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2002-2003 ACFR (July 1 - June 30 Annual Comprehensive Financial Report)
CITY OF LA QUINTA I La Quinta, California Comprehensive Annual Financial Report Year Ended June 30, 2003 CITY OF LA QUINTA La Quinta, California Comprehensive Annual Financial Report Year. ended June 30, 2003 Prepared by FINANCE DEPARTMENT JOHN M. FALCONER Director of Finance (This page intentionally left blank) CITY OF LA QUINTA Comprehensive Annual Financial Report Year ended June 30, 2003 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal i List of Principal Officials xi Organizational Chart xii Certificate of Award for Outstanding Financial Reporting (CSMFO) xiii Certificate of Achievement for Excellence in Financial Reporting (GFOA) xiv FINANCIAL SECTION Independent Auditors' Report Management's Discussion and Analysis (Required Supplementary Information) 3 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets 18 Statement of Activities 19 Fund Financial Statements: Governmental Funds: Balance Sheet 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 22 Statement of Revenues, Expenditures and Changes in Fund Balances 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 26 Proprietary Funds: Statement of Net Assets 27 Statement of Revenues, Expenses and Changes in Net Assets 28 Statement of Cash Flows 29 Fiduciary Funds: Statement of Fiduciary Assets and Liabilities — Agency Funds 30 CITY OF LA QUINTA Comprehensive Annual Financial Report Year ended June 30, 2003 TABLE OF CONTENTS, (Continued) Page FINANCIAL SECTION, (Continued Notes to the Basic Financial Statements 31 REQUIRED SUPPLEMENTARY INFORMATION: Notes to Required Supplementary Information 67 Budgetary Comparison Schedules: General Fund 68 Low/Moderate Income Housing Project Area No. 2 Fund 70 SUPPLEMENTARY SCHEDULES: Non -Major Governmental Funds: Combining Balance Sheet 72 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 73 Non -Major Special Revenue Funds: Combining Balance Sheet 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 78 Budgetary Comparison Schedules: State Gas Tax Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 80 Federal Assistance Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 81 Lighting and Landscape Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 82 CITY OF LA QUINTA Comprehensive Annual Financial Report Year ended June 30, 2003 TABLE OF CONTENTS, (Continued) Page FINANCIAL SECTION, (Continued State Law Enforcement Block Grant (SLESF): Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 83 Quimby Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 84 Public Safety Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 85 Arts in Public Place Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 86 South Coast Air Quality Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 87 Local Law Enforcement Block Grant (LLEBG): Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 88 Coachella Valley Violent Crime Task Force Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 89 Low/Moderate Income Housing Project Area No. 1 Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 90 Low/Moderate Bond — Project Area No. 1 Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 91 Low/Moderate Bond — Project Area No. 2 Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 92 CITY OF LA QUINTA Comprehensive Annual Financial Report Year ended June 30, 2003 TABLE OF CONTENTS, (Continued) Page FINANCIAL SECTION, (Continued) Major and Non -Major Debt Service Funds: Budgetary Comparison Schedules: Financing Authority Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 94 Redevelopment Agency Project Area No. 1 Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 95 Redevelopment Agency Project Area No. 2 Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 96 Major and Non -Major Capital Projects Funds: Budgetary Comparison Schedules: Combining Balance Sheet 98 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 100 Parks and Recreation Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 102 Capital Improvement Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 103 Redevelopment Agency Project Area No. 1 Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 104 Infrastructure Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 105 CITY OF LA QUINTA Comprehensive Annual Financial Report Year ended June 30, 2003 TABLE OF CONTENTS, (Continued) Page FINANCIAL SECTION. (Continued Transportation Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 106 Civic Center Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 107 Library Development Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 108 County Library Development Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 109 Community Center Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 110 Street Facility Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 111 Park Facility Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 112 Fire Facility Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 113 Assessment District 2001-1 Phase VI Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 114 Financing Authority Capital Projects Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 115 CITY OF LA QUINTA Comprehensive Annual Financial Report Year ended June 30, 2003 TABLE OF CONTENTS, (Continued) Page FINANCIAL SECTION, (Continued) Redevelopment Agency Project Area No. 2 Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 116 Internal Service Funds: Statement of Net Assets 118 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 119 Combining Statement of Cash Flows 120 Agency Funds: Combining Balance Sheet 122 Statement of Changes in Assets and Liabilities 124 Capital Assets Used in the Operation of Governmental Funds: Schedule by Source 128 Schedule by Function and Activity 129 Schedule of Changes by Function and Activity 130 CITY OF LA QUINTA Comprehensive Annual Financial Report Year ended June 30, 2003 TABLE OF CONTENTS, (Continued) Table No. Page STATISTICAL SECTION General Fund Expenditures by Function 1 132 General Fund Revenues by Source 2 133 Property Tax Levies and Collections 3 134 Schedule of Net Taxable Value 4 135 Property Tax Rates - Direct and Overlapping Governments 5 136 Special Assessment Billings and Collections 6 137 Schedule of Direct and Overlapping Bonded Debt 7 138 Computation of Legal Debt Margin 8 139 Revenue Bond Coverage 9 140 Demographic Statistics 10 141 Property Value, Construction Activity, and Bank Deposits 11 142 Principal Taxpayers 12 143 Major Employers 13 144 Schedule of Insurance in Force 14 145 Miscellaneous Statistical Data 15 146 General Fund Balance Trends 16 147 (This page intentionally left blank) November 18, 2003 P.O. Box 1504 78-495 CALLE TAMPICO LA QUINTA, CALIFORNIA 92253 Honorable Mayor, City Council, and City Manager City of La Quinta La Quinta, California (760) 777-7000 FAX (760) 777-7101 FY 2002-03 COMPREHENSIVE ANNUAL FINANCIAL REPORT LETTER OF TRANSMITTAL We are pleased to present the 2003 CAFR of the City of La Quinta to the City Council and the City Manager. This report includes financial statements of the: • City of La Quinta; • La Quinta Redevelopment Agency; and, • La Quinta Financing Authority. Our independent auditors, Conrad & Associates have expressed their opinion as to the fairness of these financial statements. The completion of the independent audit is an important part of the total financial management program for the City of La Quinta. The information found in this report is provided by management to the Council and the public to assist those interested in understanding the fiscal condition of the City as of June 30, 2003. Responsibility for both the accuracy of the data, its completeness and its fairness of presentation, including all disclosures rests with the City. 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 present fairly the financial position and results of operations of the various funds of the City of La Quinta. All disclosures necessary to enable this reader to gain an understanding of the government's financial activities have been included. This is the third year of financial statement presentation under the financial and reporting requirements of Government Accounting Standards Board Pronouncement No. 34 — The New Financial Reporting Model. The City elected early implementation of the standards in Fiscal Year 2001. In its most elementary terms, the new model attempts to present the financial position and activities of a government organization on a basis comparable to a for-profit organization. Honorable Mayor, City Council, and City Manager Document Structure The CAFR is presented in three sections: • Introductory; Financial; and, • Statistical. The introductory section includes this transmittal letter, the City's organizational chart, a list of principal officials, and awards for excellence in financial reporting. The financial section consists of the audit opinion, management's discussion and analysis of the financial statements and footnotes, and required supplementary information. The statistical section includes selected financial and demographic information, generally on a multi-year basis. The following governmental agencies that provide services to the citizens of the City of La Quinta have been excluded from this report because the City does not have financial accountability over these agencies: State of California and its departments, County of Riverside and its departments, Coachella Valley Association of Governments, Riverside County Transportation Commission, Riverside County Waste Management District, Desert Sands Unified School District, County Superintendent of Schools, Coachella Valley Unified School District, Desert Community College District, Mosquito Abatement District, and Coachella Valley Water District, Sunline Transit, Palm Springs Desert Resorts Convention and Visitors Authority, and the Desert Regional Resorts Airport Authority. Back; round 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 City was originally incorporated in 1982 as a general law City and it became a charter City in November 1996. Significant 10 -year demographic data is as follows: • Population as of January 1, 2003 was 30,452, an increase of 98% from 1992. • Retail Sales of $290 million, a 498% increase from 1992; • Taxable Sales of $355 million, a 365% increase from 1992; • Assessed Valuation of $5.453 billion, a 190% increase from 1992; and, • Hotel Room sales over $37.8 million, a 105% increase from 1992. The City area includes the La Quinta Resort, several world class golf resorts, quality neighborhoods of single family and multi -dwelling homes, and light commercial industries. The City has a beautiful Senior Center, which borders the newly opened Civic Center Campus. The Desert Sands Unified School District and Coachella Valley Unified School District provide educational opportunities for school-age children in La Quinta. ii Honorable Mayor, City Council, and City Manager The City has been experiencing rapid growth in population. During 2002, the population grew 5.99%. With this growth comes a demand on local government to meet the needs of its citizens. The total number of full time authorized positions for 2002-2003 is 76. In addition to the 30,450 permanent residents, approximately 12,0 00 seasonal residents spend three to six months in the City. La Quinta was recently named "the best place to live for golfing" by the Robb Report, and has been one of the fastest growing cities in Riverside County and California in recent years. Services Provided by the City City services can be divided into those services provided directly by City staff and those services contracted out or provided by other government agencies and organizations. Direct services provided by City staff in the following areas include: General Government City Clerk - Legislative - City Clerk - City Manager - Economic Development Community Services - Personnel - Administration Finance - Fiscal Services - Central Services Building and Safety - Administration - Code Compliance - Animal Control - Building - Emergency Services - Fire - Civic Center Building Public Works - Administration - Development/Traffic - Street & Landscape Maintenance - Construction iii - Recreation - Senior Center Community Development - Administration - Planning - South Coast Air Quality - Redevelopment Honorable Mayor, City Council, and City Manager Services are also provided to the City and its citizens by contract and by the direct services of other government agencies and organizations. These services include police and fire protection through the County of Riverside, library services through the County of Riverside, visitor & tourist information through Palm Springs Desert Resorts Convention Visitors Authority, City promotion through the La Quinta Chamber of Commerce, water service through the Coachella Valley Water District, electricity service through the Imperial Irrigation District, refuse collection through Waste Management Company, public transit through Sunline Transit Agency, and cable service through Time Warner. Si nilicant Events and Accomplishments During 2002-03 the City experienced many significant events and accomplishments that may not be readily evident from a review of the financial statements. Some of the more important of these items are: Real Estate Building permits issued exceeded $173 million in valuation last year. La Quinta issued $1.5 billion worth of building permits during the last ten years, averaging over $150 million per year. Seven hundred eighty six new housing units were built in 2002, and La Quinta's growth continues to be faster than the average recorded in Riverside County and in the Coachella Valley. Major retail developments continue to diversify and enhance La Quinta's economic base. The Centre at La Quinta auto mall site includes three auto dealerships and can accommodate up to nine dealerships, plus 400,000 square feet of retail anchored by a Super Walmart under construction; Washington Park, slated for a Target currently under construction, Washington Mutual Bank, and Stein Mart; La Quinta Corporate Center, which contains a fitness center, offices, and a post office site; La Quinta Court, a specialty shopping center with fine restaurants and a gourmet food market; La Quinta Professional Plaza, under construction, which includes Palm Desert National Bank, professional offices and restaurants; Jefferson Plaza, anchored by Home Depot, I -Hop, and Jack in the Box; One Eleven Center, anchored by Wal Mart, Staples, Ross Dress 4 Less, and coming soon, a Big 5 Sporting goods store; Point Happy, anchored by two restaurants; and Old Town La Quinta, a 140,000 square foot commercial/retail center under construction in the Village area. Several resort -oriented projects which will expand the economic diversity of the City are planned or already approved, including an Embassy Suites hotel, a Marriott Residence Inn, and development of Centre Point, a 50 -acre site at the corner of Miles Avenue and Washington Street which will include a mid -priced hotel, a boutique hotel, and a 165,000 square foot medical facility. A residential component is also part of the project, with a neighborhood park. Quality residential communities, including PGA West, Rancho La Quinta and the Traditions have increased the assessed valuation of the City, and several other large projects have been approved and are moving forward. Since 1992, assessed valuations have grown to $5.453 billion in 2002. In the last decade, assessed values have increase 190%, substantially higher than the region's average growth rate. iv Honorable Mayor, City Council, and City Manager Housing La Quinta has a wide spectrum of housing types and values, ranging from the affordable to exclusive luxury estates. The median home prices in La Quinta have been remained relatively stable with slight appreciation and are significantly lower than other areas, mostly due to the reasonably priced land values and available housing inventory. The median home price in La Quinta stands at approximately $190,000, which is lower than averages for San Diego and Los Angeles Counties and the State of California. Sales of new and existing homes in La Quinta continue to be amongst the highest volume in the Coachella Valley. New construction has brought the number of housing units available in the City to 15,940. The 15,940 units consist of 12,368 detached single family residences, 2360 attached single family residences, 953 multi family residences, and 259 mobile homes. Tourism La Quinta is well known for its many championship golf courses. The City is home to 21 championship courses, and many more are in the planning or development stages. In addition to quantity, La Quinta has some of the highest rated courses in the world of golf. Various golf tournaments, including the prestigious Bob Hope Chrysler Classic, are exposing La Quinta internationally as a quality destination and golf resort area. La Quinta's Trilogy Golf Club will be hosting the internationally televised Skins Game in 2003 and 2004. The City acquired 525 acres of previously undeveloped property adjacent to Jefferson Street and Avenue 52. This project, Silver Rock Ranch, will include two 18 -hole golf courses, hiking trails, residential casita units, as well as two or three hotels and commercial areas for retail and restaurants. The nationally recognized La Quinta Arts Festival attracts many visitors from around the country each year to the City of La Quinta and the Coachella Valley, and has relocated to a new site along Washington Street. Hotel room sales in La Quinta enjoyed dramatic growth to a record $38 million in 2002. The La Quinta Hotel, the largest destination resort in the Coachella Valley, was the largest contributor to this increase. Capital Improvements The City completed almost $16 million in capital improvements during 02-03. Projects completed or nearing completion include the Civic Center Campus landscape, anchored on one corner by the Civic Center, another corner by the Senior Center and Community Facilities and a third corner dedicated to the planned City library; Jefferson Street Phase I widening; improvements or construction of a number of city parks, including Monticello, Cove mini -park, Cove Oasis and Cahuilla Trail, Fritz Burns Park Phase 2, and the 18 acre La Quinta Park, which includes lighted soccer fields. Several significant projects which are continuing, planned or already approved, include Civic Center expansion, Avenida La Fonda improvements, construction of the City's third fire station, and Jefferson Street widening Phase H. V Honorable Mayor, City Council, and City Manager The City's Capital Improvement Program (CIP) continues to increase to meet the demands of growth, and totals $45 million for 2003-2004. This major commitment in infrastructure will continue to provide for both the current and future growth that the City has experienced. The City has several significant community facility projects underway. A skateboard park and dog park have been completed and the 18 acre La Quinta Park is near completion. This park hosts a variety of community amenities, including lighted soccer fields, ball fields, a basketball court, a children's in service area and space for a future skateboard park. Development of the City's first municipal golf course, SilverRock Ranch, will significantly add to amenities available to residents of La Quinta. SilverRock Ranch is under design and expected to be open in 2005. Ci!y Operations The following is a partial listing of the accomplishments for the citizens of La Quinta for fiscal year 2002-2003: Continued development of GIS data base for city-wide planning, obtained aerial photos of City boundaries and planning areas, and developed enhanced mapping capabilities, including public safety analysis; Improved features on City web page, making the municipal code, maps and permit detail available to the general community; Implemented economic development marketing program to support local businesses; Applied for, and received, several grant awards for community projects to enhance public safety, environmental issues, and improved traffic systems; Implemented an improved Optical Imaging system for document storage and record retrieval, including scanning and indexing existing improvement plans into digital archives; Received awards in excellence for financial and budget reports; Implemented upgrades in management information services, including additional servers, enhanced security, and improvements in City web site; Initiated selection and implementation of new software, integrating financial records and departmental operations for improved efficiency and information retrieval; Continued expansion of recreation and Senior Center programs available for community education, leisure enrichment, and health; Implemented special enforcement programs for improved public safety and neighborhood security; Began construction of City's third fire station and participated in emergency management training; Negotiated development agreements to provide for quality housing in several projects, including very low and low income seniors and low and moderate income family households; Continued implementation of the community Emergency Notification System, and improved the City's Emergency preparedness resources; Continued update of General Plan and Housing Element, and continued implementation of Design Standards for development and traffic. Future developments Future developments include: continued commercial development along the Highway 111 corridor and residential growth in the southern part of the City, redevelopment financed property development on Avenue 48, Eisenhower Street and Calle Tampico, and completion of senior residential projects. Additionally, construction of the City's third fire station, and development of the City's first municipal golf course will significantly add to Vi Honorable Mayor, City Council, and City Manager the services offered to La Quinta residents. Construction of both a library and historic museum are in the planning stages. The City will continue coordination with commercial development, ensuring quality enhancements in both new and existing projects, and continue development of resort, hotel, and destination tourist opportunities. Financial Information GASB 34 requires a separate "matter of fact" discussion of the City's financial condition that can be found in the required supplementary information section entitled "Management Discussion and Analysis (MDA)". The operating results for the City of La Quinta for FY 2002/03 were very good and our financial condition is the strongest since incorporation. The City will be faced with future funding challenges that will require a dedicated effort to fulfill our economic development plan to garner new and additional revenues. Management believes that the following items will impact future budgets of the City of La Quinta that will have to be addressed with future revenues or the use of our reserves: The need for additional police services — As the population grows the City will be faced with the need to add additional public safety officers. The need for additional fire services — Coupled with the growth in population and the desire by fire professionals to have three and four person crews, the City will need to address the need for additional fire service resources. The need for a third fire station — The City has two fire stations and a third one under construction in the north part of the City which is anticipated to be completed in January 2005. Additional personnel and paramedic services will continue to be needed. The need to fund additional landscaping costs — As a result of Proposition 218, the City has been limited on the use of City -Wide Lighting and Landscape Assessment District funding for the maintenance of landscaping in the City. The City has continued to add landscaped street medians and developed park facilities that will require additional funds for maintenance. The need to pay for the operations of additional public facilities — In the five year Capital Improvement Plan the City has plans to build a municipal library, expand the museum, and expand City Hall. The following paragraphs outline several of the major polices of the City and attempt to supplement, not supplant, the MD & A which can be found later in this report. Management of the City of La Quinta is responsible for establishing and maintaining a framework of internal controls designed to ensure that assets of the City are protected from loss, theft, or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The framework of internal controls is designed to provide reasonable, but not absolute assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Vii Honorable Mayor, City Council, and City Manager Accounting Controls - The City of La Quinta's accounting system is designed upon the following principles: In the public sector, a city government maintains a variety of "funds" that provide the basis for separately recording the financial data related to a specific activity. A