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2015-2016 ACFR (July 1 - June 30 Annual Comprehensive Financial Report)CITY OF LA QUINTA La Quinta, California ' Ir+caReoewn 1%2 OF Comprehensive Annual Financial Report Year Ended June 30, 2016 Prepared By Finance Department CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2016 Prepared By FINANCE DEPARTMENT THIS PAGE INTENTIONALLY LEFT BLANK CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2016 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letterof Transmittal................................................................................................................................. i Listof Principal Officials..........................................................................................................................v OrganizationalChart.............................................................................................................................. vi Certificate of Achievement for Excellence in Financial Reporting(GFOA)........................................... vii FINANCIAL SECTION Independent Auditors' Report.................................................................................................................1 Management's Discussion and Analysis.................................................................................................5 Basic Financial Statements: Government -Wide Financial Statements: Statementof Net Position...............................................................................................................17 Statementof Activities....................................................................................................................18 Fund Financial Statements: Balance Sheet — Governmental Funds..........................................................................................20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net 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 .......................27 Statement of Net Position — Proprietary Funds..............................................................................28 Statement of Revenues, Expenses and Changes in Fund Net Position — ProprietaryFunds...........................................................................................................................29 Statement of Cash Flows — Proprietary Funds...............................................................................30 Statement of Fiduciary Net Position - Fiduciary Funds..................................................................32 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2016 TABLE OF CONTENTS FINANCIAL SECTION (CONTINUED) Page Number Statement of Changes in Fiduciary Net Position - Fiduciary Funds...............................................33 Notes to Financial Statements..............................................................................................................35 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule by Department — General Fund................................................79 Budgetary Comparison Schedules — Major Special Revenue Funds HousingAuthority PA No. 1.....................................................................................................80 HousingAuthority PA No. 2.....................................................................................................81 Schedule of Proportionate Share of Net Pension Liability — Miscellaneous Plans ........................82 Schedule of Plan Contributions — Miscellaneous Plans.................................................................83 Notes to Required Supplementary Information..............................................................................85 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Non -Major Governmental Funds.......................................................88 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non -Major Governmental Funds.......................................................................96 Budgetary Comparison Schedules — Special Revenue Funds StateGas Tax.......................................................................................................................103 Library....................................................................................................................................104 FederalAssistance.................................................................................................................105 SLEBG...................................................................................................................................106 Lightingand Landscaping......................................................................................................107 Quimby...................................................................................................................................108 PublicSafety..........................................................................................................................109 ArtIn Public Places................................................................................................................110 SouthCoast Air Quality..........................................................................................................111 AB939...................................................................................................................................112 LawEnforcement...................................................................................................................113 JusticeAssistance Grant........................................................................................................114 MeasureA..............................................................................................................................115 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2016 TABLE OF CONTENTS COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES (CONTINUED) Budgetary Comparison Schedules — Capital Projects Funds CapitalImprovement....................................................... CivicCenter..................................................................... Transportation................................................................. Parks and Recreation...................................................... Library Development....................................................... Community Center.......................................................... StreetFacility................................................................... ParkFacility..................................................................... FireFacility...................................................................... Budgetary Comparison Schedules — Debt Service Funds Financing Authority .................................................... Combining Statement of Net Position — Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Fund Net Position — Internal Service Funds .......................... Combining Statement of Cash Flows — Internal Service Funds Combining Statement of Net Position — All Agency Funds Combining Statement of Changes in Assets and Liabilities — All Agency Funds STATISTICAL SECTION Net Position by Component (Table 1)............................................................. Changes in Net Position (Table 2)................................................................... Changes in Net Position — Governmental Activities (Table 3) ........................ Changes in Net Position — Business -type Activities (Table 4) ........................ Fund Balances of Governmental Funds (Table 5) .......................................... Changes in Fund Balances of Governmental Funds (Table 6) ....................... Tax Revenue by Source (Table 7)................................................................... Top 25 Sales Tax Producers (Table 8) ........................................................... Taxable Sales by Category (Table 9).............................................................. Assessed Value and Estimated Actual Value of Taxable Property (Table 10) Page 116 117 118 119 120 121 122 123 124 125 128 129 130 132 133 136 138 140 142 144 146 148 149 150 153 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2016 TABLE OF CONTENTS STATISTICAL SECTION (CONTINUED) Direct and Overlapping Property Tax Rates (Table 11) Principal Property Taxpayers (Table 12) ....................... Property Tax Levies and Collections (Table 13) ........... Ratios of Outstanding Debt by Type (Table 14)............ Ratio of General Bonded Debt Outstanding (Table 15) Direct and Overlapping Debt (Table 16) ........................ Legal Debt Margin Information (Table 17) ..................... Pledged -Revenue Coverage (Table 18) ........................ Demographic and Economic Statistics (Table 19) ........ Principal Employers (Table 20) ..................................... Full-time City Employees (Table 21) ............................. Operating Indicators (Table 22) ..................................... Capital Asset Statistics (Table 23) ................................ Schedule of Insurance in Force (Table 24) ................... Page Number 154 156 157 158 160 161 162 164 165 166 167 168 169 170 December 6, 2016 To the Citizens of the City of La Quinta, the Honorable Mayor and Members of the City Council Enclosed is the City of La Quints Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2016. This transmittal letter provides a non- technical summary of the City's finances, services, achievements and economic outlook. A more detailed discussion of the City's finances can be found in the Management's Discussion and Analysis section (MD&A) that immediately follows the independent auditor's report. The MD&A provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this transmittal and should be read in conjunction with it. Ensuring the financial integrity of our public institutions is crucial to maintain the public's trust. Responsibility for the accuracy and the completeness of all disclosures, rests with the City of La Quinta. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to fairly present the financial position and results of City operations and funds. Disclosures to enable the reader to gain an understanding to the City's financial activities have been included. This CAFR was prepared in conformance with Generally Accepted Accounting Principles (GAAP). The City's financial reporting is based upon all Governmental Accounting Standards Board (GASB) pronouncements. Government Code Section 26909 (a') requires that the City, as a local agency of the County, contract with a certified public accountant to perform an annual audit of the accounts and records of the City and that the audit conform to generally accepted auditing standards. Further, Government Code Section 26909 (b) states that an audit report shall be filed with the State Controller and with the County Auditor of the County in which the district is located within 12 months of the end of the fiscal year. In addition, City Ordinance 2.12.040 requires an annual audit be performed by a certified public accountant. This CAFR fulfills these requirements for the fiscal year ending June 30, 2016. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive frame- work of internal controls that has been established for this purpose. Because 78-495 Calle Tampico R La Quinta I California 92253 1 760,777.7000 1 wwwla-Quinta.orQ the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The independent auditor's report is located at the front of the financial section of this report. Lance Soll & Lunghard LLP Certified Public Accountants have issued an unmodified ("clean") opinion on the City of La Quinta's financial statements for the year ended June 30, 2016. The independent audit involved examining evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and estimates made by management, and evaluating the overall financial statement presentation. The independent auditor concluded based on the audit that there was a reasonable basis for rendering an unmodified opinion that the City of La Quinta's financial statements for the fiscal year ended June 30, 2016 are fairly presented in conformity with GAAP. This is the most favorable conclusion and commonly known as a "clean" opinion. Profile of the Government The City of La Quinta is located 120 miles east of Los Angeles in the eastern portion of Riverside County known as the Coachella Valley. The City motto is "The Gem of the Desert." The City is governed by a five -member City Council under the Council/Manager form of government. The Mayor is directly elected by the citizens. The Mayor serves a two-year term and the four Council Members serve four-year terms, with two Council Members elected every two years. The Mayor and four Council Members are elected at large. The City was originally incorporated in 1982 as a general law City and become a charter City in November 1996. The Council appoints the City Manager, who in turn appoints the heads of the various departments. The City of La Quinta provides a range of services, which include construction and maintenance of streets and other infrastructure; community development and planning; construction and code compliance; recreational and cultural activities; and general municipal services. The City also contracts with other government agencies and organizations for specific services, including police and fire protection, library and museum services, water and sewer service, electricity service, refuse collection, public transit, and cable television service. The City of La Quints is also financially accountable for a legally separate Successor Agency for the former Redevelopment Agency, a Financing Authority, and a Housing Authority. Additional information on these legally separate entities can be found in the notes to the financial statements. Pursuant to City Ordinance 2.08.060 and 2.12.030, the City Manager and Finance Director are responsible for the preparation of the annual budget for City Council consideration prior to the start of the fiscal year. The annual budget serves as the foundation for the City's financial planning and control. The budget is prepared by fund, function, department, and line item. Department heads may transfer line item resources within a division with the approval of the City Manager. The City Manager may authorize transfers between divisions and departments. Local Economy The City of La Quinta comprises an area of approximately 36 square miles and,. as of January 2016 has a full time population of 39,977 according to California Department of Finance records. Nearly 18,000 seasonal residents also call La Quinta home from October through May each year. According to the State of California Employment Development Department, as of October 2016, the unemployment rate for La Quinto was 4%, which was much lower than Riverside County's at 6.3% and the statewide average of 5.3%. The City's dominant industries are comprised of recreation, tourism and retailers with the following major employers: La Quinto Resort and Club, Desert Sands unified School District, Wal-Mart Super Center, Costco, Home Depot, Imperial Irrigation District, Lowe's Home Improvement, Rancho La Quinto and Stater Brothers. Long-term Financial planning The City of La Quinta is committed to sound financial governance. The City has a long history of providing a superior level of public safety services, life enrichment opportunities, and a quality environment to its residents, businesses and visitors. In June of 2016 the City Council adopted a conservative budget for fiscal year 2016-17 based on the current economic conditions. The adopted budget had operating expenses exceeding revenues by $83,500. The voters of the City of La Quinta approved a one percent sales and use tax increase in November 2016 which will become effective on April 1, 2017. This combined with other cost saving measures and additional revenue from a recently updated fee schedule will ensure the City's financial stability and capacity to provide current service levels in the future. Included in the 2016-17 budget is the use of $750,000 from the Successor Agency loan repayment to fund the North La Quinto turf conversion improvements and $1,552,000 for other capital improvement projects. Included in the CIP budget is a General Fund contribution of $1 million for the pavement management program. Other projects include Civic Center campus irrigation upgrades and sidewalk improvements. La Quinto has cultivated a sound foundation of general fund revenues including sales tax, transient occupancy (hotel) tax, and property tax. Due to the timing of the City of La Quinta's incorporation in 1982 (after the passage of Proposition 13, the landmark property tax reform legislation enacted in 1978) the City receives a smaller share of property tax than cities incorporated prior to 1978; therefore the City relies heavily on sales tax and transient occupancy (hotel) tax. The Future In November 2014, the City entered into a purchase, sale and development agreement with SilverRock Development Company to construct a luxury hotel and spa, a conference center, a lifestyle hotel, luxury and lifestyle branded residential, resort and mixed use villages, and a permanent golf clubhouse. Mass grading and ground breaking of the luxury hotel is scheduled to start in the spring of 2017. In addition to this development project, the residents of La Quints have entrusted the City with additional funds from the recently approved sales tax measure. An oversight committee appointed by the City Council will serve to assist the City in determining how additional funds will be allocated in future years and ensure ongoing City operational and residential needs are met while also promoting growth and long-term prosperity. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of La Quinta for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2015. This was the nineteenth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. 'V'V'e believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the effi- cient and dedicated service of the finance department staff. Credit also must be given to the Mayor and City Council for their support in maintaining the highest standards of professionalism in the management of the City of La Quinta's finances. Respectfully submitted, iv Darla Campos Finance Director City of La Quinta Directory of Officials June 30, 2016 CITY COUNCIL Linda Evans, Mayor John Pena, Mayor Pro Tem Lee Osborne, Council Member Kristy Franklin, Council Member Robert Radi, Council Member ADMINISTRATION Frank J. Spevacek, City Manager Karla Campos, Finance Director Christopher Escobedo, Community Resources Director William H. Ihrke, City Attorney Steve Howlett, Facilities Director Tim Jonasson, Design and Development Director/City Engineer Susan Maysels, City Clerk Ur Community Services Human Resources Analyst Coordinator Community Services Human Resources Analyst Coordinator Administrative Technician Community Resources CommunityPrograms& Manager Wellness Supervisor Office Assistant Part Time Office Assistant Part -Time Staff Community Resources Director Marketing & Events Management Assists nt Code/Animal Officer Supervisor Deputy City Clerk Code/Animal Officer City Clerk Deputy City Clerk Puhlic Safety Manager Code/Animal Supervisor Code/Animal Officer Part Time Administrative Code/Animal Officer Technician Buildings Coordinator Buildings Superintendent Office Assistant Buildings Worker Parks Foreman Parks Superintendent Maintenance Worker II Parks Worker Facilities Director dministrative Technician Maintenance Worker I Maintenance Foreman Maintenance Worker I Maintenance Worker I Maintenance Manager Maintenance Worker II Maintenance Worker I Maintenance foreman Maintenance Worker I Maintenance Worker I Development Services Associate Engineer Principal Engineer Inspector City Manager Building Official Inspect/Plan Review Supervisor nspector Planning Manager Principal Planner Associate Planner Construction Inspector Construction Manager Design & Development Management Assistant Director CIP Principal Engineer Traffic Signal Tech Traffic Signal Technician Supervisor Office Assistant/Receptionist Management Analyst Executive Assistant Office Assistant Permit Technician Management Specialist Customer Service Permit Technician Manager Permit Tech Supervisor Permit Technician Accountant Vacation Rental/License Assistant Accounting Manager Account Technician Finance Director Management Assistant Account Technician Management Specialist Financial Services Analyst Business Analyst Management Specialist THIS PAGE INTENTIONALLY LEFT BLANK LSL*000 CPAs AND ADVISORS INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of La Quinta, California Report on the 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, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. PrimeGlobal LSU,9:::16 To the Honorable Mayor and Members of the City Council City of La Quinta, California 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, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary comparison schedules for the General Fund, Housing Authority PA No. 1, and Housing Authority PA No. 2, the schedule of proportionate share of the net pension liability, and the schedule of plan contributions 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. The 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 LSU,9:::16 To the Honorable Mayor and Members of the City Council City of La Quinta, California Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 29, 2016 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Brea, California November 29, 2016 THIS PAGE INTENTIONALLY LEFT BLANK Management's Discussion and Analysis As management of the City of La Quinta, we offer readers of the City of La Quinta's financial statements this narrative, overview and analysis of the financial activities for the fiscal year ended June 30, 2016. 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 and dates are represented by fiscal year. Financial Highlights The primary government assets of the City of La Quinta exceeded its liabilities at the close of the most recent fiscal year by $700,899,000 (net position). Of this amount, $79,352,000 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. Of the net position, approximately $560,397,000 or 80% was invested in capital assets and is not available to meet ongoing obligations. • The governmental activities total net position increased by $1,758,000 and the Business -Type total net position decreased by $414,000 which is attributable to the SilverRock Golf Course. As of the close of the current fiscal year, the City of La Quinta's governmental funds, which include the General Fund, Housing Authority, Capital Improvement Fund, Civic Center Fund, sixteen Special Revenue Funds, and the Finance Authority Fund, reported combined ending fund balances of $111,471,000, an increase of $8,241,000 in comparison with the prior year. The primary reason for this increase is a $5 million principal loan repayment for the Coral Mountain housing project, $882,000 one-time sales tax triple flip wind down payment from the State and a decrease of $1.2 million in public works expenses. • At the end of the current fiscal year, the unassigned General Fund Balance comprised $13,822,000, or 15%, of the total $89,997,000 General Fund Balance and represented 31 % of total final General Fund budgeted expenditures including transfers. • The total governmental activities debt decreased by $565,000 during the current fiscal year from $5,399,000 to $4,833,000. This decrease is mainly due to scheduled debt service payments that occurred during the fiscal year. (Note 6) Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of La Quinta's basic financial statements. The City of La Quinta's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 5 Government -wide financial statements The government -wide financial statements are designed to provide readers with a broad overview of the City of La Quinta's finances, in a manner similar to a private -sector business. The statement of net position presents information on all of the City of La Quinta's assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of La Quinta is improving or deteriorating. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, for example, earned but unused vacation leave. Both of the government -wide financial statements mentioned above distinguish functions of the City of La Quinta that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of La Quinta include general government, public safety, community services, community development and public works. The business -type activities of the City of La Quinta include the SilverRock Golf course operations. The government -wide financial statements include not only the City of La Quinta itself (known as the primary government), but also the La Quinta Financing Authority and the La Quinta Housing Authority. Although legally separate entities, they function for all practical purposes as departments of the City of La Quinta, and therefore have been included as an integral part of the primary government. The government -wide financial statements can be found in the table of contents under the Financial Section of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of La Quinta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of La Quinta can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. [.1 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 (30) individual governmental funds, which are distinguished between major and non -major funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, two (2) capital project funds, and two (2) special revenue funds. These five (5) funds are considered to be major funds. Data from the other twenty-five (25) 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 under Other Governmental Funds. The City of La Quinta adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found in the table of contents under the heading Basic Financial Statements. Proprietary funds Proprietary funds can be broken down into enterprise and internal service funds. The City of La Quinta maintains one (1) enterprise fund. Enterprise funds are used to report the same functions presented as business -type activities in the government - wide financial statements. The City of La Quinta uses an enterprise fund to account for its SilverRock Golf Course operations, which is considered to be a major fund. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of La Quinta's various functions. The City of La Quinta has four (4) internal service funds to account for its major equipment replacement including vehicles, information technology systems, park equipment and facility needs and an insurance fund. Because these IN four (4) 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 on the combining and individual fund statements and schedules. The basic proprietary fund financial statements can be found on the pages listed in the table of contents for Proprietary Funds: Statement of Net Position, Statement of Revenues, Expenses and Changes in Fund Net Position, and Statement of Cash Flows. Fiduciary funds Fiduciary funds, also called agency funds, are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City of La Quinta's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on the pages listed in the table of contents for Fiduciary Funds: Statement of Fiduciary Net Position — Fiduciary Funds. Notes to the financial statements The notes to the financial statements provide additional information that is essential to obtain a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on the pages listed in the table of contents for Notes to Financial Statements. Other information In addition to the basic financial statements and accompanying notes, this report also presents the combining statements referred to earlier in connection with non -major governmental funds, internal service funds, and agency funds. The non -major governmental funds' combining statements are presented immediately following the Required Supplementary Information while the combined statements for the internal service funds and agency funds are presented following the budgetary comparison schedules for the debt service funds. Government -wide financial analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of La Quinta, assets exceeded liabilities by $700,899,000 at the close of the most recent fiscal year, which is $1,344,000 more than the previous year. This increase is attributed to an increase of unrestricted net position for governmental activities. LV The largest portion of the City of La Quinta's Net Position, 80%, for this year and 81 % for last year, reflects its investment in capital assets (e.g., land, buildings; machinery, and equipment), net of related debt. The City of La Quinta uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. However, it should be noted that the resources needed to repay the related debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate debt. City of La Quinta Net Position An additional portion of the City of La Quinta's net position (9% in 2015 and 2016) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted Net Position $79,353,000 (11 %) 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 $5,087,000, which is approximately $194,000 more than the previous year. SilverRock's negative unrestricted net position reflects the outstanding $5.3 million advance from the General Fund which is decreased by cash, deposits and receivables on hand to met current obligations. Governmental activities Governmental activities Net Position increased by $1,758,000 accounting for a .003% percent change in the Net Position from the previous year. Key elements of these changes are as follows: 6C Governmental activities %Change Business -type activities %Change Total %Change 2015 2016 2015 2016 2015 2016 Current and other assets $ 169,644,485 $ 171,960,396 0.014 $ (4,567,837) $ (4,694,217) 0.028 $ 165,076,648 $ 167,266,179 0.013 Capital assets 523,599,258 520,479,310 0.006 44,118,111 43,898,784 0.005 567,717,369 564,378,094 0.006 Total assets 693,243,743 692,439,706 0.001 39,550,274 39 204,567 0.009 732,794 017 731644 273 0.002 Deferred outflows of resources 783,364 1,799,679 1.297 783,364 1,799,679 1.297 Current liabilities 18,834,801 17,069,335 (0.094) 324,810 392,689 0.209 19,159,611 17,462,024 (0.089) Non-current liabilities 12,573,105 14,297 608 0.137 12 573,105 14,297,608 0.137 Total liabilities 31,407,906 31,366,943 0.001 324,810 392,689 0.209 31,732,716 31759,632 0.001 resources 2,289,402 784,958 0.657 2,289,402 784 958 0.657 Net position: Net investment in capital assets 523,495,389 516,498,620 (0.013) 44,118,111 43,898,784 (0.005) 567,613,500 560,397,404 (0.013) Restricted 62,472,221 61,148,731 (0.021) 62,472,221 61,148,731 (0.021) Unrestricted 74,362,189 84,440,133 0.136 4892,647 5,086906 0.040 69,469,542 79,353,227 0.142 Total net position $ 660,329,799 $ 662,087,484 0.003 $ 39,225,464 $ 38,811,878 (0.011) $ 699,555,263 $ 700,899,362 0.002 An additional portion of the City of La Quinta's net position (9% in 2015 and 2016) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted Net Position $79,353,000 (11 %) 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 $5,087,000, which is approximately $194,000 more than the previous year. SilverRock's negative unrestricted net position reflects the outstanding $5.3 million advance from the General Fund which is decreased by cash, deposits and receivables on hand to met current obligations. Governmental activities Governmental activities Net Position increased by $1,758,000 accounting for a .003% percent change in the Net Position from the previous year. Key elements of these changes are as follows: 6C Citv of La Quinta Chanaes in Net Position • Revenues overall decreased by $8,732,000 with the two largest category decreases being capital grants from unavailable revenues at year end. These revenues will be recognized in 2016/17. In addition, operating transfers for Capital Improvement projects decreased due to multi-year projects. These funding sources will be recognized in future fiscal years as projects are completed. Expenses for Governmental Activities overall decreased by $3,678,000 (seven percent decrease). The biggest decreases were in public works which decreased by $5,959,000. Planning and development, public safety, general government, community resources had a combined increase of $2,279,000 and the remaining $2,000 increase is attributed to interest on long-term debt. Expenses related to public works governmental activities decreased $5,959,000 as compared to the previous year. The primary reason for this change was the reallocation of street and lighting and landscape expenses from the general fund to other governmental funds and a decreased of $4.7 million contributed from the City for Capital Projects. 