 1,400,000 1,200,000 1,000,000 - - 343,814 174,584 - - - 133,390,000 130,255,000 126,925,000 - - 5,800,000 5,680,000 11,555,000 - - 84,560,000 82,890,000 81,150,000 - - - - 28,850,000 - - 5,160,000 4,760,000 4,340,000 3,895,000 3,425,000 (804,944) (768,801) (1,115,799) - - 235,359,040 228,778,771 256,270,610 3,935,090 5,639,246 285,217 54,543 286,097 169,084 43,736 285,217 54,543 286,097 169,084 43,736 235,644,257$ 228,833,314$ 256,556,707$ 4,104,174$ 5,682,982$ 43,778 44,421 37,836 38,075 38,401 21,355 23,489 23,528 23,528 23,612 76,227$ 90,124$ 104,410$ 104,045$ 77,790$ 14.48%10.81%10.44%0.17%0.31% 5,383$ 5,151$ 6,781$ 108$ 148$ 153 TABLE 12 Fiscal Year City Hall Local Agency Tax Percent of Per Ended Lease Revenue Allocation Assessed Median June 30 Obligation Bonds 1 Bonds Total Value 1 Household Income 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 2012 3,895,000 - - 3,895,000 0.04%37 2013 3,425,000 - - 3,425,000 0.03%44 General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). 1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California. 2 Information not collected prior to Fiscal Year 2006 Source: City of La Quinta Outstanding General Bonded Debt CITY OF LA QUINTA Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years (In Dollars) 154 TABLE 13 City Assessed Valuation 10,274,998,112$ Total Assessed Valuation 10,274,998,112$ Source: Riverside County Auditor Controller Estimated Share of Percentage Outstanding Overlapping Applicable 1 Debt 6/30/13 Debt Overlapping Debt Repaid with Property Taxes And Assessments: Desert Community College District 16.779% 318,557,917$ 53,450,833$ Coachella Valley Unified School District 52.969% 183,662,102 97,283,979 Desert Sands Unified School District (DSUSD) 20.018% 299,439,872 59,941,874 DSUSD Community Facilities District No. 1 88.912% 1,455,000 1,293,670 City of La Quinta 1915 Act Bonds 100.000% 565,000 565,000 Coachella Valley Water District Assessment District No. 68 86.247% 2,260,000 2,011,071 Total overlapping debt repaid with property taxes 805,939,891 214,546,427 Overlapping Other Debt including Certifications of Participation (COP) Riverside County General Fund Obligations 5.122% 640,243,149$ 32,793,254$ Riverside County Pension Obligations 5.122% 346,790,000 17,762,584 Riverside County Board of Education COP 5.122% 3,900,000 199,758 Coachella Valley Unified School District COP 52.969% 46,205,000 24,474,326 DSUSD COP 20.018% 51,790,000 10,367,322 Coachella Valley Recreation and Park District COP 26.240% 2,215,000 581,216 Total overlapping other debt 1,091,143,149 86,178,460 Total overlapping debt 1,897,083,040 300,724,887 City direct debt 5,682,982 Total direct and overlapping debt 1 306,407,869$ Notes: 1 For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value. Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. Source: California Municipal Statistics, Inc.- overlapping debt Source: City of La Quinta - City Direct debt Direct and Overlapping Debt June 30, 2013 CITY OF LA QUINTA 155 2004 2005 2006 2007 2008 Assessed valuation 5,357,903,512$ 6,220,471,097$ 7,813,866,586$ 9,975,646,644$ 11,866,414,134$ Debt limit percentage 15%15%15%15%15% Debt limit 803,685,527 933,070,665 1,172,079,988 1,496,346,997 1,779,962,120 Total net debt applicable to limit: General obligation bonds - - - - - Legal debt margin 803,685,527$ 933,070,665$ 1,172,079,988$ 1,496,346,997$ 1,779,962,120$ Total debt applicable to the limit as a percentage of debt limit 0.0%0.0%0.0%0.0%0.0% The City of La Quinta has no general bonded indebtedness. Fiscal Year CITY OF LA QUINTA Legal Debt Margin Information Source: City of La Quinta Finance Department based upon the Assessed valuation received from the County of Riverside Auditor Controllers Office Section 43605 of the Government Code of the State of California limits the amount of indebtedness for public improvements to 15% of the assessed valuation of all real and personal property of the City. Last Ten Fiscal Years 156 TABLE 14 2009 2010 2011 2012 2013 12,416,034,763$ 11,753,185,892$ 10,870,790,733$ 10,331,431,958$ 10,274,998,112$ 15%15%15%15%15% 1,862,405,214 1,762,977,884 1,630,618,610 1,549,714,794 1,541,249,717 - - - - - 1,862,405,214$ 1,762,977,884$ 1,630,618,610$ 1,549,714,794$ 