fund is an accounting entity with a complete set of self -balancing accounting records. Each fund has been established because of some restriction on the use of the resources received by that fund. In the private sector, a corporation may have many subsidiaries that make up the parent corporation. Likewise in the public sector, all of the funds make up the complete financial resources of the City of La Quinta. This report includes the transactions of all entities over which the City Council of the City of La Quinta has authority (as defined by the Governmental Accounting Standards Board). The City's accounting system operates on a modified accrual basis of accounting for all governmental and agency type funds. Governmental funds include the General, Special Revenue, Debt Service, and Capital Projects Funds. Under the modified accrual basis of accounting, revenues are recorded when received in cash or accrued when they are both measurable and collectible within the accounting period or soon enough after the end of the period to pay liabilities of the period. Expenditures, other than interest or long term debt, are recorded when liabilities are incurred. At year end, the City has prepared the required entries necessary to report the City financial position and activities on an accrual basis of accounting which recognizes revenues when earned and expenses when incurred. The City maintains two Internal Service Funds and no Enterprise Funds. These types of funds use the accrual basis of accounting. Revenues are recorded when earned and expenses when incurred. In addition to maintaining funds to record accounting transactions, internal controls exist within the accounting system to ensure the safety of assets from misappropriation, unauthorized use or disposition, and to maintain the accuracy of financial record keeping. These internal controls must be established consistent with sound management practices based upon the cost/benefit of the controls imposed. The cost of a control should not be excessive to its derived benefit as viewed by City management. The internal controls in existence at the City of La Quinta are sufficient to ensure, in all material respects, both the safety of the City's assets and the accuracy of the financial record keeping system. The City began implementation of new integrated financial accounting software, to improve reporting capabilities and enhance internal controls in all areas of financial records. BudgetM Controls - The City Manager submits a preliminary budget to the City Council before each fiscal year. A public meeting is then held prior to July 1 to receive public comment. A budget is required to be adopted before the beginning of the fiscal year. Amendments to the budget or budget transfers between funds require Council approval. Budget transfers within funds require City Manager approval. The City also maintains an encumbrance system as one budget technique. All fiscal year end appropriations and encumbrances lapse at year end unless specifically approved by the Council for inclusion in the following year's appropriations. Each Department receives a monthly budget -to -actual expenditure report. In addition, each department can access on-line budgetary data from the financial information system available throughout the City-wide computer network. The City Council is also given an Executive level Summary of Revenues and Expenditures on a monthly basis. Honorable Mayor, City Council, and City Manager Gann Limit - Appropriations Subject to the Limit - In 1979, Proposition 4, the "Gann" initiative, was passed by the voters of California. The purpose of this law was to limit government spending by putting a capon the total proceeds of taxes that may be appropriated each year. This limit is increased each year through a formula that takes into consideration changes in the Consumer Price Index and state per -capita income. If a city reaches this limit, excess tax revenue must be returned to the State or citizens through a process of refunds, rebates, or other means that may be defined at that time. The Gann Limit for the City of La Quinta has increased steadily since 1979 and still provides the City with a comfortable operating margin. Risk Management - The California Joint Powers Insurance Authority (CJPIA) was formed in 1997 under a joint exercise of powers agreement between local governments for the purpose of jointly funding programs of insurance under Section 990 of the California Government Code. The Authority is governed by a Board of Directors, which is composed of one director from each member organization which maintains membership in the Liability program. The City of La Quinta j oined the CJPIA in order to achieve long-term premium stability. Each member city must remain in the pool for three years. Each year, the self-insured pool undergoes a retrospective deposit computation based on current incurred loss valuations. Appropriate adjustments are then made over a three-year period. The likelihood of the need for excess premiums is remote given the claims history of the cities involved and the length of time necessary to settle large claims. Generally, individual claims in excess of the self-insured amount for workers compensation and general liability fall under the insurance policies purchased by the City. The CJPIA provides for liability insurance coverage with a maximum of $50,000,000 per claim. All reserves are invested and earnings are credited to members in proportion to their equity. At present, the CJPIA has invested reserves in excess of $100,000,000. City Retirement Costs - The City is a member of the California Public Employers Retirement System (PERS). Employer contribution rates are reviewed and adjusted annually to achieve full funding for retirement benefits by the year 2011. Cash Management - The City Council annually adopts an investment policy that is intended to provide the highest investment return with the maximum security while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds. At all times there was compliance with the City's investment policy, and safety and liquidity objectives were placed above rates of return considerations in making deposits and investments. Certificate of Award for Outstanding Financial Reporting The California Society of Municipal Finance Officers (CSMFO) and the Government Financial Officers Association (GFOA) both present an annual Certificate of Award for Outstanding Financial Reporting. We believe that our current report conforms to their program requirements and we are submitting this report to their organizations for consideration. If received, the Certificates are valid for one year only. The City has received the GFOA and CSMFO awards in prior years and hope to continue to receive these awards. ix Honorable Mayor, City Council, and City Manager Acknowledgments This report could not have been accomplished without the dedicated services of the Finance Department staff. Recognition is given to Amy Swan -Draper, Accounting Manager for her efforts in preparing the introductory and financial sections, Vianka Orrantia, Secretary for her report preparation skills and Sharon Christensen, Misaela Mendoza, Diane Martin and Pat Parker for their diligence in processing most Qf them- sactions reported upon in the financial section of this report. Again, we also appreciate the City Manager and City Council for providing the resources necessary to prepare this report and for their role in preserving the City's frame work 'of internal controls and again wish to express our appreciate for the efforts of the Conrad & Associates, CPA's audit team, for their professionalism in conducting the annual audit for. the City of La Quinta. Respectfully submitted, John M. Falconer Finance Director and Treasurer City of La Quinta Directory of Officials June 30, 2003 CITY COUNCIL Don Adolph, Mayor Stanley Sniff, Mayor Pro Tem Terry Henderson, Council Member Lee Osborne, Council Member Ronald Perkins, Council Member ADMINISTRATION Thomas P. Genovese, City Manager Mark Weiss, Assistant City Manager John M. Falconer, Finance Director Tom Hartung, Building & Safety Director Jerry Herman, Community Development Director Kathy Jenson, City Attorney Dodie Horvitz, Community Services Director June Greek, City Clerk Tim Jonasson, Public Works Director/City Engineer X1 EO a +r pC -:Lay = � " i` umo Awa—`gw caoi —ca°nm c L• $ !E Tefa ° m=°2c EL--c_Eoe��md� c�O1u m V N o. —,,& % U U ®- U ° U C d T2 N �m -E 7 N c c EW 00)0 18VA a cc?NvU �5 32 v E❑ S m� m E m U c E U V m m m m c c P: c CO c m` m0 EL) o0 ocamm�QC N E U m m s E y E o o c E S�Ec acc 'may oV U -E L) oU U m°c N U m O m ..g �c ac 00 0 0 0 Oe a ¢u i`e E d m w �a 0 d�5 OC. py3 W C�u v �•� c❑2 cc- 3m.NmFmwwr?www.e�m�m c ._ u— U.. .-�� N �Vmc aE❑oac10 g'3�cOw'3 echo ILa 0 u12 x �U° m -CN. V c 2ii�3 a m�•�NNHo (Ame u O� a m m c J -: c iii X11 u 9 0 U O N N r1 i O .O V LA vA L � V � OV v � C LL j C: +J w E L c rO � V 'N 4— H O .4 0 O w r� U xiv M O O N tl r -I .1 q CONRAD. ASSOCIATES, L.L.P. The Honorable Mayor and City Council City of La Quinta La Quinta, California Independent Auditors' Report CERTIFIED PUBLIC ACCOUNTANTS 2301 DUPONT DRIVE, SUITE 200 IRVINE, CALIFORNIA 92612 (949)474-2020 Fax (949) 263-5520 We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of La Quinta, California as of and for the year ended June 30, 2003, which CDllectively comprise of the City's basic financial statements, as listed in the accompanying table of contents. These financial statements are the responsibility of the management of the City of La Quinta, California. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of La Quinta, California, as of June 30, 2003, and the respective changes in financial position and cash flows, where applicable, of the City of La Quinta, California and the respective budgetary comparison information for the general fund and major special revenue funds of the City for the year then ended in conformity with accounting principles generally accepted in the United States of America. The information identified in the accompanying table of contents as management's discussion and analysis and required supplementary information is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City of La Quinta's basic financial statements. The introductory section combining and individual nonmajor fund financial statements and statistical schedules listed in the table of contents 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 have been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION The Honorable Mayor and City Council City of La Quinta La Quinta, California In accordance with Government Auditing Standards, we have also issued a report dated August 14, 2003 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 grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. August 14, 2003 PA Management Discussion and Analysis The Management Discussion and Analysis (MDA) is intended to provide the reader of the statements with a concise analysis of the financial results and financial position of the City of La Quinta. The New Reporting Model As mentioned in the prior year MDA, the impact of the new reporting model on the financial statements constitutes the biggest change in the way governmental activities have previously been reported. We have to return to the original "blue book" in the mid 1980's to recall such a major change in the accounting and reporting of governmental activities. Overall, we believe that from a financial reporting standpoint, the preparation of this document continues to be one of the most challenging for the governmental accounting profession. As will be discussed later in detail, most discussion on the new reporting model has focused on infrastructure reporting. This year a major effort was needed to update the infrastructure reporting for additions and deletions during the year. Two new statements have been presented entitled the Statement of Net Assets and Statement of Activities. The purpose of the Statement of Net Assets is to report on the financial and capital resources for all governmental funds in a single statement. The purpose of the Statement of Activities is to report on the activity of the government's operations and is presented in a format that reports the net (expense)/revenue of its various functions. In addition, the Governmental Funds Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balances have been classified into major and non -major funds. These major and non -major funds are determined based upon criteria set forth by the GASB. The GASB believed that this major and non -major classification allows the reader to review the significant funds in one report rather than have the reader determine what is a major fund and what is non -major. Executive Summary As was the case last year, the overall financial results of the City of La Quinta for FY 2002/03 were very good and our financial condition is the strongest since incorporation. Our financial results were stronger than the prior year despite lower interest income and higher costs and the City was generally able to see increases in its reserves. Offsetting our lower interest income and higher costs were increases in transient occupancy and sales tax collections, and a slight increase in permits and fees. In addition, with our higher population, we were able to collect more in State subventions; however, as mentioned earlier, the City incurred higher costs for servicing the larger population. As a fast growing municipality, the City of La Quinta has been able to add to its general reserves. The future challenge will be to ensure that these reserves and the on-going taxes and fees will meet the demands for public services that a community at build -out will require. 3 Background In this MDA section, the Finance Director departs from the past, which required a "just present the reader with the facts" approach and enters into the future with a requirement to "tell it like it is". The analysis also is required to convey the financial results with an element of subjectivity. This subjectivity is based upon the Finance Director's knowledge of the City's "business cycle" and the possible economic factors that may impact the City. The Government Accounting Standards Board is the rule making body that promulgates or sets the accounting rules. This rule making body is slowly but surely moving toward a standard of accounting based upon the full accrual basis of accounting, which is required for for-profit companies. To accomplish this move toward a full accrual basis of accounting, many of the government accounting software providers are incorporating features that will generate two separate sets of statements. One set is produced on the modified accrual basis of accounting and the other on the full accrual basis of accounting. The intent of this software is to capture the data throughout the year necessary to push a button at the end of the year and print out a statement based upon the modified accrual basis of accounting and another statement based upon the full accrual basis of accounting. The City accounting system is based upon the modified basis of accounting throughout the year. Once a year, at year-end, the City prepares memo entries to convert the modified basis of accounting throughout the year to the full accrual basis of accounting. This conversion is prepared on a spreadsheet program and is given to our outside auditors. No formal entries are entered into the accounting system to convert to the accrual basis of accounting. Management believes this less formal conversion process is simpler, more flexible and less costly for the City of La Quinta. You may be asking yourself how significant is the change in the two reporting methods? The following table summarizes the differences for FY 02/03: Description Modified Accrual Accrual Change Assets 152,533,216 488,643,410 336,110,194 Liabilities 46,875,421 174,497,075 127,621,654 Revenues 70,554,718 47,468,715 (23,086,003) Expenditures 70,192,981 45,980,015 (24,212,966) Fund Balance/Net Assets 105,657,795 314,146,335 208,488,540 Revenues over (under) expenditures 361,737 1,488,700 1,126,963 It is apparent that the change in accounting methods dramatically changes the way the reader of the financial statements interprets the financial condition and operations of the City. Management will attempt to present the reader with an analysis that is simpler to understand and draws distinctions between the two accounting methods where possible. The GASB requires that governmental agencies provide two years worth of financial information so that the reader will be able to draw comparisons on the results of operations and the financial position from year to year. 4 Assets The following chart lists a condensed Statement of Net Assets for the fiscal year ending June 30, 2003 and 2002. Total net assets increased $1.5 million from the previous year. CITY OF LA QUINTA Statement of Net Assets Governmental Governmental Governmental Activities Activities Activities 2003 2002 Changes Current and other assets 129,398,242 123,522,074 5,876,168 Capital assets 359,245,168 361,734,987 (2,489,819) Total assets 488,643,410 485,257,061 3,386,349 Current and other liabilities 10,588,398 5,917,187 4,671,211 Long term liabilities 163,908,677 166,682,239 (2,773,562) Total liabilities 174,497,075 172,599,426 1,897,649 Net assets Investment in capital assets, net of related debt 225,818,022 234,923,191 (9,105,169) Restricted 40,038,313 34,708,445 5,329,868 Unrestricted 48,290,000 43,025,999 5,264,001 Total net assets 314,146,335 312,657,635 1,488,700 Employees One major asset of the City of La Quinta is its employees. While not quantified on the books, the City has 76 authorized full time equivalent positions to provide the services required by the community. Cash and Investments The City of La Quinta has cash and investments on hand to meet both immediate and long-term needs. The City Finance Director serves as the Treasurer and is appointed by the City Manager. The City has a seven member Investment Advisory Board. It is appointed by the City Council and meets monthly to review the Treasurer's Report and provide valuable assistance to the Treasurer on current trends and topics in this area, as well as annually reviewing the Investment Policy. The City has a conservative investment policy, which is more restrictive than the policy limitations set forth in 53601 of the Government Code of the State of California. The Treasurer is required to prepare a monthly Treasurer's Report that certifies that he/she believes that the City has, to the best of its ability, the cash to meet its obligations for the next six months. During FY 02/03, the City has met this six-month liquidity requirement. In addition, the City has a two-year (730 -day) limitation on the maximum maturity of our investments and has a buy/hold investment strategy, which does not promote actively selling securities before their maturity, except for liquidity purposes. During FY 02/03, the City did not sell an investment before maturity. Therefore, the financial statements do not report any gains or losses on investments. The following table lists the earnings rates and average maturity of the portfolio: 61 Summary of FY 02/03 Interest Rates/Earnings Month 6 Month Benchmark (%) Average Maturity Days Pool Interest Rate (%) Fiscal Agent Interest Rate (%) Total Rate All Earnings (%) July 2002 1.73% 172 2.46% 1.00% 2.05% August 1.64% 123 2.45% 1.27% 2.07% September 1.62% 139 2.46% 1.26% 2.10% October 1.55% 121 2.41% 1.00% 2.08% November 1.29% 109 2.32% 1.00% 2.02% December 1.27% 163 2.23% 1.00% 1.80% January 2003 1.16% 137 2.11% 0.80% 1.62% February 1.20% 131 1.99% 0.59% 1.74% March 1.18% 117 2.01% 0.75% 1.78% April 1.17% 92 1.98% 0.72% 1.76% May 1.10% 74 1.86% 0.73% 1.54% June 2003 0.86% 123 1.73% 0.49% 1.40% Average FY 02/03 1.29% 125 2.10% 0.75% 1.73% Average FY 01/02 2.29% 60 3.21% 1.93% 2.71% June 2003 June 2002 Ending Cash balances $113,060,020 $106,751,100 Interest Earnings $2,086,793 $4,354,718 During FY 02/03, interest rates dropped throughout the year across the yield curve. The Treasurer exceeded the benchmark 6 month Treasury Bill rate in 12 of the 12 twelve months and overall for the year by an average of 43 basis points. Interest earned on all funds totaled $1.4 million for FY 02/03 versus $1.9 million for FY 01/02 and the total portfolio at June 30, 2003 was $ 113.0 million versus $106.8 million for the previous year. Receivables/Advances to Other Funds The City of La Quinta does not have large receivable balances. We do not have any enterprise activities such as a water or sewer department, which typically generate receivable balances. One of the interesting impacts of GASB 34 is the accounting for advances to and from other funds which will be discussed in greater depth under the Advances from other funds section of the MDA. The City has advanced funds to the City Redevelopment Agency to promote economic activities within its boundary areas. The advances have no specified due date and accrue interest between 7 and 10% per year. The intent is to repay these advances with interest before the expiration of the Redevelopment Project Area Plan in approximately thirty years. In addition, an outstanding advance from the Redevelopment Project Agency to the Park and Recreation Development Impact Fee Fund has been made to accelerate Park development. During the fiscal year, the 1994 Educational Relief Augmentation Fund (ERAF) advance from the Low and Moderate Housing Project Area 2 to the Project Area 2 Debt Service Fund was repaid. The total outstanding balances between the General Fund and the Redevelopment Agency as of June 30, 2003 and 2002 are $21,081,322 and $13,810,753, respectively. The major increase included a $6 million advance to fund construction of a Library, street improvements on Ave La Fonda and street improvements along Eisenhower Drive. The total outstanding balances between the 6 Redevelopment Agency and the Capital Fund — Park & Recreation as of June 30, 2003 and 2002 are $4,921,720 and $1,249,728, respectively. The major increase included advances to fund construction of the La Quinta Park and the Civic Center Campus. Under GASB 34 these advances to and from other funds have been eliminated from the Statement of Net Assets. Capital Assets The most debated topic of the new reporting model is the recording of fixed assets including the City infrastructure assets and accumulated depreciation. In some respects the years following the first year of implementing GASB 34 were harder than the first year. In the first year the City relied on a professional study to value the infrastructure. During FY 02/03, the City continued to track the addition and deletion of fixed assets. These additions and deletions took the form of developer contributions, and completed Capital Improvement Projects. The primary purpose of including infrastructure assets in the financial statements is to report the total amount of improvements and the amount that these assets have been. depreciated. At year-end, General Fixed Assets were 33% depreciated at year end compared to 31% in the previous year, Internal Service assets were 61% depreciated compared to 57% last year and infrastructure improvements were 64% depreciated compared to 61% in the prior year. The higher depreciation percentage indicates that the assets are older and will require accelerated future expenditures in the future to replace aging assets. In each case cited above, the depreciation percentage increased which indicates that the City infrastructure assets are aging faster than they are being replaced. The City has an two internal service funds — equipment replacement and information technology. The Equipment Replacement Fund is for the replacement of equipment and major capital items such as the roofs and air conditioners in the City Hall and Senior Center. The Information Technology fund is for the replacement of computers and related equipment and to charge departments for their fair share of computer related services. In addition to the general fixed assets, such as buildings, parks, computers and internal service assets, the City has included its infrastructure assets in the Statement of Net Assets. Infrastructure assets included in the Statement of Net Assets were City maintained streets, street medians, curb and gutter, traffic signals, sidewalks, bridges, artwork, sound walls, bike paths, storm drains and retention basins. Infrastructure assets not included in the Statement of Net Assets were the construction costs of State Highway 111, private streets — generally behind gates, and public water, sewer, electricity, gas and cable utilities maintained by others. Infrastructure assets, except for land, have been depreciated to reflect a net infrastructure amount. In addition to the fixed assets and infrastructure assets, capital assets also include construction in progress. Under the modified accrual basis of accounting, the costs of these construction projects have previously been expenditures and not reported in the Statement of Net Assets. Under the new reporting model, these costs have been reported in the Statement of Assets. Projects still in progress at year-end included the Phase 1 Jefferson Street project, Assessment District 2000-1 improvements including the Village, the Civic Center Project and the La Quinta Park. The following chart details the fixed assets, infrastructure assets, and construction in progress as of the end of the fiscal year: CITY OF LA QUINTA Fixed Assets and Construction in Progress Liabilities The City of La Quinta has incurred both short and long term debt. Most readers are familiar with accounts payable, accrued salary, payroll taxes and developer deposits, while others may be familiar with advances from other funds and bonds payable. The City of La Quinta is current in meeting its short and long-term commitments and there is no known violation of any bond indenture covenant. In addition, all bonds have been insured and carry a "AAA" rating by a major rating agency. During the fiscal year, the City, Redevelopment Agency and the Financing Authority did not issue any new debt. This was not the case in the previous year when Redevelopment Agency (RDA) Project Area 1 issued $88 million of "AAA" insured Tax Allocation Bonds. At the RDA's request, they asked Standard and Poors to rate Project Area 1 on a stand-alone basis, which is without bond insurance, and are pleased that we have maintained our "A" rating. Similar stand-alone ratings for the City of La Quinta, RDA Project Area 2 and the Financing Authority are not available. 