10 Governmental Activities Business -Type Activities Total Revenues: 2015 2016 Change 2015 2016 Change 2015 2016 Change Program revenues: Charges for services $ 3,771,088 3,559,749 $ (211,339) $ 3,561,857 $ 3,621,495 $ 59,638 $ 7,332,945 $ 7,181,244 $ (151,701) Operating grants and - - contributions 16,829,107 12,213,338 (4,615,769) - - - 16,829,107 12,213,338 (4,615,769) Capital grants and - - contributions 3,536,444 1,076,145 (2,460,299) 2,872,122 - (2,872,122) 6,408,566 1,076,145 (5,332,421) General revenues, transfers and extraordinary item: - - - - Property taxes 8,776,491 8,798,296 21,805 - 8,776,491 8,798,296 21,805 Othertaxes 18,208,067 19,594,158 1,386,091 - - - 18,208,067 19,594,158 1,386,091 Investment income 1,981,343 2,390,468 409,125 2,043 4,282 2,239 1,983,386 2,394,750 411,364 Motor vehicle in lieu 3,486,367 3,651,549 165,182 - - - 3,486,367 3,651,549 165,182 Extraordinary gain/loss on dissolution of RDA Transfers (247,739) (115,400) 132,339 247,739 115,400 (132,339) - - Miscellaneous 296,346 376,193 79,847 915,164 218,823 (696,341) 1,211,510 595,016 (616,494) 56,637,514 51,544,496 (5,093,018) 7,598,925 3,960,000 (3,638,925) 64,236,439 55,504,496 (8,731,943) Total revenues Expenses: General government 5,166,732 5,645,004 478,272 - - 5,166,732 5,645,004 478,272 Public safety 21,636,149 22,067,603 431,454 21,636,149 22,067,603 431,454 Planning and development 2,212,013 3,359,732 1,147,719 2,212,013 3,359,732 1,147,719 Community services 5,992,362 6,214,098 221,736 5,992,362 6,214,098 221,736 Public works 18,116,732 12,157,245 (5,959,487) 18,116,732 12,157,245 (5,959,487) Interest on long-term debt 340,716 343,129 2,413 340,716 343,129 2,413 Golf course - - - 5,053,360 4,373,586 (679,774) 5,053,360 4,373,586 (679,774) Total expenses 53,464,704 49,786,811 (3,677,893) 5,053,360 4,373,586 (679,774) 58,518,064 54,160,397 (4,357,667) Increase in net position before restatements 3,172,810 1,757,685 (1,415,125) 2,545,565 (413,586) (2,959,151) 5,718,375 1,344,099 (4,374,276) Restatements (8,033,971) - 8,033,971 - - (8,033,971) - 8,033,971 Increase in net position (4,861,161) 1,757,685 6,618,846 2,545,565 (413,586) (2,959,151) (2,315,596) 1,344,099 3,659,695 Net position - beginning 665,190,960 660,329,799 (4,861,161) 36,679,899 39,225,464 2,545,565 701,870,859 699,555,263 (2,315,596) $ 660,329,799 662,087,484 $ 1,757,685 $ 39,225,464 $ 38,811,878 $ (413,586) $ 699,555,263 $ 700,899,362 $ 1,344,099 Net position - ending • Revenues overall decreased by $8,732,000 with the two largest category decreases being capital grants from unavailable revenues at year end. These revenues will be recognized in 2016/17. In addition, operating transfers for Capital Improvement projects decreased due to multi-year projects. These funding sources will be recognized in future fiscal years as projects are completed. Expenses for Governmental Activities overall decreased by $3,678,000 (seven percent decrease). The biggest decreases were in public works which decreased by $5,959,000. Planning and development, public safety, general government, community resources had a combined increase of $2,279,000 and the remaining $2,000 increase is attributed to interest on long-term debt. Expenses related to public works governmental activities decreased $5,959,000 as compared to the previous year. The primary reason for this change was the reallocation of street and lighting and landscape expenses from the general fund to other governmental funds and a decreased of $4.7 million contributed from the City for Capital Projects. 10 • Expenses related to planning and development governmental activities were $1,148,000 higher than the previous reporting period. This was due to an increase of $646,000 in planning and development expenses in the capital project fund and $489,000 in the general fund attributed to design contract services. • The General Fund contributed $115,000 to the business -type activities of the golf course. Funds were utilized to support operations per the adopted budget. Business -type activities This was the eleventh full year of operations for the SilverRock Golf fund since the golf course began early operation in 2005. Net Position decreased by $414,000 related mostly to lower operating revenues and transfers and offset by lower operating expenses and no capital contributions during 2015/16. Charges for services primarily consisted of green fees which totaled $3,621,000, which was $60,000 higher than the previous year, with golf course expenses of $4,374,000, which was $680,000 less than the previous year. In 2015/16, the General Fund transferred $115,000 to the SilverRock Golf fund in order to support operations. The total outstanding advance due to the General Fund from the inception of the Golf Course opening is $5,360,000. 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 $111,471,000 as follows: 11 City of La Quinta Governmental Fund Balances Category General Fund Percent All Other Funds Percent Total Funds Percent Nonspendable Restricted Committed Unassigned Total $ 48,605,070 - 27,569,446 13,822,012 54% 0% 31% 15% $ 8,422 33,121,360 - (11,655,344) 0% 154% 0% -54% $ 48,613,492 33,121,360 27,569,446 2,166,668 44% 30% 25% 2% $ 89,996,528 100% $ 21,474,438 100% $ 111,470,966 100% Governmental fund balances ended the year totaling $111,471,000, an increase of $8,241,000 in comparison with the prior years' ending balance of $103,230,000. These collective fund balances include the General Fund (discussed in further detail below), Housing Authority, Financing Authority, Capitial Improvement Fund, Civic Center Fund, and various Special Revenue funds. Nonspendable Of the total amount $48,613,000 or 44% constitutes non -spendable reserves, which means that these reserves are not available to fund operating expenditures of the organization because they are in the form of land and receivables. Restricted $33,121,000 or 30% are restricted fund balances which are the result of external limitations on spending from restricted special purpose funds such Measure A, which can only be used for transportation; Gas Tax Fund restricted for street related purposes; or Quimby Funds restricted for park development and improvements. Committed $27,569,000 or 25% are committed fund balances which are the result of self-imposed limitations placed upon by the City Council. Committed funds include working capital reserves and emergency reserves which by City policy are set at 10% and 40% respectively based on the current adopted budget. Committed funds also include funds that have been approved for Capital Projects, including carryovers for multi-year projects. Unassigned The remaining fund balance or $2,167,000 represents unassigned fund balances or the residual net resources after taking into consideration the other classifications. The Civic Center fund accounted for $7.2 million of the $11.6 million negative unassigned balance in other funds. This amount represents an advance due to the General Fund and is included in the General Fund nonspendable fund balance. 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 was $13,822,000 while total fund balance reached $89,967,000. 12 The City of La Quinta's general fund balance increased by $3,188,000 in 2015/16. Key factors for this increase are as follows: • The General Fund revenues overall were 1.3% higher than budgeted. The increased revenue is attributable to higher than expected property tax revenue. The City received $1,223,000 more than budgeted property tax revenue and a one-time triple flip sales tax wind down payment of $882,000. • Actual expenditures were $6,025,000 less than the final budget, but $511,000 higher than 2014/15 expenditures. $4,274,000 of expenditure savings has been carried over into 2016/17 for continuing appropriations related to operations and Capital Improvement Project (CIP). Housing Authority Project Area No. 1 Fund The Housing Authority fund is used to account for the housing activities of the Housing Authority in Project Area No. 1. The primary purpose of this fund is to promote and to provide quality housing. The fund balance decreased by $22,000 to end the year at $10,920,000. Housing Authority Project Area No. 2 Fund The Housing Authority fund is used to account for the housing activities of the Housing Authority in Project Area No. 2. The primary purpose of this fund is to promote and to provide quality housing. The fund balance increased by $5,117,000 to end the year at $6,411,000. The increase is attributed to a $5 million principal loan repayment received for the Coral Mountain housing project. Capital Improvement Fund The Capital Improvement Fund is primarily used to record the expenditure of funds for capital projects. The fund had twenty two (22) active Capital Improvement Projects budgeted during 2015/16. The three most active projects during the year were the pavement management plan street improvements ($1,297,000), Library 10th anniversary improvements ($862,000), and Adams Street signal and street improvements ($638,000). Other major future projects include North La Quinta parkway turf conversion, Madison Street widening, pavement management plan street improvements, Fritz Burns pool improvements, Village circulation improvements, and citywide drainage enhancements. Civic Center Fund The Civic Center fund is primarily used to collect developer impact fees for the 2004 City Hall expansion and to fund a portion of the debt service on the original City Hall construction. The City Hall expansion was completed in 2007/08 and the final repayment of the original City Hall construction bonds is scheduled in 2018/19. A $7.1 million advance from the General Fund is outstanding at the end of 2015/16. 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 four (4) internal service funds to accumulate resources for equipment and vehicle replacement, information technology activities, insurance and park equipment and facility replacement. General Fund Budgetary Highlights During the year there was a $2,192,000 increase in appropriations and transfers out between the original ($42,066,000) and final amended budget ($44,258,000). Following are the main components of the changes: • $1,728,000 in carryover appropriations from prior fiscal years to 2015/16 to fund capital improvement projects as approved by City Council. • $209,000 increase for worker's compensation insurance premiums During the fiscal year revenue estimates were increased by $1,122,000 of which $864,000 was one-time in nature: $529,000 was a one-time insurance reimbursement payment for costs related to flood clean-up activities in 2014/15 and the remaining $335,000 was for a Transient Occupancy Tax (TOT) mitigation payment received for 2014/15 in 2015/16. The budget increases were possible because of additional anticipated revenues and the availability of unassigned reserves. Capital Asset and Debt Administration Capital assets The City of La Quinta's capital assets for its governmental and business -type activities as of June 30, 2016, amounts to $564,378,000 (net of accumulated depreciation). This includes land, right of way, buildings and improvements, machinery and equipment, streets and bridges, and construction in progress. The investment in capital assets decreased in 2015/16 due to depreciation expense and removal of street maintenance from construction in progress which exceeded the purchase of capital assets. 14 The following chart lists the asset categories for governmental and business like activities net of depreciation: Citv of La Quinta Capital Assets (net of depreciation) Major capital asset events during the 2015/16 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 • Wellness Center expansion and improvements $3,392,000 • Adams Street signal and street improvements $1,058,000 • Library 10th anniversary improvements $939,000 • Park ADA (Americans with Disability Act) improvements $549,000 • The deletion of $1,689,000 in construction in progress attributed to maintance related expenses which are not capitalized. Business -type activities The Golf Course capital asset balance at June 30, 2016, was $43,899,000, net of accumulated depreciation. The balance decreased by $219,000. There were no purchases or disposal of business type assets during 2015/16. Additional information on the City of La Quinta's capital assets can be found in Note 5 to the financial statements. Long-term debt At the end of the current fiscal year, the City of La Quinta governmental funds had total bonded debt outstanding of $4,833,000. Of the total amount, $1,850,000 of this debt represents the principal outstanding for the 1996 Lease Revenue Bonds used for the construction and improvements of La Quinta Civic Center. 15 Governmental Business -type Description Activities Activities Total 2015 2016 2015 2016 2015 2016 Land $ 69,816,674 $ 69,816,674 $ 39,712,954 $ 39,712,955 $ 109,529,628 $ 109,529,629 Buildings and improvements 43,404,761 46,016,651 4,200,754 3,985,914 47,605,515 50,002,565 Equipment and furniture 929,668 1,226,255 204,403 199,915 1,134,071 1,426,170 Vehicles 191,390 188,104 - - 191,390 188,104 Infrastructure 384,832,840 394,539,014 - - 384,832,840 394,539,014 Construction in progress 24,423,925 8,692,612 - - 24,423,925 8,692,612 Total $ 523,599,258 $ 520,479,310 $ 44,118,111 $ 43,898,784 $ 567,717,369 $ 564,378,094 Major capital asset events during the 2015/16 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 • Wellness Center expansion and improvements $3,392,000 • Adams Street signal and street improvements $1,058,000 • Library 10th anniversary improvements $939,000 • Park ADA (Americans with Disability Act) improvements $549,000 • The deletion of $1,689,000 in construction in progress attributed to maintance related expenses which are not capitalized. Business -type activities The Golf Course capital asset balance at June 30, 2016, was $43,899,000, net of accumulated depreciation. The balance decreased by $219,000. There were no purchases or disposal of business type assets during 2015/16. Additional information on the City of La Quinta's capital assets can be found in Note 5 to the financial statements. Long-term debt At the end of the current fiscal year, the City of La Quinta governmental funds had total bonded debt outstanding of $4,833,000. Of the total amount, $1,850,000 of this debt represents the principal outstanding for the 1996 Lease Revenue Bonds used for the construction and improvements of La Quinta Civic Center. 15 City of La Quinta Outstanding Debt The largest portion of long-term debt, $1,975,000 is for Washington Street Apartments and is paid by housing program revenues. The total outstanding debt decreased by $565,000 during 2015/16. The decrease was due to regular scheduled debt service payments. Business -type activities carried no long term debt since 2013/14. Additional information on the City of La Quinta's long-term debt can be found in Note 6 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 2016/17: • During the last ten years, the City of La Quinta has been in a growth phase with assessed values increasing from $10.02 billion in 2006/07 to $11.97 billion or over 16% percent in 2015/16. It is important to note however, that from 2009/10 to 2013/14 assessed values decreased by approximately 8.73% and are below the highest threshold of $12.4 billion in 2008/09. • Sales tax has been slightly increasing and the budget projects an increase of $712,000 in 2016/17. Increased economic development is offset by a leakage of sales from businesses within the City to internet based shopping. • AB1x26 dissolved California Redevelopment Agencies as of January 31, 2012 continues to affect city revenues. Due to the loss of Tax Increment, the City's ability to fund future capital projects has been severely curtailed. The City placed a one percent sales and use tax for voter consideration on the November 2016 ballot. The tax is anticipated to generate an additional $6 million annually in general fund revenue. 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, Karla Campos, Finance Director, 78-495 Calle Tampico, La Quinta, CA, 92253 or by telephone at 760-777-7703. 16 Governmental Activities Debt Type: 2015 2016 Capital Leases $ 103,869 $ 155,396 Compensated Absences 853,497 852,551 General Liability Retrospective Deposit - - Loans Payable 2,036,277 1,975,294 Revenue Bonds 2,405,000 1,850,000 Total $ 5,398,643 $ 4,833,241 The largest portion of long-term debt, $1,975,000 is for Washington Street Apartments and is paid by housing program revenues. The total outstanding debt decreased by $565,000 during 2015/16. The decrease was due to regular scheduled debt service payments. Business -type activities carried no long term debt since 2013/14. Additional information on the City of La Quinta's long-term debt can be found in Note 6 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 2016/17: • During the last ten years, the City of La Quinta has been in a growth phase with assessed values increasing from $10.02 billion in 2006/07 to $11.97 billion or over 16% percent in 2015/16. It is important to note however, that from 2009/10 to 2013/14 assessed values decreased by approximately 8.73% and are below the highest threshold of $12.4 billion in 2008/09. • Sales tax has been slightly increasing and the budget projects an increase of $712,000 in 2016/17. Increased economic development is offset by a leakage of sales from businesses within the City to internet based shopping. • AB1x26 dissolved California Redevelopment Agencies as of January 31, 2012 continues to affect city revenues. Due to the loss of Tax Increment, the City's ability to fund future capital projects has been severely curtailed. The City placed a one percent sales and use tax for voter consideration on the November 2016 ballot. The tax is anticipated to generate an additional $6 million annually in general fund revenue. 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, Karla Campos, Finance Director, 78-495 Calle Tampico, La Quinta, CA, 92253 or by telephone at 760-777-7703. 16 CITY OF LA QUINTA STATEMENT OF NET POSITION JUNE 30, 2016 Assets: Cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Internal balances Prepaid costs Deposits Due from other governments Inventories Land held for resale Capital assets not being depreciated Capital assets, net of depreciation Total Assets Deferred Outflows of Resources: Deferred items related to pensions Total Deferred Outflows of Resources Liabilities: Accounts payable Accrued liabilities Accrued interest Unearned revenue Deposits payable Due to other governments Noncurrent liabilities: Due within one year Due in more than one year Net OPEB liability Net pension liability Total Liabilities Deferred Inflows of Resources: Deferred items related to pensions Total Deferred Inflows of Resources Net Position: Net investment in capital assets Restricted for: Planning and development projects Public safety Public works Capital projects Community services Unrestricted Total Net Position See Notes to Financial Statements 17 Primary Government Governmental Business -Type Activities Activities Total $ 83,196,452 $ 273,116 $ 83,469,568 87,061 61,569 148,630 3,812,397 - 3,812,397 26,060,260 - 26,060,260 3,201,059 683 3,201,742 5,360,151 (5,360,151) - 635,304 1,865 637,169 14,600 250,000 264,600 41,273,112 14,976 41,288,088 - 63,725 63,725 8,320,000 - 8,320,000 363,438,080 39,712,955 403,151,035 157,041,230 4,185,829 161,227,059 784,958 - 784,958 692,439,706 39,204,567 731,644,273 784,958 - 784,958 1,799,679 - 1,799,679 1,799,679 - 1,799,679 5,339,033 356,555 5,695,588 525,304 634 525,938 42,540 - 42,540 563,536 - 563,536 8,896,491 35,500 8,931,991 1,702,431 - 1,702,431 1,585,183 - 1,585,183 3,248,058 - 3,248,058 813,077 - 813,077 8,651,290 - 8,651,290 31,366,943 392,689 31,759,632 784,958 - 784,958 784,958 - 784,958 516,498,620 43,898,784 560,397,404 45,277,136 - 45,277,136 189,988 - 189,988 1,250,827 - 1,250,827 3,776,409 - 3,776,409 10,654,371 - 10,654,371 84,440,133 (5,086,906) 79,353,227 $ 662,087,484 $ 38,811,878 $ 700,899,362 CITY OF LA QUINTA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 Business -Type Activities: Golf Course 4,373,586 3,621,495 - - Total Business -Type Activities 4,373,586 3,621,495 - - Total Primary Government $ 54,160,397 $ 7,181,244 $ 12,213,338 $ 1,076,145 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 Transfers Total General Revenues and Transfers Change in Net Position Net Position at Beginning of Year Net Position at End of Year See Notes to Financial Statements 18 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 5,645,004 $ 192,538 $ 111,940 $ - Public safety 22,067,603 1,378,704 6,254,781 - Planning and development 3,359,732 467,053 3,723,526 - Community services 6,214,098 386,824 39,940 - Public works 12,157,245 1,134,630 2,083,151 1,076,145 Interest on long-term debt 343,129 - - - Total Governmental Activities 49,786,811 3,559,749 12,213,338 1,076,145 Business -Type Activities: Golf Course 4,373,586 3,621,495 - - Total Business -Type Activities 4,373,586 3,621,495 - - Total Primary Government $ 54,160,397 $ 7,181,244 $ 12,213,338 $ 1,076,145 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 Transfers Total General Revenues and Transfers Change in Net Position Net Position at Beginning of Year Net Position at End of Year See Notes to Financial Statements 18 Net (Expenses) Revenues and Changes in Net Position Primary Government Governmental Business -Type Activities Activities Total $ (5,340,526) (14,434,118) 830,847 (5,787,334) (7,863,319) (343,129) (32,937,579) $ (5,340,526) (14,434,118) 830,847 (5,787,334) (7,863,319) (343,129) (32,937,579) - (752,091) (752,091) - (752,091) (752,091) (32,937,579) (752,091) (33,689,670) 8,798,296 - 8,798,296 7,835,745 - 7,835,745 9,107,046 - 9,107,046 1,799,938 - 1,799,938 334,465 - 334,465 516,964 - 516,964 3,651,549 - 3,651,549 2,390,468 4,282 2,394,750 376,193 218,823 595,016 (115,400) 115,400 - 34,695,264 338,505 35,033,769 1,757,685 (413,586) 1,344,099 660,329,799 39,225,464 699,555,263 $ 662,087,484 $ 38,811,878 $ 700,899,362 See Notes to Financial Statements 19 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTALFUNDS JUNE 30, 2016 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 4,257,347 $ 8,244 $ - Capital Accrued liabilities 467,736 4,748 4,438 Projects Unearned revenues 63,946 Special Revenue Funds Funds 497,797 Deposits payable Housing Housing 29,182 772,433 Due to other governments Authority PA Authority PA Capital - General No.1 No.2 Improvement Assets: Advances from other funds - - - Pooled cash and investments $ 50,372,569 $ 2,575,773 $ 6,386,856 $ 1,689,898 Receivables: Deferred Inflows of Resources: Accounts 14,375 37,714 34,972 - Taxes 3,648,066 - - - Notes and loans - 2,060,260 24,000,000 - Accrued interest 97,298 2,535,238 527,043 - Prepaid costs 204,589 - 8,422 - Deposits - - 14,600 - Due from other governments 33,916,569 6,276,420 - 391,224 Due from other funds 413,136 - - - Advances to other funds 14,974,800 - - - Land held for resale 8,320,000 - - - Total Assets $ 111,961,402 $ 13,485,405 $ 30,971,893 $ 2,081,122 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 4,257,347 $ 8,244 $ - $ 923,736 Accrued liabilities 467,736 4,748 4,438 3,109 Unearned revenues 63,946 - - 497,797 Deposits payable 7,937,494 22,383 29,182 772,433 Due to other governments 71,430 - - - Due to other funds - - - - Advances from other funds - - - - Total Liabilities 12,797,953 35,375 33,620 2,197,075 Deferred Inflows of Resources: Unavailable revenues 9,166,921 2,530,471 24,527,043 179,188 Total Deferred Inflows of Resources 9,166,921 2,530,471 24,527,043 179,188 Fund Balances: Nonspendable: Prepaid costs 204,589 - 8,422 - Land held for resale 8,320,000 - - - Advances to other funds 14,974,800 - - - Due from other Governments 25,105,681 - - - Restricted for: Planning and development projects - 10,919,559 6,402,808 - Public safety - - - - Community services - - - - Public works - - - - Capital Projects - - - - Committed to: Working capital reserve 3,894,000 - - - Capital Projects 2,302,000 - - - Emergency reserve 15,576,000 - - - Post retirement health benefits 1,523,400 - - - Carryovers 4,274,046 - - - Unassigned 13,822,012 - - (295,141) Total Fund Balances 89,996,528 10,919,559 6,411,230 (295,141) Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 111,961,402 $ 13,485,405 $ 30,971,893 $ 2,081,122 See Notes to Financial Statements 20 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTALFUNDS JUNE 30, 2016 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 Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Prepaid costs Land held for resale Advances to other funds Due from other Governments Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Committed to: Working capital reserve Capital Projects Emergency reserve Post retirement health benefits Carryovers Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances See Notes to Financial Statements 21 Capital Projects C.. -A - Other Total Governmental Governmental Civic Center Funds Funds $ - $ 16,006,774 $ 77,031,870 87,061 - 164,331 3,812,397 - - 26,060,260 - 29,736 3,189,315 - - 213,011 - 14,600 688,899 41,273,112 - 413,136 14,974,800 8,320,000 $ - $ 16,889,740 $ 175,389,562 $ - $ 114,753 $ 5,304,080 - 44,589 524,620 - 1,793 563,536 - 134,999 8,896,491 - 1,631,001 1,702,431 92,393 34,526 126,919 7,119,614 2,495,035 9,614,649 7,212,007 4,456,696 26,732,726 - 782,247 37,185,870 - 782,247 37,185,870 - - 213,011 - - 8,320,000 - - 14,974,800 - - 25,105,681 - 888,833 18,211,200 - 189,988 189,988 - 9,872,124 9,872,124 - 1,250,827 1,250,827 - 3,597,221 3,597,221 - - 3,894,000 - - 2,302,000 - - 15,576,000 - - 1,523,400 - - 4,274,046 (7,212,007) (4,148,196) 2,166,668 (7,212,007) 11,650,797 111,470,966 $ - $ 16,889,740 $ 175,389,562 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, 2016 Fund balances of governmental funds Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity. Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable Capital lease payable Loans payable Compensated Absences Proportionate share of net pension liability Deferred outflows related to pensions: Employer contributions made after the measurement date Difference between expected and actual experiences Differences in propotions Difference between actual and the proportionate share of aggregate employer contributions Deferred inflows related to pensions: Changes of assumptions Adjustment due to difference in proportions Net difference between projected and actual plan earnings Difference between actual and the proportionate share of aggregate employer contributions Governmental funds report all OPEB contributions as expenditures, however in the statement of net position any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as a asset or liability. Accrued interest payable for the current portion of interest due on Bonds has not been reported in the governmental funds. Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. $ (1,772,385) (54,567) (2,036,277) (852,551) Internal service funds are used by management to charge the costs of certain activities, such as equipment replacement and information technology, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. Net Position of governmental activities See Notes to Financial Statements 23 883,415 49,494 858,566 8,204 (468,260) (21,037) (234,744) (60,917) $ 111,470,966 505,237,405 (4,715,780) (8,651,290) 1,799,679 (784,958) (813,077) (42,540) 37,185,870 21,401,209 $ 662,087,484 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2016 Revenues: Taxes Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions from other agencies Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Capital Projects 5,264,591 - - - 21,842,616 - - - 1,863,059 390,072 337,359 646,475 3,126,861 - - - 1,539,233 - - - 1,050,953 - - 6,065,040 16,632 - 60,983 - - - 131,863 - 34,703,945 390,072 530,205 6,711,515 6,689,292 (22,393) 5,117,438 (4,647,349) 27,419 - - 5,569,242 (3,528,747) - - - (3,501,328) - - 5,569,242 3,187,964 (22,393) 5,117,438 921,893 86,808,564 10,941,952 1,293,792 (1,217,034) $ 89,996,528 $ 10,919,559 $ 6,411,230 $ (295,141) See Notes to Financial Statements 24 Special Revenue Funds Funds Housing Housing Authority PA Authority PA Capital General No.1 No.2 Improvement $ 27,345,219 $ - $ - $ - 1,161,820 - - - 9,540,038 - 426,134 1,536,683 1,332,541 - - - 1,028,298 367,679 5,216,359 5,172 283,076 - - - - - - 28,459 - - - 493,852 702,245 - 5,150 - 41,393,237 367,679 5,647,643 2,064,166 5,264,591 - - - 21,842,616 - - - 1,863,059 390,072 337,359 646,475 3,126,861 - - - 1,539,233 - - - 1,050,953 - - 6,065,040 16,632 - 60,983 - - - 131,863 - 34,703,945 390,072 530,205 6,711,515 6,689,292 (22,393) 5,117,438 (4,647,349) 27,419 - - 5,569,242 (3,528,747) - - - (3,501,328) - - 5,569,242 3,187,964 (22,393) 5,117,438 921,893 86,808,564 10,941,952 1,293,792 (1,217,034) $ 89,996,528 $ 10,919,559 $ 6,411,230 $ (295,141) See Notes to Financial Statements 24 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2016 Revenues: Taxes Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions from other agencies Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year See Notes to Financial Statements 25 Capital Projects V..- l - 823,877 6,420,538 (3,085,602) (6,614,349) (2,261,725) (193,811) 47,461 (1,011,659) 8,240,704 (7,259,468) 12,662,456 103,230,262 $ (7,212,007) $ 11,650,797 $ 111,470,966 Other Total Governmental Governmental Civic Center Funds Funds $ - $ 712,770 $ 28,057,989 - 944,050 944,050 - - 1,161,820 - 3,457,821 14,960,676 - - 1,332,541 - 858,234 7,475,742 - - 283,076 - - 28,459 109,007 838,216 1,441,075 - 1,811 709,206 109,007 6,812,902 56,394,634 - 2,433 5,267,024 - 283,346 22,125,962 - 57,294 3,294,259 - 1,856,177 4,983,038 - 2,561,977 4,101,210 - 93,881 7,209,874 - 555,000 632,615 61,546 152,728 346,137 61,546 5,562,836 47,960,119 47,461 1,250,066 8,434,515 - 823,877 6,420,538 (3,085,602) (6,614,349) (2,261,725) (193,811) 47,461 (1,011,659) 8,240,704 (7,259,468) 12,662,456 103,230,262 $ (7,212,007) $ 11,650,797 $ 111,470,966 THIS PAGE INTENTIONALLY LEFT BLANK 26 CITY OF LA QUINTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 Net change in fund balances - total governmental funds $ 8,240,704 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation and disposals exceeded capital outlay in the current period. Capital outlay $ 7,194,790 Depreciation (8,248,026) Disposal of capital assets (1,688,951) (2,742,187) 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 555,000 Capital lease repayments 16,632 Loan repayments 60,983 632,615 Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 5,383 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. 946 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. (72,006) Pension expense recognizes the change in net pension liability and therefore is not recognized under the current resources measurement and (decreases)/increases from net position 302,860 Revenues reported as unavailable revenue in the governmental funds and recognized as charges for services and operating contributions and grants in the statement of activities. (4,822,906) Internal service funds are used by management to charge the costs of certain activities, such as equipment replacement and information technology, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities. 212,276 Change in net position of governmental activities $ 1,757,685 See Notes to Financial Statements 27 CITY OF LA QUINTA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2016 Business -Type 6,164, 582 Activities - - Enterprise Funds Governmental 1,865 Activities - 250,000 Internal Golf Course Service Funds Assets: Current: Cash and investments Receivables: Accounts Accrued interest Prepaid costs Deposits Due from other governments Inventories Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Deposits payable Due to other funds Current portion of capital leases Total Current Liabilities Noncurrent: Advances from other funds Long-term portion of capital leases Total Noncurrent Liabilities Total Liabilities Net Position: Net investment in capital assets Unrestricted Total Net Position Total Liabilities and Net Position See Notes to Financial Statements 28 $ 273,116 $ 6,164, 582 61,569 - 683 11,744 1,865 422,293 250,000 - 14,976 392,689 63,725 - 665,934 6,598,619 43,898,784 15,241,905 43,898,784 15,241,905 $ 44,564,718 $ 21,840,524 $ 356,555 $ 34,953 634 684 35,500 - - 286,217 - 63,784 392,689 385,638 5,360,151 - - 53,677 5,360,151 53,677 5,752,840 439,315 43, 898, 784 15,124,444 (5,086,906) 6,276,765 38,811,878 21,401,209 $ 44,564,718 $ 21,840,524 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016 Operating Revenues: Sales and service charges Miscellaneous Total Operating Revenues Operating Expenses: Administration and general Fuel and oil Maintenance and parts Contract services Software and supplies Depreciation expense Other Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Interest expense Gain on disposal of capital assets Total Nonoperating Revenues(Expenses) Income (Loss) Before Transfers Transfers in Transfers out Changes in Net Position Net Position: Beginning of Year End of Fiscal Year See Notes to Financial Statements 29 Business -Type 302,444 Activities - 57,750 Enterprise Funds Governmental 4,000,246 Activities - - Internal Golf Course Service Funds $ 3,621,495 $ 2,192,272 218,823 - 3,840,318 2,192,272 36,221 302,444 - 57,750 - 122,630 4,000,246 642,008 - 247,295 219,327 772,073 97,157 - 4,352,951 2,144,200 (512,633) 48,072 4,282 70,413 (20,635) (2,375) 17,755 (16,353) 85,793 (528,986) 133,865 176,969 209,000 (61,569) (130,589) (413,586) 212,276 39,225,464 21,188,933 $ 38,811,878 $ 21,401,209 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016 Cash Flows from Operating Activities: Cash received from customers and users Cash received from/(paid to) interfund service provided Cash paid to suppliers for goods and services Cash paid to employees for services Net Cash Provided (Used for) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers out Cash transfers in Advance from other funds Net Cash Provided by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Proceeds from capital debt Acquisition and construction of capital assets Interest paid on capital debt Capital lease payments Proceeds from sales of capital assets Net Cash Used for Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year See Notes to Financial Statements 30 Business -Type Activities - Enterprise Funds 131,430 (417,493) (2,375) (63,271) 40,936 (310,773) 3,920 64,770 3,920 64,770 272,980 514,603 136 5,649,979 $ 273,116 $ 6,164,582 Governmental Activities - Internal Golf Course Service Funds $ 4,788,138 $ - - 2,056,196 (4,027,896) (1,072,241) (37,849) (301,760) 722,393 682,195 (61,569) (130,589) 176,969 209,000 (568,733) - (453,333) 78,411 131,430 (417,493) (2,375) (63,271) 40,936 (310,773) 3,920 64,770 3,920 64,770 272,980 514,603 136 5,649,979 $ 273,116 $ 6,164,582 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016 Reconciliation of Operating Income to Net Cash Provided (Used for) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in due from other governments (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in due to other funds Total Adjustments Net Cash Provided (Used for) by Operating Activities See Notes to Financial Statements 31 Business -Type Activities - Enterprise Funds Golf Course _ $ (512,633) $ 219,327 35,872 11,760 900,188 69,507 (1,628) Governmental Activities - Internal Service Funds 48,072 772,073 (422,293) (2,558) 684 286,217 1,235,026 634,123 $ 722,393 $ 682,195 CITY OF LA QUINTA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2016 See Notes to Financial Statements 32 Pension Trust Private -Purpose Agency Trust Fund Funds Assets: Agency of the Pension Plan Pooled cash and investments $ 303,443 Receivables: $ 21,895,992 - Taxes 270 5,191 Notes and loans 537,113 - Accrued interest - 294 Prepaid asset - Due from other governments - Restricted assets: 3,703,218 Cash and investments with fiscal agents - - Total Assets $ 308,928 Deferred Outflows of Resources: - 3,662,288 Deferred charge on refunding 9,420,752 -241,570,315 Total Deferred Outflows of Resources Liabilities: 254,681,381 Accounts payable $ - Accrued interest (193,184,363) - Deposits payable $ 140,545 308,928 Long-term liabilities: Due in one year - Due in more than one year - Total Liabilities $ 308,928 Net Position: Restricted for pensions Held in trust for other purposes Total Net Position See Notes to Financial Statements 32 Pension Trust Private -Purpose Fund Trust Fund Successor Supplemental Agency of the Pension Plan former RDA $ 140,275 $ 21,895,992 - 2,453,585 270 - - 537,113 - 1,631,001 - 31,276,109 140,545 57,793,800 - 3,703,218 - 3,703,218 - 28,026 - 3,662,288 - 9,420,752 -241,570,315 - 254,681,381 140,545 - - (193,184,363) $ 140,545 $ (193,184,363) CITY OF LA QUINTA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2016 Additions: Taxes Interest and change in fair value of investments Total Additions Deductions: Administrative expenses Contractual services Interest expense Loss on reduction of loan Total Deductions Changes in Net Position Net Position - Beginning of the Year Net Position - End of the Year See Notes to Financial Statements 33 Pension Trust Private -Purpose Fund Trust Fund Successor Supplemental Agency of the Pension Plan former RDA $ - $ 19,363,022 1,642 82,303 1,642 19,445, 325 12,833 401,253 359,719 10,644,931 317,602 12,833 11,723,505 (11,191) 7,721,820 151,736 (200,906,183) $ 140,545 $ (193,184,363) THIS PAGE INTENTIONALLY LEFT BLANK ii! CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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 City and its component units, which are entities for which the City 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 City's operations and so data from these units are reported with the interfund data of the primary government. The following organizations are considered to be component units of the City: City of La Quinta Public Financing Authority The La Quinta Public Financing Authority (Financing Authority) was established pursuant to a Joint Exercise of Powers Agreement dated November 19, 1991, between the City and the Former Redevelopment Agency (now Successor Agency). The purpose of the Financing Authority is to provide financing necessary for the construction of various public improvements through the issuance of debt. Although the Financing Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Financing Authority and the management of the City has operational responsibility for the Financing Authority. Separate financial statements of the Financing Authority are not prepared. City of La Quinta Housing Authority The La Quinta Housing Authority (Housing Authority) was established pursuant to California Housing Authorities Law (Health and Safety Code Sections 34200 et seq.) on September 15, 2009. The purpose of the Housing Authority is to provide safe and 35 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Summary of Significant Accounting Policies (Continued) sanitary housing opportunities for La Quinta residents. Although the Housing Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Housing Authority and the management of the City has operational responsibility for the Housing Authority. 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 City's citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not properly included among program revenues are reported instead as general revenues. Amounts paid to acquire capital assets are capitalized as assets in the government -wide financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the government -wide financial statements, rather than as other financing sources. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditures. Fund Financial Statements The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the governmental, proprietary, and fiduciary funds are presented after the government -wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for 0 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Summary of Significant Accounting Policies (Continued) governmental and proprietary funds. Fiduciary statements include financial information for fiduciary funds. Fiduciary funds of the city primarily represent assets held by the City in a custodial capacity for other individuals or organizations. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation Government -Wide Financial Statements While separate government -wide and fund financial statements are presented, they are interrelated. The governmental activities column incorporates data from governmental funds and internal service funds, while business -type activities incorporate data from the government's enterprise funds. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Governmental Funds In the fund financial statements, governmental funds are presented using the modified -accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses a 60 -day availability period. Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed delivered tax revenues are recognized as revenues in the period in which the underlying exchange transaction on which they are based takes place. Imposed nonexchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government -mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets, deferred outflows of resources, current liabilities, and deferred inflows of resources are generally included on their balance sheets. The reported fund balance is considered to be a measure of "available spendable resources". Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses). Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. 37 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 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. 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. 0.1 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Summary of Significant Accounting Policies (Continued) Fiduciary Funds The pension and private -purpose trust funds are reported using the economic resources measurement focus and the accrual basis of accounting. The agency fund has no measurement focus but utilizes the accrual basis of accounting for reporting its assets and liabilities. d. Major Funds, Internal Service Funds and Fiduciary Fund Types The City's major governmental funds are as follows: General Fund — This fund is the primary fund of the City and is used to account for all revenue and expenditures of the City not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Manager, City Attorney, Finance, City Clerk, Community Development, Police Services, Public Works, and Community Services. Housing Authority Prosect Area No. 1 — This fund accounts for the housing activities of the Housing Authority in Project Area 1 which promotes and provides for quality housing. Revenues will be provided from the receipts and collections of rents, notes and loans. All monies in the Housing Authority must be used in accordance with the applicable housing -related provisions of the California Housing Authorities Law. Housing Authority Project Area No. 2 — This fund accounts for the housing activities of the Housing Authority in Project Area 2 which promotes and provides for quality housing. Revenues will be provided from the receipts and collections of rents, notes and loans. All monies in the Housing Authority must be used in accordance with the applicable housing -related provisions of the California Housing Authorities 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 — This fund accounts 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 — This fund accounts for the activities of the SilverRock Golf Resort. Other fund types of the City are as follows: Debt Service Funds — These funds account for the servicing of long-term debt. 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. CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Summary of Significant Accounting Policies (Continued) 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. Insurance Fund — This fund accounts for City-wide insurances: liability, property, earthquake, workers compensation and risk management. Expenses are shared among departments on an allocation basis. Fiduciary Funds: Agency Fund — This fund accounts for assets held by the City as an agent 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 Agency and its allocated revenue to pay estimated installment payments of enforceable obligations until obligations of the Former 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. All investments are valued at fair value. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance. Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary fund's share in the City's cash and investment pool. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the statement of cash flows, the entire balance of cash and investments on the combined balance sheet for the proprietary funds is considered cash and cash equivalents. 40 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Summary of Significant Accounting Policies (Continued) Inventory Inventory is valued at cost using the first in/first out (FIFO) method. The City uses the consumption method of accounting for inventories. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. 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 statements of net position and the 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 that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has one item which qualifies for reporting in this category; please refer to Note 8 for more details. In addition to liabilities, the statements of net 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 that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two items which qualify for reporting in this category; please refer to Note 8 for more details. 41 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Summary of Significant Accounting Policies (Continued) Compensated Absences Vacation and sick time is vested on a percentage based on number of years employed at the City. Maximum accumulation of sick and vacation is 30 and 40 days, respectively. Upon termination or retirement, permanent employees are entitled to receive compensation at their current base salary for all unused vacation leave. If an employee terminates with a minimum of two years' service, the employee is entitled to receive 25% of the value of his unused sick leave. The percentage increases by 25% for each five-year period until the employee is entitled to 75% of the value of their unused sick leave. This will occur upon the completion of ten years of continuous employment. The General Fund resources are used to pay for the accumulated benefits to employees. Pensions In government -wide financial statements, retirement plans (pensions) are required to be recognized and disclosed using the accrual basis of accounting (see Note 11 and the required supplementary information (RSI) section immediately following the Notes to Financial Statements), regardless of the amount recognized as pension expenditures on the governmental fund statements, which use the modified accrual basis of accounting. In general, the City recognizes a net pension liability, which represents the City's proportionate share of the excess of the total pension liability over the fiduciary net position of the pension reflected in the actuarial report provided by the California Public Employees' Retirement System (CaIPERS). The net pension liability is measured as of the City's prior fiscal year-end. Changes in the net pension liability are recorded, in the period incurred, as pension expense or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change. The changes in net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources (that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience) are amortized over the weighted average remaining service life of all participants in the respective pension plan and are recorded as a component of pension expense beginning with the period in which they are incurred. For purposes of measuring the net pension liability and deferred outflows/inflows or resources relating to pensions and pension expense, information about the fiduciary net position of the City's pension plan with CalPERS and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefits terms. Investments are reported at fair value. Projected earnings on pension investments are recognized as a component of pension expense. Differences between projected and actual investment earnings are reported as deferred inflows of resources or deferred outflows of resources and amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred. Each subsequent year will incorporate an additional closed basis five-year period of recognition. 42 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Summary of Significant Accounting Policies (Continued) Long -Term Obligations In the government -wide financial statements and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 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 City's highest authority, the City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is by a resolution. Assigned includes amounts that are constrained by the City'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. The general fund is the only fund that reports a positive unassigned fund balance. Fund Balance Flow Assumptions — governmental fund financial statements Sometimes the City of La Quinta will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. 43 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Summary of Significant Accounting Policies (Continued) 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 — governmental and proprietary fund financial statements Sometimes the City of La Quinta will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City's policy to consider restricted — net position to have been depleted before unrestricted — net position is applied. f. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. g. Adopted Accounting Standards The City implemented GASB Statement No.72, Fair Value Measurement and Application, during the year ended June 30, 2016. The changes resulting from this implementation are reflected in Note 2. h. Budgets The Transportation Uniform Mitigation Fee, Development Agreement, Indian Gaming, and Infrastructure Funds did not adopt a budget and therefore are not presented as supplementary information. II. DETAILED NOTES ON ALL FUNDS Note 2: Cash and Investments Cash and investments as of June 30, 2016, are classified in the accompanying financial statements as follows: Statement of Net Position: Cash and investments Statement of Fiduciary Net Position: Cash and investments Cash with fiscal agent Total cash and investments 44 $ 83,469,568 22,339,710 31,276,109 $ 137,085,387 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 2: Cash and Investments (Continued) Cash and investments as of June 30, 2016, consist of the following: Cash on hand $ 1,900 Deposits with financial institutions 2,203,037 Investments 134,880,450 Total cash and investments $ 137,085,387 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, 2016, the carrying amount of the City's deposits was $2,203,037, and the bank balance was $3,951,227. The $1,748,190 difference represents outstanding checks and other reconciling items. Investments Authorized by the California Government Code and the Citv's Investment Po 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. 45 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 2: 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. Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of short term and long term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Investment Type Certificates of Deposit Federal agency securities: Federal National Mortgage Association Federal Home Loan Mortgage Corp U.S Treasury Note State investment pool Held by bond trustee: Money market funds Total Remaining Maturity (in years) 1 year Total or Less 1 to 3 Years 3 to 5 Years $ 11,067,970 $ 978,218 $ 8,596,015 $ 1,493,737 18,026,280 18,026,280 - - 10,042,575 - - 10,042,575 20,036,950 15,004,350 - 5,032,600 44,430,566 44,430,566 - - 31,276,109 31,276,109 - - $ 134,880,450 $ 109,715,523 $ 8,596,015 $ 16,568,912 46 *Maximum *Maximum Investment Types *Maximum Percentage of Investment In Authorized by State Law Maturity Portfolio One Issuer U.S. Treasury Obligations 3 years None $30 million U.S. Agency Securities 5 years 30% 20 - 30 million Local Agency Bonds 10 years 30% 30 million California Local Agency Obligations 10 years 30% 30 million Commercial Paper 90 days 15% 5 million Certificates of Deposit 5 years 30% 250,000 Negotiable Certificates of Deposits 5 years 30% 250,000 Corporate Notes 3 years 10% 5 million Money Market Mutual Funds On Demand 20% N/A Local Agency Investment Fund (LAIF) N/A N/A 50 million Investment Agreements 3 years 10% N/A Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of short term and long term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Investment Type Certificates of Deposit Federal agency securities: Federal National Mortgage Association Federal Home Loan Mortgage Corp U.S Treasury Note State investment pool Held by bond trustee: Money market funds Total Remaining Maturity (in years) 1 year Total or Less 1 to 3 Years 3 to 5 Years $ 11,067,970 $ 978,218 $ 8,596,015 $ 1,493,737 18,026,280 18,026,280 - - 10,042,575 - - 10,042,575 20,036,950 15,004,350 - 5,032,600 44,430,566 44,430,566 - - 31,276,109 31,276,109 - - $ 134,880,450 $ 109,715,523 $ 8,596,015 $ 16,568,912 46 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 2: Cash and Investments (Continued) Disclosures Relatina to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's investment policy limits investments in commercial paper to those rated A-1 and P-1 or higher from Standard and Poor's (S&P) and money market mutual funds that are rated "AAA". The quality of U.S. Treasury securities is not analyzed since they are not deemed to have credit risk. As of June 30, 2016, the City had investments with a variety of issuers, all of which were "investment grade" and were legal under state and municipal law. The City's investments in money market mutual funds were all rated "AAA", and federal agency securities were all rated AA+ by S&P and Moody's. As of June 30, 2016, 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, 2016, the City had individual investments that represent 5% or more of total investments in the following securities: Federal Home Loan Mortgage Corporation $ 10,042,575 7.5% Federal National Mortgage Association 18,026,280 13.4% Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relations to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. 47 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 2: Cash and Investments (Continued) GASB Statement No. 31 The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards (e.g. mark to market) for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the City reports its investments at fair value in the statement of net position and balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of June 30, 2016: 48 Level Totals 1 2 3 Investments: US Treasury Note $ 20,036,950 $ $ 20,036,950 $ Federal Agency Securities 28,068,855 28,068,855 - Certificates of Deposit 11,067,970 - 11,067,970 - Local Agency Investment Fund 44,430,566 - 44,430,566 - Total Cash Investments 103,604,341 103,604,341 - Investments with Fiscal Agents: Money Market Funds 31,276,109 - 31,276,109 - Total Investments with Fiscal Agent 31,276,109 - 31,276,109 - Totallnvestments $ 134,880,450 $ - $ 134,880,450 $ - 48 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 3: 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 4: 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 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, 2016, including matured, unpaid interest of $2,530,471 is $4,565,859. 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 1s' of each year from annual residual receipts as defined in the Note once the project is completed and may be repaid early if the property is refinanced, or if the property is transferred to another entity. On February 1, 2012, this receivable was transferred to the Housing Authority Project Area No. 2 which took over the housing function of the Former Agency upon dissolution. As of June 30, 2016, the outstanding principal portion on the Note is $24,000,000 and the outstanding interest portion is $527,043. 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 $24,872 at June 30, 2016. 