1,541,249,717$ 0.0%0.0%0.0%0.0%0.0% 157 TABLE 15 Fiscal Year Ended Lease Less: Other Net Lease June 30 Revenue 1 Debt Payments Revenue Principal Interest Coverage 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 2012 673,521 - 673,521 445,000 228,521 1.00 2013 673,130 - 673,130 470,000 203,130 1.00 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Debt Service 1 Lease revenues consist of payments from the City General Fund and Civic Center Development Impact Fee Fund. Local Agency Revenue Bonds (City Hall Project) CITY OF LA QUINTA Pledged-Revenue Coverage Last Ten Fiscal Years (In Dollars) 158 TABLE 16 Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Year Year Year Year Year Year Year Year Year Year Sources: 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013(7) City Land (Sq Miles)(3) 35.1 35.1 35.10 35.10 35.31 35.31 35.31 35.31 35.16 35.16 Population (1) 32522 36145 38,340 41,092 42,958 43,778 44,421 37,836 38,075 38,401 Median Household Income (in dollars)(4) (4)(4) $65,906 $67,754 $74,683 $76,227 $90,124 $104,410 $104,045 $77,790 Number of Dwelling Units (3) 15,942 17,549 18,762 20,176 21,058 21,355 23,489 23,528 23,528 23,612 Persons per Household (3) 2.848 2.878 2.855 2.846 2.851 2.851 2.865 2.549 2.555 2.57 Average Income per person per household (6) (6)(6) $23,084 $23,807 $26,195 $26,737 $31,457 $40,961 $40,722 $41,200 Labor Force (2) 13700 14300 14,500 15,300 15,200 14,800 14,600 14,400 15,100 17400 Employment (2) 13200 13900 14,100 14,900 14,600 13,700 13,500 13,300 14,100 16,300 Unemployment Rate (2) 3.65% 2.80% 2.76% 2.61% 3.95% 7.43% 7.53% 7.64% 6.62% 6.30% Median age (4) (4)(4)36 36.4 36.4 36.4 42.2 41.5 42.8 45.6 Sources: (1) State of California Department of Finance - January 1 of each year (2) State of California Economic Development Department website (3) City of La Quinta Building & Safety and Community Development Departments (4) Desert Wheeler's Newsletter City Overview through 2009; HdLCoren & Cone Companies thereafter - 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 (7) Five year average 2007-2011 Census Demographic and Economic Statistics Last Ten Calendar Years CITY OF LA QUINTA 159 TABLE 17 Percent of Number of Total Number of Employer Activity Rank Employees Employment Employees Rank La Quinta Resort & Club Hotel & Golf Resort 1 1,246 7.64%1,500 1 Desert Sands Unified School District Government 2 1,176 7.21%550 3 PGA West Golf Resort 3 1,100 6.75%1,100 2 Wal-Mart Super Center Retailer 4 340 2.09%250 4 Costco Retailer 5 244 1.50%- - Rancho La Quinta Golf Resort 6 209 1.28%200 5 Home Depot Retailer 7 160 0.98%180 6 Lowe's Home Improvement Retailer 8 148 0.91%150 7 Imperial Irrigation District Utility Company 9 140 0.86%110 9 Stater Brothers Grocery Store 10 119 0.73%126 8 Vons Grocery Store 11 98 0.60%103 10 Tradition Golf Club Golf Resort 12 95 0.58%97 12 Total employment listed 5,075 31.13%4,366 Total City Employment - July 1 16,300 12,100 Source: City of La Quinta CITY OF LA QUINTA Principal Employers Current Year and Ten Years Ago 2012-2013 2003-2004 160 TABLE 18 Function 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administration 8.00 8.00 9.00 10.00 12.00 12.00 13.00 14.00 12.00 11.00 City Clerk 5.00 5.00 5.00 5.00 6.00 6.00 6.00 6.00 5.00 5.00 Finance 8.00 8.00 9.00 9.00 9.00 9.00 9.00 9.00 8.00 8.00 Community Services 7.00 8.00 10.25 10.25 11.25 11.25 10.35 10.35 10.35 10.35 Building and Safety 19.00 21.00 22.00 24.00 25.00 25.00 25.00 21.00 21.00 21.00 Planning and Development 9.00 9.00 12.00 12.00 12.00 12.00 10.00 9.00 8.00 9.00 Public Works 22.00 23.50 26.25 26.25 28.25 29.25 27.25 26.25 24.25 23.25 Golf Course - 0.50 0.50 0.50 0.50 0.50 0.40 0.40 0.40 0.40 Total 78.00 83.00 94.00 97.00 104.00 105.00 101.00 96.00 89.00 88.00 Source: City of La Quinta Fiscal Year Ended June 30, 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 Last Ten Fiscal Years CITY OF LA QUINTA Full-time City Employees by Function 161 TABLE 19 2006 2007 2008 2009 2010 2011 2012 2013 Finance: Number of Active Business Licenses 3,208 3,424 3,690 3,523 3,428 3,183 3,310 3,520 Number of Animal Licenses Processed 892 1,022 1,272 1,609 1,768 1,619 1,674 1,505 Number of Accounts Payable Checks Processed 4,696 4,722 4,840 4,819 4,393 4,530 