2003 Accumulated Depreciated Type Life Total Depreciation Remaining Percent years Fixed Assets Land N/A $56,467,549 N/A $56,467,549 33.32% General Fixed Assets 5-30 17,015,511 5,669,405 11,346,106 60.55% Internal Service Fixed Assets 3-15 2,355,382 1,426,172 929,210 75,838,442 7,095,577 68,742,865 Total Fixed Assets Infrastructure Assets Right of Way (ROW) N/A i 230,148,147 N/A 230,148,147 Art in Public Places N/A 1,472,958 N/A 1,472,958 231,621,105 N/A 231,621,105 Subtotal Street Pavement 20-25 45,582,821 38,398,502 7,184,319 Curbs/Gutters 50 7,316,410 2,683,405 4,633,005 Sidewalks 20 5,439,145 4,552,652 886,493 Median 50 5,318,736 1,556,083 3,762,653 Parking Medians 50 21,301 8,946 12,355 Bridges 35 9,933,145 2,075,917 7,857,228 Traffic Signals 20 41083,647 1,427,334 2,656,313 Bike Paths 20 642,304 264,029 378,275 Sound Wall 20 74,200 11,130 63,070 Retention Basin 10 957,019 831,229 125,790 Storm Drains 50 2,028,035 310,580 1,717,455 81,396,763 52,119,807 29,276,956 64.03% Subtotal Total Infrastructure Assets $313,017,868 $52,1191807 $260,898,061 Construction in Progress 29,604,242 Total Capital Assets, net $359,245,168 Liabilities The City of La Quinta has incurred both short and long term debt. Most readers are familiar with accounts payable, accrued salary, payroll taxes and developer deposits, while others may be familiar with advances from other funds and bonds payable. The City of La Quinta is current in meeting its short and long-term commitments and there is no known violation of any bond indenture covenant. In addition, all bonds have been insured and carry a "AAA" rating by a major rating agency. During the fiscal year, the City, Redevelopment Agency and the Financing Authority did not issue any new debt. This was not the case in the previous year when Redevelopment Agency (RDA) Project Area 1 issued $88 million of "AAA" insured Tax Allocation Bonds. At the RDA's request, they asked Standard and Poors to rate Project Area 1 on a stand-alone basis, which is without bond insurance, and are pleased that we have maintained our "A" rating. Similar stand-alone ratings for the City of La Quinta, RDA Project Area 2 and the Financing Authority are not available. Advances From Other Fund The General Fund has advanced funds to both the Redevelopment Project Area 1 and 2 Debt Service Funds. The City created the La Quinta Redevelopment Agency (RDA) and its two project areas in accordance with State law to promote economic activities, remove blight and provide low and moderate housing to its residents using property taxes generated in each of the Project Areas. The Redevelopment Areas were created to keep property tax revenues generated in its boundaries for projects in the project areas and to be able to accelerate projects by issuing bonds and incurring other debt. Examples of the projects funded to date include flood control projects at the top of the Cove, and resurfacing of street, curb, and gutter in the Cove and Westward Ho areas. These types of projects could not have been accomplished without the use of advances and bonds. As of June 30, 2003, the City of La Quinta has advanced the RDA Project Debt Service Area 1 $11,503,322 and Debt Service Project Area 2 $9,578,000. The advances carry an interest rate of between 7-10% with no specified repayment date. Since the RDA Board is comprised of the City Council, GASB requires that the activities of the RDA be included with the activities of the City. In the past these advances were recorded in the General Long Term Debt Group of Accounts. Under the new reporting model these advances, have been recorded as liabilities in the individual fund statements. As a result of this accounting change, the Debt Service Area 2 fund has a negative fund balance of $ (6,182,506) as of June 30, 2003 compared to a fund deficit as of June 30, 2002 of $ (5,622,884). While it is preferable to have funds with positive balances, it should be noted that this negative balance was a result of the City advances. This advance has no specified re -payment date and it is not the intent of Management to request repayment of the advance in the near future. Rather, Management will seek future repayments from the debt service funds when fund balances are available, which would be sometime before the project areas expire — in approximately 30 years. The La Quinta Redevelopment Agency has advanced funds to the Capital Project — Park and Recreation Fund to construct the Civic Center Campus and the La Quinta Park. The advances were made to accelerate the construction of these facilities which would have not been constructed to meet the growing needs of the community. The advances carry an interest rate that fluctuates with the average earnings of the investment pool and were $4,921,720 for FY 02/03 and $1,249,728 for FY 01/02. This advance has no specified re -payment date. Under GASB 34 these advances to and from other funds have been eliminated from the Statement of Net Assets. Lonp, Term Liabilities Long term liabilities consist of notes, bonds and pass-through agreements that have been separated into the amount due in the next year and the amount due beyond. In order to accelerate capital or housing projects, the City and RDA have issued bonds. These bonds have also been insured to take advantage of lower debt service costs and provide the investor with an added comfort level. In addition, as with a home mortgage, we have refunded several of our bond issues to take advantage of lower interest rates, which in turn has resulted in lower debt service costs. As previously discussed the RDA issued $88 million in bonds during FY 2002, however, no bonds were issued in FY 02/03. 9 The Statement of Net Assets has a long-term liability amount due within one year of $4,021,110 and an amount due in more than one year of $159,887,567 for FY 02/03, as compared to $3,312,895 due within one year and $163,369,344 from FY 01/02. NET ASSETS AND INTERNAL SERVICE FUNDS The objective of the Statement of Net Assets is to provide a consolidated summary of the City's assets, liabilities and net assets that reflects the City's fiscal worth and liquidity as a whole. Over time the increases or decreases in total net assets will reflect the health of the City. In order to report the unrestricted net assets of the City, the City must subtract from its assets related liabilities, net investments in capital assets and restricted net assets. Under the new reporting model, the total unrestricted net assets of the City of La Quinta, RDA and Financing Authority is $48,290,000 as reported in the Statement of Net Assets. This is an increase of $5,264,001 from last year. As in the past, Management has elected, as detailed in the basic financial statements, to further restrict and designate general fund balances that have not been reflected in the new Statement of Net Assets. Management believes that these restrictions and designations reflect the Council's desire to set aside funds to meet the requirements of a growing City and to be available for future projects. The total equity and other credits of the City is $314,146,335 of which $225,474,945 consists of capital assets, net of the related debt that was used in acquisition. $40,381,390 consists of restrictions placed upon special revenue, capital projects, and debt service funds leaving total unrestricted net assets of $48,290,000. The City has two internal service funds — Equipment Replacement and Information Technology Funds that primarily receive its revenues from charges for services from other City departments. Under the new reporting model, the assets and liabilities of these internal service funds have been included in the Statement of Net Assets. ACTIVITIES The objective of the Statement of Activities is to report the full cost of providing government services for that year. The format also permits the reader to ascertain the extent to which each function is either self-financing or draws from the general funds of the government. The following chart lists a condensed version of the Changes in Net Assets for the fiscal years ending June 30, 2003 and 2002. 10 CITY OF LA QUINTA Changes in Net Assets 2003 2002 Change Revenues Program revenues Charges for services $ 5,627,924 4,850,755 777,169 Operating grants and 1,797,031 1,699,255 97,776 contributions Capital grants 5,160,405 11,662,424 (6,502,019) General revenues Taxes 32,764,817 28,544,634 4,220,183 Investment income 1,353,868 1,867,744 (513,876) Motor Vehicle in lieu 1,768,091 1,473,217 294,874 Gain (loss) on sale of capital assets - (21,397) Other 513,876 692,691 (178,815 Total revenues 48,986,012 50,769,323 (1,804,708) Fxeiises General government 3,203,462 3,241,576 (38,114) Public safety 8,547,005 7,522,532 1,024,473 Community services 1)321,825 1,411,943 (90,118) Planning and development 19,083,860 7,110,125 11,973,735 Public works 6,785,759 6,434,239 351,520 Interest 8,555,401 6,653,406 1,901,995 Total expenses 47,497,312 32,373,821 15,123,491 Excess (deficiency) $ 1,488,700 18,395,502 (16,928,199) Net assets - 6/30/2001 294,262,133 Net assets - 6/30/2002 312,657,635 312,657,635 Net assets - 6/30/2003 $ 314,146,335 The following graph depicts the revenue by source for governmental activities for FY 02/03 which totaled $48,986,012. 11 Revenues by Source - Governmental Activities 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 The Statement of Activities starts with functional expenses, subtracts out functional revenues to arrive at a net number for each function, and then subtracts out all general revenues to arrive at the net change in net assets for the reporting period. The following graph depicts the expenses and program revenues for governmental activities for FY 02/03: Expenses and Program Revenues - Governmental Activities 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 e Expenditures ■ Program revenues The functional revenue for FY 02/03 was $48,986,012 versus $50,769,323 for FY 01/02. The decrease can be attributed to a reduction in capital grants from the prior year related to construction projects and lower investment income. The functional expenses for FY 02/03 were 12 N n a X 7 3 7 CD (D N (D 7 N n < 3 �f O 2 f7 7 (D N C fa r2 CD .N. CD (D CD I 7 .�. 0. N e Expenditures ■ Program revenues The functional revenue for FY 02/03 was $48,986,012 versus $50,769,323 for FY 01/02. The decrease can be attributed to a reduction in capital grants from the prior year related to construction projects and lower investment income. The functional expenses for FY 02/03 were 12 $47,497,312 versus $32,373,821 for FY 01/02. The increase can be attributed to greater debt service, public safety expenses and planning and development costs. The debt service increases are a result of the FY 01/02 new bond issues, which result in higher debt service payments. The public safety increases are a result of higher police service levels/costs and recording fire service costs as an expense in accordance with a new contract with the County of Riverside. The planning and development costs increases are a result of the Redevelopment Agency efforts to create low and moderate housing within the community and consist of expenditures for the Miraflores Housing and Senior Apartment Projects. The net excess decreased $16,928,199 from FY 01/02 as a result of lower revenues and greater expenses from the prior year. As mentioned earlier, this net increase of $1,488,700 reported in the Statement of Activities compares to a net increase of $361,737 under the modified accrual basis of accounting. The primary reasons for the differences between the two amounts are: 1) the net reduction in the capitalization of $2.4 million in infrastructure improvements, 2) the reclassification of $2.3 million of long-term principal debt, and 3) the revenue recognition of $1.3 million in deferred revenue. REVENUES General Fund Revenues With the economic slow down that occurred during FY 01/02 continuing during FY 02/03, the City was concerned about the impacts it would have on our tourist industry and sales tax receipts. Transient Occupancy Taxes have returned to the FY 00/01 levels and were just over $4 million and Sales taxes increased from $3.9 million in FY 01/02 to $4.35 million in FY 02/03. The City has been seen by homebuilders and by homebuyers as a suitable place to build and live. Homebuilders have seen La Quinta as a place to build homes because of the availability of land and labor which has resulted in greater than budgeted development fees and charges for services. Homebuyers have seen La Quinta as a place to buy because of lower interest rates and good home values which has resulted in greater property taxes, sales taxes and motor vehicle registration taxes. As a result of the increased population, and because of available land along the Highway 111 corridor, the City is experiencing retail growth that has added sales taxes to the City. It should be noted that the area north of Highway 111 has been fully developed with new home development generally occurring in the central and recently annexed southern portions of the City. The City is home to a world class destination resort which continues to generate transient occupancy taxes. Actual FY 02/03 revenues were generally higher than normal which is explained by the $4.0 million favorable variance with the budget and $1.9 million higher than last year's actual. Compared to last year, taxes increased by $1.1 million, licenses and permits were relatively flat, charges for services increased '/2 million based upon the strong building demand,intergovernmental increased $700,000 based upon population based State subventions — Motor Vehicle In -lieu fee, investment income decreased $136,000 based upon lower interest rates, and miscellaneous income decreased $440,000 based upon a receipt in FY 01/02 of a one time health care dividend from a insurance provider. With this as background, the following chart and graph reflects the major revenue categories of the General Fund for the last two years: 13 Revenues: Original Budget Final Bud et 2003 Actual Favorable/ (Unfavorable) 2002 Actual Actual Change Taxes $ 9,498,070 9,498,070 11,572,985 2,074,915 10,443,436 1,129,549 Licenses and permits 840,600 840,600 1,982,127 1,141,527 1,857,691 124,436 Charges for services 1,256,700 1,273,450 2,302,759 1,029,309 1,757,744 545,015 Intergovernmental 4,155,800 5,104,555 4,394,046 (710,509) 3,683,490 710,556 Investment income 1,360,600 1,465,600 1,894,303 428,703 2,030,346 (136,043) Miscellaneous 5,0001 5,2501 87,2361 81,986 529,190 441,954) $ 17,116 770 1 18,187,5251 22,233,456L 4,045,931 20,301,897 1 931,559 Total revenues Other Revenues The Statement of Activities lists FY 02/03 tax increment funds collected of $21,191,832 versus $18,899,329 in FY 01/02. As previously discussed, these funds are used for repayment of RDA debt and low and moderate housing. This year the two RDA Project Areas (1 and 2) property tax valuations have increased an average of 23% based upon new growth and higher County Tax Assessor's assessments on existing properties. In addition, far fewer assessment appeals at the County Assessor's office are outstanding. EXPENSES The Statement of Activities lists $33,512,175 in expenses for FY 01/02 as compared to $27,841,749 for the prior year. Of this amount the three largest categories are $7.1 million (6.1 million in FY 00/01) in Planning and Development which includes the RDA, $7.8 million (5.8 million in FY 00/01) in interest debt service costs for outstanding debt, and $7.5 million (5.8 million in FY 00/01) in Public Safety, which includes the costs of the County of Riverside Sheriffs and Fire contracts. The City contracts with the California Department of Forestry through the County of Riverside for fire services and with a private vendor for library services. Through an agreement with the County of Riverside, $836,310 in library services ($826,510 in FY 00/01) was withheld from our property tax increment payments and not remitted to the City. The Statement of Activities includes fire protection service costs this year of $1,565,220 (offset by a like amount of intergovernmental revenue from tax increment payments) which has not been the case in prior years. The City has entered into an agreement with the County of Riverside to annually set forth the level of service for fire services. Any service level over the amount of tax increment generated from the RDA would require additional payments to the County. General Fund Expenses The following table lists the $15,320,428 in general find expenditures included in the Statement of Activities. Ex enditures Original Bud et Final Budget 2003 Actual Favorable/ (Unfavorable) 2002 Actual Actual Change General government $ 3,886,174 3,858,936 3,140,576 718,360 2,954,060 186,516 Public safety 8,166,379 8,489,691 8,202,408 287,283 7,609,121 593,287 Community services 1,109,518 1,217,949 991,558 226,391 1,014,474 (22,916) Planning and development 822,612 995,363 674,450 320,913 726,589 (52,139) Public works 2,409,8231 3,426,7941 2,311,4361 1,115,3581 1.536,0331 775 403 $ 16,394,506' 1'7,988,733 15,320,428 2,668,305 13,840,277 1,480,151 Total expenditures 14 The major increases in the original and final budget for public safety consisted of increases in the plan check services for the Building Division to deal with the increased building activity in the City of La Quinta. The major increase between the original and final budget in public works budgets consisted of increases in plan check contracts -to service new developments and additional slurry seal projects for road repair. Major increases in actual costs for FY 02/03 can be attributed to added police positions and salaries, additional building inspection contract services, additional building plan check contract services, and additional engineering plan check contract services. iMlaior and Dion -Major Funds The City has identified six major funds for FY 02/03 — General Fund, Low & Moderate Income Housing Project Area 2 Fund, Debt Service RDA No.l Fund, Debt Service RDA No.2 Fund, Capital Projects Fund, and Capital Fund — Parks and Recreation. GASB has set forth criteria for identifying major funds based upon the size of their balance statements or financial activity during the year. Major funds can change from year to year except for the General Fund, which is always considered a major fund. In addition, management is given the latitude to identify any additional major fiends, even though the funds may not meet the GASB criteria. For this year, the City of La Quinta has not identified a non -major fund to classify as a major fund. The purpose of this major and non -major classification is to highlight for the reader those funds that have a material impact on the City financial statement which may warrant closer review by the reader. Conclusion As was mentioned in the Executive Summary, Management is pleased to report that the City of La Quinta was able to add to its reserves for FY 02/03. We hope you find this financial report, based upon the third year of implementing GASB 34 reporting model, helpful in your evaluation of the financial position and the operations of the City of La Quinta. If you have any questions about this report, please feel free to give me a call, John Falconer, CPA at 760-777-7150. 15 (This page intentionally left blank) IV BASIC FINANCIAL STATEMENTS 17 CITY OF LA QUINTA Statement of Net Assets June 30, 2003 Governmental Activities Net assets: Invested in capital assets, net of related debt 2003 2002 Assets: Cash and investments (note 2) $ 81,299,937 65,308,092 Accounts receivable 264,272 581,783 Taxes receivable 263,555 235,029 Prepaid items 17,515 228,233 Interest receivable 173,789 226,787 Notes receivable (note 4) 12,613,565 12,509,966 Due from other governments 4,560,265 4,834,420 Deposits 186,073 149,518 Restricted assets: Cash and investments with fiscal agent (note 2) 30,019,271 39,448,246 Capital assets (note 5): Land 56,467,549 56,467,549 Right of way 230,148,147 230,148,147 Construction in progress 29,604,242 29,880,113 Other capital assets, net 43,025,230 45,239,178 Total assets 488,643,410 485,257,061 Liabilities: Accounts payable 5,363,158 2,039,312 Accrued salaries and benefits 270,617 240,398 Interest payable 2,767,256 2,322,557 Deposits payable 1,768,499 1,314,920 Due to other governments 418,868 - Noncurrent liabilities (notes 6 to 13): Due within one year 4,021,110 3,312,895 Due in more than one year 159,887,567 163,369,344 Total liabilities 174,497,075 172,599,426 Net assets: Invested in capital assets, net of related debt 225,818,022 234,923,191 Restricted for: Public safety 40,210 332,574 Community services 573,981 648,850 Planning and development 18,540,558 19,835,504 Public works 20,883,564 13,891,517 Unrestricted 48,290,000 43,025.999 Total net assets $ 314,146,335 312,657,635 See accompanying notes to the basic financial statements. 18 Governmental activities: General governinent Public safety Community services Planning and development Public works Interest expense Total governmental activities CITY OF LA QUINTA Statement of Activities Year ended June 30, 2003 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Net Govennnnental Activities 2003 2002 $ 3,203,462 298,749 - - (2,904,713) (2,987,685) 8,547,005 2,917,866 240,084 - (5,389,055) (4,827,037) 1,321,825 205,806 539,742 342,448 (233,829) (541,758) 19,083,860 611,278 225,851 - (18,246,731) (6,233,494) 6,785,759 1,594,225 791,354 4,817,957 417,777 7,081;993 8,555,401 - - - (8,555,401) (6,653,406) $47,497,312 5,627,924 1,797,031 5,160,405 (34,911,952) (14,161,387) General revenues: T ales : Property taxes Tax increment Sales taxes Transient occupancy taxes Franchise taxes Other taxes Investment income Motor vehicle in lieu Gain (loss) on sale of capital -assets Miscellaneous revenues Total general revenues Change in net assets Net assets at beginning of year Net assets at end of year See accompanying notes to the basic financial statements. 