49 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 5: Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2016, is as follows: Depreciation expense was charged to the following functions in the Statement of Activities: General government Beginning Community development 115,832 Community services Ending Public works Balance at Internal service 772,073 Balance at July 1, 2015 Additions Deletions Transfers June 30, 2016 Governmental Activities: Capital assets, not being depreciated: Land $ 69,816,674 $ - $ - $ - $ 69,816,674 Right of way 284,928,794 - - - 284,928,794 Art purchases - - - - - Construction -in -progress 24,423,925 7,025,619 1,688,951 (21,067,981) 8,692,612 Total Capital Assets, Not Being Depreciated 379,169,393 7,025,619 1,688,951 (21,067,981) 363,438,080 Capital assets, being depreciated: Buildings and improvements 69,273,971 - 30,223 4,932,812 74,176,560 Equipment and furniture 2,982,523 503,369 42,927 - 3,442,965 Vehicles 1,696,250 83,294 27,725 - 1,751,819 Infrastructure 202,264,372 - - 16,135,169 218,399,541 Total Capital Assets, Being Depreciated 276,217,116 586,663 100,875 21,067,981 297,770,885 Less accumulated depreciation: Buildings and improvements 25,869,210 2,320,922 30,223 - 28,159,909 Equipment and furniture 2,052,855 206,782 42,927 - 2,216,710 Vehicles 1,504,860 63,400 4,545 - 1,563,715 Infrastructure 102,360,326 6,428,995 - - 108,789,321 Total Accumulated Depreciation 131,787,251 9,020,099 77,695 - 140,729,655 Total Capital Assets, Being Depreciated, Net 144,429,865 (8,433,436) 23,180 21,067,981 157,041,230 Governmental Activities Capital Assets, Net $ 523,599,258 $ (1,407,817) $ 1,712,131 $ - $ 520,479,310 Depreciation expense was charged to the following functions in the Statement of Activities: General government $ 345,804 Community development 115,832 Community services 1,260,434 Public works 6,525,956 Internal service 772,073 $ 9,020,099 -6% CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 5: Capital Assets (Continued) Capital asset activity for business -type activities for the year ended June 30, 2016, is as follows: Depreciation expense was charged to the following function in the Statement of Activities: Golf Course 51 $ 219,327 Beginning Ending Balance at Balance at July 1, 2015 Additions Deletions June 30, 2016 Business -Type Activities: Capital assets, not being depreciated: Land $ 39,712,955 $ - $ - $ 39,712,955 Total Capital Assets, Not Being Depreciated 39,712,955 - - 39,712,955 Capital assets, being depreciated: Buildings and improvements 6,636,465 - - 6,636,465 Equipment and furniture 2,303,742 - - 2,303,742 Vehicles 20,348 - - 20,348 Software 20,255 - - 20,255 Total Capital Assets, Being Depreciated 8,980,810 - - 8,980,810 Less accumulated depreciation: Buildings and improvements 2,435,711 214,840 - 2,650,551 Equipment and furniture 2,099,340 4,487 - 2,103,827 Vehicles 20,348 - - 20,348 Software 20,255 - - 20,255 Total Accumulated Depreciation 4,575,654 219,327 - 4,794,981 Total Capital Assets, Being Depreciated, Net 4,405,156 (219,327) - 4,185,829 Governmental Activities Capital Assets, Net $ 44,118,111 $ (219,327) $ - $ 43,898,784 Depreciation expense was charged to the following function in the Statement of Activities: Golf Course 51 $ 219,327 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Changes in Long -Term Liabilities - Governmental Activities 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, 2016: A description of individual issues of debt (excluding defeased bonds) outstanding as of June 30, 2016, is as follows: Copier Leases Payable In June 2013, the City entered into a 5 -year lease agreement for photocopiers for $71,045 maturing in monthly increments of $1,456, with interest payable monthly at 8.47%. This 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. On April 1, 2015, the City leased an additional copier for $9,000; this amount was added to the outstanding principal at April 1, 2015 of $49,505 to arrive at a new balance of $58,505 maturing in monthly increments of $1,728, with interest payable monthly at 8.47%. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2016, are as follows: Year Ending Balance at June 30, Total Balance at Due within 2018 July 1, 2015 Additions Deletions June 30, 2016 one year City: $ 37,935 Compensated absences payable $ 853,497 $ 851,605 $ 852,551 $ 852,551 $ 851,606 Copier Lease Payable 54,567 - 16,632 37,935 18,169 Dell Computer Lease 49,302 17,682 25,355 41,629 25,868 De Lage Landen Public Finance - 113,748 37,916 75,832 37,916 RDA Project Area No. 2: Provident Loan 1,367,344 - 41,748 1,325,596 45,375 US Department of Agriculture 668,933 - 19,235 649,698 21,249 Financing Authority: Revenue bonds 2,405,000 - 555,000 1,850,000 585,000 Total $ 5,398,643 $ 983,035 $ 1,548,437 $ 4,833,241 $ 1,585,183 A description of individual issues of debt (excluding defeased bonds) outstanding as of June 30, 2016, is as follows: Copier Leases Payable In June 2013, the City entered into a 5 -year lease agreement for photocopiers for $71,045 maturing in monthly increments of $1,456, with interest payable monthly at 8.47%. This 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. On April 1, 2015, the City leased an additional copier for $9,000; this amount was added to the outstanding principal at April 1, 2015 of $49,505 to arrive at a new balance of $58,505 maturing in monthly increments of $1,728, with interest payable monthly at 8.47%. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2016, are as follows: Year Ending June 30, Total 2017 $ 20,739 2018 20,739 Total Payments 41,478 Less amount representing interest (3,543) Outstanding Principal $ 37,935 52 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Changes in Long -Term Liabilities — Governmental Activities (Continued) Dell Computer Lease Payable In April 2014, the City entered into a 5 -year lease agreement for Dell computers for $90,629 maturing in annual increments ranging from $20,693 to $408, with interest payable annually at 4.79%. In August 2015, the City entered into another 5 -year lease for Dell computers for $17,682 maturing in annual increments from $16,620 to $639, with interest payable annually at 4.07%. This lease agreement qualifies as a capital lease for accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments at the inception date. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2016, are as follows: Year Ending June 30, Total 2017 $ 27,730 2018 10,234 2019 5,747 2020 665 Total Payments 44,376 Less amount representing interest (2,747) Outstanding Principal $ 41,629 Technology Hardware Lease Payable In 2016, the City entered into a 3 -year lease agreement for network firewall and switches for $113,748 maturing in three annual installments of $37,916, with no interest. This lease agreement qualifies as a capital lease for accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments at the inception date. The minimum future lease obligations and the net present value of the lease payments as of June 30, 2016, are as follows: Year Ending June 30, Total 2017 $ 37,916 2018 37,916 Total Payments 75,832 Less amount representing interest - Outstanding Principal $ 75,832 53 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Changes in Long -Term Liabilities — Governmental Activities (Continued) 1996 Lease Revenue Refunding Bonds On November 15, 1996, the Financing Authority issued $8,790,000 of 1996 Lease Revenue Refunding Bonds to defease the remaining 1991 Local Agency Revenue Bonds in the amount of $8,200,000 and to provide funds for construction of remaining improvements to the La Quinta Civic Center site. The bonds consist of $3,630,000 of serial bonds and $5,150,000 of term bonds. The serial bonds will accrue interest at rates between 3.70% and 5.30% and principal amounts mature between October 1, 1997 and October 1, 2008, in amounts ranging from $285,000 to $380,000. The term bonds accrue interest at a rate of 5.55% and mature on October 1, 2018. A surety agreement has been purchased to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The amount of principal outstanding at June 30, 2016, is $1,850,000. The minimum annual requirements to amortize the bond payable as of June 30, 2016, are as follows: Principal Interest 2017 $ 585,000 $ 86,441 2018 615,000 53,141 2019 650,000 18,038 Totals $ 1,850,000 $ 157,620 Loans Washington Street Apartments In October 2008, the Former 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 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, 2016, is $1,325,596. The minimum annual requirements to amortize the loan payable as of June 30, 2016, are as follows: 54 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Changes in Long -Term Liabilities — Governmental Activities (Continued) Principal Principal Interest 2017 $ 45,375 $ 109,099 2018 49,317 105,157 2019 53,602 100,872 2020 58,259 96,216 2021 63,320 91,154 2022 1,055,723 14,670 Totals $ 1,325,596 $ 517,168 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 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, 2016, is $649,698. Compensated absences Compensated absences are described in Note 1. The liability is typically liquidated by the general fund. 55 Principal Interest 2017 $ 21,249 $ 64,033 2018 23,474 61,807 2019 25,932 59,349 2020 28,648 56,634 2021 31,648 53,634 2022-2026 215,456 210,953 2027-2031 303,291 73,179 Totals $ 649,698 $ 579,589 Compensated absences Compensated absences are described in Note 1. The liability is typically liquidated by the general fund. 55 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: 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, 2016. Assessment District No. 97-1 Proceeds $ 705,262 a'. Outstanding at Maturity Date Interest Rate June 30, 2016 9/2/2018 4.10% - 5.60% $ 130,000 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 8: Deferred Outflows and Inflows of Resources Pursuant to GASB Statement No. 63, "Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position," and GASB Statement No. 65, "Items Previously Reported as Assets and Liabilities," the City recognized deferred outflows of resources in the government -wide financial statements. These items are a consumption of net position by the City that is applicable to a future reporting period. Previous financial reporting standards do not include guidance for reporting those financial statement elements, which are distinct from assets and liabilities. The City has one item that is reportable on the Government -wide Statement of Net Position. It relates to outflows from changes in the net pension liability (Note 11). Deferred outflows of resources that are reported in the proprietary funds are included in the Government -wide Statement of Net Position. Governmental activities recorded deferred outflows of resources related to pensions of $1,799,679. In addition, the City recognized deferred inflows of resources in the government -wide financial statements and governmental fund financial statements. These items are an acquisition of net position by the City that is applicable to a future reporting period. Previous financial reporting standards do not include guidance for reporting those financial statement elements, which are distinct from assets and liabilities. The City has one item that is reportable on the Government -wide Statement of Net Position; inflows from changes in the net pension liability (Note 11). Deferred inflows of resources reported in the Government -wide Statement of Net Position related to pensions of $784,958. Under the modified accrual basis of accounting, it is not enough that revenue is earned; it must also be available to finance expenditures of the current period. Governmental funds will therefore include additional deferred inflows of resources for amounts that have been earned but are not available to finance expenditures in the current period. The City has two items that are reportable on the Governmental Fund Balance Sheet: the first of these items relates to long-term Housing notes receivable and accrued interest recorded in the Housing special revenue funds for a total amount of $27,057,514 (Note 4). The second relates to revenues not yet available from fire credit and grants in the amount of $10,128,356. Note 9: Interfund Receivables and Payables The composition of current interfund receivable and payable as of June 30, 2016, are as follows: Due to Other Funds Civic Center Internal Service Non -Major Fund Funds Governmental Total Due From Other Funds General Fund $ 92,393 $ 286,217 $ 34,526 $ 413,136 The interfund balances were made to cover negative cash balances and other temporary loans at June 30, 2016. 57 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 9: Interfund Receivables and Payables (Continued) The composition of non-current interfund receivable and payable as of June 30, 2016, are as follows: Advances From Other Funds Non -Major Civic Center Governmental Golf Course Total Advances to Other Funds General Fund $ 7,119,614 $ 2,495,035 $ 5,360,151 $ 14,974,800 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, 2016, the Civic Center expansion was completed and the amount of the advance was $7,119,614 outstanding. The advance accrues interest that would have been earned by Local Agency Investment Fund. b) As of June 30, 2016, the General Fund has advanced to the Golf Course fund $5,360,151. 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, 2016, the amount of the outstanding advance was $1,901,551. The advance accrues interest at the earnings rate of the City's investment pool fund. d) In February 2003, the Redevelopment Agency Capital Projects PA No. 2 Fund advanced $1,350,131 to the Fire Facility Fund to provide funding for development of the City's north Fire Station. On March 1, 2012 the outstanding advance of $925,192 was transferred from the Redevelopment Agency to the General Fund with the Redevelopment Agency receiving $925,192 in cash for the outstanding balance. The advance accrues interest at the earnings rate of the City's investment pool funds. As of June 30, 2016, the remaining balance of the advance was $593,484. +'� CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 10: Interfund Transfers Transfers Out Non -Major Internal Golf Course General Fund Governmental Service Funds Fund Total Transfers In General Fund $ - $ 27,419 $ - $ - $ 27,419 Capital Improvement Fund 2,384,714 3,053,939 130,589 - 5,569,242 Non -Major Governmental 819,633 4,244 - - 823,877 Internal Service Funds 209,000 - - - 209,000 Golf Course Fund 115,400 - - 61,569 176,969 Total: $ 3,528,747 $ 3,085,602 $ 130,589 $ 61,569 $ 6,806,507 a) $27,419 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) $2,384,714 was transferred from the General Fund to the Capital Improvement Fund to fund various capital projects. c) $3,053,939 was transferred to Capital Improvement Fund from various non -major funds whereby available external grant funding was received and appropriated first for various projects. d) $130,589 was transferred to the Capital Improvement Fund from the internal service funds to support various capital projects and preventative maintenance. e) $819,633 was transferred from the General Fund to various non -major funds to support various administrative operations and expenses within the City. f) $4,244 was transferred between non -major funds to repay the DIF loan liability. g) $209,000 was transferred from the General Fund to the internal service funds for various FY15-16 insurance liabilities. h) $115,400 was transferred from the General Fund to the Golf Course Fund to subsidize operations per the FY15-16 budget. i) $61,569 was transferred between the Golf Course Fund to the SilverRock reserve as noted in the contractual management agreement under section 3.10.1 whereby two (2) percent of green fees collected shall be deposited in a separate reserve account. M CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 III. OTHER INFORMATION Note 11: Defined Benefit Pension Plan Miscellaneous Plan Plan Descriptions The City of La Quinta Miscellaneous Plans, are cost-sharing multiple -employer defined benefit pension plans administered by the California Public Employees' Retirement System (CalPERS). All qualified and permanent employees are eligible to participate in the City's separate Miscellaneous (Tier I, Tier ll, and PEPRA) Plans. Benefit provisions under these plans are established by State statue and City resolution. Benefits Provided The Plan provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law. The Public Employees' Pension Reform Act of 2013 (PEPRA) requires new benefits and member contributions for new members as defined by PEPRA, that are hired after January 1, 2013. These PEPRA members in pooled plans are reflected in the new risk pools created by the CalPERS Board in response to the passage of PEPRA, beginning with the June 30, 2013, risk -pool valuations. Tier I * Tier II * PEPRA On and after On and after On and after Hire date December 16, 1983 December 17, 2012 January 1, 2013 Benefit formula 2.5% @ 55 2% @ 60 2% @ 62 Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 and up 50 and up 52 and up Monthly benefits, as a % of eligible compensation 2% to 2.5% 1.092% to 2.418% 1 % to 2% Required employee contribution rates 8.00% 7.00% 6.25% Required employer contribution rates 10.069% 7.159% 6.555% * Miscellaneous Rate Plan is closed to new entrants :1 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 11: Defined Benefit Pension Plan (Continued) Contribution Description Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS' annual actuarial valuation process. The actuarially determined rate is based on the estimated amount necessary to pay the Plans' allocated share of the risk pool's costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The required employer contribution and the amount paid to CalPERS by the City as a reduction to the net pension liability for the year ended June 30, 2016 was $783,364. The City's employer contributions were equal to the required employer contributions for the year ended June 30, 2016. Pension Liabilities. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions As of June 30, 2016, the City reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows: Proportionate Share of Net Pension Liability Tier 1 $ 8,653,739 Tier 11 (1,381) PEPRA (1,068) Total Net Pension Liability: $ 8,651,290 The City's net pension liability for each Plan is measured as the proportionate share of the net pension liability of the CalPERS Miscellaneous Pool. The net pension liability of each of the Plans is measured as of June 30, 2015, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2014 rolled forward to June 30, 2015 using standard update procedures. City's proportion of the net pension liability was based on CalPERS' Public Agency Cost -Sharing Allocation Methodology Report. The City's proportionate share of the net pension liability for each Plan as of June 30, 2014 and 2015 was as follows: Tier I Tier II PEPRA Total Plans Proportion - June 30, 2014 $ 6,433,125 $ 96 $ 170 $ 6,433,391 Proportion - June 30, 2015 8,653,739 (1,381) (1,068) 8,651,290 Change - Increase (Decrease) 2,220,614 (1,477) (1,238) 2,217,899 For the year ended June 30, 2016, the City recognized a total pension expense of $580,555 for all plans in total. 61 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 11: Defined Benefit Pension Plan (Continued) At June 30, 2016, the City reported deferred outflows and deferred inflows of resources related to pensions as follows: Pension contributions made subsequent to measurement date Changes of assumptions Differences between expected and actual experiences Net difference between projected and actual earnings on pension plan investments Differences in proportions Difference in proportionate share in contributions Deferred Outflows of Resources $ 883,415 49,494 858,566 Deferred Inflows of Resources 468,260 234,744 21,037 8,204 60,917 $ 1,799,679 $ 784,958 The $883,415 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows: Measurement Period ended June 30: 2016 2017 2018 2019 62 Deferred Outflows/(Inflows) of Resources $ (63,797) (54,691) (50,267) 300,061 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 11: Defined Benefit Pension Plan (Continued) Actuarial Methods and Assumations Used to Determine Total Pension Liabil For the measurement period ended June 30, 2015 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2014 total pension liability. The June 30, 2014 and the June 30, 2015 total pension liabilities were based on the following actuarial methods and assumptions: Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Salary Increases Investment Rate of Return Mortality Rate Table Post Retirement Benefit Increase Entry Age Normal Cost Method 7.65% 2.75% 3.3% - 14.2% (1) 7.50%(2) Derived using CalPERS' Membership Data for all Funds (3) Contract COLA up to 2.75% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.75% thereafter (1) Depending on age, service and type of employement (2) Net of Pension Plan Investment and Administrative Expenses; includes Inflation (3) The mortality table used was developed based on Cal PERS' specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2014 experience study report on the CaIPERS website. All other actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience study for the period from 1997 to 2011, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at CaIPERS' website. Change of Assumptions GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50 percent used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65 percent used for June 30, 2015 measurement date is without reduction of pension plan administrative expense. Discount Rate The discount rate used to measure the total pension liability was 7.65 percent. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CaIPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.65 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.65 percent is applied to all plans in the Public Employees Retirement Fund. 63 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 11: Defined Benefit Pension Plan (Continued) The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CaIPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses. New Strategic Asset Class Allocation Global Equity 51.0% Global Fixed Income 19.0 Inflation Sensitive 6.0 Private Equity 10.0 Real Estate 10.0 Infrastructure and Forestland 2.0 Liquidity 2.0 Real Return Years Real Return 1 -10(i) Years 11+ (2) 5.25% 5.71% 0.99 2.43 (1) An expected inflation of 2.5% used for this period (2) An expected inflation of 3.0% used for this period 64 0.45 3.36 6.83 6.95 4.50 5.13 4.50 5.09 (0.55) (1.05) CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 11: Defined Benefit Pension Plan (Continued) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Disrmunt Rate The following presents the City's proportionate share of the net pension liability for each Plan, calculated using the discount rate for each Plan, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 % point lower or 1 % point higher than the current rate: Miscellaneous plans Net Discount Rate - 1 % Current Discount Discount Rate +1% Pension Liability/(Asset) 6.50% 7.50% 8.50% Tier 1 $ 14,023,360 $ 8,653,739 $ 4,220,492 Tier II 2,037 (1,381) (4,203) PEPRA 3,594 (1,068) (4,917) Total $ 14,028,991 $ 8,651,290 $ 4,211,372 Pension Plan Fiduciary Net Position Detailed information about each pension plan's fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS website for additional information. Note 12: 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, 2016, there was one plan member. There are no required contributions by plan members. During the 2015-2016 fiscal year the City made no contributions to fund the Supplemental Pension Savings Plan. Note 13: 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' $122/month for calendar 2015 and $125/month for calendar 2016, 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. 65 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 13: Post -Employment Health Benefits (Continued) 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 2015-2016 fiscal year for $20,885. 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) $ 106,104 Interest on net OPEB obligation 29,643 Adjustment to ARC (42,856) Annual OPEB cost 92,891 Contributions made 20,885 (Decrease) increase in net OPEB obligation 72,006 Net OPEB obligation (asset) - beginning of year 741,071 Net OPEB obligation (asset) - end of year $ 813,077 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2014-2016 and the two preceding years were as follows: Fiscal Annual Year OPEB End Cost 6/30/2014 $ 120,039 6/30/2015 94,106 6/30/2016 92,891 Funded Status and Funding Progress Actual Percentage Actuarial Contribution of Annual Net OPEB (Net of OPEB Cost Obligation Adjustments) Contributed (Asset) $ 16,253 13.54% $ 663,377 16,412 17.44% 741,071 20,885 22.48% 813,077 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 Percent of Type of Valuation Value of Accrued Covered Valuation Date Assets Liability Funding Ratio Covered Payroll Payroll Interest Rate Actual 7/1/2011 $ $ 428,328 0.0% $ 7,459,445 5.7% 5.0% Actual 7/1/2014 851,125 0.0% 5,372,588 15.8% 4.0% CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 13: 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, 2014, actuarial valuation using the projected unit credit method. The actuarial assumptions included a 4.0% investment rate of return and healthcare trend rate ranging from 5% to 8%. 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, 2016, was twenty-four years. The number of active participants is 12. Note 14: Risk Management Description of Self -Insurance Pool Pursuant to Joint Powers Aareement The City of La Quinta is a member of the California Joint Powers Insurance Authority (CJPIA). The CJPIA is composed of 116 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the CJPIA 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 CJPIA 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. Self -Insurance Programs of the CJPIA Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Retrospective adjustments are scheduled to continue indefinitely on coverage years 2012-13 and prior, until all claims incurred during those coverage years are closed, on a pool -wide basis. This subsequent cost re -allocation among members, based on actual claim development, can result in adjustments of either refunds or additional deposits required. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for self-insurance programs is estimated using actuarial models and pre -funded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk -sharing pool. Additional information regarding the cost allocation methodology is provided below. Liability In the liability program claims are pooled separately between police and general government 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. 67 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 14: Risk Management (Continued) (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 from $750,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. For 2015-16, the CJPIA's pooled retention is $2 million per occurrence, with reinsurance to $20 million, and excess insurance to $50 million. The CJPIA's reinsurance contracts are subject to the following additional pooled retentions: (a) $2.5 million annual aggregate deductible in the $3 million x/s $2 million layer, (b) $3 million annual aggregate deductible in the $5 million x/s $10 million layer. There is a third annual aggregate deductible in the amount of $2.5 million in the $5 million x/s $5 million layer, however it is fully covered under a separate policy and therefore not retained by the Authority. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs of covered claims for subsidence losses have a sub -limit of $30 million per occurrence. Workers' Compensation In the workers' compensation program claims are pooled separately between public safety (police and fire) and general government 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 from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2015-16, the CJPIA's pooled retention is $2 million per occurrence, with reinsurance to statutory limits 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. Purchased Insurance Property Insurance - The City of La Quinta participates in the all-risk property protection program of the CJPIA. This insurance protection is underwritten by several insurance companies. City of La Quinta property is currently insured according to a schedule of covered property submitted by the City of La Quinta to the CJPIA. City of La Quinta property currently has all-risk property insurance protection in the amount of $62,668,100. There is a $5,000 deductible per occurrence except for non -emergency vehicle insurance which has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Earthquake and Flood Insurance - The City of La Quinta purchases earthquake insurance brokered through a third party. The City of La Quinta property currently has earthquake protection up to $10,000,000 per occurrence. There is a deductible of $25,000 per occurrence. Premiums for the coverage are paid annually in the amount of $96,000 and are not subject to retrospective adjustments. .: CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 14: Risk Management (Continued) Theft Insurance - The City purchases theft insurance coverage brokered through a third party. The City pays an annual premium of $3,366, which covers thefts up to $1,000,000, with a deductible of $5,000 per occurrence. Pollution Legal Liability Insurance - The City participates in the pollution legal liability insurance program which is available through the CJPIA. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims -made basis. There is a $50,000 deductible. The CJPIA has a limit of $10 million for the 3 -year period from July 1, 2014 through July 1, 2017. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. Earthquake and Flood insurance was reduced from $20 million to $10 million for the policy period February 7, 2015 to February 7, 2016. Note 15: Fund Balance a. Fund Balance Commitments The City has the following committed fund balance shown on the balance sheet: Committed to emergency reserve — in June of 2015 the City established the amount of 40% of the FY Year 2015-2016 budgeted operating expenditures. The City chose to base the FY 2014-2015 year-end reserves on the adopted FY 2015-2016 budget. This amount totals $15,576,000. 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, 2016, the City has committed $1,523,400 for this purpose. Committed to working capital reserve: in June of 2015 the City established the amount of 10% of the FY Year 2015-2016 budgeted expenditures. The City chose to base the FY 2014-2015 year-end reserves on the adopted FY 2015-2016 budget. This amount totals $3,894,000. Committed to Fiscal Year 2016 carryovers to Fiscal Year 2016 $4,274,046. Committed to Fiscal Year 2016 capital projects for Fiscal Year 2016 $2,302,000. These committed amounts have been approved by Council based on certain percentages and will be used only in the event of Council approval. .• CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 15: Note 16: Fund Balance (continued) b. At June 30, 2016, the following funds had deficit fund balances: Major Capital Projects Funds: Capital Improvement Civic Center Nonmajor Special Revenue Funds: Federal Assistance SLEBG Justice Assistance Grant Nonmajor Capital Projects Funds: Library Development Street Facility Fire Facility Golf Course Management Agreement $ 295,141 7,212,007 12,914 26,323 9,246 1,631,001 1,901,551 593,484 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 has been amended and extended numerous times with the current contract expiring July 1, 2018. 