3,766 3,576 Number of investment purchases 39 73 64 36 32 20 27 30 Par value of investments $327,417,000 $392,729,000 $424,500,000 $229,969,000 $267,213,000 $189,810,285 $188,782,874 $164,614,769 Number of cleared checks 5,081 4,837 5,501 5,269 4,984 4,912 5,103 3,899 Number of outgoing bank wires 202 158 136 91 75 87 63 58 Public Works: Encroachment permits issued 304 218 110 132 78 104 65 124 Request for services 618 419 1152 1931 1306 746 534 740 Building & Safety: Permits: Single family Detached 1,044 526 297 129 56 85 39 83 Single family Attached 227 38 0 6 12 0 11 0 Residential Pool 866 612 331 207 152 148 127 162 Wall/Fence 1,502 963 583 299 178 218 149 167 Other 1,607 1,404 1,121 908 790 1,033 916 1,042 Total Permits 5,246 3,543 2,332 1,549 1,188 1,484 1,242 1,454 Code Compliance: Animal Control Incidents Handled 1,901 687 2,920 3,630 3,984 4,392 4,246 3,206 Vehicle abatements 909 296 351 346 214 263 139 99 Garage Sale Permits 1,190 1,444 1,519 1,535 1,663 1,805 1,430 1,404 Weed abatements 141 76 117 97 125 143 106 1,668 Nuisance abatements 1,611 2,032 2,142 3,130 2,340 2,252 2,433 1,668 Community Services: Library activities: Library Volume 42,050 44,981 66,124 81,124 89,060 92,484 109,000 63,955 Library books checked out 55,002 99,659 117,738 215,843 259,711 263,064 275,838 220,690 Library Cards Issued 5,550 5,325 3,675 3,684 3,547 3,822 4,477 2,966 Number of School Children Visiting Library 745 260 841 1,036 772 1,881 962 737 Library Volunteer Hours 1,891 1,583 1,951 2,342 2,723 4,280 2,720 2,226 Senior Center: Number of visits 14,305 12,955 14,013 15,739 20,326 18,403 16,642 9,350 Senior Center Volunteer Hours 3,481 4,192 3,332 2,583 3,131 3,099 2,690 2,233 Recreation activities: Participants: Leisure Classes 1,373 1,192 990 1,140 1,437 1,512 2,016 1,475 Special events 4,668 7,809 8,109 11,053 8,795 8,933 36,305 5,970 Adult Sports 3,402 6,827 8,550 10,806 13,364 13,092 5,647 3,865 Golf course: Golf rounds played 38,934 40,548 40,516 39,150 43,779 45,269 46,949 46,352 Average $ Green fee 71.12 76.97 81.09 76.13 71.59 70.7 70.4 67.44 Planning and Development: Number of residential units approved 1,063 534 338 100 255 208 285 228 Commercial square footage approved 533,726 124,821 342,502 390,097 6,200 27,526 61,662 0 Source: City of La Quinta Note: Information not collected before 2006 Last Eight Fiscal Years CITY OF LA QUINTA Operating Indicators by Function 162 TABLE 20 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Public works: Streets (miles)118.40 118.40 118.40 122 127 127 127 127 128 128 Bikepaths (miles)22 22 22 22 22 22 22 22 22 22 Streetlights 1 1173 85 85 261 265 265 269 269 Traffic signals 2 2244 45.25 45.25 49 50 50 51 52 Traffic signs 2 222,799 2,845 2,895 2,899 2,909 2,919 2,934 2,984 Bridges 2 2212 12 12 12 12 12 12 12 Parks and recreation: Parks 12 12 12 12 13 13 13 13 13 13 Park Acreage 207 207 207 207 209 209 218 218 218 218 Undeveloped Park Acreage 2 2240 40 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 1 1 Source: City of La Quinta Fiscal Year Ended June 30, CITY OF LA QUINTA 2 In Fiscal Year ending 2006 traffic signals , traffic signs, and undeveloped park acreage were included for the first time. 1 In Fiscal Year ending 2009 street lights at intersections were included for the first time. Capital Asset Statistics by Function Last Ten Fiscal Years 163 TABLE 21 Company Name Policy Number Coverage Limits Term Premium Hartford FA0267254-11 Employee Dishonesty,$1,000,000 12/3/12 - 12/3/13 $3,375 Forgery, Computer Fraud Lexington 20412656 All Risk Property Insurance 64,319,900 7/01/12 - 7/01/13 $59,620 20412887 Including Auto Physical Damage,7/1/13 - 7/1/14 $65,215 Terrorism, Boiler & Machinery (Excluding Earthquake) Lloyds WB-0009204 Earthquake/Flood 20,000,000 2/07/13 - 2/07/14 $108,193 Real & Personal Property Including Contingent Tax Interruption California Comprehensive General $50 Million 6/30/13 - 6/30/14 ($60,876) Joint Powers Liability Single Limit per Occurrence Insurance Authority California Worker's Compensation 10,000,000 6/30/13 - 6/30/14 $166,767 Joint Powers Insurance Authority Alliant PEC0011896301 Pollution Liability 10,000,000 7/01/11 - 7/01/14 $26,227 CITY OF LA QUINTA Schedule of Insurance in Force June 30, 2012 164