19 1,800,616 1,450,196 21,191,832 18,899,329 4,345,381 3,093,588 4,036,290 3,967,003 690,544 654,696 700,154 479,822 1,353,868 1,867,741 1,768,091 1,473,217 - (21,397) 513,876 692,691 36,400,652 32,556,889 1,488,700 18,395,502 312,657,635 294,262,133 $314,146,335 312,657,635 CITY OF LA QUINTA Governmental Fluids - Balance Sheet June 30, 2003 See accompanying notes to the basic financial statements, 20 Special Revenue Debt Service Funds Low/Moderate Income Redevelopment Redevelopment Housing - Agency - Agency - General PA No. 2 PA No. 1 PA No. 2 Assets Cash and investments $ 29,564,818 5,953,126 13,817,453 5,185,371 Cash with fiscal agent - - 2,098 164 Accotuits receivable 99,925 - - - Taxes receivable 263,555 - - - Prepaid items 17,515 - - - Interest receivable 173,789 - - - Notes receivable - 9,500,000 - - Due from other funds (note 19) 32,218 - - - Due from other govermnents 3,604,543 48,126 248,927 192,504 Advances to other finds (note 19) 21,081,322 - - - Deposits 1,073 - - - Total assets $ 54,838,758 15,501,252 14,068,478 5,378,039 Liabilities and Fund Balances Liabilities Accounts payable $ 2,362,214 18,342 292,097 1,982,545 Accrued salaries and benefits 270,617 - - - Deferred revenue 2,496,081 9,500,000 - - Deposits payable 1,604,477 - - - Due to other governments 397,174 - - - Due to other fimds (note 19) 23,512 - - - Advances from other funds (note 19) - - 11,503,322 9,578,000 Total liabilities 7,154,075 9,518,342 11,795,419 11,560,545 Find Balances: Fund balances (deficits) (note 22): Reserved for: Debt service - - 2,273,059 - Bond projects - - - Prepaid items 17,515 - - Deposits 1,073 - - Advances to other finds 21,081,322 - - Notes receivable - - - Unreserved, reported in: General find 26,584,773 - - - Special revenue fluids - 5,982,910 - - Debt service finds - - - (6,182,506) Capital projects finds - - - - Total fluid balances 47,684,683 5,982,910 2,273,059 (6,182,506) Total liabilities and fluid balances $ 54,838,758 15,501,252 14,068,478 5,378,039 See accompanying notes to the basic financial statements, 20 Capital Projects Park and Capital Recreation Fund Improvement Redevelopment Other Agency - Govennnental Totals PANo.I Funds 2003 2002 726,139 278,705 7,285,910 - - 30,016,934 10,000 - 63,672 - - 349,042 - - 3,811,874 726,139 18,078 4,921,720 4,939,798 701,419 584,541 116,878 701,419 41,114,718 24,185 24,185 15,539,457 78,350,979 62,301,395 75 30,019,271 39,448,246 139,347 249,272 581,783 - 263,555 235,029 - 17,515 228,233 - 173,789 226,787 3,113,565 12,613,565 13,215,806 - 95,890 5,207,097 117,123 4,560,265 4,834,420 1,109,846 26,003,042 13,810,753 185,000 186,073 149,518 20,204,413 152,533,216 140,239,067 62,521 5,326,445 1,998,744 - 270,617 240,398 995,979 12, 992, 060 12,3 71, 097 47,144 1,768,499 1,314,920 21,694 418,868 - 54,300 95,890 5,207,097 - 26,003,042 13,810,753 1,181,638 46,575,421 34,943,009 - - - 529 2,273,588 4,996,086 - - 30,016,934 - 30,016,934 37,087,727 - - - - 17,515 226,485 - - - 185,000 186,073 149,518 - _ 3,811,874 - 24,893,196 13,810,753 - - - 2,117,586 2,117,586 2,136,111 26,584,773 27,981,710 - - - 3,399,521 9,382,431 12,107,305 - - - - (6,182,506) (5,622,884) (4,213,659) - 7,261,725 13,320,139 16,368,205 12,423,247 (4,213,659) - 41,090,533 19,022,775 105,657,795 105,296,058 726,139 701,419 41,114,718 20,204,413 152,533,216 140,239,067 21 CITY OF LA QUINTA Govermnental Funds Reconcilation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2003 Fund balances of govenunental fiends Amounts reported for goverunental activities in the statement of net assets are different because: Capital assets, net of depreciation, have not been included as financial resouces in govermnental find activity. Infrastructure Other capital assets Accuunulated depreciation Long term debt and compensated absences from the General Long Tenn Debt Account Group that have not been included in the governmental fund activity: Bonds payable Compensated absences Other long term liabilities Accrued interest payable for the current portion of interest due on bonds payable has not been reported in the governmental fiends. Revenues that are measurable but not available. Amounts are recorded as deferred revenue under the modified accrual basis of accounting. $ 105,657,795 342,622,109 73,483,061 (57,789,212) (152,768,164) (462,260) (10,678,253) (2,767,256) 12,992,060 Internal service fluids are used by mangement to charge the costs of certain activities, such as e0u.ipuruent management, to individual finds. The assets and liabilities of the internal service finds must be added to the statement of net assets 3,856,455 Net assets of governmental activities $ 314,146,335 See accompanying notes to the basic financial statements. 22 (This page intentionally left blank) 23 CITY OF LA QUINTA Governmental Fund Types - Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 2003 Revenues: Taxes Licenses and permits Charges for services Developer fees Intergovernmental Investment income Special assessments Rental income Miscellaneous Total revenues Expenditures: Current: General government Public safety Community services Planning and development Public works Capital projects Debt service: Principal Interest Payments under pass-through obligations Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Proceeds of tax allocation bonds Sale of capital assets Transfers in (note 21) Transfers out (note 21) Total other financing sources (uses) Net change in fiord balances Fund balances (deficit) at General $ 11,572,985 1,982,127 2,302,759 4,394,046 1,894,303 87,236 22,233,456 Special Revenue Low/Moderate Income Housing - n A NT- ') 2,479,241 129,263 2,608,504 Debt Service Funds Redevelopment Agency - PA No. 1 21,086,099 204,789 21,290,888 Redevelopment Agency - PA No. 2 9,916,962 67,844 9,984,806. 3,140,576 - - 8,202,408 - - - 991,558 - - - 674,450 765,795 316,567 149,787 2,311,436 - - - 15,320,428 765,795 6,913,028 1,842,709 2,264,940 7,491,294 9,669,282 19,742,083 272,978 1,467,846 7,892,712 9,783,323 1,548,805 201,483 162,398 19,861 1,738,783 (270,346 (585,753) (6,000,000) (107,948) (565,892) (4,261,217) 6,805,080 1,276,817 (2,712,412) beginning of year 40,879,603 4,706,093 4,985,471 Fund balances (deficit) at end of year $ 47,684,683 5,982,910 2,273,059 See accompanying notes to the basic financial statements. 24 338,895 1,100,000 761,105) (559,622) (5,622 884 6,182 506 Capital Projects Redevelopment Other Parks and Capital Agency - Governmental Totals Recreation Fund Improvement PA No. 1 Funds 2003 2002 _ - - 5,271,524 50,326,811 43,011,931 - 1,982,127 1,857,691 _ _ _ - 2,302,759 1,757,744 424,762 - - 2,596,483 3,021,245 2,298,647 - 1,741,474 - 1,059,001 7,194,521 9,583,451 28,503 - 652,611 391,396 3,368,709 4,135,009 - - - 780,259 780,259 757,619 - - 38,692 1,055,818 1,094,510 1,001,389 - 60,000 55,789 280,752 483,777 584,197 453,265 1,801,474 747,092 11,435,233 70,554,718 64,987,678 _ - - 203,831 3,344,407 3,161,596 - - - 142,020 8,344,428 7,610,308 - 2,406 993,964 1,067,837 a - 1,559,307 4,338,388 7,804,294 10,693,374 _ _ - 1,373,614 3,685,050 2,897,312 - 15,945,630 - 111,948 16,057,578 57,342,978 - 109,034 - 285,000 2,931,952 11,453,487 52,523 63,216 - 394,435 9,469,314 7,017,016 _ - - - 17,561,994 13,669,166 52,523 16,117,880 1,559,307 6,851,642 70,192,981 114,913,074 400,742 (14,316,406) (812,215) 4,583,591 361,737 (49,925,396) - _ _ _ - 88,000,000 _ - - - - 146,603 14,316,406 6,000,000 1,310,913 23,887,256 64,255,590 (4,773,363) - 1,939,564) (9,218,230) (23,887,256) (65,255,590) (4,773,363) 14,316,406 4,060,436 v (7,907,317) - 87,146,603 (4,372,621) - 3,248,221 (3,323,726) 361,737 37,221,207 158,962 - 37,842,312 22,346,501 105,296,058 68,074,851 (4,213,659) - 41,090,533 19,022,775 105,657,795 105,296,058 25 CITY OF LA QUINTA Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year ended June 30, 2003 Net changes in fiord balances - total governmental fiords Amounts reported for governmental activities in the statement of activities is different because: Govenunental fiends report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated usefiil lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital outlay Depreciation Repayment of bond principal is an expenditure in the governmental fiords, but the repayment reduces long-tenn liabilities in the statement of net assets The statement of net assets includes accred interest on long term debt. To record as an expense the net change in compensated absences in the statement of activities. Revenues that are measurable but not available. Amounts are not recorded as revenue under the modified accrual basis of accounting. hnternal service funds are used by management to charge the costs of certain activities, such as equipment management, to individual fiords. The net revenues (expenses) of the internal service fiords is reported with governmental activities. Change m net assets of governuuental activities See accompanying notes to the basic financial statements. 26 $ 361,737 1,355,618 (3,756,163) 2,813,625 (444,699) (40,063) 1,326,803 (128,158) $ 1,488,700 CITY OF LA QUINTA Proprietary Funds Statement of Net Assets June 30, 2003 Assets Current assets: Cash and investments Due from other governments Capital assets, net Total assets Liabilities Current liabilities: Accounts payable Net Assets Invested in capital assets, net of related debt Unrestricted Total net assets Governmental Activities Internal Service Funds 2003 _ 2002 $ 2,948,958 3,006,697 15,000 - 929,210 1,018,484 3,893,168 4,025,181 36,713 40,568 929,210 1,018,484 2,927,245 2,966,129 $ 3.856,455 3,984,613 See accompanying notes to the basic financial statements. 27 CITY OF LA QUINTA Proprietary Funds Statement of Revenues, Expenses and Changes in Net Assets Year ended June 30, 2003 Operating revenues: Charges for services Miscellaneous Total operating revenues Operating expenses: Fuel and oil Maintenance and parts Contract services Software and supplies Depreciation Other operating expenses Total operating expenses Operating income (loss) Non-operating revenues (expenses); Investment income Total non-operating revenues (expenses) Income (loss) before transfers and capital contributions Transfers in Capital contributions Changes in net assets Net assets at beginning of year Net assets at end of year Governmental Activities Internal Service Funds 2003 2002 $ 451,512 304,982 2,382 - 453,894 304,982 34,213 119,032 172,755 70,749 276,517 11,784 685,050 (231,156) 72,899 72,899 (158,257) 30,099 (128,158) 3,984,613 $ 3,856,455 See accompanying notes to the basic financial statements. 28 30,282 119,212 189,567 39,060 253,823 8,597 640,541 335,559 97,586 97,586 (237,973) 1,000,000 108,495 870,522 3,114,091 3,984,613 CITY OF LA QUINTA Proprietary Funds Statement of Cash Flows Year ended June 30, 2003 See accompanying notes to the basic financial statements. 29 Govermnental Activities - Internal Service Funds 2003 2002 Cash flows from operating activities: Cash received from other customers $ 438,894 304,982 Cash payments to suppliers for goods and services (393,873) (347,253) Net cash provided by (used for) operating activities 45,021 (42,271) Cash flows from non -capital financing activities: Transfer from other fiinds - 1,000,000 Net cash provided by (used for) non -capital financing activities - 1,000,000 Cash flows from capital and related activities: Purchase of fixed assets (175,659) (174,194) Net cash provided by (used for) capital and related activities (175,659) (174,194) Cash flows from investing activities: Interest received on investments 72,899 97,586 Net cash provided by (used for) investing activities 72,899 97,586 Net increase (decrease) in cash and cash equivalents (57,739) 881,121 Cash and cash equivalents at begiinling of year 3,006,697 2,125,576 Cash and cash equivalents at end of year $ 2,948,958 3,006,697 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ - (231,156) (335,559) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 276,517 253,823 Adjustments: (Increase) decrease in due from other govenunents (15,000) - (Increase) decrease in other assets 18,515 - Increase (decrease) in accounts payable (3,855) 39,465 Net cash provided by (used for) operating activities $ 45,021 (42,271) Noncash capital, financing and investing activities: Fixed assets contributed by other fluids $ 30,099 108,495 See accompanying notes to the basic financial statements. 29 CITY OF LA QUINTA Agency Funds Statement of Fiduciary Assets and Liabilities June 30, 2003 Assets Cash and investments (note 2) Accounts receivable Total assets Liabilities Due to bondholders Total liabilities 2003 2002 $ 1,740,812 1,994,762 44,846 - $ 1,785,658 1,994,762 $ 1,785,658 1,994,762 $ 1,785,658 1,994,762 See accompanying notes to the basic financial statements. 30 CITY OF LA QUINTA Notes to the Basic Financial Statements Year ended June 30, 2003 1 Summary of Significant Accounting Policies (a) Reporting Entit The City of La Quinta ("the City") was incorporated May 1, 1982 under the general laws of the State of California. In November 1996, the City became a charter City. The City operates under the Council - Manager form of government. The City provides many community services including public safety, highway and street maintenance, health and social services, cultural and leisure services, public improvements, planning and zoning services, and community development services. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. As required by generally accepted accounting principles, these financial statements present the government and its component units, which are entities for which the government is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization's governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. _ All of the City's component units are considered to be blended component units. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are reported with the interfund data of the primary government. The following organizations are considered to be component units of the City: La Quinta Redevelopment Agency The La Quinta Redevelopment Agency (Agency) has established two redevelopment project areas pursuant to the State of California Health & Safety Code, Section 33000 entitled "Community Redevelopment Law". On November 29, 1983 and May 16, 1989, the City Council approved and adopted the Redevelopment Plans for the La Quinta Redevelopment Project Areas No. 1 and No. 2, respectively. These plans provide for the elimination of blight and deterioration, which was found to exist in the project areas. Although the Agency is legally separate, it is reported as if it were part of the City because the City 31 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (1) 'Summary of Significant Accounting Policies, (Continued) Council also serves as the governing board of the Agency. Separate financial statements of the Agency can be obtained at City Hall. City of La Quinta Public Financing Authority The La Quinta Public Financing Authority (Authority) was established pursuant to a Joint Exercise of Powers Agreement dated November 19, 1991 between the City of La Quinta and the La Quinta Redevelopment Agency. The purpose of the Authority is to provide financing necessary for the construction of various public improvements through the issuance of debt. Although the Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Authority. Separate financial statements of the Authority are not prepared. (b) Basis of Accounting and Measurement Focus The basic financial statements of the City are composed of the following: r Government -wide financial statements • Fund financial statements • Notes to the financial statements Financial reporting is based upon all GASB pronouncements, as well as the FASB Statements and Interpretations, APB Opinions, and Accounting Research Bulletins that were issued on or before November 30, -1989 that do not conflict with or contradict GASB pronouncements. FASB Pronouncements issued after November 30, 1989 are not followed in the preparation of the accompanying financial statements. Government -wide Financial Statements Government -wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the governmental and business -type activities of the primary government (including its blended component units), as well as its discreetly presented component units. The City of La Quinta has no business -type activities or discretely presented component units. Eliminations have been made in the Statement of Activities so that certain allocated expenses are recorded only once (by function to which they were allocated). However, general governmental expenses have not been allocated as indirect expenses to the various functions of the City. 32 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (1) Summary of SigrLificant Accounting Policies, (Continued) Government -wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government -wide financial statements. Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange -like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, and liabilities resulting from nonexchange transactions are recognized in accordance with the requirements of GASB Statement No. 33. Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting govermnent'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. Amounts paid to acquire capital assets are capitalized as assets in the government - wide financial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as a liability in the government -wide financial statements, rather than as an other financing source. Amounts paid to reduce long- term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure. Fund Financial Statements The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fiend are accounted for with a separate set of self - balancing accounts that comprise its assets, liabilities, fiend 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 primary government's governmental, proprietary, and fiduciary funds are presented after the government -wide financial statements. These statements display information about major fiends individually and nonmajor fiends in the aggregate for governmental and enterprise fiends. Fiduciary statements include financial information for fiduciary finds and similar component units. Fiduciary funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations. 33 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) 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 thirty day availability period. Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the field 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 derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction on which they are based takes place. Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government -mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. The reported find balance (net current assets) is considered to be a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Non-current portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources," since they do not represent net current assets. Recognition of governmental find 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 find type expenditures or find liabilities. 34 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (1) Summary of Significant Accouniiii-, Policies, (Continued) 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 an other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. When both restricted and unrestricted resources are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources. Pronrietary Funds The City's internal service funds are proprietary funds. In the fiend financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net assets. Amounts paid to acquire capital assets are capitalized as assets in the internal service fund financial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as a liability in the internal service fiend financial statements, rather than as an other financing source. Amounts paid to reduce long- term indebtedness of the internal service fund are reported as. a reduction of the related liability, rather than as an expenditure. Fiduciary unds The City's fiduciary funds are agency fiends. Agency fiends are custodial in nature. Assets equal liabilities. Agency funds use the accrual basis of accounting. (c) Major Funds, Internal Service Funds and Fiduciary Fund Types The City's major finds are as follows: General Fund — The primary fund of the City 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 field including City Manager, City Attorney, Finance, City Clerk, Community Development, Police Services, Public Works, Building and Safety, and Community Services. 35 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) Low/Moderate Income Housing -- Project Area No. 2 Fund — This special revenue fund is used to account for the required 20% set aside of property tax increments that is legally restricted for increasing or improving housing for low and moderate income households. Redevelopment Agency Debt Service —Project Area No. 1 Fund — This debt service fund is used to account for the accumulation of resources for the payment of debt service for bond principal and interest and trustee fees for Project Area No. 1. Redevelopment Agency Debt Service — Project Area No. 2 Fund — This debt service fund is used to account for the accumulation of resources for the payment of debt service for bond principal and interest and trustee fees for Project Area No. 2. Parks and Recreation Capital Projects 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. Ca ital Im rovement Fund — This capital projects fiend is used to account for the planning, design and construction of various capital projects throughout the City of La Quinta and the Redevelopment Agency. Redevelopment Agency Ca ital Projects — Project Area No. 1 Fund — This fluid is used to account for the bond proceeds, interest and other finding that will be used for development, planning, construction and land acquisition within the project area. Other fund types of the City are as follows: Internal Service Funds: Equipment Replacement Fund — This fund accounts for equipment and vehicle maintenance and replacement services provided to other departments on a cost - reimbursement basis. Information Technology Fund — This fund is used to account for the acquisition of computer equipment, maintenance, and services to support information systems within the City. Costs are reimbursed by the benefiting departments. Agency Funds — These funds account for assets held by the City as an agency for assessment district bondholders and for Arts in Public Places donations. 36 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) 1 SurranEy of Significant Accounting Policies, Continued (d) Investments For financial reporting purposes, investments are adjusted to their fair value whenever the difference between fair market value and the carrying amount is material. 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 sate of investments. 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 fiend's average cash and investment balance. (e) 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 fiends' share in the cash and investment pool of the City of La Quinta. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the statement of cash flows, the entire balance of cash and investments on the combined balance sheet for the internal service fund is considered cash and cash equivalents. (f) 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 $500 are capitalized if they have an expected useful life of three years or more. Capital assets include public domain (infrastructure) general fixed assets consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains. 37 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) (f) Capital Assets, (Continued) Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government—wide financial statements and in the fund financial statements of the internal service funds. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective balance sheet. The following schedule summarizes fixed asset useful lives: Buildings and improvements 10-30 years Equipment and furniture 3-20 years Vehicles 5-10 years Infrastructure 10-50 years (g) Employee Leave Benefits Sick time is vested on a percentage based on number of years employed at the City. Maximum accumulation of sick and vacation is 30 and 40 days, respectively. Upon termination or retirement, permanent employees are entitled to receive compensation at their current base salary for all unused vacation leave. If an employee terminates with a minimum of two years service, the employee is entitled to receive 25% of the value of his unused sick leave. The percentage increases by 25% for each five-year period until the employee is entitled to 75% of the value of his unused sick leave. This will occur upon the completion of ten years of continuous employment. (h) Postemployment Benefits The City does not provide postemployment benefits (other than pension benefits) to its employees. (i) Prepaid Items Certain payments to vendors reflect costs applicable to fixture accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. 0) Fund Equity In the fund financial statements, governmental funds report reservations of fiend balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fiend balance represent tentative management plans that are subject to change. 38 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (2) Cash and Investments Cash and investments are reported as follows: Statement of Net Assets: Cash and investments Cash and investments with fiscal agent Statement of Fiduciary Assets and Liabilities: Cash and investments Total $ 81,299,937 30,019,271 1,740,812 $113,060,020 Cash and investments held by the City at June 30, 2003 consisted of the following: Petty cash $ 1,000 Demand deposits 5,832,441 Investments 1072226,579 Total 113,060,020 The City and its component units are authorized by its investment policy to invest in the following types of investments: Investment Type U.S. treasuries and Government National Mortgage Association FHLB, FFCB, FLB, FICB, FNMA, FHLMC Student Loan Marketing Association Government pools U.S. government and agency securities Commercial Paper Mutual Funds Certificates of Deposit Restriction None $5 million per issuer $3 million $40 million and 20% of portfolio 100% of portfolio $3 million per issuer, 15% of portfolio and 90 days 20% 60% Under the California Government Code, a financial institution is required to secure deposits made by state or local governmental units by pledging securities held in the form of an undivided collateral pool. 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. 