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, 2016, the Golf Course had an operating loss before contributions and transfers of $528,986. Note 17: Construction Commitments Various construction projects were in progress at June 30, 2016. The following material construction commitments existed at June 30, 2016, with an estimated cost to complete: Project Name Dune Palms Bridge Dune Palms Road Street Improvements HSIP Intersection Improvements HSIP Traffic Signal Interconnect Network Upgrade Madison Street Median Landscape Conversion Calle Tampico at Avenida Bermudas Drainage Washington Street Apt Rehab & Testa Property 70 Expenditures Project Contract to date as of Remaining Number Amount June 30, 2016 Commitments 111205 $ 17,510,000 $ 662,752 $ 16,847,248 091004 2,483,000 53,837 2,429,163 201601 1,260,400 1,123 1,259,277 201602 1,971,000 1,183 1,969,817 151604 1,300,000 196,772 1,103,228 151612 1,800,000 12,740 1,787,260 999901 27,996,401 363,200 27,633,201 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 18: Reimbursement Agreements The City entered into a sales tax sharing agreement on January 30, 2006, with Costco Wholesale Corporation. Under the terms of the agreement the City shall make quarterly payments of 40% of any sales tax generated from Costco in an amount not to exceed $4,000,000 over a ten-year period. Due to the reporting of sales tax information by the State Board of Equalization to the City, the reimbursement payments by the City will lag by one quarter. The agreement terminates when either the $4,000,000 limit is reached or in 10 years whichever comes first. The Costco business opened in November 2006. As of June 30, 2016, the City made $3,304,708 in reimbursement payments to the owner leaving an outstanding balance of $695,292. On September 9, 2014, the City entered into a sales tax sharing agreement with One Eleven La Quinta LLC ("Hobby Lobby"). Under the terms of the agreement the City shall make quarterly payments of 50% of any sales tax generated from Hobby Lobby in an amount not to exceed $400,000 over an eight 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 $400,000 limit is reached or in eight years whichever comes first. The Hobby Lobby business opened in December 2014. As of June 30, 2016, the City made $34,370 in reimbursement payments to the owner leaving an outstanding balance of $365,360. Note 19: 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 (`Former 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 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 Agency is reported as a fiduciary fund (private purpose trust fund). 71 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 19: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) a. Cash and Investments Cash and investments reported in the accompanying financial statements consisted of the following: Cash and investments pooled with the City $ 21,895,992 Cash and investments with fiscal agent 31,276,109 $ 53,172,101 b. Loans Receivable Owner Participation Agreement — Garff Properties, LLC In July 2010, the Former Agency entered into an Owner Participation Agreement (OPA) with Garff Properties -La Quinta, LLC ("Garff') that provides for the Former Agency to provide a rehabilitation loan to Garff of up to $2,300,000 for the construction of a new auto dealership facility and rehabilitation of an existing dealership facility. In connection with the OPA, Garff has executed a promissory note which is secured by a deed of trust, and an operating covenant. The loan will be repaid by crediting future sales and property tax increment taxes generated on the site until the cumulative taxes collected equals the loan amount. At that time, the note will be cancelled and the operating covenant will terminate. If, after ten years of operation, a shortfall exists between the revenues collected and the outstanding loan amount, the note will be cancelled and the operating covenant will terminate. Further, if at any time through no fault of the dealership certain future events outside of the dealership control occur the note will be cancelled and the operating covenant will terminate. The balance at June 30, 2016 is $1,152,538. Owner Participation Agreement — Torre Nissan In June 2011, the Former Agency entered into an Owner Participation Agreement (OPA) with an autodealer, Mega Dealer, LLC ("Torre Nissan") that provides for the Former 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 facilities. In connection with the OPA, Torre Nissan has executed a promissory note, which is secured by a subordinated deed of trust, and an operating covenant. 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. If Nissan Motor Company ceases to exist, the note will be cancelled and the operating covenant will terminate. At the end of the ten-year operating covenant, the operating covenant will terminate and the note will be cancelled, and any outstanding loan balance will be forgiven. The balance at June 30, 2016 is $1,301,047. c. Due from other Governments La Quinta Library In April 2005, an advance of $2,490,273 was made from the Former 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, 2016, is $1,631,001. 72 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 19: 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, 2016, follows: Total $ 260,174,113 $ - $ 9,183,046 $ 250,991,067 $ 9,420,752 Tax Allocation Bonds As of June 30, 2016, the following issuances of Tax Allocation Bonds were outstanding: Series 2011, Project Area No. 2 On June 6, 2011, the Former Agency issued subordinate taxable tax allocation bonds in the amount of $6,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 2. The 2011 tax allocation bonds were issued at a discount of $86,207 and issuance costs of $108,500. The bonds consist of $190,000 of term bonds that accrue interest at 5.375% and mature on September 1, 2016, $280,000 of term bonds that accrue interest at 7.125% and mature on September 1, 2021, $380,000 of term bonds that accrue interest at 7.600% and mature on September 1, 2026, and $5,150,000 of term bonds that accrue interest at 8.150% and mature on September 1, 2031. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2016, is $5,850,000 with an unamortized discount of $70,800. The minimum annual requirements to amortize the bond payable as of June 30, 2016, are as follows: Balance at Interest Balance at Due within one $ 469,630 July 1, 2015 Additions Deletions June 30, 2016 year Tax allocation bonds $ 185,865,000 $ - $ 6,035,000 $ 179,830,000 $ 6,630,000 City loans 33,271,129 - 1,889,029 31,382,100 2,200,752 Revenue bonds 27,790,000 - 565,000 27,225,000 590,000 Unamortized premiums/discounts 13,247,984 - 694,017 12,553,967 - Total $ 260,174,113 $ - $ 9,183,046 $ 250,991,067 $ 9,420,752 Tax Allocation Bonds As of June 30, 2016, the following issuances of Tax Allocation Bonds were outstanding: Series 2011, Project Area No. 2 On June 6, 2011, the Former Agency issued subordinate taxable tax allocation bonds in the amount of $6,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 2. The 2011 tax allocation bonds were issued at a discount of $86,207 and issuance costs of $108,500. The bonds consist of $190,000 of term bonds that accrue interest at 5.375% and mature on September 1, 2016, $280,000 of term bonds that accrue interest at 7.125% and mature on September 1, 2021, $380,000 of term bonds that accrue interest at 7.600% and mature on September 1, 2026, and $5,150,000 of term bonds that accrue interest at 8.150% and mature on September 1, 2031. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2016, is $5,850,000 with an unamortized discount of $70,800. The minimum annual requirements to amortize the bond payable as of June 30, 2016, are as follows: Totals $ 5,850,000 $ 8,792,049 73 Principal Interest 2017 $ 40,000 $ 469,630 2018 50,000 466,774 2019 50,000 463,211 2020 55,000 459,471 2021 60,000 455,374 2022-2026 355,000 2,203,161 2027-2031 515,000 2,036,234 2032-2036 1,635,000 1,710,074 2037-2040 3,090,000 528,120 Totals $ 5,850,000 $ 8,792,049 73 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 19: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Series 2013A On December 17, 2013, the Successor Agency issued subordinate tax allocation refunding bonds in the amount of $97,190,000 to refinance outstanding long term obligations held by the Successor Agency. The 2013 Series A tax allocation bonds were issued at a premium of $6,056,280 and issuance costs of $480,001. Interest rates on the bonds range from 3.00% to 5.00% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from property tax revenue. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2016, is $89,095,000 with an unamortized premium of $5,147,838. The minimum annual requirements to amortize the bond payable as of June 30, 2016, are as follows: Totals $ 89,095,000 $ 42,423,326 Series 20138 On December 17, 2013, the Successor Agency issued subordinate tax allocation refunding bonds in the amount of $23,055,000 to refinance outstanding long term obligations held by the Successor Agency. The 2013 Series B tax allocation bonds were issued at a discount of $8,951 and issuance costs of $122,274. The bonds consist of $3,710,000 of term bonds that accrue interest at 5.240% and mature on September 1, 2026, $4,335,000 of term bonds that accrue interest at 5.550% and mature on September 1, 2029, and $5,115,000 of term bonds that accrue interest at 5.820% and mature on September 1, 2032. The remaining $9,895,000 matures annually with rate ranging from 0.76% to 4.89%. The interest and principal on the bonds are payable from property tax revenue. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2016, is $21,010,000 with an unamortized discount of $7,607. 74 Principal Interest 2017 $ 3,505,000 $ 4,264,413 2018 3,645,000 4,121,413 2019 3,790,000 3,953,763 2020 3,985,000 3,759,388 2021 4,180,000 3,555,263 2022-2026 24,255,000 14,339,941 2027-2031 30,815,000 7,648,489 2032-2034 14,920,000 780,656 Totals $ 89,095,000 $ 42,423,326 Series 20138 On December 17, 2013, the Successor Agency issued subordinate tax allocation refunding bonds in the amount of $23,055,000 to refinance outstanding long term obligations held by the Successor Agency. The 2013 Series B tax allocation bonds were issued at a discount of $8,951 and issuance costs of $122,274. The bonds consist of $3,710,000 of term bonds that accrue interest at 5.240% and mature on September 1, 2026, $4,335,000 of term bonds that accrue interest at 5.550% and mature on September 1, 2029, and $5,115,000 of term bonds that accrue interest at 5.820% and mature on September 1, 2032. The remaining $9,895,000 matures annually with rate ranging from 0.76% to 4.89%. The interest and principal on the bonds are payable from property tax revenue. A portion of the proceeds were used to fund the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2016, is $21,010,000 with an unamortized discount of $7,607. 74 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 19: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2016, are as follows: Totals $ 21,010,000 $ 10,893,343 2014 Series A Local Agency Tax Allocation Bonds On July 9, 2014, the Successor Agency issued tax allocation refunding bonds in the amount of $65,600,000, with a premium of $8,545,482, to refinance outstanding 2004 Series A Revenue Bonds of $72,865,000 with interest payments ranging between 3% to 5.25%. The net proceeds of $73,402,709 (after payment of $592,017 in issuance costs) plus an additional $4,012,653 of 2004 Series A sinking fund monies were used to purchase U.S. Government Securities. Those securities were deposited in an irrevocable trust with an escrow agent; and issued to pay-off $77,415,362 of remaining principal and accrued interest of 2004 Series A. As a result, the 2004 Series A bonds are considered to be defeased and the liability for those bonds has been removed from the Successor Agency's long-term debt. The remaining unamortized bond premium at June 30, 2016 was $7,731,588. The Successor Agency in effect reduced its aggregate debt service payments over the remaining maturity period of the 2004 Series A by $11,814,531 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $7,801,878. The minimum annual requirements to amortize the 2014 Series A bonds payable as of June 30, 2016, are as follows: Principal Interest 2017 $ 880,000 $ 1,016,504 2018 900,000 996,053 2019 920,000 970,318 2020 950,000 939,623 2021 985,000 903,488 2022-2026 5,625,000 3,774,539 2027-2031 7,240,000 2,085,626 2032-2033 3,510,000 207,192 Totals $ 21,010,000 $ 10,893,343 2014 Series A Local Agency Tax Allocation Bonds On July 9, 2014, the Successor Agency issued tax allocation refunding bonds in the amount of $65,600,000, with a premium of $8,545,482, to refinance outstanding 2004 Series A Revenue Bonds of $72,865,000 with interest payments ranging between 3% to 5.25%. The net proceeds of $73,402,709 (after payment of $592,017 in issuance costs) plus an additional $4,012,653 of 2004 Series A sinking fund monies were used to purchase U.S. Government Securities. Those securities were deposited in an irrevocable trust with an escrow agent; and issued to pay-off $77,415,362 of remaining principal and accrued interest of 2004 Series A. As a result, the 2004 Series A bonds are considered to be defeased and the liability for those bonds has been removed from the Successor Agency's long-term debt. The remaining unamortized bond premium at June 30, 2016 was $7,731,588. The Successor Agency in effect reduced its aggregate debt service payments over the remaining maturity period of the 2004 Series A by $11,814,531 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $7,801,878. The minimum annual requirements to amortize the 2014 Series A bonds payable as of June 30, 2016, are as follows: Totals $ 63,875,000 $ 34,583,500 75 Principal Interest 2017 $ 2,205,000 $ 3,023,425 2018 2,270,000 2,956,300 2019 2,340,000 2,875,450 2020 2,435,000 2,779,950 2021 2,530,000 2,668,000 2022-2026 14,695,000 11,258,125 2027-2031 18,740,000 7,099,250 2032-2035 18,660,000 1,923,000 Totals $ 63,875,000 $ 34,583,500 75 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 19: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Revenue Bonds As of June 30, 2016, the following issuances of Revenue Bonds were outstanding: 2011 Series A Local Agency Subordinate Taxable Revenue Bonds On June 9, 2011, the La Quinta Financing Authority issued revenue bonds in the amount of $28,850,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2. The 2011 local agency subordinate taxable revenue bonds were issued with issuance costs of $323,375 and a discount of $308,839. Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2011. Interest payments range from 3.750% to 8.185% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2026, September 1, 2031 and September 1, 2036, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2022, September 1, 2027, and September 1, 2032, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. A portion of the proceeds were used to fund the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The principal balance of outstanding bonds at June 30, 2016, is $27,225,000 with an unamortized discount of $247,052. The minimum annual requirements to amortize the bond payable as of June 30, 2016, are as follows: Totals $ 27,225,000 $ 28,212,000 76 Principal Interest 2017 $ 590,000 $ 2,081,067 2018 625,000 2,045,406 2019 665,000 2,004,653 2020 705,000 1,959,071 2021 755,000 1,908,676 2022-2026 4,685,000 8,586,497 2027-2031 6,780,000 6,399,878 2032-2036 9,930,000 3,126,280 2037 2,490,000 100,472 Totals $ 27,225,000 $ 28,212,000 76 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 19: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Loans from the City of La Quinta The City of La Quinta loaned money to the Former Agency to cover operating and capital shortfalls. In a letter dated November 6, 2013, the California Department of Finance approved the loans as enforceable obligations to be paid through Successor Agency property tax. This loan approved split between the City's General and the Housing Authority Funds. As of June 30, 2016, the amount due to the City of La Quinta was $31,382,100. 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 $331,959,218 with annual debt service requirements as indicated above. For the current year, the total property tax revenue recognized by the Successor Agency for the payment of indebtedness incurred was $19,363,022 and the debt service obligation on the bonds was $17,676,972. f. Conduit Debt Financing 2002 Series B Multifamily Housing Revenue Bonds In April 2002, the Former 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, 2016, are $2,520,000. 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 Agency is covered under the insurance policy of the City of La Quinta at June 30, 2016. 77 THIS PAGE INTENTIONALLY LEFT BLANK 78 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERALFUND YEAR ENDED JUNE 30, 2016 See Notes to Required Supplementary Information 79 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 86,808,564 $ 86,808,564 $ 86,808,564 $ - Resources (Inflows): Taxes 24,706,300 25,768,000 27,345,219 1,577,219 Licenses and permits 1,181,300 1,183,400 1,161,820 (21,580) Intergovernmental 10,358,100 10,336,700 9,540,038 (796,662) Charges for services 1,197,100 1,074,500 1,332,541 258,041 Use of money and property 650,400 510,400 1,028,298 517,898 Fines and forfeitures 208,400 212,400 283,076 70,676 Miscellaneous 119,700 648,700 702,245 53,545 Transfers in 190,400 - 27,419 27,419 Amounts Available for Appropriations 125,420,264 126,542,664 128,229,220 1,686,556 Charges to Appropriation (Outflow): General government Legislative 283,300 283,300 271,384 11,916 City Manager 1,101,500 1,068,700 1,105,929 (37,229) City Attorney 380,000 416,000 419,119 (3,119) Marketing 663,500 723,000 698,260 24,740 Human Resources 330,600 347,800 302,450 45,350 City Clerk 523,100 542,000 511,292 30,708 Fiscal Services 935,500 984,300 951,177 33,123 Central Services 1,157,400 1,070,300 997,424 72,876 The Hub Customer Services - - 7,556 (7,556) Public safety Police 13,939,600 13,950,300 14,085,959 (135,659) Public Buildings 1,158,200 1,190,400 1,120,889 69,511 Code Compliance 934,000 974,300 822,456 151,844 Building & Safety 610,600 609,600 581,905 27,695 Fire 6,019,800 6,019,800 5,220,358 799,442 Emergency Services - - 11,049 (11,049) Planning and development Administration 1,482,400 1,407,700 1,346,756 60,944 Current Planning 501,800 517,800 516,303 1,497 Parks and recreation Community Services Admin 906,100 936,600 974,961 (38,361) Wellness Center 460,700 468,600 472,638 (4,038) Parks & Recreation 225,300 233,200 234,011 (811) Park Maintenance 1,487,200 1,595,100 1,445,251 149,849 Public works Administration 474,400 482,000 418,618 63,382 Development Services 612,100 613,400 513,918 99,482 Maintenance/Operations - Street - - 540 (540) Engineering Services 729,500 727,700 606,157 121,543 Capital outlay 1,030,300 1,080,300 1,050,953 29,347 Debt service: Principal retirement - - 16,632 (16,632) Transfers out 6,118,600 8,054,990 3,528,747 4,526,243 Total Charges to Appropriations 42,065,500 44,297,190 38,232,692 6,064,498 Budgetary Fund Balance, June 30 $ 83,354,764 $ 82,245,474 $ 89,996,528 $ 7,751,054 See Notes to Required Supplementary Information 79 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 1 YEAR ENDED JUNE 30, 2016 Variance with See Notes to Required Supplementary Information 80 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $2,884,667 $ 10,941,952 $ 10,941,952 $ - Resources (Inflows): Use of money and property 245,900 245,900 367,679 121,779 Amounts Available for Appropriations 3,130,567 11,187,852 11,309,631 121,779 Charges to Appropriation (Outflow): Planning and development Administration 182,800 182,800 167,305 15,495 Low/Mod Housing 201,200 201,200 222,767 (21,567) Total Charges to Appropriations 384,000 384,000 390,072 (6,072) Budgetary Fund Balance, June 30 $ 2,746,567 $ 10,803,852 $10,919,559 $ 115,707 See Notes to Required Supplementary Information 80 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY PA NO. 2 YEAR ENDED JUNE 30, 2016 See Notes to Required Supplementary Information 81 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $1,146,138 $ 1,293,792 $ 1,293,792 $ - Resources (Inflows): Intergovernmental 419,000 419,000 426,134 7,134 Use of money and property 195,000 195,000 5,216,359 5,021,359 Miscellaneous 6,300 6,300 5,150 (1,150) Loan repayments - - - - Amounts Available for Appropriations 1,766,438 1,914,092 6,941,435 5,027,343 Charges to Appropriation (Outflow): Planning and development Low/Mod Housing 421,500 421,500 337,359 84,141 Debt service: Principal retirement 64,000 64,000 60,983 3,017 Interest and fiscal charges 135,500 135,500 131,863 3,637 Total Charges to Appropriations 621,000 621,000 530,205 90,795 Budgetary Fund Balance, June 30 $1,145,438 $ 1,293,092 $ 6,411,230 $ 5,118,138 See Notes to Required Supplementary Information 81 CITY OF LA QUINTA MISCELLANEOUS PLANS SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) Notes to Schedule: Benefit Changes: These figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30, 2014. This applies for voluntary benefits changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshake). Changes of Assumptions: The discount rate was changed from 7.5 percent (net of administration expense) to 7.65 percent. (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only one year is shown. 82 2016 2015 Miscellaneous Tier I Proportion of the Net Pension Liability 0.12608% 0.10339% Proportionate Share of the Net Pension Liability $ 8,653,739 $ 6,433,125 Covered -Employee Payroll $ 4,559,188 $ 4,579,059 Proportionate Share of the Net Pension Liability as Percentage of Covered -Employee Payroll 189.81% 140.49% Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 78.40% 79.82% Miscellaneous Tier II Proportion of the Net Pension Liability -0.00002% 0.00000% Proportionate Share of the Net Pension Liability $ (1,381) $ 96 Covered -Employee Payroll $ 478,762 $ 324,252 Proportionate Share of the Net Pension Liability as Percentage of Covered -Employee Payroll -0.29% 0.03% Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 78.40% 79.82% Miscellaneous PEPRA Proportion of the Net Pension Liability -0.00002% 0.00000% Proportionate Share of the Net Pension Liability $ (1,068) $ 170 Covered -Employee Payroll $ 330,643 $ 469,277 Proportionate Share of the Net Pension Liability as Percentage of Covered -Employee Payroll -0.32% 0.04% Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 78.40% 79.82% Notes to Schedule: Benefit Changes: These figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30, 2014. This applies for voluntary benefits changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshake). Changes of Assumptions: The discount rate was changed from 7.5 percent (net of administration expense) to 7.65 percent. (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only one year is shown. 82 CITY OF LA QUINTA MISCELLANEOUS PLANS SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) Miscellaneous Tier I Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered -Employee Payroll Contributions as a Percentage of Covered -Employee Payroll Miscellaneous Tier II Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered -Employee Payroll Contributions as a Percentage of Covered -Employee Payroll Miscellaneous PEPRA Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered -Employee Payroll Contributions as a Percentage of Covered -Employee Payroll $ 797,603 $ 728,073 (797,603) (728,073) $ 4,082,282 $ 4,559,188 19.54% 15.97% $ 53,961 $ 31,102 (53,961) (31,102) $ 893,589 $ 478,762 6.04% 6.50% $ 31,851 $ 24,189 (31,851) (24,189) $ 476,026 $ 330,643 6.69% 7.32% (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only one year is shown. Note to Schedule: Valuation Date: Methods and assumptions used to determine contribution rates: Single and Agent Employers Example Amortization method Assets valuation method Inflation Salary Increases Investment rate of return Retirement age Mortality 83 June 30, 2013 Entry age normal Level percentage of payroll, closed 20 years Market value 2.75% 3.3%-14.20% depending on age, service and type of employment 7.5% net of pension plan investment expense, including inflation 50 Years Membership Data for all Funds THIS PAGE INTENTIONALLY LEFT BLANK Mal CITY OF LA QUINTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2016 Budget Procedures General Budget Policies The City adopts an annual budget prepared on the modified accrual basis of accounting for its governmental funds and on the accrual basis of accounting for its proprietary funds. The City manager or his designee is authorized to transfer budgeted amounts between the accounts of any department or funds that are approved by City Council. Prior year appropriations lapse unless they are approved for carryover into the following fiscal year. Expenditures may not legally exceed appropriations at the department level. 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). The Transportation Uniform Mitigation Fee, Development Agreement, Indian Gaming, and Infrastructure Funds did not adopt a budget. Excess Expenditures Over Budget General Fund: General Government City Manager City Attorney The Hub Customer Service Public Safety Police Emergency Services Parks and Recreation Community Services Admin Wellness Center Parks and Recreation Public Works Maintenance/operations-streets Budget Actual Variance $ 1,068,700 $ 1,105,929 $ 37,229 416,000 419,119 3,119 - 7,556 7,556 13,950,300 14,085,959 135,659 - 11,049 11,049 934,600 974,961 40,361 436,600 472,638 36,038 233,200 234,011 811 - 540 540 85 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. Lightinq 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. Art 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 Fund — To account for law enforcement grants. Justice Assistance Grant Fund — To account for Federal Bureau of Justice Block Grant program grant funds, which are used to reduce crime and improve public safety. Measure A Fund — To account for the revenues and expenditures related to Measure A monies. Transportation Uniform Mitigation Fee Fund — To account for the revenues and expenditures related to Transportation Uniform Mitigation Fee monies. CAPITAL PROJECT FUNDS Capital projects funds account for the financial resources to be used for the acquisition, construction or improvements of major capital facilities and infrastructure. Infrastructure Fund — To account for the accumulation of resources provided through developer fees for the acquisition, construction or improvement of the City's infrastructure, prior to adoption of the new Developer Impact Fee Structure on August 16, 1999. This fund accounts for all developer resources received prior to this date, and is budgeted by the Council through adoption of the annual capital improvement program budget. Transportation Fund, Parks and Recreations Fund, Library Development Fund, Community Center Fund, Street Facility Fund, Park Facility Fund, Fire Facility Fund — To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the City's infrastructure. The Developer Impact Fee was adopted by the City Council on August 16, 1999. Eight new funds have been established to account for the specific impact areas of these fees, and are budgeted by the Council through adoption of the annual Capital Improvement Program budget. DEBT SERVICE FUNDS Debt Service Funds are used to account for the accumulation of resources for, and the payment of, governmental long-term debt principal and interest. La Quinta Financing Authority Fund — To account for rental activity for the Civic Center and rental income used to pay the Financing Authority Civic Center and 2004 Local Agency Revenue Bond debt obligations. 