39 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) 2) Cash and Investments Continued Deposits of cities and other state or local governments are classified in three categories to give an indication of the level of credit risk assumed by the City, as Follows: Category 1 - includes deposits that are insured or collateralized with securities held by the City or its agent in the City's name. Category 2 - includes deposits collateralized with securities held by the pledging financial institution's trust department or agent in the City's name. Category 2 also includes deposits collateralized by an interest in an undivided collateral pool held by an authorized Agent or Depository and subject to certain regulatory requirements under State law. Category 3 - includes deposits collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the City's name. Category 3 also includes any uncollateralized deposits. Category Bank Book Form of Deposit 1 2 3 Balance Balance Deposits held by the City: Demand deposits $10Q,000 5_821,596 - 5,921,596 5,832,441 Investments of cities in securities are classified in three categories to give an indication of the level of custodial risk assumed by the entity. Category 1 - includes investments that are insured or registered or for which the securities are held by the City or the City's custodial agent (which must be a different institution other than the party through which the City purchased the securities) in the City's name. Investments held "in the City': name" include securities held in a separate custodial or fiduciary account and identified as owned by the City in the custodian's internal accounting records. Category 2 - includes uninsured and unregistered investments for which the securities are held in the City's name by the dealer's agent (or by the trust department of the dealer if the dealer was a financial institution and another department of the institution purchased the securities for the City). Category 3 - includes uninsured and unregistered investments for which the securities are held by the dealer's trust department or agent, but not in the City's name. Category 3 also includes all securities held by the broker-dealer agent of the City (the party that purchased the securities for the City) regardless of whether or not the securities are being held in the City's name. HE CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (2) Cash and Investments, (Continued) Category Carrying 1 2 3 Value Investments held by the City: U.S. Treasury Notes $ 19,050,157 - - 19,050,157 U.S. Treasury Bills 21,962,478 - - 21,962,478 Government Agency Securities 14,929,002 - - 14,929,002 Investments held by fiscal agent: U.S. Treasury Bills 29,002,448 - 29,002,448 55,941.637 29.002,448 - 84,944,085 Investments held by the City not subject to categorization: Investment in Stale of California Local Agency Investment Fund 21,265,671 Investments held by fiscal agent not subject to categorization: Investment in mutual funds: First American Treasury Obligation Fund 1,016,823 $107,226,579 The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 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 relation 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. Included in LAIF's investment portfolio are collateralized mortgage obtigations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. (3) Property Taxes Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases appz'oved 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 sixty days after year-end. 41 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (3) Property Taxes, (Continued) Lien date January 1 Levy date July 1 Due dates November 1 and February Collection dates December 10 and April 10 The La Quinta Redevelopment Agency's primary source of revenue comes from property taxes. Property taxes allocated to the Agency are computed in the following manner: (a) The assessed valuation of all property within the project area is determined on the date of adoption of the Redevelopment Plan. (b) Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are allocated to the Agency; all taxes on the "frozen" assessed valuation of the property are allocated to the City and other districts. The Agency has no power to levy and collect taxes and any legislative property tax shift might reduce the amount of tax revenues that would otherwise be available to pay the principal of, and interest on, debt. Broadened property tax exemptions could have a similar effect. Conversely, any increase in the tax rate or assessed valuation, or any reduction or elimination of present exemptions would increase the amount of tax revenues that would be available to pay principal and interest on debt. 42 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (4) Notes Receivable In September 1994, the Redevelopment Agency sold certain real property to LINC Housing for $2,112,847. The property was used to construct single-family homes and rental units to increase the City's supply of low and moderate income housing. The note bears interest at 6% per annum and is due in hill on June 15, 2029. In December 2000, the Redevelopment Agency entered into an agreement with DC&TC, LLC to receive $9,500,000 as a reimbursement for Agency costs incurred for the construction of infrastructure related to the development of senior apartments. Payments are due to the Agency in the amount of annual positive cash flow generated by the rental of the units. All unpaid principal and interest on the nate are due fifty-five years after the completion of the project. Interest on the note accrues at 3% per annum. Other notes receivable Total 43 Outstanding Balance at June 30. 2003 $ 3,031,367 9,500,000 82,198 12,613,565 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (5) Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2003 is as follows: Less accumulated depreciation: Buildings and improvements Equipment and furniture Vehicles Infrastructure Total accumulated depreciation Net depreciable assets Capital assets not depreciated: Land Right of way Construction in progress Capital assets, net 4,450,611 750,140 (305) 5,200,446 1,238,543 142,631 (164,279) 1,216,895 595,217 96,852 (13,832) 678,237 49,076,750 3,043,057 - 52,119,807 55,361,121 4,032,680 (178,416) 59,215,385 45,239,178 (2,313,665) 56,467,549 - 230,148,147 - 29,880,113 7,026,490 99,717 43,025,230 56,467,549 230,148,147 (7,302,361) 29,604,242 361 734,987 4,712,825 -C7-,2 359,245, 168 Depreciation expense was charged in the following functions in the Statement of Activities: General government $ 118,266 Public safety 466,152 Community services 319,990 Planning and development 29,253 Public works 3,099,019 Total 4 032 G80 44 Balance at Balance at June 30, 2002 Additions Deletions June 30, 2003 Buildings and improvements $ 15,596,822 831,454 - 16,428,276 Equipment and furniture 1,985,975 59,825 (57,520) 1,988,280 Vehicles 945,851 29,667 (21,179) 954,339 Infrastructure 82,071,651 798,069 - 82,8692720 Total cost of depreciable assets 100,600,299 1,719,015 (78,699) 102,240,615 Less accumulated depreciation: Buildings and improvements Equipment and furniture Vehicles Infrastructure Total accumulated depreciation Net depreciable assets Capital assets not depreciated: Land Right of way Construction in progress Capital assets, net 4,450,611 750,140 (305) 5,200,446 1,238,543 142,631 (164,279) 1,216,895 595,217 96,852 (13,832) 678,237 49,076,750 3,043,057 - 52,119,807 55,361,121 4,032,680 (178,416) 59,215,385 45,239,178 (2,313,665) 56,467,549 - 230,148,147 - 29,880,113 7,026,490 99,717 43,025,230 56,467,549 230,148,147 (7,302,361) 29,604,242 361 734,987 4,712,825 -C7-,2 359,245, 168 Depreciation expense was charged in the following functions in the Statement of Activities: General government $ 118,266 Public safety 466,152 Community services 319,990 Planning and development 29,253 Public works 3,099,019 Total 4 032 G80 44 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) �6) General Long -Term Debt Changes in general long-term debt for the year ended June 30, 2003 were as follows: City: Compensated absences payable Due to the Coachella Valley Association of Governments Developer Agreement Payable RDA Project Area No. 1: Tax allocation bonds Housing tax allocation bonds Pass-through agreements payable: Coachella Valley Unified School District RDA Project Area No. 2: Tax allocation bonds Housing tax allocation bonds Due to County of Riverside Financing Authority: Revenue bonds Total 71 Due to the Coachella Vallev Association of Governments The City of La Quinta entered into an Interchange Reimbursement Agreement with the Coachella Valley Association of Governments (CVAG) to finance capital improvements at the Washington Street I-10 interchange. The City will reimburse CVAG $828,311 over a period of seventeen years beginning July 31, 1996. The annual payments to CVAG range from $28,311 to $50,000. At June 30, 2003, the balance is $478,311. 45 Amounts Balance at Balance at due within June 30, 2002 Additions Deletions .lune 30, 2003 one year $ 422,197 546,881 (506,818) 462,260 416,034 528,311 - (50,000) 478,311 50,000 743,723 - (59,035) 684,688 58,199 119,944,836 64,658 (1,260,000) 118,749,494 1,890,000 16,333,872 - (307,022) 16,026,850 318,831 8,063,172 - (697,918) 7,365,254 711,877 6,505,000 53,670 (90,000) 6,468,670 90,000 4,416,128 - (82,978) 4,333,150 86,169 2,250,000 - (100,000) 2,150,000 100,000 7,475,000 285,000) 7,190,000 300,000 S L 66,682.2665,209 L438.771) MKS. 4.021.110 71 Due to the Coachella Vallev Association of Governments The City of La Quinta entered into an Interchange Reimbursement Agreement with the Coachella Valley Association of Governments (CVAG) to finance capital improvements at the Washington Street I-10 interchange. The City will reimburse CVAG $828,311 over a period of seventeen years beginning July 31, 1996. The annual payments to CVAG range from $28,311 to $50,000. At June 30, 2003, the balance is $478,311. 45 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) 7 Due to the Coachella Valley Association of Governments Continued The minimum annual requirements to amortize payable to Coachella Valley Association of Governments as of June 30, 2003 are as follows: June 30 Principal 2004 $ 50,000 2005 50,000 2006 50,000 2007 50,000 2008 50,000 2009 50,000 2010 50,000 2011 50,000 2012 50,000 2013 28,311 $478311 8 Tax Allocation Bonds As of June 30, 2003, the following issuances of Tax Allocation Bonds were outstanding: Series 1994 Tax Allocation Refunding Bonds, Series 1994, were issued by the Agency on May 5, 1994, in the amount of $26,665,000 to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1989 and 1990. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. Interest rates on the bonds range from 3.80% to 8% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest on and principal of the bonds are payable solely from pledged tax increment revenues. The bonds are not subject to redemption prior to maturity. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2003 is $18,410,000. 46 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) 8) Tax Allocation Bonds, (Continued Series 1998, Project Area No. 1 Tax allocation refunding bonds, Series 1998, in the amount of $15,760,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1991. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No, 1. Interest rates on the bonds range from 5.20% to 5.25% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable from pledged tax increment revenues. Term Bonds maturing September 1, 2028 are subject to mandatory sinking fiend redemption, in part by lot, on September 1, 2013 and on each September 1 thereafter, through September 1, 2028, at a price equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2003 is $15,760,000. Series 1998, Project Area No. 2 Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1992. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 2. Interest rates on the bonds range from 3.75% to 5.28% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 2. Term Bonds maturing September 1, 2028 and September 1, 2033 are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2009 and September 1, 2019, respectively, and on each September 1 thereafter at a price equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2003 is $6,415,000. 47 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) 8) Tax Allocation Bonds (Continued) Tax Allocation Bonds, Series 2001 — Project Area No. 1 On August 15, 2001, the Agency issued tax allocation bonds in the amount of $48,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2001 tax allocation bonds were issued at a discount of $422,400 and issuance costs of $1,517,325. The bonds consist of $17,280,000 of term bonds that accrue interest at 5.00% and mature on September 1, 2021 and $30,720,000 of term bonds that accrue interest at 5.18% and mature on September 1, 2031. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2003 is $46,189,590 ($48,000,000 net of unamortized discount and issuance costs of $1,810,410). Tax Allocation Bonds Series 2002 — Project Area No. 1 On June 12, 2002, the Agency issued tax allocation bonds in the amount of $40,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. the 2002 tax allocation bonds were issued at a discount of $360,000 and issuance costs of $1,250,096. At June 30, 2003, the unexpended balance of bond proceeds is $30,133,486. The bonds consist of $6,355,000 of serial bonds and $33,645,000 of term bonds. Interest rates on serial bonds range from 1.75% and 4.00% and are payable semi-annually on March 1 and September 1 of each year until maturity. Term bonds accrue interest at 5.00% and 5.125% and mature on September 1, 2022 and September 1, 2023. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2003 is $38,443,574 ($40,000,000 net of unamortized discount and issuance costs of $1,556,426). 48 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (8) Tax Allocation Bonds, (Continued) The minimum annual requirements (including sinking find requirements) to amortize tax allocation bonds as of June 30, 2003 are as follows: $ 18,410,000 7,447,434 15,760,000 15,622,880 48,000,000 51,050,855 40,000,000 41,997,228 6,415,000 6,478,780 49 Project Area No. 1 Project Area No, 2 1994 Tax Allocation Bonds 1998 Tax Allocation Bonds 2001 Tax Allocation Bonds 2002 Tax Allocation Bonds 1998 Tax Allocation Bonds June 30 Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2004 $ 1,325,000 1,274,465 - 819,520 - 2,430,720 565,000 1,905,825 90,000 327,080 2005 1,430,000 1,182,140 - 819,520 - 2,430,720 575,000 1,895,131 95,000 323,264 2006 1,510,000 1,087,700 - 819,520 - 2,430,720 585,000 1,882,361 100,000 319,168 2007 1,620,000 973,455 - 819,520 - 2,430,720 600,000 1,867,091 105,000 314,785 2008 1,740,000 850,815 - 819,520 - 2,430,720 615,000 1,849,617 110,000 310,135 2009 1,865,000 719,233 819,520 - 2,430,720 635,000 1,829,914 115,000 305,184 2010 2,000,000 578,160 - 819,520 - 2,430,720 660,000 1,807,557 120,000 299,550 2011 2,145,000 426,868 - 819,520 2,430,720 680,000 1,782,926 125,000 293,272 2012 2,305,000 264,443 - 819,520 • 2,430,720 705,000 1,756,430 130,000 286,737 2013 2,470,000 90,155 - 819,520 - 2,430,720 735,000 1,727,981 140,000 279,819 2014 - - 655,000 802,490 1,565,000 2,391,595 705,000 1,695,656 145,000 272,516 2015 - 690,000 767,520 1,645,000 2,311,345 735,000 1,659,656 150,000 264,956 2016 725,000 730,730 1,730,000 2,226,970 770,000 1,622,031 160,000 257,013 2017 - - 765,000 691,990 1,815,000 2,138,345 810,000 1,582,531 170,000 248,556 2018 - 800,000 651,300 1,905,000 2,045,345 855,000 1,540,906 175,000 239.716 2019 - 845,000 608,530 2,000,000 1,947,720 895,000 1,497,156 185,000 230,491 2020 - 890,000 563,420 2,100,000 1,845,220 940,000 1,451,281 195,000 220,631 2021 - 935,000 515,970 2,205,000 1,737,595 985,000 1,403,156 205,000 210,131 2022 - 985,000 466,050 2,315,000 1,624,595 1,035,000 1,352,656 215,000 199,106 2023 - 1,035,000 413,530 2,430,000 1,504,755 1,090,000 1,299,531 230,000 187,425 2024 - - 1,090,000 358,280 2,555,000 1,377,637 1,140,000 1,243,069 240,000 175,087 2025 1,145,000 300,170 2,685,000 1,244,018 1,200,000 1,183,106 255,000 162,094 2026 - - 1,205,000 239,070 2,820,000 1,103,640 1,265,000 1,119,941 265,000 148,444 2027 - - 1,265,000 174,850 2,965,000 956,1.23 1,330,000 1,053,444 280,000 134,138 2028 - - 1,330,000 107,380 3,120,000 800,955 1,395,000 983,615 295,000 119,044 2029 - - 1,400,000 36,400 3,275,000 637,882 1,470,000 910,200 310,000 103,163 2030 - - - 3,445,000 466,523 3,015,000 795,272 325,000 86,494 2031 - - 3,620,000 286,365 3,170,000 636,781 345,000 68,906 2032 - - - 3,805,000 97,027 3,335,000 470,091 360,000 50,400 2033 - - - 7,505,000 192,316 380,000 30,975 2034 - 400,000 10,500 $ 18,410,000 7,447,434 15,760,000 15,622,880 48,000,000 51,050,855 40,000,000 41,997,228 6,415,000 6,478,780 49 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (9) 1995 Housing Tax Allocation Bonds (TABS) La Quinta Redevelopment Project Areas No. 1 and 2 1995 Housing Tax Allocation Bonds were issued by the Agency on July 1, 1995, in the amount of $22,455,000 to increase, improve and/or preserve the supply of low and moderate income housing in the City. Interest is payable semi-annually on March 1 and September 1 of each year commencing March 1, 1996. Interest payments range from 4% to 6% per annum. The interest and principal of the bonds are payable from pledged tax increment revenues of both project areas. Term Bonds maturing on September 1, 2025 are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2011 and on each September 1 thereafter, through September 1, 2025, at a price equal to the principal amount plus accrued interest. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The principal balance of outstanding bonds at June 30, 2003 is $20,360,000. 50 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) 9 1995 Housing Tax Allocation Bonds (TABS), Continued The minimum annual requirements (including sinking fiend requirements) to amortize housing tax allocation bonds as of June 30, 2003 are as follows: 1995 Housing TABS June 30 Principal Interest 2004 $ 405,000 1,183,538 2005 425,000 1,162,990 2006 450,000 1,140,890 2007 530,000 1,115,502 2008 560,000 1,086,470 2009 590,000 1,055,125 2010 620,000 1,021,540 2011 655,000 985,840 2012 695,000 946,650 2013 735,000 903,750 2014 780,000 858,300 2015 825,000 810,150 2016 875,000 759,150 2017 925,000 705,150 2018 985,000 647,850 2019 1,040,000 587,100 2020 1,105,000 522,750 2021 1,170,000 454,500 2022 1,240,000 382,200 2023 1,315,000 305,550 2024 1,395,000 224,250 2025 11475,000 138,150 2026 1,565,000 46,950 $20,360.000 17.044,345 (10) 1996 Lease Revenue Refunding Bonds On November 15, 1996, the Authority issued $8,790,000 of 1996 Lease Revenue Refunding Bonds to defease the remaining 1991 Local Agency Revenue Bonds in the amount of $8,200,000 and to provide funds for construction of remaining improvements to the La Quinta Civic Center site. 51 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (10) 1996 Lease Revenue Refunding Bonds, (Continued) The bonds consist of $3,630,000 of serial bonds and $5,160,000 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 to 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 on the 1996 Lease Revenue Refunding Bonds at June 30, 2003 is $7,190,000. The minimum annual requirements (including sinking fund requirements) to amortize revenue bonds as of June 30, 2003 are as follows: (11) Due to County of Riverside Project Area No. 2 Based on an agreement dated July 5, 1989 between the Agency and the County, until the tax increment reaches $5,000,000 annually in Project Area No. 2, the Agency will pay to 52 1996 Revenue Bonds June 30 Principal Interest 2004 $ 300,000 380,830 2005 315,000 366,220 2006 330,000 350,575 2007 345,000 333,865 2008 360,000 315,880 2009 380,000 296,450 2010 400,000 275,280 2011 420,000 252,525 2012 445,000 228,521 2013 470,000 203,130 2014 495,000 176,351 2015 525,000 148,046 2016 555,000 118,076 2017 585,000 86,441 2018 615,000 53,141 2019 650,000 18,038 (11) Due to County of Riverside Project Area No. 2 Based on an agreement dated July 5, 1989 between the Agency and the County, until the tax increment reaches $5,000,000 annually in Project Area No. 2, the Agency will pay to 52 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (11) Due to County of Riverside, (Continued) the County 50% of the County portion of tax increment. At the County's option, the County's pass-through portion can be retained by the Agency to finance new County facilities or land costs that benefit the County and serve the La Quinta population. Per the agreement, the Agency must repay all amounts withheld from the County. The tax increment is to be paid to the County in amounts ranging from $100,000 to $250,000 over a payment schedule through June 30, 2015. Interest does not accrue on this obligation. The balance at June 30, 2003 is $2,150,000. The minimum annual requirements to amortize amounts due to the County of Riverside as of June 30, 2003 are as follows: June 30 Principal 2004 $ 100,000 2005 100,000 2006 100,000 2007 100,000 2008 150,000 2009 200,000 2010 200,000 2011 200,000 2012 250,000 2013 250,000 2014 250,000 2015 250,000 $2,150,000 (12) Notes Payable to Coachella Valley Unified School District An agreement was entered into in 1991 between the Agency, the City of La Quinta and the Coachella Valley Unified School District (District), which provides for the payment to the District a portion of tax increment revenue associated with properties within District confines. Such payments are subordinate to other indebtedness of the Agency incurred in furtherance of the Redevelopment Plan for Project Area No. 1. This tax increment is paid to the District over a payment schedule through August 1, 2012, in amounts ranging from $474,517 to $834,076, for a total amount of $15,284,042. Tax increment payments outstanding at June 30, 2003 totaled $7,365,254. The District agrees to use such funds to provide classroom and other construction costs, site acquisition, school busses, and expansion or rehabilitation of current facilities. 53 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) X12 Notes Payable to Coachella Valley Unified School District, (Continued) The minimum annual requirements to amortize payable to Coachella Valley Unified School District as of June 30, 2003 are as follows: June 30 Principal 2004 $ 711,877 2005 726,114 2006 740,636 2007 755,449 2008 770,558 2009 785,968 2010 801,688 2011 817,722 2012 834,076 2013 421,166 $7,365,254 13 Developer Agreement Payable In December 1998, the City entered into a tax sharing agreement with Stamko Development Co. in relation to the development of an auto mall located within the City. For a period of ten years, the agreement requires the City to make quarterly payments to the developer in the amount of 33% of the sales and use tax revenues generated by the site up to a maximum amount of $122,250 in any twelve month period. Additionally, if the sales and use tax revenues generated exceed $530,000, adjusted annually by the CPI index, the City is required to pay $76,4A -Y- for that year for a maximum of ten years. During the year ended June 30, 2002, the developer completed all the requirements to be entitled to begin receiving payments from the City. However, sales and tax revenues for the year ended June 30, 2003 did not exceed the required $550,670. Therefore, the additional $76,411 was not paid to the developer. 54 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (13) Developer Agreement Payable, (Continued) The minimum annual requirements to amortize the developer agreement payable as of June 30, 2003 are as follows: June 30 Principal Interest Total 2004 $ 58,199 64,051 122,250 2005 67,496 54,754 122,250 2006 73,403 48,847 122,250 2007 79,812 42,438 122,250 2008 86,772 35,478 122,250 2009 96,311 25,939 122,250 2010 104,498 17,752 122,250 2011 118,197 4,053 122,250 $4 688 293,312 97&Q00 (14) 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. 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 Bonds do not constitute an obligation of the City; therefore, they are not included in the general long-term debt account group in the accompanying; financial statements. The following is a summary of Improvement Bonds outstanding at June 30, 2003: 55 Amount Outstanding Proceeds Maturity Date Interest Rate at June 30, 2003 Assessment District No. 90-1 $1,227,155 9/2/05 6.50%-7.00% $ 225,000, Assessment District No. 9 1 -1 2,240,866 9/2/06 6.70%-6.80% 545,000 Assessment District No. 92-1 1,880,891 9/2/08 5.00%-5.40% 795,000 Assessment District No. 97-1 705,262 9/2/18 4.10%-5.20% 630,000 Assessment District No. 200 1 -1 2,285,000 9/2/15 5.00%-6.60% 1,985,000 55 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (15) Defined Benefit Pension Plan Plan Description The City of La Quinta contributes to the California Public Employees Retirement System (PERS), an agent multiple -employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of PERS' annual financial report may be obtained from their executive office: 400 P Street, Sacramento, California 95814. Funding Policy Participants are required to contribute 7% of their annual covered salary. The City makes the contributions required of City employees on their behalf and for their account. The City is required to contribute at an actuarially determined rate. For the year ended June 30, 2003, the rate was 0% of annual covered payroll. The contribution requirements of plan members and the City are established and may be amended by PERS. Annual Pension Cost For 2003, the City's annual pension cost (employer contribution) in the amount of $0 was equal to the City's required and actual contributions. The required contribution was determined as part of the June 30, 2000, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 8.25% investment rate of return (net of administrative expenses), (b) projected annual salary increases that vary by duration of service, and (c) 2% per year cost -of -living adjustments. Both (a) and (b) included an inflation component of 4.5%. The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a four-year period (smoothed market value). Any unfunded actuarial accrued liability is amortized as a level percentage of projected payroll on a closed basis. PERS combines the prior service unfunded liability and the current service unfunded liability into a single initial unfunded liability. The single funding horizon for the unfunded liability is June 30, 2011. 