87 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 Liabilities, and Fund Balances: Liabilities: Accounts payable $ 2,490 Special Revenue Funds - $ 50,462 Accrued liabilities Federal - - Gas Tax Library Assistance SLEBG Assets: - - Deposits payable Pooled cash and investments $ 303,334 $ 3,634,125 $ - $ 23,871 Receivables: - - - Taxes - - - - Accrued interest 123 7,107 - 268 Due from other governments - 646,567 12,341 - Total Assets $ 303,457 $ 4,287,799 $ 12,341 $ 24,139 Liabilities, and Fund Balances: Liabilities: Accounts payable $ 2,490 $ 3,053 $ - $ 50,462 Accrued liabilities 39,529 - - - Unearned revenues - - - - Deposits payable - - - - Due to other governments - - - - Due to other funds - - 25,255 - Advances from other funds - - - - Total Liabilities 42,019 3,053 25,255 50,462 Deferred Inflows of Resources: Unavailable revenues - 772,976 - - Total Deferred Inflows of Resources - 772,976 - - Fund Balances: Restricted for: Planning and development projects - - - - Public safety - - - (26,323) Community services - 3,511,770 - - Public works 261,438 - - - Capital Projects - - - - Unassigned - - (12,914) - Total Fund Balances 261,438 3,511,770 (12,914) (26,323) Total Liabilities and Fund Balances $ 303,457 $ 4,287,799 $ 12,341 $ 24,139 :: CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 (CONTINUED) Revenue Funds Liabilities, and Fund Balances: Liabilities: Accounts payable $ - $ Lighting and Accrued liabilities - 5,060 - - Indian Gaming Landscaping Quimby Public Safety Assets: - - - Due to other governments - - - - Pooled cash and investments $ 39,872 $ 154,126 $ 5,424,537 $ 35,888 Receivables: Total Liabilities 1,793 40,563 - - Deferred Inflows of Resources: Taxes - 45,245 - - Accrued interest 76 - 10,129 67 Due from other governments - - - - Total Assets $ 39,948 $ 199,371 $ 5,434,666 $ 35,955 Liabilities, and Fund Balances: Liabilities: Accounts payable $ - $ 35,503 $ - $ - Accrued liabilities - 5,060 - - Unearned revenues 1,793 - - - Deposits payable - - - - Due to other governments - - - - Due to other funds - - - - Advances from other funds - - - - Total Liabilities 1,793 40,563 - - Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Restricted for: Planning and development projects - - - - Public safety - - - 35,955 Community services - - 5,434,666 - Public works 38,155 158,808 - - Capital Projects - - - - Unassigned - - - - Total Fund Balances 38,155 158,808 5,434,666 35,955 Total Liabilities and Fund Balances $ 39,948 $ 199,371 $ 5,434,666 $ 35,955 :• CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 Liabilities, and Fund Balances: Special Revenue Funds Liabilities: Art in Public South Coast Development $ 151 $ Places Air Quality AB 939 Agreement Assets: - - Unearned revenues - - Pooled cash and investments $ 565,982 $ 146,950 $ 734,759 $ 135,300 Receivables: - - - - Due to other funds Taxes - - - - Accrued interest 1,155 276 1,416 261 Due from other governments - 13,581 - - Total Assets $ 567,137 $ 160,807 $ 736,175 $ 135,561 Liabilities, and Fund Balances: Liabilities: Accounts payable $ 151 $ 8,149 $ - $ - Accrued liabilities - - - - Unearned revenues - - - - Deposits payable - - - 134,999 Due to other governments - - - - Due to other funds - - - - Advances from other funds - - - - Total Liabilities 151 8,149 - 134,999 Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Restricted for: Planning and development projects - 152,658 736,175 - Public safety - - - - Community services 566,986 - - - Public works - - - - Capital Projects - - - 562 Unassigned - - - - Total Fund Balances 566,986 152,658 736,175 562 Total Liabilities and Fund Balances $ 567,137 $ 160,807 $ 736,175 $ 135,561 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 (CONTINUED) Assets: Pooled cash and investments Receivables: Taxes Accrued interest Due from other governments Total Assets Liabilities, 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: Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Unassigned Total Fund Balances Total Liabilities and Fund Balances Revenue Funds Justice Law Assistance Enforcement Grant 173,184 $ 25 $ Transportation Uniform Measure A Mitigation Fee 671,185 $ 15,483 119 nor - 173,184 86 333 - 1,282 33 7,139 9,271 - - $ 180,656 $ 9,296 $ 791,553 $ 15,516 $ 300 $ - $ - $ 14,645 - 9,271 - - 300 9,271 - 14,645 - 9,271 - - 9,271 - - 180,356 - - - - - 791,553 871 - (9,246) - - 180,356 (9,246) 791,553 871 $ 180,656 $ 9,296 $ 791,553 $ 15,516 Sl CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 - Accrued liabilities - - - - Unearned revenues - - - - Capital Projects Funds - - - - Due to other governments - - - 1,631,001 Parks and Library - - - - Infrastructure Transportation Recreation Development Assets: Deferred Inflows of Resources: Unavailable revenues Pooled cash and investments $ 23,573 $ 3,464,432 $ 358,702 $ - Receivables: Restricted for: Planning and development projects Taxes - - - - Accrued interest 45 6,969 - - Due from other governments - - - - Total Assets $ 23,618 $ 3,471,401 $ 358,702 $ - Liabilities, and Fund Balances: Liabilities: Accounts payable - Accrued liabilities - - - - Unearned revenues - - - - Deposits payable - - - - Due to other governments - - - 1,631,001 Due to other funds - - - - Advances from other funds - - - - Total Liabilities - - - 1,631,001 Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Restricted for: Planning and development projects - - - - Public safety - - - - Community services - - 358,702 - Public works - - - - Capital Projects 23,618 3,471,401 - - Unassigned - - - (1,631,001) Total Fund Balances 23,618 3,471,401 358,702 (1,631,001) Total Liabilities and Fund Balances $ 23,618 $ 3,471,401 $ 358,702 $ - 92 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 (CONTINUED) Capital Projects Funds Community Center Street Facility Park Facility Fire Facility Assets: Pooled cash and investments $ 101,445 $ - $ 1 $ - Receivables: Taxes - - - - Accrued interest 195 - 1 - Due from other governments - - - - Total Assets $ 101,640 $ - $ 2 $ - Liabilities, and Fund Balances: Liabilities: Accounts payable - Accrued liabilities - - - - Unearned revenues - - - - Deposits payable - - - - Due to other governments - - - - Due to other funds - - - - Advances from other funds - 1,901,551 - 593,484 Total Liabilities - 1,901,551 - 593,484 Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Restricted for: Planning and development projects - - - - Public safety - - - - Community services - - - - Public works - - 2 - Capital Projects 101,640 - - - Unassigned - (1,901,551) - (593,484) Total Fund Balances 101,640 (1,901,551) 2 (593,484) Total Liabilities and Fund Balances $ 101,640 $ - $ 2 $ - CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 Assets: Pooled cash and investments Receivables: Taxes Accrued interest Due from other governments Total Assets Liabilities, 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: Restricted for: Planning and development projects Public safety Community services Public works Capital Projects Unassigned Total Fund Balances Total Liabilities and Fund Balances Debt Service Funds Financing Authority Total Governmental Funds $ 16,006,774 - 164,331 29,736 688,899 $ - $ 16,889,740 $ - $ 114,753 44,589 - 1,793 - 134,999 - 1,631,001 - 34,526 - 2,495,035 4,456,696 782,247 782,247 - 888,833 - 189,988 - 9,872,124 - 1,250,827 - 3,597,221 - (4,148,196) 11,650,797 $ - $ 16,889,740 THIS PAGE INTENTIONALLY LEFT BLANK 00M CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Federal Gas Tax Library Assistance SLEBG 862,296 1,919,600 454,002 114,618 1,122 42,649 - 1,388 863,418 1,962,249 454,002 116,006 235,488 - 1,837,045 - - 1,296,773 - - - 1,296,773 1,837,045 - 235,488 (433,355) 125,204 454,002 (119,482) 321,700 - - - - (841,771) (454,002) - 321,700 (841,771) (454,002) - (111,655) (716,567) - (119,482) 373,093 4,228,337 (12,914) 93,159 $ 261,438 $ 3,511,770 $ (12,914) $ (26,323) CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 (CONTINUED) Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Lighting and Indian Gaming Landscaping Quimby Public Safety - 944,050 - - 110 497 64,613 411 - - 15,751 - 110 944,547 80,364 411 - 1,265,204 - - 1,265,204 - - 110 (320,657) 80,364 411 493,500 - 2,000 - (305,730) - - 493,500 (305,730) 2,000 110 172,843 (225,366) 2,411 38,045 (14,035) 5,660,032 33,544 $ 38,155 $ 158,808 $ 5,434,666 $ 35,955 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Art in Public South Coast Development Places Air Quality AB 939 Agreement - 62,946 - - 7,249 1,711 8,715 373 39,940 - - - 47,189 64,657 8,715 373 - 37,768 19,526 - 19,132 - - - 93,881 - - - 113,013 37,768 19,526 - (65,824) 26,889 (10,811) 373 (50,000) - - - (50,000) - - - (115,824) 26,889 (10,811) 373 682,810 125,769 746,986 189 $ 566,986 $ 152,658 $ 736,175 $ 562 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 (CONTINUED) Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Justice Law Assistance Transportation Enforcement Grant Measure A Uniform $ - $ - $ 712,770 $ - 39,359 5,000 - - 2,092 25 8,119 290 41,451 5,025 720,889 290 33,587 14,271 - - 33,587 14,271 - - 7,864 (9,246) 720,889 290 (2,648) (647,311) - - (2,648) (647,311) - 7,864 (11,894) 73,578 290 172,492 2,648 717,975 581 $ 180,356 $ (9,246) $ 791,553 $ 871 r e CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Capital Projects Funds Parks and Library Infrastructure Transportation Recreation Development 279 43,237 1,089 - - 442,858 217,088 36,464 - 1,811 - - 279 487,906 218,177 36,464 12,686 12,686 279 487,906 218,177 23,778 (779,896) - - - (779,896) - - 279 (291,990) 218,177 23,778 23,339 3,763,391 140,525 (1,654,779) $ 23,618 $ 3,471,401 $ 358,702 $ (1,631,001) 100 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 (CONTINUED) Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Capital Projects Funds Community Center Street Facility Park Facility Fire Facility 1,186 - 3 - 13,674 18,081 4,240 50,120 14,860 18,081 4,243 50,120 16,581 - 5,385 16,581 - 5,385 14,860 1,500 4,243 44,735 4,244 - - - (4,244) - - 4,244 (4,244) - 14,860 5,744 (1) 44,735 86,780 (1,907,295) 3 (638,219) $ 101,640 $ (1,901,551) $ 2 $ (593,484) 101 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Revenues: Taxes Assessments Intergovernmental Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year 102 Debt Service Funds Financing Authority 673,076 Total Governmental Funds $ 712,770 944,050 3,457,821 858,234 838,216 1,811 673,076 6,812,902 2,433 2,433 - 283,346 - 57,294 - 1,856,177 - 2,561,977 - 93,881 555,000 555,000 118,076 152,728 675,509 5,562,836 (2,433) 1,250,066 2,433 823,877 (3,085,602) 2,433 (2,261,725) - (1,011,659) 12,662,456 $ - $ 11,650,797 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STATE GAS TAX YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Variance with Budgetary Fund Balance, June 30 $ 525,593 $ 488,693 $ 261,438 $ (227,255) 103 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 373,093 $ 373,093 $ 373,093 $ - 1,116,800 1,116,800 862,296 (254,504) 200 200 1,122 922 321,700 321,700 321,700 - 1,811,793 1,811,793 1,558,211 (253,582) 1,286,200 1,323,100 1,296,773 26,327 1,286,200 1,323,100 1,296,773 26,327 Budgetary Fund Balance, June 30 $ 525,593 $ 488,693 $ 261,438 $ (227,255) 103 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Community services Transfers out Total Charges to Appropriations Variance with Budgetary Fund Balance, June 30 $ 4,749,437 $ 3,736,678 $ 3,511,770 $ (224,908) 104 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 4,228,337 $ 4,228,337 $ 4,228,337 $ - 2,200,000 2,200,000 1,919,600 (280,400) 6,000 6,000 42,649 36,649 6,434,337 6,434,337 6,190,586 (243,751) 1,684,900 1,720,400 1,837,045 (116,645) - 977,259 841,771 135,488 1,684,900 2,697,659 2,678,816 18,843 Budgetary Fund Balance, June 30 $ 4,749,437 $ 3,736,678 $ 3,511,770 $ (224,908) 104 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FEDERAL ASSISTANCE YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (12,914) $ (12,914) $ (12,914) $ - 145,000 145,000 454,002 309,002 132,086 132,086 441,088 309,002 -_ 422,706 454,002 (31,296) 422,706 454,002 (31,296) Budgetary Fund Balance, June 30 $ 132,086 $ (290,620) $ (12,914) $ 277,706 105 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SLEBG YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budget Amounts Actual Original Final Amounts $ 93,159 $ 93,159 $ 93,159 100 100 114,618 100,000 100,000 1,388 193,259 193,259 209,165 Variance with Final Budget Positive (Negative) 114,518 (98,612) 15,906 235,488 (235,488) 235,488 (235,488) Budgetary Fund Balance, June 30 $ 193,259 $ 193,259 $ (26,323) $ (219,582) 106 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIGHTING AND LANDSCAPING YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Assessments Use of money and property Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (14,035) $ (14,035) $ (14,035) $ - 959,300 959,300 944,050 (15,250) - - 497 497 493,500 493,500 493,500 - 1,438,765 1,438,765 1,424,012 (14,753) 1,452,800 1,452,800 1,265,204 187,596 1,452, 800 1,452,800 1,265,204 187,596 Budgetary Fund Balance, June 30 $ (14,035) $ (14,035) $ 158,808 $ 172,843 107 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE QUIMBY YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 5,660,032 $ 5,660,032 $ 5,660,032 $ - 12,000 12,000 64,613 52,613 75,000 75,000 15,751 (59,249) 5,747,032 5,747,032 5,740,396 (6,636) - 4,408,248 305,730 4,102,518 4,408,248 305,730 4,102,518 Budgetary Fund Balance, June 30 $ 5,747,032 $ 1,338,784 $ 5,434,666 $ 4,095,882 108 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Transfers in Amounts Available for Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 33,544 $ 33,544 $ 33,544 $ - 100 100 411 311 2,000 2,000 2,000 - 35,644 35,644 35,955 311 Budgetary Fund Balance, June 30 $ 35,644 $ 35,644 $ 35,955 $ 311 109 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE ART IN PUBLIC PLACES YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Community services Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 110 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 682,810 $ 682,810 $ 682,810 $ - 3,500 3,500 7,249 3,749 95,000 95,000 39,940 (55,060) 781,310 781,310 729,999 (51,311) 19,000 19,000 19,132 (132) 110,000 110,000 93,881 16,119 - 200,000 50,000 150,000 129,000 329,000 163,013 165,987 $ 652,310 $ 452,310 $ 566,986 $ 114,676 110 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SOUTH COAST AIR QUALITY YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Planning and development Total Charges to Appropriations Variance with -_ 37,768 (37,768) 37,768 (37,768) Budgetary Fund Balance, June 30 $ 171,069 $ 171,069 $ 152,658 $ (18,411) 111 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 125,769 $ 125,769 $ 125,769 $ - 45,000 45,000 62,946 17,946 300 300 1,711 1,411 171,069 171,069 190,426 19,357 -_ 37,768 (37,768) 37,768 (37,768) Budgetary Fund Balance, June 30 $ 171,069 $ 171,069 $ 152,658 $ (18,411) 111 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE AB 939 YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Planning and development Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 112 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 746,986 $ 746,986 $ 746,986 $ - 2,500 2,500 8,715 6,215 749,486 749,486 755,701 6,215 61,500 59,500 19,526 39,974 61,500 59,500 19,526 39,974 $ 687,986 $ 689,986 $ 736,175 $ 46,189 112 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LAW ENFORCEMENT YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 172,492 $ 172,492 $ 172,492 $ - 22,586 500 172,492 195,578 39,359 16,773 2,092 1,592 213,943 18,365 - 54,058 33,587 20,471 54,058 33,587 20,471 Budgetary Fund Balance, June 30 $ 172,492 $ 141,520 $ 180,356 $ 38,836 113 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE JUSTICE ASSISTANCE GRANT YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,648 $ 2,648 $ 2,648 $ - 12,000 12,000 5,000 (7,000) - - 25 25 14,648 14,648 7,673 (6,975) - - 14,271 (14,271) - - 2,648 (2,648) - - 16,919 (16,919) $ 14,648 $ 14,648 $ (9,246) $ (23,894) 114 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE MEASURE A YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 115 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 717,975 $ 717,975 $ 717,975 $ - 749,500 749,500 712,770 (36,730) - - 8,119 8,119 1,467,475 1,467,475 1,438,864 (28,611) 1,105,500 1,228,641 647,311 581,330 115 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2016 116 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ (1,217,034) $ (1,217,034) $ (1,217,034) $ - Resources (Inflows): Intergovernmental 1,932,500 19,774,076 1,536,683 (18,237,393) Use of money and property - - 5,172 5,172 Contributions 416,000 416,000 28,459 (387,541) Developer participation 453,318 1,252,272 493,852 (758,420) Transfers in 11,895,900 17,565,886 5,569,242 (11,996,644) Amounts Available for Appropriations 13,480,684 37,791,200 6,416,374 (31,374,826) Charges to Appropriation (Outflow): Planning and development 492,164 492,164 646,475 (154,311) Capital outlay 37,248,636 37,248,636 6,065,040 31,183,596 Total Charges to Appropriations 37,740,800 37,740,800 6,711,515 31,029,285 Budgetary Fund Balance, June 30 $(24,260,116) $ 50,400 $ (295,141) $ (345,541) 116 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CIVIC CENTER YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (7,259,468) $ (7,259,468) $ (7,259,468) $ - 200,000 200,000 109,007 (90,993) (7,059,468) (7,059,468) (7,150,461) (90,993) -_ 61,546 (61,546) 61,546 (61,546) Budgetary Fund Balance, June 30 $ (7,059,468) $ (7,059,468) $ (7,212,007) $ (152,539) 117 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE TRANSPORTATION YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Budgetary Fund Balance, June 30 $ 2,689,691 $ 1,309,315 $ 3,471,401 $ 2,162,086 118 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 3,763,391 $ 3,763,391 $ 3,763,391 $ - 7,700 7,700 43,237 35,537 650,000 650,000 442,858 (207,142) - - 1,811 1,811 4,421,091 4,421,091 4,251,297 (169,794) 1,731,400 3,111,776 779,896 2,331,880 1,731,400 3,111,776 779,896 2,331,880 Budgetary Fund Balance, June 30 $ 2,689,691 $ 1,309,315 $ 3,471,401 $ 2,162,086 118 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATION YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 140,525 $ 140,525 $ 140,525 $ - - - 1,089 1,089 350,000 350,000 217,088 (132,912) 490,525 490,525 358,702 (131,823) $ 490,525 $ 490,525 $ 358,702 $ (131,823) 119 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY DEVELOPMENT YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (1,654,779) $ (1,654,779) $ (1,654,779) $ 65,000 65,000 36,464 (28,536) (1,589,779) (1,589,779) (1,618,315) (28,536) -_ 12,686 (12,686) 12,686 (12,686) Budgetary Fund Balance, June 30 $ (1,589,779) $ (1,589,779) $ (1,631,001) $ (41,222) 120 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE COMMUNITY CENTER YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 86,780 $ 86,780 $ 86,780 $ - 4,500 4,500 1,186 (3,314) 35,200 35,200 13,674 (21,526) 126,480 126,480 101,640 (24,840) Budgetary Fund Balance, June 30 $ 126,480 $ 126,480 $ 101,640 $ (24,840) 121 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STREET FACILITY YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (1,907,295) $ (1,907,295) $ (1,907,295) $ 35,000 35,000 18,081 (16,919) - - 4,244 4,244 (1,872,295) (1,872,295) (1,884,970) (12,675) - - 16,581 (16,581) 16,581 (16,581) $ (1,872,295) $ (1,872,295) $ (1,901,551) $ (29,256) 122 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARK FACILITY YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 3 $ 3 $ 3 $ - - - 3 3 7,000 7,000 4,240 (2,760) 7,003 7,003 4,246 (2,757) - - 4,244 (4,244) 4,244 (4,244) Budgetary Fund Balance, June 30 $ 7,003 $ 7,003 $ 2 $ (7,001) 123 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FIRE FACILITY YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (638,219) $ (638,219) $ (638,219) $ - 80,000 80,000 50,120 (29,880) (558,219) (558,219) (588,099) (29,880) -_ 5,385 (5,385) 5,385 (5,385) Budgetary Fund Balance, June 30 $ (558,219) $ (558,219) $ (593,484) $ (35,265) 124 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FINANCING AUTHORITY YEAR ENDED JUNE 30, 2016 125 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ - $ - $ - $ - Resources (Inflows): Use of money and property 671,000 671,000 673,076 2,076 Transfers in - - 2,433 2,433 Amounts Available for Appropriations 671,000 671,000 675,509 4,509 Charges to Appropriation (Outflow): General government 5,000 5,000 2,433 2,567 Debt service: Principal retirement 555,000 555,000 555,000 - Interest and fiscal charges 118,076 118,076 118,076 - Total Charges to Appropriations 678,076 678,076 675,509 2,567 Budgetary Fund Balance, June 30 $ (7,076) $ (7,076) $ - $ 7,076 125 THIS PAGE INTENTIONALLY LEFT BLANK 126 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 — To account for the operational maintenance and ultimate replacement of City owned and operated vehicles and equipment Information Technology Fund — To account for the purchase and replacement of information systems. Park Equipment and Facilities Fund — To account for the purchase and replacement of City owned park facility infrastructure. Insurance Fund — To account for the City's insurance coverage. 127 CITY OF LA QUINTA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2016 Noncurrent: Capital assets - net of accumulated depreciation 646,638 560,338 14,034,929 - 15,241,905 Total Noncurrent Assets 646,638 560,338 14,034,929 - 15,241,905 Total Assets $ 3,411,933 $ 1,302,089 $ 16,706,209 $ 420,293 $ 21,840,524 Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Due to other funds Current portion of capital leases Total Current Liabilities Noncurrent: Long-term portion of capital leases Total Noncurrent Liabilities Total Liabilities Net Position: Net investment in capital assets Unrestricted Total Net Position Total Liabilities and Net Position $ 6,170 $ 28,783 $ 6,170 92,567 - 53,677 - 53,677 6,170 146,244 $ - $ 34,953 684 684 286,217 286,217 - 63,784 - 286,901 385,638 - - 53,677 - 53,677 286,901 439,315 646,638 442,877 Governmental Activities - Internal Service Funds - 15,124,444 2,759,125 712,968 2,671,280 Park 3,405,763 1,155,845 Equipment Information Equipment Replacement Technology and Facilities Insurance Totals Assets: Current: Cash and investments $ 2,760,040 $ 738,312 $ 2,666,230 $ - $ 6,164,582 Receivables: Accrued interest 5,255 1,439 5,050 - 11,744 Prepaid costs - 2,000 - 420,293 422,293 Total Current Assets 2,765,295 741,751 2,671,280 420,293 6,598,619 Noncurrent: Capital assets - net of accumulated depreciation 646,638 560,338 14,034,929 - 15,241,905 Total Noncurrent Assets 646,638 560,338 14,034,929 - 15,241,905 Total Assets $ 3,411,933 $ 1,302,089 $ 16,706,209 $ 420,293 $ 21,840,524 Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Due to other funds Current portion of capital leases Total Current Liabilities Noncurrent: Long-term portion of capital leases Total Noncurrent Liabilities Total Liabilities Net Position: Net investment in capital assets Unrestricted Total Net Position Total Liabilities and Net Position $ 6,170 $ 28,783 $ 6,170 92,567 - 53,677 - 53,677 6,170 146,244 $ - $ 34,953 684 684 286,217 286,217 - 63,784 - 286,901 385,638 - - 53,677 - 53,677 286,901 439,315 646,638 442,877 14,034,929 - 15,124,444 2,759,125 712,968 2,671,280 133,392 6,276,765 3,405,763 1,155,845 16,706,209 133,392 21,401,209 $ 3,411,933 $ 1,302,089 $ 16,706,209 $ 420,293 $ 21,840,524 128 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2016 Governmental Activities - Internal Service Funds Park Equipment Information Equipment and Replacement Technology Facilities Insurance Totals Operating Revenues: Sales and service charges $ 521,280 $ 522,996 $ 547,296 $ 600,700 $ 2,192,272 Total Operating Revenues 521,280 522,996 547,296 600,700 2,192,272 Operating Expenses: Administration and general - 500 301,944 302,444 Fuel and oil 57,750 - - 57,750 Maintenance and parts 122,630 - - - 122,630 Contract services - 227,514 40,130 374,364 642,008 Software and supplies - 247,295 - - 247,295 Depreciation expense 126,852 121,473 523,748 - 772,073 Total Operating Expenses 307,232 596,782 563,878 676,308 2,144,200 Operating Income (Loss) 214,048 (73,786) (16,582) (75,608) 48,072 Nonoperating Revenues (Expenses): Interest revenue 31,621 8,432 30,360 - 70,413 Interest expense - (2,375) - (2,375) Gain on disposal of capital assets 17,755 - - - 17,755 Total Nonoperating Revenues (Expenses) 49,376 6,057 30,360 - 85,793 Income (Loss) Before Transfers 263,424 (67,729) 13,778 (75,608) 133,865 Transfers in - - 209,000 209,000 Transfers out (130,589) - (130,589) Changes in Net Position 132,835 (67,729) 13,778 133,392 212,276 Net Position: Beginning of Year 3,272,928 1,223,574 16,692,431 - 21,188,933 End of Fiscal Year $ 3,405,763 $ 1,155,845 $ 16,706,209 $ 133,392 $ 21,401,209 129 CITY OF LA QUINTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2016 Governmental Activities - Internal Service Funds Reconciliation of Operating Income to Net Cash Provided (Used for) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in due to other funds Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: There were no non-cash transactions in the current year. $ 214,048 $ (73,786) $ (16,582) $ (75,608) $ 48,072 126,852 121,473 523,748 - Park - (2,000) - (420,293) Equipment Information Equipment - - (2,558) Replacement Technology and Facilities Insurance Totals Cash Flows from Operating Activities: 286,217 121,420 122,347 523,748 (133,392) 634,123 Cash received from/(paid to) interfund service provided $ 521,280 $ 520,996 $ 547,296 $ 466,624 $ 2,056,196 Cash paid to suppliers for goods and services (185,812) (471,935) (40,130) (374,364) (1,072,241) Cash paid to employees for services - (500) - (301,260) (301,760) Net Cash Provided (Used for) by Operating Activities 335,468 48,561 507,166 (209,000) 682,195 Cash Flows from Non -Capital Financing Activities: Cash transfers out (130,589) - - - (130,589) Cash transfers in - 209,000 209,000 Net Cash Provided by Non -Capital Financing Activities (130,589) - - 209,000 78,411 Cash Flows from Capital and Related Financing Activities: Proceeds from capital debt 131,430 - - 131,430 Acquisition and construction of capital assets (267,412) (150,081) - - (417,493) Interest paid on capital debt (2,375) - - (2,375) Capital lease payment - (63,271) - - (63,271) Proceeds from sales of capital assets 40,936 - - 40,936 Net Cash Used for Capital and Related Financing Activities (226,476) (84,297) - - (310,773) Cash Flows from Investing Activities: Interest received 29,331 7,848 27,591 - 64,770 Net Cash Provided by Investing Activities 29,331 7,848 27,591 - 64,770 Net Increase (Decrease) in Cash and Cash Equivalents 7,734 (27,888) 534,757 514,603 Cash and Cash Equivalents at Beginning of Year 2,752,306 766,200 2,131,473 - 5,649,979 Cash and Cash Equivalents at End of Year $ 2,760,040 $ 738,312 $ 2,666,230 $ - $ 6,164,582 Reconciliation of Operating Income to Net Cash Provided (Used for) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in due to other funds Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: There were no non-cash transactions in the current year. $ 214,048 $ (73,786) $ (16,582) $ (75,608) $ 48,072 126,852 121,473 523,748 - 772,073 - (2,000) - (420,293) (422,293) (5,432) 2,874 - - (2,558) - - 684 684 - - - 286,217 286,217 121,420 122,347 523,748 (133,392) 634,123 $ 335,468 $ 48,561 $ 507,166 $ (209,000) $ 682,195 130 AGENCYFUNDS Agency funds are used to account for assets held by the City as an agent for individual, private organizations and other governmental units. The agency funds and their purposes are as follows: The City of La Quinta has the following agency funds: Assessment District No. 97-1 and 2001-1 — To account for assessments paid to the City for debt service payments on bond issues used to finance sewer improvements. 131 CITY OF LA QUINTA COMBINING STATEMENT OF NET POSITION ALL AGENCY FUNDS JUNE 30, 2016 Assets: Pooled cash and investments Receivables: Taxes Accrued interest Total Assets Liabilities: Deposits payable Total Liabilities Assessment District Assessment District No. 97-1 No. 2001-1 Totals $ 161,659 $ 141,784 $ 303,443 1,870 3,321 5,191 294 - 294 $ 163,823 $ 145,105 $ 308,928 $ 163,823 $ 145,105 $ 308,928 $ 163,823 $ 145,105 $ 308,928 132 CITY OF LA QUINTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2016 133 Balance Balance 7/1/2015 Additions Deductions 6/30/2016 Assessment District No. 97-1 Assets: Pooled cash and investments $ 155,499 $ 59,811 $ 53,651 $ 161,659 Receivables: Taxes 1,419 1,870 1,419 1,870 Accrued interest 160 454 320 294 Total Assets $ 157,078 $ 62,135 $ 55,390 $ 163,823 Liabilities: Deposits payable $ 157,078 $ 61,975 $ 55,230 $ 163,823 Total Liabilities $ 157,078 $ 61,975 $ 55,230 $ 163,823 Assessment District No. 2001-1 Assets: Pooled cash and investments $ 137,239 $ 4,610 $ 65 $ 141,784 Receivables: Taxes 3,605 3,321 3,605 3,321 Total Assets $ 140,844 $ 7,931 $ 3,670 $ 145,105 Liabilities: Deposits payable $ 140,844 $ 7,931 $ 3,670 $ 145,105 Total Liabilities $ 140,844 $ 7,931 $ 3,670 $ 145,105 Totals - All Agency Funds Assets: Pooled cash and investments $ 292,738 $ 64,421 $ 53,716 $ 303,443 Receivables: Taxes 5,024 5,191 5,024 5,191 Accrued interest 160 454 320 294 Total Assets $ 297,922 $ 70,066 $ 59,060 $ 308,928 Liabilities: Deposits payable $ 297,922 $ 69,906 $ 58,900 $ 308,928 Total Liabilities $ 297,922 $ 69,906 $ 58,900 $ 308,928 133 THIS PAGE INTENTIONALLY LEFT BLANK 134 STATISTICAL SECTION This part of the City of La Quinta's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Financial Trends Page These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. 136 Revenue Capacity These schedules obtain information to help the reader assess the government's most significant local revenue source, property taxes. 153 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. 158 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. 165 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. 