56 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (15) Defined Benefit Pension Plan, (Continued) Miscellaneous Employees Three -Year Trend Information (16) Claims Payable/Self Insurance The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 92 California public entities and is organized under a joint powers agreement pursuant to California Government Code Section 6500, et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self- insured losses, to purchase excess insurance or reinsurance, and to arrange for group - purchased insurance for property and other coverages. The Authority's pool began covering claims of its members in 1978. Each member government has a representative on the Board of Directors. The Board operates through a 9 -member Executive Committee. General Liability Each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year). Six months after the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made for each open claims year. Costs are spread to members as follows: the first $30,000 of each occurrence is charged directly to the city; costs from $30,001 to $750,000 are pooled based on a members share of costs under $30,000; costs from $750,001 to $5,000,000 are pooled based on payroll. Costs to covered claims above $5,000,000 are currently paid by reinsurance. The protection for the City is $50,000,000 per occurrence and $50,000,000 annual aggregate. 57 Annual Pension Percentage of Net Pension Fiscal Year Cost (APC) APC Contributed Obligation 6/30/01 $70,752 100% -0- 6/30/02 15369 100% -0- 6/30/03 0 100% -0- Required Supplementary Information ($ amount in thousands) Entry Age Normal Actuarial Unfunded Annual UAAL Accrued Value Liability/ Covered As a % of Valuation Date Liabili of Assets (Excess Assets) Funded Status Payroll Payroll 06/30/99 $4,989,981 7,206,658 (2,216,677) 144.4% 3,087,175 (71.8%) 06/30/00 5,704,327 8,340,014 (2,635,687) 146.2% 3,146,845 (83.8%) 06/30/01 6,314,188 8,806,753 (2,492,565) 139.5% 3,349,776 (74.4%) (16) Claims Payable/Self Insurance The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 92 California public entities and is organized under a joint powers agreement pursuant to California Government Code Section 6500, et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self- insured losses, to purchase excess insurance or reinsurance, and to arrange for group - purchased insurance for property and other coverages. The Authority's pool began covering claims of its members in 1978. Each member government has a representative on the Board of Directors. The Board operates through a 9 -member Executive Committee. General Liability Each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year). Six months after the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made for each open claims year. Costs are spread to members as follows: the first $30,000 of each occurrence is charged directly to the city; costs from $30,001 to $750,000 are pooled based on a members share of costs under $30,000; costs from $750,001 to $5,000,000 are pooled based on payroll. Costs to covered claims above $5,000,000 are currently paid by reinsurance. The protection for the City is $50,000,000 per occurrence and $50,000,000 annual aggregate. 57 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (16) Claims Payable/Self Insurance, (Continued) Workers Compensation The City also participates in the workers compensation pool administered by the Authority. Pool deposits and retrospective adjustments are valued in a manner similar to the General Liability pool. The City of La Quinta is charged for the first $10,000 of each claim. Costs above that level are pooled to $50,000. Costs from $50,001 to $100,000 per claim are pooled based on the City's losses under its retention level. Costs between $100,001 and $2,000,000 per claim are pooled based on payroll. Costs between $2,000,000 and $50,000,000 are paid by excess insurance purchased by the Authority. The excess insurance provides coverage of $50,000,000 per occurance. During the past three fiscal years none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage provided for the prior year. (17) Contingencies Various claims and suits have been filed against the City in the normal course of operations. Although the outcome of these lawsuits is not presently determinable, in the opinion of management, the resolution of these matters will not have a material adverse effect on the financial position of the City. (18) Educational Revenue Augmentation Fund (ERAF) Payment During fiscal year ended June 30, 2003, Chapter 1127 of the 2002 Statutes of the State of California require redevelopment agencies to shift $75 million in property tax revenue to kindergarten through twelfth grade schools and community colleges. The State Department of Finance has determined that the La Quinta Redevelopment Agency amount is $723,518 of the $75 million which was forwarded to the Riverside County Auditor in accordance with the statute. 58 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) 19 Interfund Receivables and Payables Current interfund receivables and payables balances at June 30, 2003 are as follows: Due from other funds Due to other finds Amount General Fund Other governmental funds $32,218 (A) Capital Improvement Fund General Fund 23,512 (B) Parks and Recreation Fund 18,078 (B) Other governmental funds 22,082 (B) $95,890 (A) Short term borrowing to cover temporary cash shortfalls. (B) Short term borrowing to cover June 2003 construction project expenditures. Noncurrent interfund receivable and payable balances at June 30, 2003 are as follows: Advances to other funds Advances from other fiends Amount General Fund RDA Debt Service — PA No. 1 $ 5,398,322 (C) RDA Debt Service — PA No. 2 9,578,000 (C) RDA Capital Projects — PA No. 1 _ 6,105,000 (D) Subtotal 21,081,322 RDA Capital Projects — PA No. 1 Parks and Recreation Fund 3,811,874 (E) RDA Capital Projects — PA No. 2 Parks and Recreation Fund 1,109,846 (F) Total $26,003,042 (C) As of June 30, 2003 the amount due to the General Fund from RDA Debt Service 1 was $5,398,322 and from RDA Debt Service 2 was $9,578,000. These outstanding advances consist of monies loaned to the Redevelopment Agency with no required repayment date and accrues interest at 10% per aiuium. (D) 1n April 2003, the General Fund advanced $6,105,000 to the Redevelopment Agency Capital Projects — PA No. 1 Fund to provide funding for capital projects within the project area. The advance accrues interest at 7% per annum and is to be repaid by November 29, 2033. US CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (19) Interfund Receivables and Payables, (Continued) (E) In January 2002, the Redevelopment Agency Capital Projects — PA No. 1 Fund advanced $2,448,263 to the Parks and Recreation Fund to provide funding for civic center campus improvements. The advance accrues interest at the earnings rate of the City's investment pool funds. Annual installments due July 31, 2002 and 2003 shall not be less than the amount of park facility developer impact fees collected by the City during the period to which a particular installment payment applies. In July 2002, another advance of $1,908,192 was made to provide funding for the development of the publicly owned improvements to the La Quinta Community Park. Annual payments will be determined by City Council. The remaining balance of these advances at June 30, 2003 is $3,811,874. (F) In July 2002, the Redevelopment Agency Capital Projects — PA No. 2 Fund advanced $1,100,000 to the Parks and Recreation Fund to provide financing for the development of the publicly owned improvements to the La Quinta Community Park. Annual payments will be determined by City Council. At June 30, 2003, the outstanding balance of the advance is $1,109,846. (20) Construction Commitments The following material construction commitments existed at June 30, 2003; Expenditures as of Remaining Project Name June 30, 2003 Commitments Municipal Library $ 226,746 5,074,930 The Ranch 42,867,153 3,132,847 Fire Station 1,003,343 2,670,449 Phase 2 — Jefferson St. Improvements (Hwy. 111) 4,141 2,610,183 Miraflores Senior Apartments 6,090,410 2,519,415 Museum Expansion 68,394 1,107,979 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) 21 Interfund Transfers Interfund transfers were as follows for the year ended June 30, 2003: Transfer In General Fund Low/Moderate Income Housing PA No. 2 Fund RDA Debt Service — PA No. 1 Fund RDA Debt Service — PA No. 2 Fund Capital Improvement Fund Capital Improvement Fund Capital Improvement Fund Capital Improvement Fund Capital Improvement Fund Subtotal Capital Improvement Fund Transfer Out Amount Non -Major Funds $ 162,398 Non -Major Funds 19,861 Non -Major Funds 11738,783 (A) Low/Moderate Income Housing PA No. 2 Fund 338,895 General Fund 268,346 Low/Moderate Income Housing PA. No. 2 Fund 246,858 Parks and Recreation Fund 4,773,363 (B) RDA Capital Projects — PA No. 1 Fund 13939,564 (C) Non -Major Funds 78,27.5 (D) 14,316,406 RDA Capital Projects — PA No. 2 Fund RDA Debt Service — PA No. 2 Fund 1,100,000 (E) RDA Capital Projects — PA No. 1 Fund RDA Debt Service — PA No. 1 Fund 6,000,000 (F) Non -Major Funds General Fund 2,000 Non -Major Funds Non -Major Funds 2082913 6 The following describes the major transfers in and transfers out included in the financial statements: Transfers to Major Funds (A) $1,738,783 was transferred to the RDA Debt Service — PA No. 1 Fund from the Low/Moderate Income Housing — Project Area No. 1 Fund for debt service payments on amounts due to the 1995 Housing Tax Allocation Bonds. (B) $4,773,363 was transferred to the Capital Improvement Fund from the Parks and Recreations Fund for reimbursements of capital outlay for park and recreation projects. 61 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (21) Interfund Transfers, (Continued) (C) $1,939,564 was transferred to the Capital Improvement Fund from the RDA Capital Projects — PA No. 1 Fund for reimbursements of various capital projects. (D) $7,088,275 was transferred to the Capital Improvement Fund from other governmental funds for reimbursements of various capital projects. (E) $1,100,000 was transferred to the RDA Capital Projects — PA No. 2 Fund from the RDA Debt Service — PA No. 2 Fund in relation to an advance from the RDA Capital Projects — PA No. 2 Fund to the Parks and Recreation Fund. (F) $6,000,000 was transferred to the RDA Capital Projects — PA No. 1 Fund from the RDA Debt Service — PA No. 1 Fund in relation to an advance from the General Fund to the RDA Capital Projects — PA No. 1 Fund. (22) Fund Deficits The following fiend had a deficit balance at June 30, 2003: Special Revenue Fund: Federal Assistance $ (7,320) Debt Service Fund: Redevelopment Agency — PA No. 2 (6,182,506) Capital Projects Fund: Parks and Recreation (4,213,659) Redevelopment Agency — PA No. 2 The deficit was created by outstanding advances from the General Fund which are intended to be paid back in the fixture with anticipated tax increment revenues. Parks and Recreation The deficit was created by outstanding advances from Capital Projects Funds — PA No. 1 and 2 to accelerate park projects. The advances are intended to be paid back in the fixture with future park developer impact fee collections. 62 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (23) Expenditures in Excess of Appropriations Expenditures for the year ended June 30, 2003 exceeded the appropriations of the following funds/departments: (24) Conduit Debt Financing 2002 Series A Variable Rate Multifamily Housing Revenue Bonds In March 2002, the La Quinta Redevelopment Agency issued $5,000,000 of 2002 Series A Variable Rate 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 May 15, 2035. Outstanding bonds at June 30, 2003 are $5,000,000. The bonds are secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bonds are not obligations of the issuer, but payable solely from the security. 2002 Series B Multifamily Housing Revenue Bonds In April 2002, the La Quinta Redevelopment Agency issued $3,000,000 of 2002 Series B Multifamily Housing Revenue Bonds to provide financing for the acquisition, construction and equipping of a multifamily senior rental housing project known as Miraflores Apartments located in the City of La Quinta. The bonds mature on June 1, 2035 and bear interest at 5.5% per annum. Outstanding bonds at June 30, 2003 are $3,000,000. The bonds are secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bonds are not obligations of the issuer, but payable solely from the security. 63 Budget Actual Variance General Fund: Building $ 764,868 867,135 (102,267) Parks and recreation programs 95,850 102,395 (6,545) Development and traffic 992,859 1,060,949 (68,090) Maintenance/operations — L&L 772,086 789,483 (17,397) Capital projects administration (18,944) 140,656 (159,600) Special revenue funds: ' South Coast Air Quality 5,700 8,043 (2,343) CV Violent Crime Task Force 120,000 132,020 (12,020) (24) Conduit Debt Financing 2002 Series A Variable Rate Multifamily Housing Revenue Bonds In March 2002, the La Quinta Redevelopment Agency issued $5,000,000 of 2002 Series A Variable Rate 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 May 15, 2035. Outstanding bonds at June 30, 2003 are $5,000,000. The bonds are secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bonds are not obligations of the issuer, but payable solely from the security. 2002 Series B Multifamily Housing Revenue Bonds In April 2002, the La Quinta Redevelopment Agency issued $3,000,000 of 2002 Series B Multifamily Housing Revenue Bonds to provide financing for the acquisition, construction and equipping of a multifamily senior rental housing project known as Miraflores Apartments located in the City of La Quinta. The bonds mature on June 1, 2035 and bear interest at 5.5% per annum. Outstanding bonds at June 30, 2003 are $3,000,000. The bonds are secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bonds are not obligations of the issuer, but payable solely from the security. 63 CITY OF LA QUINTA Notes to the Basic Financial Statements (Continued) (25) Unreserved Fund Balances Unreserved fund balances at June 30, 2003 consisted of the following: Capital is Park and Other Recreation RDA Governmental Fund PA No. 1 Funds Total 10,523,200 - - - 1,800,300 transfers 14,261,273 - - - - - 14,261,273 Undesignated - 5,982.910 (6.182506) X4213,659) 7,261,725 !16,719,660 19,568,130 Total unreserved fund balances(deficit) 26.584.773 5.982.910 [b.182, (4.213.6591 16.719.660 46.152.903 64 General Special Revenue Fund Designated for: Emergency reserve $ 10,523,200 Cash flows 1,800,300 Operations/projects/ Capital is Park and Other Recreation RDA Governmental Fund PA No. 1 Funds Total 10,523,200 - - - 1,800,300 transfers 14,261,273 - - - - - 14,261,273 Undesignated - 5,982.910 (6.182506) X4213,659) 7,261,725 !16,719,660 19,568,130 Total unreserved fund balances(deficit) 26.584.773 5.982.910 [b.182, (4.213.6591 16.719.660 46.152.903 64 Debt Special Revenue Service Low/Moderate Income Housing RDA PA No. 2 PA No. 2 Capital is Park and Other Recreation RDA Governmental Fund PA No. 1 Funds Total 10,523,200 - - - 1,800,300 transfers 14,261,273 - - - - - 14,261,273 Undesignated - 5,982.910 (6.182506) X4213,659) 7,261,725 !16,719,660 19,568,130 Total unreserved fund balances(deficit) 26.584.773 5.982.910 [b.182, (4.213.6591 16.719.660 46.152.903 64 REQUIRED SUPPLEMENTARY INFORMATION 65 GENERAL FUND GENERAL FUND - The primary fund of the City used to account for all revenue and expenditures of the City not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Manager, City Attorney, Finance, City Clerk, Community Development, Police Services, Public Works, Building and Safety, and Community Services. SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues (other than major capital projects) and the related expenditures that are legally required to be accounted for in a separate fiend. The following fund has been classified as a major fund. The budget -actual comparison for this fund has been presented in the accompanying financial statements as required supplementary information: Low and Moderate Income Housing P.A. No. 2 Fund — To account for the required 20% set aside of property tax increments that is legally re improving housing for low and moderate income households. GL for increasing or CITY OF LA QUINTA Notes to Required Supplementary Information Year ended June 30, 2003 (1) Budgets and Budgetary Accounting; The City adopts an annual budget prepared on the modified accrual basis of accounting for its governmental fiends 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. Revisions that alter the total appropriations of any department or fiend are approved by City Council. Additional appropriations in the amount of $32,573,559 were made during the year. 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. Reserves for encumbrances are not recorded by the City of La Quinta. (2) Expenditures in Excess of Appropriations Expenditures for the year ended June 30, 2003 exceeded the appropriations "of the following funds/departments: General Fund: Building Parks and recreation programs Development and traffic Maintenance/operations — L&L Capital projects administration 67 Budget Actual Variance $ 764,868 867,135 (102,267) 95,850 102,395 (6,545) 992,859 1,060,949 (68,090) 772,086 789,483 (17,397) (18,944) 140,656 (159,600) Revenues: Taxes Licenses and permits Charges for services Intergovernmental Investment income Miscellaneous Total revenues Expenditures: General government: Legislative City manager Economic development Personnel Fiscal services Central services City clerk Total general government Public safety: Police Building and safety administrative Code compliance Animal control Building Emergency services Fire Civic center building Total public safety Community services: Senior center Parks and recreation administration Parks and recreation programs Total cormrnunity services CITY OF LA QUINTA General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Budget Original Final Actual $ 9,498,070 9,498,070 11,572,985 840,600 840,600 1,982,127 1,256,700 1,273,450 2,302,759 4,155,800 5,104,555 4,394,046 1,360,600 1,465,600 1,894,303 5,000 5,250 87,236 17,116,770 18,187,525 _22,233,456 666,585 666,585 562,397 519,002 468,120 424,596 905,719 905,719 774,128 460,565 498,565 376,300 423,404 391,171 375,027 587,994 590,871 331,493 322,905 337,905 296,635 3,886,174 3,858,936 3,140,576 4,435,632 4,511,101 4,485,189 180,816 180,816 178,681 566,659 568,159 521,909 203,582 203,582 170,115 559,868 764,868 867,135 35,390 35,390 23,159 1,752,000 1,783,343 1,525,113 432,432 442,432 431,107 8,166,379 8,489,691 8,202,408 289,365 291,065 269,386 Variance with Prior Final Budget Year Positive (Negative) Actual 2,074,915 1,141,527 1,029,309 (710,509) 428,703 81.986 4,0045,931 104,188 43,524 131,591 122,265 16,144 259,378 41,270 718,360 25,912 2,135 46,250 33,467 (102,267) 12,231 258,230 11,325 287,283 21,679 10,443,436 1,857,691 1,757,744 3,683,490 2,030,346 529,190 20,301,897 535,735 247,986 784,007 440,464 372,339 288,355 285.174 2,954,060 3,990,644 172,423 430,897 156,219 686,683 80,794 1,602,204 489,257 7,609,121 247,073 724,303 831,034 619,777 211,257 691,439 95,850 95,850 102,395 (6,545) 75,962 1,109,518 1,217,949 991,558 226,391 1,014,474 W. (Continued) Planning and development: Community development administration Current plant -ting Total planuung and development Public works: Public works administration Development and traffic Maintenance/operations - St. Maintenance/operations - L & L Capital projects administration Total public works 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 balance CITY OF LA QUINTA General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) Variance with Prior _ Budget Final Budget Year Original Final Actual Positive (Negative) Actual 421,112 421,112 280,908 140,204 273,239 401,500 574,251 393,542 180,709 453,350 822,612 995,363 674,450 320,913 726,589 164,998 183,019 139,120 43,899 205,971 733,619 992,859 1,060,949 (68,090) 842,547 544,060 1,497,774 181,228 1,316,546 200,330 764,286 772,086 789,483 (17,397) 401,028 202,860 (18,944 140,656 (159,600) (113,843) 2,409,823 3,426,794 2,311,436 1,115,358 1,536,033 16,394,506 17,988,733 15,320,428 2,668,305 13,840,277 722,264 198,792 6,913,028 6,714,236 6,461,620 30,000 176,716 162,398 (14,318) 189,072 (124,250) (1,473,812 (270,346) 1,203,466 X1,395,559 (94,250) (12297,0 (107,948) 1,189,148 (1,206,487) 628,014 (1,098,304) 6,805,080 7,903,384 5,255,133 Fund balance at beginning of year 40,879,603 40,879,603 40,879,603 - 35,624,470 Fund balance at end of year $ 41,507,617 39,781,299 47,684,683 7,903,384 40,879,603 69 CITY OF LA QUINTA Special Revenue Funds Low/Moderate Income Housing Project Area No. 2 Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Taxes Investment income Total revenues Expenditures: Current: Planning and development Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Sale of capital assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance with Prior Budget Final Budget Year Original Final Actual Positive (negative) Actual $ 1,896,343 2,360,051 2,479,241 119,190 20,700 38,207 129,263 91,056 1,917,043 2,398,258 2,608,504 210,246 1,771,247 1,883,543 765,795 1,117,748 1,771,247 1,883,543 765,795 1,117,748 145,796 514,715 1,842,709 1,327,994 801,358 - (801,358) - 16,964 19,861 2,897 (338,895) (4,448,587) (585,753) 3,862,834 (338,895) (3,630,265) 565,892 (193,099) (3,115,550) 1,276,817 4,706,093 4,706,093 4,706,093 $ 4,512,994 1,590,543 5,982,910 70 3,064,373 4,392,367 4,392,367 2,025,212 115,747 2,140,959 682,702 682,702 1,458,257 (503,010 503,010 955,247 3,750,846 4,706,093 SUPPLEMENTARY SCHEDULES 71 Assets Cash and investments Cash with fiscal agent Accounts receivable Notes receivable Due from other funds Due from other governments Advances to other funds Deposits Total assets Liabilities and Fund Balances Liabilities: Accounts payable Deferred revenue Deposits payable Due to other governments Due to other funds Total liabilities Fund balances: Reserved for: Debt service Notes receivable Deposits Unreserved: Designated for capital projects Undesignated Total fund balances Total liabilities and fund balances CITY OF LA QUINTA Non -Major Governmental Funds Combining Balance Sheet June 30, 2003 Special Revenue $ 3,332,905 17 78,447 3,113,565 117,123 185,000 $ 6,827,057 $ 33,668 995,979 19,309 21,694 54,300 1,124,950 2,117,586 185,000 3,399,521 5,702,107 Debt Service Fund Capital Financing Projects Totals Authority Funds 2003 2002 2,971 12,203,581 15,539,457 17,700,009 58 - 75 2,245,152 - 60,900 139,347 166,984 - - 3,113,565 3,009,966 - - - 180,999 - 117,123 150,677 1,109,846 1,109,846 - - - 185,000 - 3,029 13,374,327 20,204,413 23,453,787 2,500 26,353 62,521 47,837 - - 995,979 873,855 - 27,835 47,144 15,788 - - 21,694 - - - 54,300 169,806 2,500 54,188 1,181,638 1,107,286 529 - 529 10,615 - - 2,117,586 2,136,111 185,000 - 13,320,139 13,320,139 12,759,428 - - 3,399,521 7,440,347 529 13,320,139 19,022,775 22,346,501 $ 6,827,057 3,029 13,374,327 20,204,413 23,453,787 72 CITY OF LA QUINTA Non -Major Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 2003 Debt VA Special Service Fund Capital Revenue Financing Projects Totals Funds Authority Funds 2003 2002 Revenues: Taxes $ 5,271,524 - - 5,271,524 4,488,487 Developer fees 319,970 - 2,276,513 2,596,483 1,827,222 Intergovernmental 859,001 - 200,000 1,059,001 1,117,668 Investment income 86,752 80 304,564 391,396 828,795 Special assessments 780,259 - - 780,259 757,619 Rental income 376,863 678,955 - 1,055,818 1,001,389 Miscellaneous 280,752 - - 280,752 55,007 Total revenues 7,975,121 679,035 2,781,077 11,435,233 10.076,187 Expenditures: Current: General government - - 203,831 203,831 207,536 Public safety 142,020 - - 142,020 1,187 Community services 2,406 - - 2,406 53,363 Planning and development 4,111,103 9,686 217,599 4,338,388 3,973,785 Public works 1,373,614 - - 1,373,614 1,361,279 Capital outlay 111,948 - - 111,948 - Debt service: Principal - 285,000 - 285,000 275.000 Interest - 394,435 - 394,435 407.177 Total, expenditures 5,741,091 689,121 421,430 6,851,642 6,279,327 Excess (deficiency) of revenues over (under) expenditures 2,234,030 10,086) 2,359,647 4,583,591 3,796,860 Other financing sources (uses): Sale of capital assets - - - - 146,603 Transfers in 2,000 - 1,308,913 1,310,913 2,000 Transfers out (6,110,381) - (3,107,849) (9,218,230) (7,757,991) Total other financing sources (uses) (6,108,381) - (1,798,936) (7,907,317) (7,609,388) Net change in fund balances (3,874,351) (10,086) 560,711 (3,323,726) (3,812,528) Fund balances at beginning of year 9,576,458 10,615 12,759,428 22,346,501 26,159,029 Fund balances at end of year $ 5,702,107 529 13,320,139 19,022,775 22,346,501 VA (This page intentionally left blank) 74 NON -MAJOR 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. Federal Assistance Fund - To account for revenues from the Community Development Block Grants received from the Federal Government and the expenditures of those resources. Lighting and Landscape Special Assessment District 89-1 Fund - To account for special assessments levied on real property and the expenditure thereof from City-wide lighting and landscape maintenance and improvements. State Law Enforcement 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. 