168 135 ta Qaa CITY OF LA QUINTA Net Position by Component Last Ten Fiscal Years GEM ofthe DESERT — - (accrual basis of accounting) Governmental Activities: Net investment in capital assets Restricted Unrestricted Total Governmental Activities Net Position Business -Type Activities: Net investment in capital assets Restricted Unrestricted Total Business -Type Activities Net Position Primary Government: Net investment in capital assets Restricted Unrestricted Total Primary Government Net Position Source: City of La Quinta Fiscal Year Fiscal Year 2007 2008 2009 2010 2011 $ 300,220,033 $ 343,019,328 $ 323,669,955 $ 336,459,272 $ 276,787,752 49,277,895 86,041,189 105,297,168 96,332,870 107,042,126 106,939,577 79,642,102 96,654,981 77,187,433 97,009,428 $ 456,437,505 $ 508,702,619 $ 525,622,104 $ 509,979,575 $ 480,839,306 $ 42,692,025 $ 42,778,015 $ 42,536,608 $ 42,879,482 $ 42,491,051 (2,385,462) (3,109,524) (3,937,454) (4,863,848) (4,918,951) $ 40,306,563 $ 39,668,491 $ 38,599,154 $ 38,015,634 $ 37,572,100 $ 342,912,058 $ 385,797,343 $ 366,206,563 $ 379,338,754 $ 319,278,803 49,277,895 86,041,189 105,297,168 96,332,870 107,042,126 104,554,115 76,532,578 92,717,527 72,323,585 92,090,477 $ 496,744,068 $ 548,371,110 $ 564,221,258 $ 547,995,209 $ 518,411,406 136 TABLE 1 2012 2013 2014 2015 2016 $ 534,388,479 $ 529,681,342 $ 527,614,666 $ 523,495,389 $ 516,499,682 26,585,382 49,598,397 53,669,248 62,472,221 61,148,731 89,832,811 83,399,745 83,907,046 74,362,189 84,439,071 $ 650,806,672 $ 662,679,484 $ 665,190,960 $ 660,329,799 $ 662,087,484 $ 42,105,683 $ 41,741,443 $ 41,354,565 $ 44,118,111 $ 43,898,784 (4,745,892) (4,750,604) (4,674,666) (4,892,647) (5,086,906) $ 37,359,791 $ 36,990,839 $ 36,679,899 $ 39,225,464 $ 38,811,878 $ 576,494,162 $ 571,422,785 $ 568,969,231 $ 567,613,500 $ 560,398,466 26,585,382 49,598,397 53,669,248 62,472,221 61,148,731 85,086,919 78,649,141 79,232,380 69,469,542 79,352,165 $ 688,166,463 $ 699,670,323 $ 701,870,859 $ 699,555,263 $ 700,899,362 137 taQa6CITY OF LA QUINTA Changes in Net Position Last Ten Fiscal Years - - UL1l 84f+QLtl V,I - (accrual basis of accounting) Fiscal Year Source: City of La Quints 138 2007 2008 2009 2010 2011 Expenditures: Governmental activities: General government $ 6,284,342 $ 6,953,073 $ 7,836,146 $ 34,287,068 $ 11,283,358 Public safety 12,724,100 13,472,036 19,736,941 21,274,519 21,070,458 Planning and development 7,736,520 35,323,858 7,317,689 5,173,326 18,715,283 Community services 4,299,453 5,797,116 14,808,850 15,923,380 4,735,964 Public works 10,511,874 11,097,526 11,100,833 12,326,726 10,757,279 Contribution to other agencies - - - - 31,324,064 Interest on long-term debt 15,163,422 15,522,441 15,631,438 15,330,603 14,353,359 Total governmental activities expenditures 56,719,711 88,166,050 76,431,897 104,315,622 112,239,765 Business -type activities: Golf course 4,520,173 4,761,581 4,440,546 4,169,768 4,202,274 Total business -type activities expenditures 4,520,173 4,761,581 4,440,546 4,169,768 4,202,274 Total Primary Government Expenditures 61,239,884 92,927,631 80,872,443 108,485,390 116,442,039 Program Revenues: Governmental activities: Charges for services: General government 60,530 8,328 25,053 21,439 47,696 Public safety 2,659,515 2,050,492 1,373,952 1,100,491 1,044,399 Planning and development 169,643 134,211 138,391 69,391 74,471 Community services 387,065 374,092 275,178 250,557 210,151 Public works 2,244,156 1,900,437 1,308,702 1,124,647 1,086,771 Operating grants and contributions 3,796,495 5,905,664 10,725,280 15,363,650 13,152,942 Capital grants and contributions 17,601,131 50,090,419 10,647,270 5,974,311 3,157,828 Total governmental activities program revenues 26,918,535 60,463,643 24,493,826 23,904,486 18,774,258 Business -type activities: Charges for services: Golf course 3,540,748 3,814,233 3,368,135 3,584,996 3,756,615 Capital grants and contributions 352,687 Total business -type activities program revenues 3,540,748 4,166,920 3,368,135 3,584,996 3,756,615 Total Primary Government Program Revenues 30,459,283 64,630,563 27,861,961 27,489,482 22,530,873 Net Revenues (Expenditures): Governmental activities (29,801,176) (27,702,407) (51,938,071) (80,411,136) (93,465,507) Business -type activities (979,425) (594,661) (1,072,411) (584,772) (445,659) Total Net Revenues (Expenditures) (30,780,601) (28,297,068) (53,010,482) (80,995,908) (93,911,166) General Revenues and Other Changes in Net Position: Governmental activities: Taxes: Property taxes 4,999,051 6,014,305 6,653,583 6,278,470 5,942,353 Tax increment 42,583,031 42,114,893 36,702,197 35,390,317 32,569,795 Transient occupancy taxes 5,448,361 5,327,203 4,480,467 4,265,438 4,737,968 Sales tax 8,896,716 8,492,213 7,279,513 6,927,388 7,323,835 Franchise taxes 1,259,985 1,748,082 1,533,249 1,585,427 1,607,829 Business license taxes 307,032 317,011 285,304 302,223 285,270 Othertaxes 872,753 641,705 455,089 461,957 437,235 Motor vehicle in lieu, unrestricted 3,291,055 3,803,647 3,940,801 3,714,437 3,515,395 Investment income 11,854,951 10,230,489 7,387,244 5,362,684 4,693,974 Gain (loss) on sale of capital assets - 57,346 21,542 2,330 - Miscellaneous 2,052,246 1,220,627 118,567 477,936 3,211,584 Extraordinary gain/loss on dissolution of RDA - - - - - Transfers (874,645) Total governmental activities 80,690,536 79,967,521 68,857,556 64,768,607 64,325,238 Business -type activities: Investment income 1,817 4,310 3,074 1,252 2,125 Gain (loss) on sale of capital assets - (47,721) - - - Miscellaneous - - - - - Transfers 874,645 - - - - Total business -type activities 876,462 (43,411) 3,074 1,252 2,125 Total Primary Government 81,566,998 79,924,110 68,860,630 64,769,859 64,327,363 Changes In Net Position Governmental activities 50,889,360 52,265,114 16,919,485 (15,642,529) (29,140,269) Business -type activities (102,963) (638,072) (1,069,337) (583,520) (443,534) Total Primary Government $ 50,786,397 $ 51,627,042 $ 15,850,148 $ (16,226,049) $ (29,583,803) Source: City of La Quints 138 2012 2013 2014 2015 2016 $ 6,183,712 $ 4,511,023 $ 4,830,239 $ 5,166,732 $ 5,645,004 20,815,454 21,047,691 21,169,423 21,636,149 22,067,603 6,378,352 2,274,541 3,098,015 2,212,013 3,359,732 5,093,402 4,986,104 4,130,085 5,992,362 6,214,098 13,288,521 11,803,133 12,610,994 18,116,732 12,156,183 3,021,496 447,048 405,977 340,716 343,129 54,780,937 45,069,540 46,244,733 53,464,704 49,785,749 4,085,282 4,208,855 4,971,977 5,053,360 4,373,586 58,866,219 49,278,395 51,216,710 58,518,064 54,159,335 86,869 38,812 71,042 121,140 192,538 1,020,822 927,604 1,412,819 1,655,421 1,378,704 68,470 112,695 595,980 489,589 467,053 247,397 245,392 1,224,719 307,869 386,824 1,080,744 1,209,438 1,195,703 1,197,069 1,134,630 11,289,673 28,068,940 14,587,153 16,829,107 12,213,338 3,871,898 3,736,879 3,481,424 3,561,857 3,621,495 2,872,122 R R71 R9R R 7'AA R74 R 491 414 R dR3 979 3 R�l1 446 (30,996,169) (14,466,659) (23,176,031) (29,328,065) (32,936,517) (213,384) (471,976) (1,490,553) 1,380,619 (752,091) (31,209,553) (14,938,635) (24,886,584) (27,947,446) (33,688,608) 21,370,476 7,043,604 9,193,753 8,776,491 8,798,296 5,446,883 5,980,684 6,307,737 6,637,183 7,835,745 7,713,741 7,833,545 8,786,819 8,873,008 9,107,046 1,687,440 1,669,476 1,688,263 1,861,453 1,799,938 293,592 292,966 307,654 306,087 334,465 428,963 518,778 580,834 530,336 516,964 3,173,826 3,157,330 3,291,042 3,486,367 3,651,549 1,925,255 1,605,718 2,190,357 1,981,343 2,390,468 - 28,551 - - - 268,644 192,509 243,498 296,346 376,193 158,654,715 (2,189,984) (6,402,450) - - (500,000) (247,739) (115,400) 200,963,535 26,133,177 25,687,507 32,500,875 34,695,264 1,075 2,225 1,567 2,043 4,282 - 100,799 678,046 915,164 218,823 - - 500,000 247,739 115,400 1,075 103,024 1,179,613 1,164,946 338,505 200,964,610 26,236,201 26,867,120 33,665,821 35,033,769 169,967,366 11,666,518 2,511,476 3,172,810 1,758,747 (212,309) (368,952) (310,940) 2,545,565 (413,586) $ 169,755,057 $ 11,297,566 $ 2,200,536 $ 5,718,375 $ 1,345,161 139 TABLE 2 CITY OF LA QUINTA Changes in Net Position - Governmental Activities ta Qaa Last Ten Fiscal Years GEMoftbeDESERT - - (accrual basis of accounting) Expenditures: General government Public safety Planning and development Community services Public works Contribution to other agencies Interest on long-term debt Total Governmental Activities Expenditures Program Revenues: Charges for services: General government Public safety Planning and development Community services Public works Operating grants and contributions Capital grants and contributions Total Governmental Activities Program Revenues Net Revenues (Expenditures) General Revenues and Other Changes in Net Position: Taxes: Property taxes Tax increment Transient occupancy taxes Sales tax Franchise tax Business license taxes Othertax Motor vehicle in lieu, unrestricted Investment income Gain (loss) on sale of capital assets Miscellaneous Extraordinary gain/loss on dissolution of RDA Transfers Total Governmental Activities Changes in Net Position Source, City of La Quinta Fiscal Year 2007 2008 2009 2010 2011 $ 6,284,342 $ 6,953,073 $ 7,836,146 $ 34,287,068 $ 11,283,358 12,724,100 13,472,036 19,736,941 21,274,519 21,070,458 7,736,520 35,323,858 7,317,689 5,173,326 18,715,283 4,299,453 5,797,116 14,808,850 15,923,380 4,735,964 10, 511,874 11,097,526 11,100,833 12, 326,726 10,757,279 - - - - 31,324,064 15,163,422 15, 522,441 15,631,438 15, 330,603 14, 353,359 56,719,711 88,166,050 76,431,897 104,315,622 112,239,765 60,530 8,328 25,053 21,439 47,696 2,659,515 2,050,492 1,373,952 1,100,491 1,044,399 169,643 134,211 138,391 69,391 74,471 387,065 374,092 275,178 250,557 210,151 2,244,156 1,900,437 1,308,702 1,124,647 1,086,771 3,796,495 5,905,664 10,725,280 15,363,650 13,152,942 17,601,131 50,090,419 10,647,270 5,974,311 3,157,828 26,918,535 60,463,643 24,493,826 23,904,486 18,774,258 (29,801,176) (27,702,407) (51,938,071) (80,411,136) (93,465,507) 4,999,051 6,014,305 6,653,583 6,278,470 5,942,353 42,583,031 42,114,893 36,702,197 35,390,317 32,569,795 5,448,361 5,327,203 4,480,467 4,265,438 4,737,968 8,896,716 8,492,213 7,279,513 6,927,388 7,323,835 1,259,985 1,748,082 1,533,249 1,585,427 1,607,829 307,032 317,011 285,304 302,223 285,270 872,753 641,705 455,089 461,957 437,235 3,291,055 3,803,647 3,940,801 3,714,437 3,515,395 11,854,951 10,230,489 7,387,244 5,362,684 4,693,974 - 57,346 21,542 2,330 - 2,052,246 1,220,627 118,567 477,936 3,211,584 (874,645) - - - - 80,690,536 79,967,521 68,857,556 64,768,607 64,325,238 $ 50,889,360 $ 52,265,114 $ 16,919,485 $ (15,642,529) $ (29,140,269) 140 Table 3 2012 2013 2014 2015 2016 $ 6,183,712 $ 4,511,023 $ 4,830,239 $ 5,166,732 $ 5,645,004 20,815,454 21,047,691 21,169,423 21,636,149 22,067,603 6,378,352 2,274,541 3,098,015 2,212,013 3,359,732 5,093,402 4,986,104 4,130,085 5,992,362 6,214,098 13,288,521 11,803,133 12,610,994 18,116,732 12,156,183 3,021,496 447,048 405,977 340,716 343,129 54,780,937 45,069,540 46,244,733 53,464,704 49,785,749 86,869 38,812 71,042 121,140 192,538 1,020,822 927,604 1,412,819 1,655,421 1,378,704 68,470 112,695 595,980 489,589 467,053 247,397 245,392 1,224,719 307,869 386,824 1,080,744 1,209,438 1,195,703 1,197,069 1,134,630 11,289,673 28,068,940 14,587,153 16,829,107 12,213,338 9,990,793 4,115,238 3,981,286 3,536,444 1,076,145 23,784,768 34,718,119 23,068,702 24,136,639 16,849,232 (30,996,169) (10,351,421) (23,176,031) (29,328,065) (32,936,517) 21,370,476 7,043,604 9,193,753 8,776,491 8,798,296 5,446,883 5,980,684 6,307,737 6,637,183 7,835,745 7,713,741 7,833,545 8,786,819 8,873,008 9,107,046 1,687,440 1,669,476 1,688,263 1,861,453 1,799,938 293,592 292,966 307,654 306,087 334,465 428,963 518,778 580,834 530,336 516,964 3,173,826 3,157,330 3,291,042 3,486,367 3,651,549 1,925,255 1,605,718 2,190,357 1,981,343 2,390,468 - 28,551 - - 376,193 268,644 192,509 243,498 296,346 - 158,654,715 (2,189,984) (6,402,450) - - - - (500,000) (247,739) (115,400) 200,963,535 26,133,177 25,687,507 32,500,875 34,695,264 $ 169,967,366 $ 15,781,756 $ 2,511,476 $ 3,172,810 $ 1,758,747 141 Qaa CITY OF LA QUINTA Changes in Net Position - Business -type Activities ��111 Last Ten Fiscal Years -- GEM f the DESERT — - (accrual basis of accounting) o Expenditures: Golf course Total Business -Type Activities Expenditures Program revenues: Charges for services: Golf course Capital grants and contributions Total Business -Type Activities Program Revenues Net Revenues (Expenditures) General Revenues and Other Changes in Net Position: Investment income Gain (loss) on sale of capital assets Miscellaneous Transfers Capital contributions Total Business -Type Activities Changes in Net Position Source: City of La Quinta Fiscal Year 2007 2008 2009 $ 4,520,173 $ 4,761,581 $ 4,440,546 $ 4,520,173 4,761,581 4,440,546 2010 2011 4,169,768 $ 4,202,274 4,169,768 4,202,274 3,540,748 3,814,233 3,368,135 3,584,996 3,756,615 - 352,687 - - - 3,540,748 4,166,920 3,368,135 3,584,996 3,756,615 (979,425) (594,661) (1,072,411) (584,772) (445,659) 1,817 4,310 3,074 1,252 2,125 - (47,721) - - - 874,645 - - - - 979,425 1,855,887 (43,411) 3,074 1,252 2,125 $ 876,462 $ (638,072) $ (1,069,337) $ (583,520) $ (443,534) 142 2012 4,085,282 $ 4,085,282 2013 2014 4,208,855 $ 4,971,977 $ 4,208,855 4,971,977 TABLE 4 2015 2016 5,053,360 $ 4,373,586 5,053,360 4,373,586 3,871,898 3,736,879 3,561,857 3,621,495 - - 2,872,122 - 3,871,898 3,736,879 6,433,979 3,621,495 (213,384) (471,976) (4,971,977) 1,380,619 (752,091) 1,075 2,225 1,567 2,043 4,282 100,799 678,046 915,164 218,823 - 500,000 247,739 115,400 1,075 103,024 1,179,613 1,164,946 338,505 $ (212,309) $ (368,952) $ (3,792,364) $ 2,545,565 $ (413,586) 143 CITY OF LA QUINTA ta Qaa Fund Balances of Governmental Funds Last Ten Fiscal Years - GEM oftbeDESERT - (modified accrual basis of accounting) All other governmental funds: Fiscal Year Nonspendable: 2007 t11 2008 111 2009 111 2010 t+) 2011 General fund: $ 7,977 $ 5,353 $ 19,197 $ 7,740 $ 10,563 Nonspendable: 2,081,645 2,076,063 2,067,028 2,088,709 2,081,614 Prepaid costs $ 11,774 $ 10,601 $ 12,424 $ 9,030 $ 23,260 Land held for resale - - - - 8,320,000 Advances to other funds 27,597,329 45,264,966 46,137,692 57,897,671 15,373,104 Deposits - 4,825 9,830 9,830 9,967 Due from Other Governments 153,818 - - - - Restricted for: 12,214,375 11,406,628 11,387,631 11,675,417 10,248,314 Debt service - - - - 169,631 Committed: 66,225,066 69,626,275 50,556,856 53,123,856 58,111,106 Emergency reserve 18,722,524 19,651,824 18,201,948 17,774,648 18,018,595 Post retirement health benefits - - - 1,258,059 1,258,059 Capital Projects 482,718 2,100,000 2,144,085 - - Working capital reserve - - - (33,626,907) (13,250,398) Carryovers - - $ 88,101,047 $ 69,101,978 $ 100,289,462 Educational purposes 500,000 250,000 Economic development 2,327,430 1,911,131 - - - Assigned: Continuing appropriations 2,257,200 2,835,297 3,485,747 1,555,176 1,768,494 Insurance - - - - - Unassigned 32,741,545 20,423,375 22,335,655 13,525,704 48,140,444 Total general fund $ 84,640,520 $ 92,452,019 $ 92,327,381 $ 92,030,118 $ 93,081,554 All other governmental funds: Nonspendable: Prepaid costs $ 7,977 $ 5,353 $ 19,197 $ 7,740 $ 10,563 Notes and loans 2,081,645 2,076,063 2,067,028 2,088,709 2,081,614 Advances to other funds 4,823,543 4,402,213 4,321,119 4,293,166 4,569,188 Deposits - - 4,540 6,400 6,000 Restdcted: Planning and development projects 15,297,481 21,906,749 25,807,752 31,032,124 34,018,930 Public safety 153,818 198,843 245,468 48,852 96,364 Community services 12,214,375 11,406,628 11,387,631 11,675,417 10,248,314 Public works 104,878 309,566 7,539,181 448,731 396,355 Capital Projects 66,225,066 69,626,275 50,556,856 53,123,856 58,111,106 Debt service 24,309,220 5,094,635 5,490,098 3,890 4,001,426 Assigned: Continuing appropriations - - 2,000 - - Unassigned (7,854,868) (19,653,179) (19,339,823) (33,626,907) (13,250,398) Total all other governmental funds $ 117,363,135 $ 95,373,146 $ 88,101,047 $ 69,101,978 $ 100,289,462 Notes: 111 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. Source: City of La Quinta 144 TABLE 5 2012 2013 2014 2015 2016 $ 27,481 $ 11,786 $ 1,500 $ 15,653 $ 204,589 8,320,000 8,320,000 8,320,000 8,320,000 8,320,000 15,417,929 15,509,691 15,163,183 14,943,098 14,974,800 118,516 4,830 4,830 33,985 - 41,378,966 34,976,516 26,715,575 25,105,681 173,426 - - - 17, 516, 295 16, 034, 995 16, 034, 995 15, 372, 600 15, 576, 000 1,523,401 1,523,401 1,523,401 1,523,401 1,523,400 - 2,848,737 1,507,429 1,727,390 2,302,000 - 2,836,820 3,843,150 3,894,000 356,438 476,400 4,274,046 1,041,172 1,013,533 - - - - 209,000 - 47,737,861 5,926,651 10,699,641 13,837,312 13,822,012 $ 91,876,081 $ 92,572,590 $ 91,633,753 $ 86,808,564 $ 89,996,528 $ 12,875 $ 10,310 $ - $ - $ 8,422 2,065,611 2,062,589 - 13,600 13,600 - - - 10,767,199 3,730,533 5,970,006 13,108,499 18,211,200 245,187 258,968 274,274 301,843 189,988 11,162,057 11,626,441 12,459,516 10,711,704 9,872,124 145,823 262,754 1,571,163 1,129,697 1,250,827 4,089,156 1,392,581 1,590,168 3,873,699 3,597,221 2,534 2,234 - - - (13,248,593) (13,179,196) (12,370,462) (12,703,744) (11,655,344) $ 15,255,449 $ 6,180,814 $ 9,494,665 $ 16,421,698 $ 21,474,438 145 CITY OF LA QUINTA ta ��Changes in Fund Ba Last Ten Fiscal Year -- — - GEM oft$e DESERT lances of Governmental Funds S (modified accrual basis of accounting) (15,780,719) (9,704,488) (20,789,339) (11,299,485) Other financing sources (uses): Fiscal Year 2007 2008 2009 2010 2011 Revenues: Issuance of revenue bonds - - - - Taxes $ 100,103,324 $ 105,870,933 $ 99,816,072 $ 93,831,918 $ 88,498,457 Assessments 877,191 909,229 927,816 966,639 956,048 Licenses and permits 2,788,882 2,107,035 871,167 472,409 547,071 Intergovernmental 14, 803,971 15,382,135 18,679,355 19,473,076 19,005,643 Charges for services 1,821,794 1,334,060 673,779 484,043 501,418 Use of money and property 14,804,348 12,874,926 7,043,646 5,338,679 4,670,732 Contributions - 37,643,190 240,591 395,823 327,751 Developer participation 5,310,440 6,537,991 2,243,785 273,739 945,805 Miscellaneous 412,353 629,471 720,185 608,342 319,763 Total Revenues 140,922,303 183,288,970 131,216,396 121,844,668 115,772,688 Expenditures Current: General government 6,150,699 7,367,144 7,230,436 30,220,882 10,885,519 Public safety 15,685,493 17,181,775 18,946,866 20,116,936 19,826,372 Planning and development 28,994,177 15,374,160 7,261,835 6,028,492 8,460,420 Community services 4,027,302 5,336,757 4,698,985 4,204,626 4,147,758 Public works 6,755,507 6,563,494 6,324,055 6,862,887 4,808,060 Capital projects 36,420,417 82,883,317 32,363,859 14,514,910 21,287,775 Debt service: Principal retirement 5,647,940 5,949,311 6,319,580 6,616,412 7,011,261 Interest and fiscal charges 15,059,977 15,424,708 15,348,598 15,357,968 15,037,919 Payment to bond escrow - - - - - Payments under pass-through obligations 36,498,575 42,989,023 42,426,670 38,710,894 35,607,089 Total Expenditures 155,240,087 199,069,689 140,920,884 142,634,007 127,072,173 Excess (Deficiency) of Revenues Over (Under) Expenditures (14,317,784) (15,780,719) (9,704,488) (20,789,339) (11,299,485) Other financing sources (uses): Issuance of tax allocation bonds 6,000,000 Issuance of revenue bonds - - - - 28,850,000 Transfers in 60,954,576 88,604,682 40,502,929 30,386,372 61,657,034 Transfers out (60,954,576) (87,342,608) (40,527,930) (28,893,365) (61,652,479) Other debts issued - 2,332,752 Capital leases - 182,094 - - Proceeds from sale of capital assets 124,097 158,061 8,683,850 Total Other Financing Sources (Uses) 124,097 1,602,229 2,307,751 1,493,007 43,538,405 Extraordinary gain/loss on dissolution of RDA - - - - - Net Change in Fund Balances $ (14,193,687) $ (14,178,490) $ (7,396,737) $ (19,296,332) $ 32,238,920 Debt Service as a Percentage of Noncapital Expenditures Irl 61.0% 47.1% 59.0% 47.6% 53.0 Notes: 0)The capitalizable expenditures were derived from the Reconciliation of the Statement of Revenues, Expenditures, and Changes h Fund Balances of Governmental Funds. Source: City of La Quinta 146 TABLE 6 2012 2013 2014 2015 2016 $ 53,632,023 $ 23,506,679 $ 27,192,089 $ 26,678,471 $ 28,057,989 950,292 954,058 951,181 940,221 944,050 482,831 566,510 953,540 1,356,978 1,161,820 15, 875, 582 15,464, 942 16, 506, 666 15, 702, 943 14, 960, 676 635,111 625,813 1,238,277 1,341,438 1,332,541 1,914,518 1,582,762 2,175,048 1,950,957 7,475,742 303,773 18,377,253 838,972 1,956,452 28,459 74,973,601 62,796,109 53,490,028 53,311,984 56,394,634 4,881,922 4,587,888 4,068,827 5,050,425 5,267,024 19,669,517 20,168,038 21,189,086 21,664,472 22,125,962 4,314,646 27,514,768 1,748,477 2,097,525 3,294,259 4,086,686 4,411,536 4,011,432 4,798,123 4,983,038 6,192,733 5,067,370 4,617,050 5,283,309 4,101,210 13,335,989 8,622,783 7,974,747 11,097,186 7,209,874 7,066,726 556,871 558,019 594,383 632,615 6,701,079 437,678 411,010 348,334 346,137 (8,031,138) (8,570,823) 8,911,380 2,378,227 8,434,515 12,554,752 29,841,053 4,201,763 12,037,331 6,420,538 (12,580,120) (29,841,053) (4,335,679) (12,322,714) (6,614,349) - 71,045 9,000 875,275 121,652 849,907 192,697 (133,916) (276,383) (193,811) (79,058,255) - (6,402,450) - $ (86,239,486) $ (8,378,126) $ 2,375,014 $ 2,101,844 $ 8,240,704 43.7% 1.6% 2.6% 2.2% # 2.4 147 $40 $35 $30 $25 $20 $15 $10 $5 $0 Tax Revenue by Source (Excluding Tax Increment) (in millions) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ■Property Tax ■Transient Occupancy Tax ■Sales Tax ■Franchise Tax ■Business License Tax ❑Other Taxes Notes: 0) The tax increment received was a result of the activity of the Redevelopment Agency. On June 28, 2011 Ca. Governor Jerry Brown signed ABx1 26, the Redevelopment Dissolution Act, which was upheld by the California Supreme Court on Dec. 29, 2011 and the agency was effective ly dissolved Feb. 1, 2012. Source: City of La Quinta 148 City of La Quinta TABLE 7 ta Qaa Tax Revenue by Source Last Ten Fiscal Years —GEM uftb,DESERT f (in dollars) Transient Fiscal Year Occupancy Business Ended June 30, Property Tax Tax Increment (+1 Tax Sales Tax Franchise Tax License Tax Other Taxes Total 2007 $ 4,999,051 $ 42,583,031 $ 5,448,361 $ 8,896,716 $ 1,259,985 $ 307,032 $ 872,753 $ 64,366,929 2008 6,014,305 42,114,983 5,327,203 8,492,213 1,748,082 317,011 641,705 64,655,502 2009 6,653,583 36,702,197 4,480,467 7,279,513 1,533,249 285,304 455,089 57,389,402 2010 6,278,470 35,390,317 4,265,438 6,927,388 1,585,427 302,223 461,957 55,211,220 2011 5,942,353 32;569,795 4,737,968 7,323,835 1,607,829 285,270 437,235 52,904,285 2012 21,370,476 - 5,446,883 7,713,741 1,687,440 293,592 428,963 36,941,095 2013 7,043,604 5,980,684 7,833,545 1,669,476 292,966 518,778 23,339,053 2014 9,193,753 6,307,737 8,786,819 1,688,263 307,654 580,834 26,865,060 2015 8,776,491 6,637,183 8,873,008 1,861,453 306,087 530,336 26,984,558 2016 $ 8,798,296 $ $ 7,835,745 $ 9,107,046 $ 1,799,938 $ 334,465 $ 516,964 28,392,454 $40 $35 $30 $25 $20 $15 $10 $5 $0 Tax Revenue by Source (Excluding Tax Increment) (in millions) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ■Property Tax ■Transient Occupancy Tax ■Sales Tax ■Franchise Tax ■Business License Tax ❑Other Taxes Notes: 0) The tax increment received was a result of the activity of the Redevelopment Agency. On June 28, 2011 Ca. Governor Jerry Brown signed ABx1 26, the Redevelopment Dissolution Act, which was upheld by the California Supreme Court on Dec. 29, 2011 and the agency was effective ly dissolved Feb. 1, 2012. Source: City of La Quinta 148 City of La Quinta aa Top 25 Sales Tax Producers ta QCurrent Year and Ten Years Ago —GEMoftheDESERT— (in dollars) Fiscal Year 2015-16 Fiscal Year 2006-07 Business Name nl Business Category Business Name 1+1 Business Category Arco AM PM Bed Bath & Beyond Best Buy Chevrolet Cadillac of La Quinta Circle K Cliffhouse Costco G&MOil Hobby Lobby Home Depot Hyundai of La Quinta Kohls La Quinta Resort & Club Lowe's Marshalls Ross Stater Bros Stein Mart Stuff Pizza Bar & Grill Target Torre Nissan Verizon Wireless Village Market Vons Walmart Supercenter Service Stations Home Furnishings Electronics/Appliance Stores New Motor Vehicle Dealers Service Stations Fine Dining Discount Dept Stores Service Stations Specialty Stores Lumber/Building Materials New Motor Vehicle Dealers Department Stores Hotels -Liquor Lumber/Building Materials Family Apparel Family Apparel Grocery Stores Liquor Department Stores Casual Dining Dept Stores New Motor Vehicle Dealers Electronics/Appliance Stores Service Stations Grocery Stores Liquor Discount Dept Stores Arco AM PM Bed Bath & Beyond Best Buy Champion Cadillac Chevrolet Circle K Circuit City Costco Home Depot Hyundai of La Quinta Kia of La Quinta Kohls La Quinta Resort & Spa & PGA West Linders Furniture Lowe's Marshalls Palisades Gas & Wash Ralphs Ross Shell/Texaco Staples Stater Bros Stein Mart Target Torre Nissan Walmart Supercenter Mini Mart Service Stations Home Furnishings Electronics/Appliance Stores New Motor Vehicle Dealers Service Stations Electronics/Appliance Stores Discount Dept Stores Lumber/Building Materials New Motor Vehicle Dealers New Motor Vehicle Dealers Department Stores Hotels -Liquor Home Furnishings Lumber/Building Materials Family Apparel Service Stations Grocery Stores Liquor Family Apparel Service Stations Office Supplies/Furniture Grocery Stores Liquor Department Stores Discount Dept Stores New Motor Vehicle Dealers Discount Dept Stores TABLE 8 Percent of Fiscal Year Total Paid by Top 25 Accounts: 68.72% Percent of Fiscal Year Total Paid by Top 25 Accounts: 72.28% $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 2007 Sales Tax Revenue (in millions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 Notes: 111 Firms are listed alphabetically. State law does not allow for the disclosure of the sales tax revenue amounts by account. Source: HDL, Coren & Cone 149 ta Qaa City of La Quinta Taxable Sales by Category Last Ten Calendar Years -GEM ofth,DESERT - (in thousands) Other retail stores 11% Service statio 7% Taxable Sales Calendar Year 2006 Apparel stores All Mh- 15% 13% ise Food stores 4% ing and drinking places 9% Notes: (+) Due to confidentiality issues preventing the disclosure of the top ten largest sales tax payers by business name, this catego rical list has been provided as an alternative source of information regarding the City of La Quinta's sales tax revenue. Source: HDL. Coren & Cone 150 Fiscal Year 2006 2007 2008 2009 2010 Apparel stores $ 18,408 $ 23,159 $ 22,019 $ 22,061 $ 22,143 General merchandise 164,170 231,637 226,032 209,394 206,153 Food stores 30,657 30,399 27,865 26,196 25,351 Eating and drinking places 78,716 81,379 83,310 80,172 79,646 Building materials 107,594 98,771 74,604 59,747 60,740 Auto dealers and supplies 130,110 108,815 70,645 33,576 43,566 Service stations 55,142 53,208 54,413 39,127 46,059 Other retail stores 95,929 118,065 111,210 99,779 94,532 All other outlets 161,229 169,896 154,186 120,668 120,291 Total $ 841,955 $ 915,329 $ 824,284 $ 690,720 $ 698,481 Other retail stores 11% Service statio 7% Taxable Sales Calendar Year 2006 Apparel stores All Mh- 15% 13% ise Food stores 4% ing and drinking places 9% Notes: (+) Due to confidentiality issues preventing the disclosure of the top ten largest sales tax payers by business name, this catego rical list has been provided as an alternative source of information regarding the City of La Quinta's sales tax revenue. Source: HDL. Coren & Cone 150 2011 2012 2013 2014 2015 $ 23,223 $ 24,430 $ 25,741 $ 25,461 $ 25,115 211,249 220,970 223,324 216,871 208,189 25,197 25,854 26,394 25,748 22,845 86,433 94,859 97,662 101,647 106,216 62,879 65,445 68,606 73,087 75,658 58,938 62,668 72,839 84,826 87,440 54,342 56,001 52,093 47,541 40,777 97,477 99,028 100,811 101,721 105,284 132,417 130,421 142,049 150,746 155,173 $ 752,155 $ 779,676 $ 809,519 $ 827,648 $ 826,697 Other retail 13% Service star 5% Taxable Sales Calendar Year 2015 All Mhor rtior. Apparel stores Building materials 9% 151 TABLE 9 nerchandise 5% Food stores 3% ind drinking V places 13% THIS PAGE INTENTIONALLY LEFT BLANK 152 TABLE 10 CITY OF LA QUINTA Assessed Value of Taxable Property Last Ten Fiscal Years GEM ofthrDESERT — (in dollars) TABLE 10 Unsecured Home Owner Taxable Residential Commercial Agricultural Other Property Exempt Assessed Value Direct Rate (3) 2016141 10,634,834,332 1,088,406,355 64,533,443 79,120,572 113,142,376 (49,130,200) 11,930,906,878 1.0000 $13,000 $12,000 $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Taxable Assessed Value (in millions) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016(4) Notes: (1) Other includes dry farm, government owned, institutional, irrigated, miscellaneous, recreational, vacant, cross reference and unknown. Prior years 2007 through 2015 adjusted to match current reporting for consistency. (2) Prior years 2007 through 2015 adjusted to match current reporting for consistency. 131 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 which time the new assessed value is 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. (4) In 2016 (and going forward) data will be obtained from California Municipal and The Assessor Controller's Office. The existing column headers were slightly modified to accommodate the property type classifications. Source:: HdL, Coren & Cone; County of Riverside Assessor 2006107 through 2015116 Combined Tax Rolls 153 Entire City (including Redevelopment Agency) Exempt Fiscal Year Ended Unsecured Property Taxable June 30, Residential Commercial Industrial Other i') Property Iz1 Valuation Assessed Value Direct Rate 2007 8,047,222,562 622,347,465 19,605,470 1,249,148,569 87,854,778 (147,738,118) 10,026,178,844 1.0000 2008 9,514,081,076 789,425,538 20,028,196 1,494,745,262 100,609,062 (151,817,297) 11,918,889,134 1.0000 2009 10,034,763,263 827,032,029 20,432,889 1,475,352,236 112,389,346 (152,860,511) 12,469,969,763 1.0000 2010 9,483,530,068 823,821,531 20,845,624 1,358,176,147 120,977,122 (154,942,598) 11,807,350,492 1.0000 2011 8,870,471,785 771,419,124 20,792,716 1,143,332,514 118,651,054 (157,742,188). 10,924,667,193 1.0000 2012 8,612,579,049 725,788,432 20,944,939 920,025,235 104,880,163 (161,420,137) 10,384,217,818 1.0000 2013 8,510,574,371 735,622,855 19,644,835 954,074,172 106,176,279 (164,227,296) 10,326,092,512 1.0000 2014 8,959,562,854 743,340,208 20,374,889 945,004,639 108,387,013 (167,489,253) 10,776,669,603 1.0000 2015 9,610,570,068 755,151,833 20,433,231 926,372,649 106,071,911 (172,972,789) 11,418,599,692 1.0000 Unsecured Home Owner Taxable Residential Commercial Agricultural Other Property Exempt Assessed Value Direct Rate (3) 2016141 10,634,834,332 1,088,406,355 64,533,443 79,120,572 113,142,376 (49,130,200) 11,930,906,878 1.0000 $13,000 $12,000 $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Taxable Assessed Value (in millions) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016(4) Notes: (1) Other includes dry farm, government owned, institutional, irrigated, miscellaneous, recreational, vacant, cross reference and unknown. Prior years 2007 through 2015 adjusted to match current reporting for consistency. (2) Prior years 2007 through 2015 adjusted to match current reporting for consistency. 131 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 which time the new assessed value is 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. (4) In 2016 (and going forward) data will be obtained from California Municipal and The Assessor Controller's Office. The existing column headers were slightly modified to accommodate the property type classifications. Source:: HdL, Coren & Cone; County of Riverside Assessor 2006107 through 2015116 Combined Tax Rolls 153 ta as CITY OF LA QUINTA Direct and Overlapping Property Tax Rates (Rate per $100 of assessed value) Last Ten Fiscal Years Direct Rates: City of La Quinta Redevelopment agency Project Area 1 Redevelopment agency Project Area 2 County of Riverside County Free Library County Structure Fire Protection Coachella Valley Unified School District Desert Sands Unified School Desert Community College District Riverside County Office of Education Riverside County Regional Park & Open Spa CV Public Cemetery CV Mosquito CV Recreation and Park Coachella Valley Water District CV Resource Conservation CVWD Improvement District 1 CVWD Storm Water Unit Total Direct Rate i41 Tax Rate Area City Non -Project Area 2007 1�1 2008 11 2009(l) 2010 11 2011 11 2012 (i) 2013 1�1 2014 11 2015 11 2016 11 0.0760 0.0760 0.0506 0.0506 0.0734 0.0760 0.0760 0.0760 0.0760 0.0760 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.1960 0.1960 0.2586 0.2586 0.2318 0.1957 0.1958 0.1958 0.1958 0.1958 0.0258 0.0258 0.0284 0.0284 0.0280 0.0252 0.0253 0.0253 0.0253 0.0253 0.0540 0.0540 0.0610 0.0610 0.0602 0.0544 0.0544 0.0544 0.0544 0.0544 0.0000 0.0000 0.0000 0.0000 0.0000 0.4322 0.4322 0.4322 0.4322 0.4322 0.4320 0.4320 0.3765 0.3765 0.3716 0.0000 0.0000 0.0000 0.0000 0.0000 0.0700 0.0700 0.0782 0.0782 0.0772 0.0698 0.0698 0.0698 0.0698 0.0698 0.0380 0.0380 0.0426 0.0426 0.0420 0.0380 0.0380 0.0380 0.0380 0.0380 0.0040 0.0040 0.0000 0.0000 0.0000 0.0040 0.0039 0.0039 0.0039 0.0039 0.0032 0.0032 0.0035 0.0035 0.0035 0.0032 0.0031 0.0031 0.0031 0.0031 0.0127 0.0127 0.0142 0.0142 0.0141 0.0127 0.0127 0.0127 0.0127 0.0126 0.0192 0.0192 0.0215 0.0215 0.0213 0.0192 0.0192 0.0192 0.0192 0.0192 0.0250 0.0250 0.0284 0.0284 0.0281 0.0254 0.0254 0.0254 0.0254 0.0254 0.0003 0.0003 0.0004 0.0004 0.0004 0.0003 0.0003 0.0003 0.0003 0.0003 0.0118 0.0118 0.0000 0.0000 0.0131 0.0118 0.0118 0.0118 0.0118 0.0118 0.0320 0.0320 0.0360 0.0360 0.0355 0.0321 0.0321 0.0321 0.0321 0.0321 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 020-005 020-005 020-005 020.005 020.005 020-005 020-005 020-005 020-005 020-005 Overlapping Rates (5) : Coachella Valley Unified School District 0.0599 0.0571 0.0595 0.0725 0.0933 0.0749 0.0797 0.1492 0.1492 0.1322 Desert Sands Unified School 0.0761 0.0756 0.0799 0.0811 0.1004 0.1147 0.1116 0.1095 0.1098 0.1092 Coachella Valley Water District 0.0488 0.0507 0.0464 0.0660 0.0860 0.0800 0.0800 0.1000 0.1000 0.1000 Desert Community College District 0.0199 0.0199 0.0199 0.0200 0.0200 0.0200 0.0200 0.0200 0.0233 0.0209 Total Overlapping Rate 0.2048 0.2033 0.2057 0.2395 0.2996 0.2895 0.2912 0.3787 0.3823 0.3622 Total Direct and Overlapping Rate 1.2048 1.2033 1.2057 1.2395 1.2996 1.2895 1.2912 1.3787 1.3823 1.3622 Notes: (1) Direct rate from Tax Rate Area (TRA) 020-160 provided by Hdl Coren & Cone, data source Riverside County Assessor 2015/16 Annual Tax Increment Tables. Overlapping debt rates from California Municipal Statistics (2) 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 Educational Revenue Augmentation Fund (ERAF) deductions and overlapping rates provided by California Municipal Statistics. M 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 W 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. (5) Overlapping rates are based upon a single tax rate area only 154 TABLE 11 020-015 020-089 Redevelopment Project Area 1 020-089 020-089 020-089 020-144 Redevelopment Project Area 2 020-144 020-144 20071x) 20081'1 20091'1 2010 (3) 20111'1 2012131 2007(2) 2008131 200911 20101'1 2011131 20121'1 0.0000 0.0000 0.0152 0.0036 0.0049 0.0524 0.0000 0.0000 0.0000 0.0000 0.0019 0.0499 0.5880 0.5150 0.5245 0.5432 0.5310 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0860 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.2920 0.2910 0.3193 0.3174 0.3059 0.0000 0.2619 0.2619 0.2325 0.2501 0.2471 0.2683 0.2617 0.2617 0.2516 0.2537 0.2511 0.2553 0.0276 0.0276 0.0277 0.0276 0.0282 0.0294 0.0280 0.0280 0.0280 0.0280 0.0286 0.0280 0.0595 0.0595 0.0595 0.0595 0.0607 0.0633 0.0603 0.0603 0.0603 0.0603 0.0616 0.0602 0.0150 0.0020 0.0149 0.0167 0.0182 0.0000 0.0000 0.0020 0.0000 0.0000 0.0000 0.0000 0.0140 0.0140 0.0695 0.0568 0.0637 0.3905 0.1980 0.1970 0.1860 0.1859 0.1930 0.3716 0.0030 0.0720 0.0177 0.0152 0.0166 0.0812 0.0410 0.0410 0.0386 0.0386 0.0401 0.0772 0.0030 0.0180 0.0093 0.0027 0.0038 0.0442 0.0220 0.0220 0.0210 0.0210 0.0218 0.0420 0.0000 0.0030 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0008 0.0002 0.0003 0.0037 0.0000 0.0000 0.0000 0.0000 0.0001 0.0035 0.0120 0.0120 0.0112 0.0111 0.0112 0.0148 0.0140 0.0140 0.0141 0.0141 0.0141 0.0140 0.0020 0.0010 0.0044 0.0014 0.0019 0.0223 0.0060 0.0060 0.0053 0.0053 0.0059 0.0212 0.0130 0.0010 0.0127 0.0120 0.0124 0.0295 0.0760 0.0760 0.0757 0.0757 0.0740 0.0281 0.0000 0.0130 0.0001 0.0000 0.0000 0.0004 0.0000 0.0000 0.0000 0.0000 0.0000 0.0004 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0005 0.0131 0.0010 0.0000 0.0000 0.0000 0.0000 0.0000 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 1.0000 1.0000 1.0000 1.0000 1.0000 020-015 020-089 020-089 020-089 020-089 020-089 020-144 020.144 020-144 020-144 020-144 020-144 0.0599 0.0571 0.0595 0.0725 0.0933 0.0749 0.0599 0.0571 0.0595 0.0725 0.0933 0.0749 0.0761 0.0756 0.0799 0.0811 0.1004 0.1147 0.0761 0.0756 0.0799 0.0811 0.1004 0.1147 0.0488 0.0507 0.0464 0.0660 0.0860 0.0800 0.0488 0.0507 0.0464 0.0660 0.0860 0.0800 0.0199 0.0199 0.0199 0.0200 0.0200 0.0200 0.0199 0.0199 0.0199 0.0200 0.0200 0.0200 0.2048 0.2033 0.2057 0.2395 0.2996 0.2895 0.2048 0.2033 0.2057 0.2395 0.2996 0.2695 1.2048 1.2033 1.2057 1.2395 1.2997 1.2895 1.2048 1.2033 1.2057 1.2395 1.2996 1.2895 155 CITY OF LA QUINTA Principal Property Taxpayers ta Qaa Current Year and Ten Years Ago —GEM ofthe DESERT — - (in dollars) LQR Golf LLC TD Desert Development Coral Option I LLC Inland American La Quinta Pavilion East of Madison LLC Town and Country Partners LLC Walmart Real Estate Business Trust Health Care Reit Inc Aventine Development Iota Griffin KSL Desert Resorts Inc Toll California Shea La Quinta Griffin Ranch Centex Homes Desert Sands Unified School District TD Desert Dev LP Quarry at La Quinta Inc Total Fiscal Year 2015-16 Fiscal Year 2006-07 TABLE 12 Percent of Percent of Total City Total City Taxable Taxable Taxable Taxable Assessed Value Assessed Assessed Value Assessed Rank (') Value Rank t11 Value 1 $ 187,698,672 1.57% 2 54,668,086 0.46% 3 53,609,814 0.45% 4 45,356,947 0.38% 5 35,277,148 0.30% 6 33,149,350 0.28% 7 29,027,004 0.24% 8 25,000,000 0.21% 9 24,915,311 0.21% 10 23,481,667 0.20% $ 512,183,999 4.29% Principal Property Tax Payers (FY 2015-16) Iota Griffin Aventine Development Health Care Reit Inch Walmart Real Esti Business Trust Town and Country Partners LLC East of Madison LLC Inland American I. Pavilion Coral Option I LLC (1) Taxable valuations include secured and unsecured Source: HdL Caren & Cone; Riverside County Assessor 2015/16 Combined Tax Rolls and the SBE Non -Unitary Tax Roll 156 4 43,683,186 0.44% - 0.00% 8 29,878,467 0.30% - 0.00% 0.00% - 0.00% 1 373,834,353 3.73% 2 57,283,555 0.57% 3 44,716,893 0.45% 5 41,055,510 0.41% 6 35,656,654 0.36% 7 32,810,634 0.33% 9 29,804,763 0.30% 10 28,235,365 0.28% $ 716,959,380 7.15% i_LQR Golf LLC :lopment AN ta Qaa GEM ofth,DESERT — CITY OF LA QUINTA Property Tax Levies and Collections Last Ten Fiscal Years (in dollars) TABLE 13 Collections within the Fiscal Year of Levy Total Collections to Date Collections in Fiscal Year Taxes Levied for Subsequent Ended June 30 the Fiscal Year (1) Amount Percent of Levy Years (2) Amount 131 Percent of Levy 2007 74,170,170 83,797,365 112.98% 1,802,076 85,599,441 115.41% 2008 83,018,429 87,804,912 105.77% 3,216,547 91,021,459 109.64% 2009 83,934,188 86,721,572 103.32% 1,471,940 88,193,512 105.07% 2010 78,621,410 80,651,874 102.58% 434,643 81,086,517 103.14% 2011 72,735,079 74,047,640 101.80% 259,209 74,306,849 102.16% 2012 69,307,476 37,885,360 54.66% 181,381 38,066,741 54.92% 2013 5,706,535 5,823,575 102.05% 180,723 6,004,298 105.22% 2014 5,845,390 5,808,387 99.37% 202,342 6,010,729 102.83% 2015 5,968,705 6,100,655 102.21% 840,512 6,941,167 116.29% 2016 6,657,414 6,374,907 95.76% 349,106 6,724,013 101.00% $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Property Tax Collections (in millions) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Notes: (1) The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed -through to other agencies. Effective February 1, 2012, AB1x26 dissolved the Redevelopment Agencies throughout the State of California which resulted in the reduction of amounts collected during Fiscal Year 2011-2012 and all subsequent years. (2) The City participates in the Riverside County Teeter program, which allows for a 30% advance, one settlement payment for the first installment, a 10% advance, a settlement payment for the second installment and one final settlement payment, which is generally received during of the subsequentyear. (3) The total tax levy is based on the Statement of Original Charge and Tax Increment Summaries from the Riverside County Auditor -Controller Office. This amount does not include the results of any successful appeals of a taxpayer assessed valuation. As such, the percentage of the levy collected may be lower than expected. Source: County of Riverside Auditor Controller's Office 157 CITY OF LA QUINTA ta Qaa Ratios of Outstanding Debt by Type c11 Last Ten Fiscal Years -GEMoftheDESERT- (in dollars) Governmental Activities: Reimbursement Agreement Capital leases USDA Loan Provident Savings Loan Due to Coachella Valley Unified School District Due to County of Riverside Developer Agreement Tax Allocation Bonds Project Area 1 Tax Allocation Bonds Project Area 2 2004 Local Agency Revenue Bonds 121 2011 Local Agency Revenue Bonds 121 City Hall Lease Revenue Bonds Unamortized Discount and Issuance Costs Total Governmental Business -type Activities: Capital Leases Total Business -Type Activities Total Primary Government Fiscal Year Ended 2007 2008 2009 2010 2011 $ 278,311 $ 228,311 $ 178,311 $ 128,311 $ - - 149,169 114,583 78,253 23,489 23,489 751,754 741,171 729,480 - - 1,556,283 1,530,958 1,503,433 4,431,178 3,675,731 2,874,653 2,072,965 1,255,243 1,750,000 1,600,000 1,400, 000 1,200,000 1,000,000 643,539 511,048 343,814 174,584 - 139,145,000 136, 350, 000 133, 390, 000 130, 255, 000 126, 925, 000 6,025,000 5,915,000 5,800,000 5,680,000 11,555,000 87,745,000 86,175,000 84,560,000 82,890,000 81,150,000 - - - - 28,850,000 5,900,000 5,540,000 5,160,000 4,760,000 4,340,000 (877,230) (841,087) (804,944) (768,801) (1,115,799) 245,040,798 239,154,003 235,359,040 228,778,771 256,270,610 825,848 681,048 285,217 54,543 286,097 825,848 681,048 285,217 54,543 286,097 $ 245,866,646 $ 239,835,051 $ 235,644,257 $ 228,833,314 $ 256,556,707 Population - State Department of Finance January 1 41,092 42,958 43,778 44,421 37,836 Number of Households 20,176 21,058 21,355 23,489 23,489 Median Household Income $ 87,799 $ 91,366 $ 92,156 $ 90,124 $ 104,410 Percentage of Personal Income 13.88% 12.47% 11.97% 10.81% 10.46 Debt Per Capita $ 5,983 $ 5,583 $ 5,383 $ 5,151 $ 6,781 Notes: 111 Details regarding the City's outstanding debt can be found in the notes to the financial statements. 121 The debt service payment for the 2004 and 2011 Lease Revenue Bonds are made from Redevelopment Project Area 1 & 2 low & moderate income tax increment. Source. City of La Quinta; HDL, Coren & Cone 158 TABLE 14 2012 2013 2014 2015 2016 40,090 71,045 129,063 103,869 155,395 - 702,105 686,345 668,933 649,698 1,441,096 1,405,755 1,367,344 1,325,596 3,895,000 3,425,000 2,930,000 2,405,000 1,850,000 3,935,090 5,639,246 5,151,163 4,545,146 3,980,689 169,084 43,736 169,084 43,736 $ 4,104,174 $ 5,682,982 $ 5,151,163 $ 4,545,146 $ 3,980,689 38,075 38,401 39,032 39,694 39,977 23,528 23,612 23,871 24,150 24,432 $ 104,045 $ 111,077 $ 109,365 $ 97,526 $ 99,157 0.17% 0.22% 0.20% 0.19% 0.16% $ 108 $ 148 $ 132 $ 115 $ 100 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Debt Per Capita 159 CITY OF LA QUINTA TABLE 15 f Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years GEMofth,DESERT — - (in dollars) Outstanding General Bonded Debt City Hall Percent of Per Median Fiscal Year Ended Lease Local Agency Tax Allocation Assessed Household June 30, Obligation Bonds Bonds Total Value (2) Income 2007 5,900,000 87,745,000 145,170,000 238,815,000 2.39% 2,720 2008 5,540,000 86,175,000 142,265,000 233,980,000 1.97% 2,561 2009 5,160,000 84,560,000 139,190,000 228,910,000 1.84% 2,484 2010 4,760,000 82,890,000 135,935,000 223,585,000 1.90% 2,481 2011 4,340,000 110,000,000 138,480,000 252,820,000 2.33% 2,421 2012 3,895,000 - - 3,895,000 0.04% 37 2013 3,425,000 3,425,000 0.03% 31 2014 2,930,000 2,930,000 0.03% 27 2015 2,405,000 2,405,000 0.02% 20 2016 1,850,000 1,850,000 #REF! 19 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2007 General Bonded Debt as a Percent of Assessed Value 2008 2009 2010 2011 2012 2013 2014 2015 2016 Notes: (') General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none) (2) Assessed value has been used because the actual value of taxable property is not readily available in the State of California Source: City of La Quinta 160 Apk CITY OF LA QUINTA QawaDirect and Overlapping Debt June 30, 2016 GEM ofthe DESERT — - (in dollars) TABLE 16 Total Assessed Valuation $ 11,930,906,878 Estimated Share Percentage Outstanding of Overlapping Applicable I'i Debt 6130115 Debt Overlapping Debt (z) Overlapping Tax and Assessment Debt Desert Community College District 16.753% $ 283,391,384 $ 47,476,559 Coachella Valley Unified School District 52.589% 219,056,138 115,199,432 Desert Sands Unified School District (DSUSD) 20.237% 329,215,000 66,623,240 DSUSD Community Facilities District No. 1 88.912% 1,215,000 1,080,281 City of La Quinta 1915 Act Bonds 100.000% 130,000 130,000 Coachella Valley Water District Assessment District No. 68 88.810% 1,725,000 1,531,970 Total Overlapping Tax and Assessment Debt 232,041,482 Overlapping General Fund Debt Riverside County General Fund Obligations 5.028% $ 889,831,745 $ 44,740,740 Riverside County Pension Obligations 5.028% 304,520,000 15,311,266 Riverside County Board of Education COP 5.028% 935,000 47,012 Coachella Valley Unified School District COP 52.589% 41,525,000 21,837,582 Desert Sands Unified School District COP 20.237% 55,780,000 11,288,199 Coachella Valley Recreation and Park District COP 26.484% 1,368,228 362,362 Total Overlapping General Fund Debt 93,587,161 Overlapping Tax Increment Debt Successor Agencies 14.108 - 100.00 % 500,513,028 314,913,700 Total Overlapping Tax Increment Debt 314,913,700 Total Gross Overlapping Debt 640,542,343 Less: Riverside County Supported Obligations 313,593 Total Net Overlapping Debt 640,228,750 Direct General Fund Debt City of La Quinta General Fund Obligations 100.000% $ 1,850,000 1,850,000 Total Direct General Fund Debt 1,850,000 Total Net Combined Direct and Overlapping Debt $ 642,078,750 Notes: (') For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value. (Z) 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: Riverside County Auditor Controller; California Minicipal Statistics, Inc. 161 taoaCITY OF LA QUINTA I Legal Debt Margin Information Last Ten Fiscal Years — GEMofibeDESERT— (in dollars) Notes: (1) 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. (2) The City of La Quinta has no general bonded indebtedness Source: California Municipal 162 Fiscal Year 2007 2008 2009 2010 2011 Assessed valuation $ 9,975,646,644 $ 11,866,414,134 $ 12,416,034,763 $ 11,753,185,892 $ 10,870,790,733 Debt limit percentage ' 15% 15% 15% 15% 15% Debt limit 1,496,346,997 1,779,962,120 1,862,405,214 1,762,977,884 1,630,618,610 Total net debt applicable to limit: General obligation bonds (2) Legal debt margin $ 1,496,346,997 $ 1,779,962,120 $ 1,862,405,214 $ 1,762,977,884 $ 1,630,618,610 Total debt applicable to the limit as a percentage of debt limit 0.0% 0.0% 0.0% 0.0% 0.0% Notes: (1) 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. (2) The City of La Quinta has no general bonded indebtedness Source: California Municipal 162 TABLE 17 2012 2013 2014 2015 2016 $ 10,331,431,958 $ 10,274,998,112 $ 10,726,752,603 $ 11,369,346,292 $ 11,930,906,878 15% 15% 15% 15% 15% 1,549,714,794 1,541,249,717 1,609,012,890 1,705,401,944 1,789,636,032 $ 1,549,714,794 $ 1,541,249,717 $ 1,609,012,890 $ 1,705,401,944 $ 1,789,636,032 0.0% 0.0% 0.0% 0.0% 0.0% 163 AM CITY OF LA QUINTA TABLE 18 Pledged-Revenue Coverageta Qaa Last Ten Fiscal Years - CEM ofth,DESERT - - (in dollars) Local Agency Revenue Bonds (City Hall Project) Fiscal Year Lease Less Other Debt Service Coverage Ended June 30, Revenue (2) Debt Payments Net Lease Revenue Principal Interest Ratio (3) 2007 678,865 678,865 345,000 333,865 1.00 2008 675,880 675,880 360,000 315,880 1.00 2009 676,450 676,450 380,000 296,450 1.00 2010 675,280 675,280 400,000 275,280 1.00 2011 672,525 672,525 420,000 252,525 1.00 2012 673,521 673,521 445,000 228,521 1.00 2013 673,130 673,130 470,000 203,130 1.00 2014 671,351 671,351 495,000 176,351 1.00 2015 673,046 673,046 525,000 148,046 1.00 2016 673,075 673,075 555,000 118,076 1.00 Notes: (1) Details regarding the city's outstanding debt can be found in the notes to the financial statements. (2) Lease revenues consist of payments from the City General Fund and Civic Center Development Impact Fee Fund. (3) Coverage ratio is a measure of the City's ability to meet its obligation. A ratio of greater than or equal to one indicates that sufficient revenue has been generated to satisfy the debt service requirements. The ratio is calculated as total available revenue (net lease revenue) divided by total debt service requirements (principal and interest) . 164 ta wCITY OF LA QUINTA Demographic and Economic Statistics Last Ten Calendar Years GEM of the DESERT - City Land (Sq Miles) Population Median Household Income (in dollars) Number of Dwelling Units Persons per Household Per Capita Income Labor Force Employment Unemployment Rate Median age $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 1 1 TABLE 19 Sources: 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (3) 35.10 35.31 35.31 35.31 35.31 35.16 35.16 35.16 35.71 35.71 (1) 41,092 42,958 43,778 44,421 37,836 38,075 38,401 39,032 39,311 39,977 (5) $87,799 $91,366 $92,156 $90,124 $104,410 $104,045 $111,077 $109,365 $97,526 $99,157 (3) 20,176 21,058 21,355 23,489 23,528 23,528 23,612 23,871 24,150 24,432 (1) 2.85 2.85 2.85 2.87 2.55 2.56 2.58 2.59 2.60 2.62 (4) $30,850 $32,047 $32,324 $31,457 $40,961 $40,722 $43,053 $42,226 $37,510 $37,846 (2) 15,300 15,200 14,800 14,600 14,400 15,100 15,300 15,600 17,300 17,800 (2) 14,900 14,600 13,700 13,500 13,300 14,100 14,400 14,900 16,600 17,200 (2) 2.61% 3.95% 7.43% 7.53% 7.64% 6.62% 5.60% 4.30% 4.50% 3.40% (4) 36.4 36.4 36.4 42.2 41.5 42.8 43.6 44.8 45.1 45.3 Median Household Income $109,365 $104,410 $104,046 $111,077 $99,15 $92,156 $87 799 $97,526 $91,366 $90,124 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Number of Dwelling Units 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sources: (1) State of California Department of Finance (2) State of California Employment Development Department Website (3) Design and Development Department (4) HDL, Coren & Cone (5) Calculated using 'Persons per Household" mulitplied by "Per Capita Income" 2016 2015 2014 2013 2012 Unemployment Rate 2011 2010 2009 2008 2007 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% Per Capita Income and Unemployment $50,000 9.00% $45,000 8.00% $40,000 7.00% $35,000 6.00% $30,000 5.00% $25,000 4.00% $20,000 $15,000 3.00% $10,000 2.00% $5,0001.00% $0 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -Percapi,.,-- -nemployment Rate 165 24,432 1,500 23,528 23 1 23,489 24,150 23,528 23,612 !,000 21,058 21,355 3,500 20,176 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sources: (1) State of California Department of Finance (2) State of California Employment Development Department Website (3) Design and Development Department (4) HDL, Coren & Cone (5) Calculated using 'Persons per Household" mulitplied by "Per Capita Income" 2016 2015 2014 2013 2012 Unemployment Rate 2011 2010 2009 2008 2007 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% Per Capita Income and Unemployment $50,000 9.00% $45,000 8.00% $40,000 7.00% $35,000 6.00% $30,000 5.00% $25,000 4.00% $20,000 $15,000 3.00% $10,000 2.00% $5,0001.00% $0 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -Percapi,.,-- -nemployment Rate 165 Qaa Yr — GEM of the DESERT — - CITY OF LA QUINTA Principal Employers Current Year and Ten Years Ago Employer Activity La Quinta Resort & Club/ PGA West Hotel & Golf Resort PGA West Golf Resort Desert Sands Unified School District Government Wal-Mart Super Center Retailer Costco Retailer Home Depot Retailer Imperial Irrigation District Utility Company Lowe's Home Improvement Retailer Rancho La Quinta Golf Resort Stater Brothers Grocery Store Traditions Golf Club Golf Resort Vons Grocery Store Ralph's i l Grocery Store Total employment listed Total City Employment - July 1 Fiscal Year 2015-16 Percent of Number of Total Rank Employees Employment 1 1,326 7.71 2 957 5.56 3 358 2.08 4 259 1.51 5 168 0.98% 6 141 0.82 7 137 0.80% 8 105 0.61 9 85 0.49 10 72 0.42% 11 63 0.37% 3 0.00 3,671 21.34% 17,200 TABLE 20 Notes: * La Quinta Resort & Club and PGA West are accounted for as one entity; as such, their employment numbers are reported together as of FY 2015-16. (1) Store closed prior to June 30, 2015 Source: City of La Quinta 166 6,062 40.68 14,900 Fiscal Year 2006-07 Percent of Number of Total Rank Employees Employment 1 1,600 10.74 5 500 3.36 2 1,534 10.30 3 800 5.37 - 0.00 6 240 1.61 7 200 1.34% 8 150 1.01 4 700 4.70 8 150 1.01 9 100 0.67% - 0.00 10 88 0.59% Notes: * La Quinta Resort & Club and PGA West are accounted for as one entity; as such, their employment numbers are reported together as of FY 2015-16. (1) Store closed prior to June 30, 2015 Source: City of La Quinta 166 6,062 40.68 14,900 CITY OF LA QUINTA Full-time City Employees by Function -GI,u �rDttilkl Last Ten Fiscal Years Fiscal Year TABLE 21 Function 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Administration -City Mgr. Office 10.00 12.00 12.00 13.00 14.00 12.00 11.00 8.00 7.00 4.00 City Clerk 5.00 6.00 6.00 6.00 6.00 5.00 5.00 4.00 4.00 3.00 Finance ISI 9.00 9.00 9.00 9.00 9.00 8.00 8.00 7.00 8.00 7.00 Community Services 10.25 11.25 11.25 10.35 10.25 10.35 10.35 11.65 11.32 ** Building and Safety 24.00 25.00 25.00 25.00 24.00 21.00 21.00 Planning and Development 12.00 12.00 12.00 10.00 9.00 8.00 9.00 Community Development - - - - - - - 19.00 20.00 Public Works 26.25 28.25 29.25 27.25 26.25 24.25 23.25 20.00 21.35 " Community Resources I'I - - - - - - - - - 18.00 Design and Development (3) - - - - - - - - - 27.00 Facilities 141 - - - - - - - - - 19.00 Golf Course 0.50 0.50 0.50 0.40 0.50 0.40 0.40 0.35 0.33 0.33 Total 97.00 104.00 105.00 101.00 99.00 89.00 88.00 70.00 72.00 78.33 110.00 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 Total Full -Time City Employees 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Notes: The City of La Quints contracts with the County of Riverside for Police Services and with the California Department of Forestry through a contract with the County of Riverside for Fire Services. In addition the City -owned Golf Course is operated by Landmark Golf. These positions have not been included as these positions are not City employees. * The City merged the Building and Safety Department with the Planning and Development Department in 2014. The resultant department is referred to as Community Development. ** During FY 2015216 the City was subject to a major reorganization in an attempt to improve efficiency and controls that effectively terminated the Community Services, Community Development, and Public Works departments. Following is a brief description of the reorganization for each department (corresponding to the above superscript): (') The Finance department no longer issues business and animal licenses. M The Community Resources department has taken over specific roles of the prior Community Development and Community Services departments including, but not limited to human resources, police, fire,library, museum, recreation, marketing, code compliance, animal control, and emergency services. (3) The Design and Development department has taken over specific roles of the prior Community Development, Public Works, and Finance departments including, but not limited to customer service, business and animal licensing, planning, building, engineering services, and development services. (4) The Facilities department has taken over specific roles of the prior Community Services and Public Works departments including, but not limited to , parks, streets, buildings, lighting and landscaping. Source., City of La Quinta 167 j' fQaa tl►7 <., GEM if&DESERT f CITY OF LA QUINTA Operating Indicators by Function Last Ten Fiscal Years TABLE 22 Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Finance: Number of Animal Licenses Processed (1) 1,022 1,272 1,609 1,768 1.619 1,674 1,505 1,602 1,374 ` Number of Accounts Payable Checks Processed 4,722 4,840 4,819 4,393 4,530 3,766 3,576 3,696 3,833 4,153 Number of investment purchases 73 64 36 32 20 27 30 22 21 22 Par value of investments $ 392,729,000 $ 424,500,000 $ 229,969,000 $ 267,213,000 $189,810,285 $188,782,874 $164,614,769 $136,323,300 $128,990,447 $137,594,669 Number of cleared checks 4,837 5,501 5,269 4,984 4,912 5,103 3,899 3,922 4,004 4,167 Number of outgoing bank wires 158 136 91 75 87 63 58 58 54 41 City Clerk: Contracts Processed ' 319 346 289 238 282 Documents Notirized * 254 301 334 203 157 Documents Recorded with County 170 125 183 106 112 Subpoenas and Claims Processed * * * * * 22 15 21 37 10 Records Requests Fulfilled and Recorded ' 518 558 601 580 518 Documents Scanned to Electronic Archives i'i * 30,437 28,798 34,671 164,847 233,182 Public Works: Encroachment permits issued 218 110 132 78 104 65 124 109 127 54 Request for services iii 419 1152 1931 1306 746 534 740 1,322 1,261 3,440 Community Development: Number of Active Business Licenses I'1 3,424 3,690 3,523 3,428 3,183 3,310 3,520 3,998 4,452 3,368 Permits: Single family Detached 526 297 129 56 85 39 83 147 176 108 Single family Attached 38 - 6 12 - 11 - - 4 7 Residential Pool 612 331 207 152 148 127 162 204 255 217 Wall/Fence 963 583 299 178 218 149 167 220 328 257 Other 1,404 1,121 908 790 1,033 916 1,042 1,158 1,316 1,230 Garage Sale Permits ul 1,444 1,519 1,535 1,663 1,805 1,430 1,404 1,255 1,290 1,109 Total Permits 4,987 3,851 3,084 2,851 3,289 2,672 2,858 2,984 3,369 2,928 Code Compliance`): Animal Control Incidents Handled i1i 687 2,920 3,630 3,984 4,392 4,246 3,206 1,645 1,085 Vehicle abatements 296 351 346 214 263 139 99 88 85 255 Weed abatements 76 117 97 125 143 106 1,404 43 45 57 Nuisance abatements/Property Maintenance 2,032 2,142 3,130 2,340 2,252 2,433 1,668 730 557 1,037 All Other "1 1,432 Community Services: Library activities: Volume 44,981 66,124 81,124 89,060 92,484 109,000 63,955 71,874 73,924 182,913 Books checked out 99,659 117,738 215,843 259,711 263,064 275,838 220,690 329,154 263,047 234,340 Cards Issued 5,325 3,675 3,684 3,547 3,822 4,477 2,966 2,035 2,418 2,179 Number of School Children Visiting 260 841 1,036 772 1,881 962 737 1,539 1,562 2,947 Volunteer Hours 1,583 1,951 2,342 2,723 4,280 2,720 2,226 1,340 1,917 2,169 Senior Center/Wellness Center I'I Number of visits 12,955 14,013 15,739 20,326 18,403 16,642 9,350 11,500 23,871 62,820 Volunteer Hours 4,192 3,332 2,583 3,131 3,099 2,690 2,233 2,745 1,279 1,585 Recreation activities: Participants: Leisure Classes 1,192 990 1,140 1,437 1,512 2,016 1,475 1,177 1,322 2,241 Special events 7,809 8,109 11,053 8,795 8,933 36,305 5,970 5,927 6,460 8,185 Adult Sports 6,827 8,550 10,806 13,364 13,092 5,647 3,865 5,878 5,487 7,192 Golf course: Golf rounds played 40,548 40,516 39,150 43,779 45,269 46,949 46,352 43,610 38,383 46,475 Average Green fee $ 76.97 $ 81.09 $ 76.13 $ 71.59 $ 70.70 $ 70.40 $ 67.44 $ 66.83 $ 45.94 $ 68.84 Planning and Development: Number of residential units approved 534 338 100 255 208 285 228 494 208 40 Commercial square footage approved 124,821 342,502 390,097 6,200 27,526 61,662 - 113,149 79,092 13,000 Notes: *Data is not available for City Clerks operations prior to FY ended June 30, 2012. (1) Data on this table may vary from year to year due to restructuring, personnel, and systems changes that have taken place at the city over the past five years. Examples include animal licensing and control contracted to County of Riverside May 2015, business licenses and garage sale permits transferred to Cc mmunity Development Department, tracking system for active business licenses updated, vacation rental requirements for permits changed, Codes Department began using GoEnforce tracking software, Public Works Department expanded use of GoRequest system, City Clerk's office began project to archive all old documents and plans electronically, and the Senior Ce nter became the Wellness Center in 2015. (3) "All Other" category includes building codes, business license, commercial, hazardous conditions, health/safety, other, parki ng, vacation rentals, and zoning. For this fiscal year, data was annualized using the seven months of actual "total closed incidents" provided by GoEnforce. Source., City of Le Quinta 168 — GEMoftbeDESERT— - CITY OF LA QUINTA Capital Asset Statistics by Function Last Ten Fiscal Years TABLE 23 Notes: 0) Bike path miles were updated to include both Class I and Class II bicycle paths in 2015. (z) In fiscal year ending 2009 street lights at intersections were included for the first time. Source: City of La Quinta 169 Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Public Works: Streets (miles) 122 127 127 127 127 128 128 128 128 128 Bikepaths (miles) i1) 22 22 22 22 22 22 22 22 34 34 Streetlights (21 85 85 261 265 265 269 269 277 277 281 Traffic signals 45.25 45.25 49 50 50 51 52 54 54 54 Traffic signs 2,845 2,895 2,899 2,909 2,919 2,934 2,984 3,018 3,018 3,018 Bridges 12 12 12 12 12 12 12 13 13 13 Parks and Recreation: Parks 12 13 13 13 13 13 13 13 13 13 Park Acreage 207 209 209 218 218 218 218 218 218 218 Undeveloped Park Acreage 40 40 40 40 40 40 40 40 40 40 Senior/Wellness 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 1 1 Notes: 0) Bike path miles were updated to include both Class I and Class II bicycle paths in 2015. (z) In fiscal year ending 2009 street lights at intersections were included for the first time. Source: City of La Quinta 169 CITY OF LA QUINTA Schedule of Insurance in Force W W June 30, 2016 — GEM of the DESERT — TABLE 24 Company Name Policy Number Coverage Limits Term Premium Hartford FA026725414 Employee Dishonesty, $1 Million 12/03/14 - 12/03/15 $3,366 Forgery, Computer Fraud Hartford FA0267225415 Employee Dishonesty, $1 Million 12/03/15 - 12/03/16 $3,366 Forgery, Computer Fraud CJPIA-Alliant B128410009W14 All Risk Property Insurance $20 Million 07/01/14 - 07/01/15 $28,793 Including Auto Physical Damage, Single Limit per Occurrence Terrorism, Boiler & Machinery subject to other sublimits (Excluding Earthquake) CJPIA-Alliant B128410009W15 All Risk Property Insurance $20 Million 07/01/15 - 07/01/16 $36,608 Including Auto Physical Damage, Single Limit per Occurrence Terrorism, Boiler & Machinery subject to other sublimits (Excluding Earthquake) Lloyds Lloyds California Joint Powers Insurance Authority California Joint Powers Insurance Authority California Joint Powers Insurance Authority Source: City of La Quinta W14D19150201 Earthquake/Flood Real & Personal Property Including Contingent Tax Interruption W14D19160301 Earthquake/Flood Real & Personal Property Including Contingent Tax Interruption Comprehensive General Liability Worker's Compensation PECO011896301 Pollution Liability 170 $10 Million 02/07/15 to 02/07/16 $95,976 $10 Million 02/07/16 - 02/07/17 $82,560 $50 Million 06/30/15 - 06/30/16 $262,563 Single Limit per Occurrence $10 Million 06/30/15 - 06/30/16 $301,260 $10 Million 7/01/14 - 7/01/17 $13,340