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 Safely Officer Fund - To account for contributions to be distributed to public safety officers disabled or killed in the line of duty. Arts in Public Places — To account for development fees paid in lieu of acquisition and installation of approved artworks in a development with expenditures restricted to acquisition, installation, maintenance and repair of artworks at approved sites. South Coast Air Quality Fund - To account for contributions from the South Coast Air Quality Management District. Use of such contributions is limited to reduction and control of airborne pollutants. Local Law Enforcement Block Grant (LLEBG) Fund - To account for Federal Bureau of Justice Block Grant program, which may be used for the purpose of reducing crime and improving public safety. Coachella Valley Violent Crime Task Force Fund — To account for the activities of the Coachella Valley Violent Crime Task Force. _Redevelopment Agency, Low and Moderate Income Housing P.A. No. 1 Fund - To account for the required 20% set aside of property tax increments that is legally restricted for increasing or improving housing for low and moderate income households. Redevelopment Agency, Low and Moderate Bond Fund P.A. No. 1 and No. 2 Funds - To account for bond proceeds and expenditures of bond -financed low and moderate income housing programs. 75 CITY OF LA QUINTA Non -Major Special Revenue Funds Combining Balance Sheet June 30, 2003 76 Lighting Arts in State Federal and Public Public Gas Tax Assistance Landscape SLEBG Quimby S afety Places Assets Cash and investments $ 374,700 - - 7,852 410,853 6,254 609,243 Cash with fiscal agent - - - - - - - Accounts receivable - - - - - - Notes receivable - - - - - - Due from other funds - - - - - - - Due from other governments - - 24,898 - - - - Deposits - - - - - - - Total assets $ 374,700 - 24,898 7,852 410,853 6,254 609,243 Liabilities and Fund Balances Liabilities: Accounts payable $ - - - - - - 1.200 Deferred revenue - - - - - - Deposits payable - - - - - Due to other governments - - - - Due to other funds - 7,320 24,898 22,082 - - Total liabilities - 7,320 24,898 - 22,082 - 1,200 Fund balances: Reserved for: Notes receivable - - - - - - - Deposits - - - - - - Unreserved 374,700 (7,320) - 7,852 388,771 6,254 608,043 Total fund balances 374,700 (7,320 - 7,852 388,771 6,254 608,043 Total liabilities and fund balances $ 374,700 - 24,898 7,852 410,553 6,254 609,243 76 Low/ Moderate Low/ Low/ CV Violent Income Moderate Moderate South Coast Crime Task Housing- Bond- Bond- Totals Air Quality LLEBG Force PA No. 1 PA No. 1 PA No. 2 2003 2002 101,612 25,575 7,828 1,714,382 74,606 - 3,332,905 5,147,673 - - - - 17 - 17 2,243,769 78,447 - - 78,447 106,084 3,113,565 - 3,113,565 3,009,966 - - - - - - - 2,538 8,300 - 21,693 62,232 - - 117,123 150,677 - - - 185,000 - - 185,000 - 109,912 25,575 29,521 5,153,626 74,623 - 6,827,057 10,660,707 - - 7,300 25,168 - - 33,668 38,351 - - - 995,979 - - 995,979 873,855 - - - 19,309 - - 19,309 15,788 - - 21,694 - - - 21,694 - - - - - - - 54,300 156,255 - - 28,994 1,040,456 - - 1,124,950 1,084,249 2,117,586 - - 2,117,586 2,136,111 - - - 185,000 - - 185,000 - 109,912 25,575 527 1,810,584 74,623 - 31399,521 7,440,347 109,912 25,575 527 4,113,170 74,623 - 5,702,107 9,576,458 109,912 25,575 29,521 5,153,626 74,623 - 6,827,057 10,660,707 77 CITY OF LA QUINTA Non -Major Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 2003 Revenues: Taxes Developer fees Intergovernmental Investment income Special assessments Rental income Miscellaneous Total revenues Expenditures: Current: Public safety Community services Planning and development Public works Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Sale of capital assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances (deficit) at end of year Lighting Arts in Gas Federal and Public Public Tax Assistance Landscape SLEBG Quimby S afety Places - - - - 91,926 558,086 30,000 - 100,713 - 7,985 - - 279 9,103 - - 780,259 - - 566,071 30,000 780,259 100,992 101,029 - 228,044 289 13,374 289 241,418 10,000 - - - - - - 2.406 569,900 - 803,714 - - - - - y - - 11 L948 569,900 - 803,714 - - 10,000 114,354 (3,829) 30,000 (23,455) 100,992 101,029 (9,711) 127,064 - - - - 2,000 - 37,320) - (100,287) (74,928) - (200,108) (37,320) - (100,287) 74,928) 2,000 (200,108) (3,829) (7,320) (23,455) 705 26,101 (7,711) (73,044) 378,529 - 23,455 7,147 362,670 13,965 681,087 $ 374,700 (7,320) - 7,852 388,771 6,254 608;043 78 132,020 - - - 142,020 1.187 - _ _ _ _ - 2,406 2,028 8,043 - - 4,103,060 - - 4,111,103 3,738,979 - _ _ _ _ - 1,373,614 1,293,029 _ - - - - 111,948 51,335 8,043 132,020 4,103,060 - - 5,741,091 5,086,558 27,538 25,395 (18,325) 1,862,485 11,949 2,898 2,234,030 2,324,026 _ - - 146,603 _ _ _ - 2,000 2,000 (32,111) - (3,286,801) (2,378,826) (6,110381) ^(3556,884) (3,286,801) - (2,378 826) (6,108,381) (3,408,281) 27,538 (6,716) (18,325) (1,424,316) 11,949 (2,375,928) (3,874,351) (1,084,255) 82,374 32,291 18,852 5,537,486 62,674 2,375,928 9,576,458 10,660,713 109,912 25,575 527 4,113,170 74,623 - 5,702,107 9,576,458 79 Low/ Moderate Low/ Low/ CV Violent Income Moderate Moderate South Coast Crime Task Housing- Bond- Bond- Totals Air Quaility LLEBG Force PA No. 1 PA No. 1 PA No. 2 2003 _ 2002 _ - - 5,271,524 - 5,271,524 4,488,487 _ _ - - - 319,970 278,061 33,538 24,243 112,421 - - - 859,001 1,117,668 2,043 1,152 1,274 36,406 11,949 2,898 86,752 402,186 - _ - _ _ - 780,259 757,619 _ - - 376,863 - - 376,863 321,145 - - - 280,752 - - 280,752 45,418 35,581 25,395 113,695 5,965,545 11,949 2,898 (7,975,121 7,410,584 132,020 - - - 142,020 1.187 - _ _ _ _ - 2,406 2,028 8,043 - - 4,103,060 - - 4,111,103 3,738,979 - _ _ _ _ - 1,373,614 1,293,029 _ - - - - 111,948 51,335 8,043 132,020 4,103,060 - - 5,741,091 5,086,558 27,538 25,395 (18,325) 1,862,485 11,949 2,898 2,234,030 2,324,026 _ - - 146,603 _ _ _ - 2,000 2,000 (32,111) - (3,286,801) (2,378,826) (6,110381) ^(3556,884) (3,286,801) - (2,378 826) (6,108,381) (3,408,281) 27,538 (6,716) (18,325) (1,424,316) 11,949 (2,375,928) (3,874,351) (1,084,255) 82,374 32,291 18,852 5,537,486 62,674 2,375,928 9,576,458 10,660,713 109,912 25,575 527 4,113,170 74,623 - 5,702,107 9,576,458 79 CITY OF LA QUINTA Special Revenue Funds State Gas Tax Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 80 Variance with Prior Budget Final Budget Year Original Final Actual Positive (ne ative) Actual Revenues: Intergovernmental $ 562,000 562,000 558,086 (3,914) 609,016 Investment income 7,900 7,900 7,985 85 12,232 Total revenues 569,900 569,900 566,071 (3,829) 621,248 Expenditures: Current: Public works 569,900 569,900 569,900 - 435,298 Total expenditures 569,900 569,900 569,900 - 435,298 Excess (deficiency) of revenues over (under) expenditures - - (3,829) (3,829) 185,950 Other financing sources (uses): Transfers out - - - (159,080) Net change in fund balances - - (3,829) (3,829) 26,870 Fund balances at beginning of year 378,529 378,529 _ 378,529 - 351,659 Fund balances at end of year $ 378,529 378,529 374,700�A3,829) 378,529 80 CITY OF LA QUINTA Special Revenue Funds Federal Assistance Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Intergovernmental Total revenues Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit) at beginning of year Fund balances (deficit) at end of year Budget Original Final Variance with Final Budget Actual Positive (ne ative) Prior Year Actual $ 164,800 164,800 30,000 (134,809) 335,618 164,800 164,800 30,000 (134,800) 335,618 (30,000) (164,825) (37,320) 127,505 (61.814) (30,000) (164,825) (37,320 127,505 {61,814 134,800 (25) (7,320) (7,295) 273,804 _ (273,804) $ 134,800 (25) (7;320) (7,295) 81 CITY OF LA QUINTA Special Revenue Funds Lighting and Landscape Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Special assessments Total revenues Expenditures: Current: Public works Total expenditures Net change in fund balances Budget Original Final $ 781,400 829,700 781,,400 829,700 781,400 829,700 781,400 829,700 Fund balances at beginning of year 23,455 23,455 Fund balances at end of year $ 23,455 23,455 IM Variance with Final Budget Actual Positive (negative) 780,259 780,259 803,714 803,714 (23,455) 23,455 49,441 49,441) 25,986 25,986 (23,455) (23,455) Prior Year Actual 757,619 757,619 857,731 857,731 (100,112) 123,567 23,455 CITY OF LA QUINTA Special Revenue Funds State Law Enforcement Block Grant Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year 100,28 100,287) (100,287 149,271 100,287 (100,287 100,287 Variance with Prior 2,200 Budget (1,495) (46,993) Final Budget Year 7,147 Original Final Actual Positive (negative) Actual Revenues: Intergovernmental $ 100,287 100,287 100,713 426 100,192 Investment income 2,200 2,200 279 1,921 2,086 Total revenues 102,487 102,487 100,992 1,495 102,278 Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year 100,28 100,287) (100,287 149,271 100,287 (100,287 100,287 - 149,271 2,200 2,200 705 (1,495) (46,993) 7,147 7,147 7,147 - 54,140 $ 9,347 9,347 7,852 (1,495) 7,147 83 CITY OF LA QUINTA Special Revenue Funds Quimby Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Developer fees Investment income Total revenues Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Budget Original Final Variance with Final Budget Actual Positive (negative) $ 25,000 25,000 91,926 8.400 8,400 9,103 33,400 33,400 101,029 - (200,826) (74,928) - (200,826 (74,928) 33,400 (167,426) 26,101 362,670 362,670 362,670 $ 396,070 195,244 388,771 66,926 703 67,629 125,898 125,898 193,527 193,527 Prior Year Actual 126,375 15,699 142,074 (284,681 (28L,68 1� (142, 607) 505,277 362,670 CITY OF LA QUINTA Special Revenue Funds Public Safety Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Variance with Prior Bridget Final Budget Year Original Final Actual Positive (negative) Actual Revenues: Investment income $ 300 300 289 11 422 Total revenues 300 300 289 (11 422 Expenditures: Current: Public safety - 10,000 10,000 - - Total expenditures - 10,000 10,000 - - Excess (deficiency) of revenues over (under) expenditures 300 (9,700) 9,711 11) 422 Other financing sources (uses): Transfers in - 2,000 2,000 - 2,000 Total other financing sources (uses) - 2,000 2,000 - 2,000 Net change in fund balances 300 (7,700) (7,711) (11) 2,422 Fund balances at beginning of year 13,965 13,965 13,965 - 11,543 Fund balances at end of year $ 14,265 6,265 6,254 11) 13,965 85 CITY OF LA QUINTA Special Revenue Funds Arts in Public Places Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Variance with Prior Budget Final Budget Year Original Final Actual Positive (negative) Actual Revenues: Developer fees $ 87,300 87,300 228,044 140,744 103,102 Investment income 16,700 16,700 13,374 (3,326) 22,955 Total revenues 104,000 104,000 241,418 137,418 126,057 Expenditures: Current: Community services 5,300 5,400 2,406 2,994 2,028 Capital outlay 98,700 128,200 111,948 16,252 51, 335 Total expenditures 104,000 133,600 114,354 19,246 53,363 Excess (deficiency) of revenues over (under) expenditures - (29,600) 127,064 156,664 72,694 Other financing sources (uses): Transfers out - 349,361 (200,108) 149,2539( 6,465) Net change in fund balances - (378,961) (73,044) 305,917 (23,771) Fund balances at beginning of year 681,087 681,087 681,087 - 704,858 Fund balances at end of year $ 681,087 302,126 608,043 .305,917 681,087 TV CITY OF LA QUINTA Special Revenue Funds South Coast Air Quality Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Intergovernmental Investment income Total revenues Expenditures: Current: Planning and development Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance with Prior Budget Final Budget Year C rigmal Final Actual Positive (negative) Actual $ 21,881 21,881 33,538 1,400 1,400 2,043 23,281 23,281 35,581 5,700 8,043 5,700 8,043 23,281 17,581 27,538 11,657 643 12,300 2,343 2,343) 9,957 46,429 - 46,429 - (46,429) - 23,281 (28,848) 27,538 82,374 82,374 82,374 $ 105,655 s-53,526 109,912 �: I 46,429 56,386 56,386 36,238 1,972 38,210 9,646 9,646 28,564 28,564 53,810 82,374 CITY OF LA QUINTA Special Revenue Funds LLEBG Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Intergovernmental Investment income Total revenues Other financing sources (uses): Transfers out Total other financing sources (uses) - - (32,111 Net change in fund balances 28,300 28,300 (6,716) Fund balances at beginning of year 32,291 32,291 32,291 Fund balances at end of year $ 60,591 60,591 25,575 :: 32,111) (35,016) (35,016) 1,820 25,725 6,566 32,291 Variance with Prior Budget �Ori�al Final Budget Year Final Actual Positive (negative) Actual — $ 28,000 28,000 24,243 (3,757) 26,704 300 300 1,152 852 841 28,300 28,300 25,395 2,905 27,545 - - (32,111) (32,111) (1,820) Total other financing sources (uses) - - (32,111 Net change in fund balances 28,300 28,300 (6,716) Fund balances at beginning of year 32,291 32,291 32,291 Fund balances at end of year $ 60,591 60,591 25,575 :: 32,111) (35,016) (35,016) 1,820 25,725 6,566 32,291 CITY OF LA QUINTA Special Revenue Funds CV Violent Crime Task Force Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Variance with Prior Budget Final Budget Year Ohijlal Final Actual Positive (negative) Actual Revenues: Intergovernmental $ - 94,881 112,421 17,540 - Investment income - - 1,274 1,274 39 Miscellaneous - - - - 20,000 Total revenues - 94,881 113,695 18,814 20,039 Expenditures: Current: Public safety - 120,000 132,020 (I2,020) 1,187 Total expenditures - 120,000 132_.020 (12,020) 1,187 Net change in fund balances - (25,119) (18,325) 6,794 18,852 Fund balances at beginning of year 18,852 18,852 18,852 - - Fund balances (deficit) at end of year $ 18,852 6,267 527 6,794 18,852 Wal CITY OF LA QUINTA Special Revenue Funds Low/Moderate Income Housing Project Area No. 1 Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Taxes Developer fees Investment income Rental income Miscellaneous Total revenues Expenditures: Current: Planning and development Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Sale of capital assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year 41339,700 7,545,700 4,103,060 3,442,640 3,729,333 4,339,700 7,545,700 4,103,060 3,442,640 3,729,333 713,481 (1,969,667) 1,862,485 3,832,152 1,420,603 150,000 150,000 - Variance with Prior Budget 1,825,000 - Final Budget Year Original Final Actual Positive (negative) Actual (1,588,783) (1,978,426) (3,286,801) $ 4,512,181 5,035,033 5,271,524 236,491 4,488,487 - - - - 48,584 200,000 200,000 36,406 (163,594) 266,302 341,000 341,000 376,863 35,863 321,145 - - 280,752 280,752 25,418 5,053,181 5,576,033 5,965,545 389,512 5,149,936 Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Sale of capital assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year 41339,700 7,545,700 4,103,060 3,442,640 3,729,333 4,339,700 7,545,700 4,103,060 3,442,640 3,729,333 713,481 (1,969,667) 1,862,485 3,832,152 1,420,603 150,000 150,000 - (150,000) 146,603 - 1,825,000 - (1,825,000) - (1,738,783) (3,953,426) (3,286,801 666,625 1,737,006) (1,588,783) (1,978,426) (3,286,801) (1,308,375) (1,590,403) (875,302) (3,948,093) (1,424,316) 2,523,777 (169,800) 5,537,486 5,537,486 5,537,486 - 5,707,286 $ 4,662,184 1,589,393 4,113,170 2,523,777 5,537,486 CITY OF LA QUINTA Special Revenue Funds Low/Moderate Bond - Project Area No. 1 Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Variance with Prior Budget Final Budget Year Original Final Actual Positive (negative) Actual Revenues: Investment income $ - - 11,949 11.949 62,674 Total revenues - - 11,949 11,949 62,674 Other financing sources (uses): Transfers out T - (832,930 Total other financing sources (uses) _ —_ - _ - 832,930) Net change in fund balance - - 11,949 11,949 (770,256) Fund balances at beginning of yea 62,674 62,674 62,674 _ - 832,930 Fund balances at end of year $ 62,674 62,674 74,623 11,949 62,674 91 CITY OF LA QUINTA Special Revenue Funds Low/Moderate Bond - Project Area No. 2 Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Variance with Prior Budget Final Budget Year Original Final Actual Positive (negative) Actual Revenues: Investment income $ - - 2,898 2,898 16,964 Total revenues - - 2,898 2,898 16,964 Other financing sources (uses) Transfers out - (2,375,928) (2,378,826 (2,898 (123,917) Total other financing sources (uses) - (2,375,928) 2,378,826 (2,898) (223,917) Net change in fund balances - (2,375,928) (2,375,928) - (206,953) Fund balances at beginning of year 2,375,928 2,375,928 2,375,928 - 2,582,881 Fund balances at end of year $ 2,375,928 - - - 2,375,928 92 MAJOR AND NON -MAJOR 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. The City of La Quinta has the following Debt Service Funds: 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 debt obligation. Redevelopment Agency, P.A. No. 1 and No. 2 - To account for the accumulation of resources for the payment of debt service for bond principal interest and trustee fees. 93 CITY OF LA QUINTA Debt Service Funds Financing Authority Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Investment income Rental income Miscellaneous Total revenues Expenditures: Current: Planning and development Debt service: Principal Interest Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance with Prior Budget Final Budget Year Original Final ActualPositive (negative) Actual $ - - 80 80 455 678,955 678,955 678,955 - 680,244 9,175 9,175 - (9,175) 9,589 688,130 688,130 679,035 (9,095) 690,288 9,686 9,686 9,686 285,000 285,000 285,000 394,435 394,435 394,435 689,121 689,121 689,121 (991) (991) (10,086) 10,615 10,61.5 10,615 $ 9,624 9,624 529 7,405 275,000 407,177 689,582 (9,095) 706 9,909 (9,095) 10,615 CITY OF LA QUINTA Debt Service Funds Redevelopment Agency Project Area No. 1 Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Taxes Investment income Total revenues Expenditures: Current: Planning and development Debt service: Principal Interest Payments under pass-through obligations 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 (deficit) at beginning of year Fund balances at end of year Budget Ori«inal Final Variance with Final Budget Actual Positive (negative) Prior Year Actual $ 18,048,724 20,140,132 21,086,099 945,967 17,953,949 - - 204,789 204,789 344,259 18,048,724 20,140,132 21,290,888 1,150,756 18,298,208 586,870 586,870 316,567 270,303 285,551 1,567,022 2,264,940 2,264,940 - 10,126,122 6,991,075 7,586,832 7,491,294 95,538 5,255,819 8,418,042 9,675,341 9,669,282 6,059 8,194,449 17,563,009 20,113,983 19,742,083 371,900 23,861,941 485,715 26,149 1,548,805 1,522,656 (5,563,733 1,738,783 1,738,783 1,738,783 - 11,090,291 - (6,000,000 6,000,000 - - - 1,738,783 4,261,217 (4,261,217) - 11,090,291 2,224,498 (4,235,068) (2,712,412) 1,522,656 5,526,558 4,985,471 4,985,471 4,985,471 - (541,087) $ 71209,969 750,403 2,273,059 1,522,650 4,985,471 95 CITY OF LA QUINTA Debt Service Funds Redevelopment Agency Project Area No. 2 Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Taxes Investment income Total revenues Expenditures: Current: Planning and development Debt service: Principal Interest Payments under pass-through obligations 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 (deficit) at beginning of year Fund balances (deficit) at end of year Budget Original Final Variance with Final Budget Actual Positive (negative) Prior Year A _-__l $ 7,585,373 9,440,205 9,916,962 476,757 8.100.847 121,000 - 67,844 67,844 28,768 7,706,373 9,440,205 9,984,806 544,601 8,129,615 161,020 161,020 149,787 11,233 123,146 272,978 272,978 272,978 - 947,956 5,933,686 1,467,846 1,467,846 - 1,286,179 6,340,423 7,895,475 7,892,712 2,763 5,474,717 12,708,107 9,797,319 9,783,323 13,996 7,831,998 (5,001,734) (357,114) 201,483 558,597 297,617 - 338,895 338,895 - 338,442 - (1,100,000) (1,100,000) - - (761,105) (761,105) - 338,442 (5,001,734) (1,118,219) (559,622) 558,597 636,059 (5,622,884) (5,622,884) (5,622,884) - (6,258,943) $ (10,624,618) (6,741,103 (6,182,506) 558,597 (5,622,884) MAJOR AND NON -MAJOR CAPITAL PROJECTS FUNDS Capital projects funds account for the financial resources to be used for the acquisition, construction or improvements of major capital facilities and infrastructure. The City of La Quinta has the following Major Capital Projects Funds: Parks and Recreation Fund — To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvements of the City's infrastructure. Capital Improvement Fund - To account for the planning, design and construction of various capital projects throughout the City of La Quinta and the Redevelopment Agency. Redevelopment Agency; Capital Projects Fund Area 1 — To account for the bond proceeds, interest and other funding that will be used for development, planning, construction and land acquisition. The City of La Quinta has the following Non -Major Capital Projects Funds: 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, Civic Center Fund, Library Development Fund, Community Center Fund, Street Facility Fund, Park Facility Fund, Fire Facility Fund — To account for the accumulation of resources provided through developer fees for the acquisition, construction, or improvement of the City's infrastructure. The Developer Impact Fee was adopted by the City Council on August 16, 1999. Six 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. County Library Development Fund — To account for the accumulation of County resources for the acquisition, construction or improvement of the City's library. Assessment District 2000-1 Phase VI Fund — To account for the bond proceeds and other funding that will be used for improvements to Assessment District 2000-1. Financing Authority Capital Projects Fund - To account for the Public Financing Authority bond proceeds that will be used for specific projects and programs of the City. acquisition. ects Fund Area 2 - To account for the bond proceeds, be used for development, planning, construction and land 97 Assets Cash and investments Cash with fiscal agent Accounts receivable Due from other funds Advances to other funds CITY OF LA QUINTA Non -Major Capital Projects Funds Combining Balance Sheet June 30, 2003 Civic Library Community Infrastructure Transportation Center Development Center $ 2,238,491 3,975,475 1,783,213 1,091,733 479,793 Total assets $ 2,238,491 3,975,475 1,783,213 1,091,733 Liabilities and Fund Balances Liabilities: Accounts payable $ - - - - Deposits payable - - - Due to other funds - - - - Total liabilities - - Fund balances: Unreserved: Designated for capital projects 2,238,491 3,975,475 1,783,213 1,091,733 Undesigated - - - - Total fund balances 2,238,491 3,975,475 1,783,213 1,091,733 Total liabilities and fund balances $ 2,238,491 3,975,475 1,783,213 1,091,733 W 479,793 479,793 479,793 479,793 Financing Redevelopment Street Park Fire A.D. 2000-1 Authority Agency Facility Facili Facili . Phase VI Projects PA No.2 111,509 27,181 91,354 444,361 _ 91,354 444,361 - 27,181 111,509 Totals 2003 2002 1,960,471 12,203,581 12,542,460 - - 1,381 60,900 60,900 60,900 - - 177,724 1,109,846 1,109,846 - 3,131,217 13,374,327 12,782,465 26,353 26,353 9,486 27,835 27,835 - _ - - 13,551 54,188 54,188 23,037 111,509 27,181 91,354 444,361 - 3,077,029 13,320,139 12,759,752 - _ - - - - - _ (324 111,509 27,181 91,354 444,361 - 3,077,029 13,320,139 12,759,428 111,509 27,181 91,354 444,361 3,131,217 13,374,327 12,782,465 CITY OF LA QUINTA Non -Major Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 2003 Revenues: Developer fees Intergovernmental Investment income Total revenues Expenditures: Current: General government Planning and development Public works Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers ui Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit) at beginning of year Fund balances at end of year Civic Library Conununity Infrastructure Transportation Center Development Center $ - 1,517,388 365,776 190,171 86,022 - - - 200,000 - 70,822 80,281 38,796 22,947 9,993 70,822 1,597,669 404,572 413,118 96,015 203,831 - - - 203,831 - - 70,822 1,597,669 200,741 413,118 96,015 (1,894,586) (1,019,180) (36,969) (156,964 - (1,894,586) (1,019,180) (36,969) (156,964) - (1,823,764) 578,489 163,772 256,154 96,015 4,062,255 3,396,986 1,619,441 835,579 383,778 $ 2,238,491 3,975,475 1,783,213 1,091,733 479,793 100 26,649 4,968 89,507 10,156 324 - - (150) - - - (150) - 26,649 4,968 89,507 10,006 324 84,860 22,213 1,847 434,355 (324) 111,509 27,181 91,354 444,361 - 101 Redevelopment Agency Totals PA No.2 2003 2002 2,276,513 1,549,161 - 200,000 - 67,277 304,564 426,154 67,277 2,781,077 1,975,315 - 203,831 207,536 217,599 217,599 227,401 - - 68,250 217,599 421,430 503,187 (150,322) 2,359,647 1,472,128 Financing Street Park Fire A.D. 2000-1 Authority Facility Facility Facility Phase VI Projects (4,201,107) 1;158,591 560,711 (2,728.979) 1,918,438 24,354 4,425 88,377 - - 2,295 543 1,130 10,156 324 26,649 4,968 89,507 10,156 324 26,649 4,968 89,507 10,156 324 - - (150) - - - (150) - 26,649 4,968 89,507 10,006 324 84,860 22,213 1,847 434,355 (324) 111,509 27,181 91,354 444,361 - 101 Redevelopment Agency Totals PA No.2 2003 2002 2,276,513 1,549,161 - 200,000 - 67,277 304,564 426,154 67,277 2,781,077 1,975,315 - 203,831 207,536 217,599 217,599 227,401 - - 68,250 217,599 421,430 503,187 (150,322) 2,359,647 1,472,128 1,308,913 1,308,913 - - (3,107,849) (4,201,107) 1,308,913 (1,798,936) (4,201,107) 1;158,591 560,711 (2,728.979) 1,918,438 12,759,428 15,488,407 3,077,029 13,320,139 12,759,428 CITY OF LA QUINTA Capital Projects Funds Parks and Recreation Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Budget Original Final Variance with Final Budget Actual Positive (negative) Revenues: Developer fees $ - 251,000 424,762 Investment income - 20,500 28,503 Total revenues - 271,500 453,265 Expenditures: Debt service: Interest expense - - 52,523 Total expenditures - - 52,523 Excess (deficiency) of revenues over (under) expenditures - 271,500 400,742 Other financing sources (uses): Transfers out - (5,391,927) (4,773,363) Total other financing sources (uses) - 5,391,927 4,773,363) Net change in fund balances - (5,120,427) (4,372,621) Fund balances at beginning of year 158,962 158,962 158,962 Fund balances (deficit) at end of year $ — 158,962 (4,961,465) (4,213,659) 102 173,762 8,003 181.765 (52,523) (52,523) Prior Year Actual 374,275 58,436 432.711 129,242 432,711 618,564 618,564 747,806 (1,309,728) (1,309,728) (877,017) 1,035,979 747,806 158;962 CITY OF LA QUINTA Capital Projects Funds Capital Improvement Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Budget Orignial Final Actual Revenues: Developer fees $ _ 2,000 - Intergovernmental - 5,796,608 1,741,474 Miscellaneous - 213,000 60.000 Total revenues - 6,011,608 1,801,474 Expenditures: Capital projects - 42,071,821 15,945,630 Debt service: Principal - 110,000 109,034 Interest -- 138,454 63,216 Total expenditures 42,320,275 16,117,880 Excess (deficiency) of revenues over (under) expenditures - (36,308,667) (14,316,406) Other financing sources (uses): Transfers in - 36,308,667 !14,316,406 Total other financing sources (uses) - 36,308,667 14,316,406 Net change in fund balances - - - Fund balances at beginning of year - - - Fund balances at end of year $ -� - - 103 Variance with Prior Final Budget Year Positive (negative) Actual (2,000) 97.150 (4,055,134) 4,782,293 (153,000) - (4,210,134) 4,879,443 26,126,191 57,342,978 966 104,409 75,238 67,841 26,202,395 57,515,228 21,992,261 (52,635,785} (21,992,261 52,635,785 (21,992,261) 52,635,785 CITY OF LA QUINTA Capital Projects Funds Redevelopment Agency Project Area No. 1 Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Investment income Rental income Miscellaneous Total revenues Expenditures: Current: Planning and development Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Proceeds of tax allocation bonds Transfers in Transfers out Total other financing sources (uses) Net change in fluid balances Fund balances at beginning of year Fund balances at end of year - 2,384,647 1,559,307 Variance with Prior Budget 1,559,307 Final Budget Year Original Final Actual Positive (negative) Actual $ - 125,000 652,611 527,611 728,658 - 41,500 38,692 (2,808) - - - 55,789 55,789 - - 166,500 747.092 580.592 728,658 - 2,384,647 1,559,307 825,340 4,901,601 - 2,384,647 1,559,307 825,340 4,901,601 - (2,218,147) (812,215) 1,405,932 (4,172,943) - - - - 88,000,000 - 6,000,000 6,000,000 - - - (9,359,860) (1,939,564) 7,420,296 (54,289,302) - (3,359,860) 4,060,436 7,420,296 33,710,698 - (5,578,007) 3,248,221 8,826,228 29,537,755 37,842,312 37,842,312 37,842,312 - 8,304,557 $ 37,842,312 32,264,305 41,090,533 8,826,228 37,842,312 104 CITY OF LA QUINTA Capital Projects Funds Infrastructure Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Investment income Total revenues Expenditures: Current: Public works Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Budget Original Final Variance with Final Budget Actual Positive (negative) Prior Year Actual $ 61300 61,700 70,822 9,122 126,855 61,700 61,700 70,822 9,122 126,855 - - - 4,670 - - - - 4,670 61,700 61,700 70,822 9,122 122,185 (175,000) (3,783,089 (1,894,586) 1,888,503 (567,740) (175,000) (3,783,089) (1,894,586) 1,888,503 (567,740) (113,300) (3,721,389) (1,823,764) 1,897,625 (445,555) 4,062,255 4,062,255 4,062,255 - 4,507,810 $ 3,948,955 340,866 2,238,491 1,897,625 4,062,255 105 CITY OF LA QUINTA Capital Projects Funds Transportation Fund Schedule of Revenues, Expenditures and Changes 'n Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Developer fees Investment income Total revenues Other financing sources (uses): Transfers out Budget Original Final Variance with Final Budget Actual Positive (negative) Prior Year A _ . 1 $ 549,000 549,000 1,517,388 968,388 655,885 23,100 23,100 80,281 57,181 115,507 572,100 572,100 1,597,669 1,025,569 771,392 (287,640) (1,302,363 (1,019,180) 283,183 893,966 Total other financing sources (uses) 287,640) (1,302,363 (1,019,180) Net change in fund balances 284,460 (730,263) 578,489 Fund balances at beginning of year 3,396,986 3,396,986 3,396,986 Fund balances at end of year $ 3,681,446 2,666,723 3,975,475 1: 283,183 1,308,752 1,308,752 (893,966) (122,574) 3,519,560 3,396,986 CITY OF LA QUINTA Capital Projects Funds Civic Center Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Developer fees Investment income Total revenues Expenditures: Current: General government Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Budget Original Final Variance with Final Budget Actual Positive (negative $ 183,000 183,000 365,776 182,776 30,300 30,300 38,796 8,496 213,300 213,300 404,572 191,272 203,831 203,831 203,831 203,831 203,831 203,831 9,469 9,469 200,741 364,687 (364,687) (36,969) (364,687 (364,687) 36,969 Net change in fund balances (355,218) (355,218) 163,772 Fund balances at beginning of year 1,619,441 1,619,441 1,619,441 Fund balances at end of year $ 1,264,223 1,264,223 1,783,213 107 191,272 327,718 327,718 518,990 518,990 Prior Year Actual 549,487 44,268 593,755 207,536 207,536 386,219 386,219 1,233,222 1,619,441 CITY OF LA QUINTA Capital Projects Funds Library Development Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Developer fees Intergovernmental Investment income Total revenues Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances (deficit) at end of year (4,676,676) (931,894 (156,964 (4,676,676) (931,894) (156,964) Variance with Prior Budget 835,579 Final Budget Year Original Final Actual ositive (negative Actual $ 112,500 112,500 0171 77,671 216,972 200,000 200,000 00,000 - 21,900 21,900 ; 47 1,047 23,812 334,400 334,400 413,118 78,718 240,784 (4,676,676) (931,894 (156,964 (4,676,676) (931,894) (156,964) (4,342,276) (597,494) 256,154 835,579 835,579 835,579 774,930 (68,106) 774,930 (68,106) 853,648 172,678 - 662,901 $ (3,506,697) 238,085 1,091,733 853,648 835,579 108 CITY OF LA QUINTA Capital Projects Funds County Library Development Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Intergovernmental Investment income Total revenues Net change in fund balances Fund balances at beginning of year Fund balances (deficit) at end of year $ 204,000 204,000 202,303 1,697 109 Variance with Prior Budget Final Budget Year Original Final Actual Positive (negative) Actual $ 200,000 200,000 200,000 - - 4,000 4,000 2,303 0,697 - 204,000 204,000 202,303 (1,697) - 204,000 204,000 202,303 (1,697) - $ 204,000 204,000 202,303 1,697 109 CITY OF LA QUINTA Capital Projects Funds Community Center Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Developer fees Investment income Total revenues Prior Year Actual 98,093 10,238 53,600 53,600 96,015 42,415 108,331 Fund balances at beginning of year Variance with Budget Final Budget _Original Final Actual ositive (negative $ 48,500 48,500 86,022 37,522 5,100 5,100 9,993 4,893 Prior Year Actual 98,093 10,238 53,600 53,600 96,015 42,415 108,331 Fund balances at beginning of year 383,778 383,778 383,778 - 275,447 Fund balances at end of year $ 437,378 437,378 479,793 42,415 383,778 110 CITY OF LA QUINTA Capital Projects Funds Street Facility Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Developer fees Investment income Total revenues Variance with Prior Budget Final Budget Year Original Final Actual Positive (negative) Actual - 61,191 $ 7,500 7,500 24,354 16,854 21,413 1,000 1,000 2,295 1,295 2,256 Total revenues 8,500 8,500 26,649 18,149 23,669 Fund balances at beginning of year 84,860 84,860 84,860 - 61,191 Fund balances at end of year S 93,360 93,360 111,509 18,149 84,860 111 CITY OF LA QUINTA Capital Projects Funds Park Facility Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 112 Variance with Prior Budget _ Final Budget Year Original Final Actual Positive (negative) Actual Revenues: Developer fees $ 2,500 2,500 4,425 1,925 5,468 Investment income 200 200 543 343 596 Total revenues 2,700 2,700 4,968 2,268 6,064 Fund balances at beginning of year 22,213 22,213 22,213 - 16,149 Fund balances at end of year $ 24,913 24,913 27,181 2,268 22,213 112 CITY OF LA QUINTA Capital Projects Funds Fire Facility Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Developer fees Investment income Total revenues Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances (deficit) at end of year Variance with Prior Budget Final Budget Year Original Final Actual Positive (negative) Actual $ 48,500 48,500 88,377 200 200 1,130 48,700 48,700 89,507 (1,500,000) 1500,000) (1,500,000) (1,500,000) - (1,451,300) (1,451,300) 89,507 1,847 1,847 1,847 39,877 1,843 930 4 40,807 1,847 1,500,000 - 1,500,000 - 1,540,807 1,847 $ (1,449,453) 1,449,453) 91354 1,540,807 1,847 113 CITY OF LA QUINTA Capital Projects Funds A.D. 2000-1 Phase VI Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Variance with Prior Budget Final Budget Year Ori final Final Actual Positive (negative) Actual Revenues: Investment income $ - - 10,156 10,156 16,555 Total revenues - - 10,156 10,156 16,555 Other financing sources (uses): Transfers out _ 142,657) (150 142,507 (539,896) Total other financing sources (uses) - 142,657 150 142,507 (539,896) Net change in fund balances - (142,657) 10,006 152,663 (523,341) Fund balances at beginning of year 434,355 434,355 434,355 - 957,696 Fund balances at end of year $ 434,355 291,698 444,361 152,663 434,355 114 CITY OF LA QUINTA Capital Projects Funds Financing Authority Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 2003 Revenues: Investment income Total revenues Other financing sources (uses): Transfers out Variance with Prior Budget Final Budget Year Original Final Actual Positive (negative Actual $ - - 324 - 324 324 324 12,991 12,991 131,792 - 131,792 (649,524) Total other financing sources (uses) - 131,792 - Net change in fund balances - (131,792) 324 Fund balances (deficit) at beginning of year (324) (324 324 Fund balances (deficit) at end of year $ 324 (132,116) 115 131,792 (649,524) 132,116 (636,533) - 636,209 132,116 .324 CITY OF LA QUINTA Capital Projects Funds Redevelopment Agency Project Area No. 2 Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Revenues: Investment income Total revenues Expenditures: Current: Planning and development Total expenditures Year ended June 30, 2003 Budget Original Final Variance with Final Budget Actual Positive (negative) $ 20,000 20,000 67,277 20,000 20,000 67,277 314,085 322,510 217,599 314,085 322,510 217,599 47,277 47,277 104,911 104,911 Prior Year Actual 72,621 72,621 227,401 227,401 Excess (deficiency) of revenues over (under) expenditures (294,085) (302,510) 150,322 _ 152,188 _(154,780) Other financing sources (uses): Transfers in 1,100,000 1,345,583 1,308,913 (36,670) - Transfers out - - - - (1,481,875) Total other financing sources (uses) 1,100,000 1,345,583 1,308,913 (36,670) 1,481,875) Net change in fund balances 805,915 1,043,073 1,158,591 115,518 (1,636,655) Fund balances at beginning of year 1,918,438 1,918,438 1,918,438 - 3,555,093 Fund balances at end of year $ 2,724,353 r 2,961,511 3,077,029 115,518 1,918,438 116 INTERNAL SERVICE FUNDS Internal service funds are used to account for activities involved in rendering services to departments within the City. Costs of materials and services used are accumulated in this fund and charged to the user departments as such goods are delivered or services rendered. The City of La Quinta has the following Internal Service Funds: Equipment Replacement Fund — used to account for the ultimate replacement of City owned and operated vehicles and equipment. Information Technology Fund — used to account for the purchase and replacement of information systems. 117 CITY OF LA QUINTA Internal Service Funds Combining Statement of Net Assets June 30, 2003 Equipment Information Replacement Technology Assets Totals 2003 2002 Current assets: Cash and investments $ 2,473,742 475,216 2,948,958 3,006,697 Due from other governments 15,000 - 15,000 - Capital assets, net 556,482 372,728 929,210 1,018,484 Total assets 3,045,224 847,944 3,893,168 4,025,181 Liabilities Current liabilities: Accounts payable 7,420 29,293 36,713 40,568 Net Assets Invested in capital assets, 556,482 372,728 929,210 1,018,484 net of related debt Unrestricted 2,481,322 445,923 2,927,245 2,966,129 Total net assets $ 3,037,804 818,651 3,856,455 3,984,613 118 CITY OF LA QUINTA Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Net Assets Year ended June 30, 2003 Operating revenues: Charges for services Miscellaneous Total operating revenues Operating expenses: Fuel and oil Maintenance and parts Contract services Software and supplies Depreciation Other operating expenses Total operating expenses Operating income (loss) Non-operating revenues (expenses): Investment income Total non-operating revenues (expenses) Income (loss) before transfers and capital contributions Transfer in Capital contributions Changes in net assets Net assets at beginning of year Net assets at end of year Equipment Information Replacement Technology Totals 2003 2002 $ 289,348 162,164 451,512 304,982 2,382 - 2,382 - 291,730 162,164 453,894 304,982 $ 3,037,804 818,651 3,856,455 3,984,613 34,213 - 34,213 30,282 119,032 - 119,032 119,212 4,000 168,755 172,755 189,567 - 70,749 70,749 39,060 142,057 134,460 276,517 253,823 2,249 9,535 11,784 8,597 301,551 383,499 685,050 6401541 (9,821) (221,3 3 5) 231,156(335,559 57,673 15,226 72,899 97,586 57,673 15,226 72,899 _ 97,586 47,852 (206,109) (158,257) (237,973) - - - 1,000,000 30.099 - 30,099 108,495 77,951 (206,109) (128,158) 870,522 2,959,853 1,024,760 3,984,613 3,114,091 $ 3,037,804 818,651 3,856,455 3,984,613 119 CITY OF LA QUINTA Internal Service Funds Combining Statement of Cash Flows Year ended June 30, 2003 Cash flows from operating activities: Cash received from other customers Cash payments to suppliers for goods and services Net cash provided by (used for) operating activities Cash flows from non -capital financing activities: Transfer from other funds Net cash provided by (used for) non -capital financing activities Cash flows from capital and related activities: Purchase of fixed assets Net cash provided by (used for) capital and related activities Cash flows from investing activities: Interest received on investments Net cash provided by (used for) investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at begimluig of year Cash and cash equivalents at end of year Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation Adjustments: (Increase) decrease in due from other governments (Increase) decrease in other assets Increase (decrease) in accounts payable Net cash provided by (used for) operating activities Noncash capital, financing and investing activities: Fixed assets contributed by other funds 120 Equipment Information Re lbcetnent Technology Totals 2003 2002 $ 276,730 162,164 438,894 304,982 (165,176) (228,697) (393,873) (347,253) 111,554 (66,533) 45,021 (42,271) - - 1,000,000 - - 1,000,000 (1,756) (173,903 175,659) (174,194) (1,756) 173,903 (175,059 (174,194) 57,673 15,226 72,899 97,586 57,673 15,226 72,899 97,586 167,471 (225,210) (57,739) 881,121 2,306,271 700,426 3,006,697 2,125,576 $ 2,473,742 475,216 2,948,958 3,006,697 $ (9,821) (221,335) (231,156) (335,559) 142,057 134,460 276,517 253;823 (15,000) - (15,000) - 12,619 5,896 18,515 1 (18,301) 14,446 (3,855) 39,465 $ 111,554 (66,533 45,021 (42_271) $ 30,099 - 30,099 108,495 AGENCY FUNDS Agency funds are used to account for assets held by the City as an agent for an individual, private organizations and other governmental units. The agency funds aiid their purposes are as follows: The City of La Quinta has the following agency funds: ssment District No. 88-1, 89-2,_90-1 91-1 92-1 to the City for debt service payments on bond 121 -1, 2000-1 - To account for assessments used to finance sewer improvements. CITY OF LA QUINTA Agency Funds Combining Balance Sheet June 30, 2003 122 Assessment Assessment Assessment Assessment District District District District No. 88-1 No. 89-2 No. 90-1 No. 9-1-1— T Assets Cash and investments $ 88,498 48,889 228,191 477,542 Accounts receivable 1,316 1,166 5,722 14,668 Total assets $ 89,814 50,055 233,913 492,210 Liabilities Due to bondholders $ 89,814 50,055 233,913 492,210 Total liabilities $ 89,814 50,055 233,913 492,210 122 Assessment Assessment Assessment 1,785,658 District District District Totals No. 92-1 No. 97-1 No. 2000-1 2003 2002 358,764 141,883 397,045 1,740,812 1,994,762 7,367 2,068 12,539 44,846 366,131 143,951 409,584 1,785,658 1,994,762 366,131 143,951 409,584 1,785,658 1,994,762 366,131 143,951 409,584 1,785,658 1,994,762 123 CITY OF LA QUINTA Agency Funds Combining Statement of Changes in Assets and Liabilities Year ended June 30, 2003 (Continued) 124 Balance at Balance at June 30, 2002 Additions Deletions .lune 30, 2003 ASSESSMENT DISTRICT NO. 88-1 Assets Cash and investments $ 169,330 13,719 (94,551) 88,498 Accounts receivable - 1,316 - 1,316 Total assets $ 169,330 15,035 94,551 89,814 Liabilities Due to bondholders $ 169,330 95,595 175,111 89,814 ASSESSMENT DISTRICT NO. 89-2 Assets Cash and investments $ 238,571 105,930 (295,612) 48,889 Accounts receivable - 1,166 - 1,166 Total assets $ 238,571 107,096 295 612 50,055 Liabilities Due to bondholders $ 238,571 50,055 (238,571 50,055 ASSESSMENT DISTRICT NO. 90-1 Assets Cash and investments $ 241,997 121,616 (135,422) 228,191 Accounts receivable - 5,722 - 5,722 Total assets $ 241,997 127,338 135,422 233,913 Liabilities Due to bondholders $ 241,997 152,629 (160,713) _233,_913 (Continued) 124 CITY OF LA QUINTA Agency Funds Combining Statement of Changes in Assets and Liabilities (Continued) Balance at June 30, 2002 Additions ASSESSMENT DISTRICT NO. 91-1 Assets Cash and investments $ 421,726 258,335 Accounts receivable - 14,668 Total assets $ 421,726 273,003 Liabilities Due to bondholders $ 421,726 ASSESSMENT DISTRICT NO. 92-1 Assets 358,764 7,367 - Cash and investments $ 344,296 Accounts receivable 217,080 (195,245) - Total assets $ 344,296 Liabilities Due to bondholders $ 344,296 ASSESSMENT DISTRICT NO. 97-1 Assets Cash and investments $ 182,474 Accounts receivable - Total assets $ 182,474 Liabilities Due to bondholders $ 182,474 125 290,373 Balance at Deletions June 30, 2003 (202,519) 477,542 - 14,668 202,519 492,210 219,889 492,210 196,271 (181,803) 358,764 7,367 - 7,367 203,638 (181,803) 366,131 217,080 (195,245) 366,131 73,184 (113,775) 141,883 2,068 - 2,068 75,252 (113,775) 143,951 81,341 (119,864) 143,951 (Continued) CITY OF LA QUINTA Agency Funds Combining Statement of Changes in Assets and Liabilities (Continued) Balance at June 30 2002 ASSESSMENT DISTRICT NO. 2000-1 Assets Cash and investments $ 396,368 Accounts receivable - Total assets $ 396,368 Liabilities Due to bondholders $ 396,368 TOTALS -ALL AGENCY FUNDS Assets Cash and investments Accounts receivable Total assets Liabilities Due to bondholders Total liabilities Balance at Additions Deletions lune 30 2003 256,186 (255,509) 397,045 12,539 - 12,539 268,725 255,509 409,584 284,196 (270,980) _ 409,584 $ 1,994,762 1,025,241 - 44,846 $ 1,994,762 1,070,087 $ 1,994,762 $ 1,994,762 126 1,171,269 1,171,269 (1,279,191) 1,740,812 44,846 (1,279,191) 1,785,658 (1,380,373) 1,785,658 (1,380,373 1,785,658 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS 127 CITY OF LA QUINTA Capital Assets Used in the Operation of Governmental Funds by Source ' June 30, 2003 and 2002 Governmental funds capital assets: Land Buildings and improvements Equipment and furniture Vehicles Infrastructure Construction in progress Total governmental funds capital assets Investment in general fixed assets by source: Capital projects funds Redevelopment agency 2003 2002 $ 56,467,549 56,467,549 15,799,488 14,974,990 1,054,971 1,046,049 161,052 161,052 313,017,867 312,219,798 29,604,242 29,880,113 $41+6,105,169 41.4 749,551 $365,540,462 357,156,449 50,564,707 57,593,102 Total government funds capital assets $416,105,169 414,749,551 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in the internal service fund are excluded from the above amounts. Generally, the capital assets of the internal service funds are included as governmental activities in the statement of net assets. 128 CITY OF LA QUINTA Capital Assets Used in the Operation of Governmental Funds Schedule of Function and Activity 1 June 30, 2003 / Buildings and Equipment Construction Land Improvements and Furniture Vehicles Infrastructure in Progress Totals Function and Activity General government: Legislative $ 5,146 - 5,146 City manager 6,951,091 121,868 132,662 - 7,205,621 Economic development - - 10,208 - - 10,208 Personnel 25,304 4,036 - - - 29,340 Finance - - 5,976 - - - 5,976 Central services - 45,877 - - - 45,877 City clerk - 145,411 - - 145,411 Total general government 6,951,091 147,172 349,316 - 7,447,579 Public safety: Police - - 143,135 143,135 Building and safety administration 52,670 - 52,670 Code compliance 4,104 - - 4,104 Animal control - 2,546 - 2,546 Building - 1,250 - 1,250 Emergency services - 1,792 66,805 - 68,597 Fire 101,392 - 3,341 161,052 - 901,951 1,167,736 Civic center building operations - 9,759,660 93,380 - - 263,715 10.116,755 Total public safety 101,392 9,761,452 367,231 161,052 - 1,165,666 1 1:556;793 Community services: Community services administration - 2,804,889 8,345 - 1,472,958 72,055 4,358,247 Parks and recreation program - 2,591 - - 2,591 Senior center 2,028,163 25,064 - - - 2,053,227 Total community services - 4,833,052 36,000 - 1,472,958 72,055 6,414,065 Community development: Community development administration - - 47,625 - - - 47,625 Redevelopment agency 49,415,066 840,000 - - 309,641 50,564,707 Total community development 49,415,066 840,000 47,625 - 309,641 50,612,332 Public works: Public works administration - 4,000 12,728 - - 16.728 Development and traffic - 19,289 - 301,764,863 19,430,039 321214.191 Street maintenance and operations 12,742 80,151 2,028,035 364 2,121,292 Lighting and landscape maintenance and operations - 201,070 141,029 7,752,011 8,626,477 16,720,587 Capital projects - - 1,602 - - 1,602 Total public works 217,812 254,799 - 311,544,909 28,056,880 340,074,400 Total governmental funds capital assets $ 56,467,549 15,799,488 1,054,971 161{,052 313,017,867 29,604,242 416,105,169 1This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in the internal service funds are excluded from the above amounts. Generally, the capital assets of the internal service funds are included as governmental activities in the statement of net assets. 129 CITY OF LA QUINTA Capital Assets Used in the Operation of Governmental Funds Schedule of Changes by Function and Activity' June 30, 2003 Public safety: Police Building and safety administration Code compliance Animal control Building Emergency services Fire Civic center building operations Total public safety Community services: 142,571 Governmental 52,670 Funds Capital 4,104 Assets Function and Activity July 1, 2002 Additions General government: - Legislative $ 5,146 City manager 7,205,621 - Economic development 10,208 - Personnel 29,340 - Finance 5,976 - Central services 45,877 City clerk 145,411 - Total general government 7,447,579 _ Public safety: Police Building and safety administration Code compliance Animal control Building Emergency services Fire Civic center building operations Total public safety Community services: 142,571 564 52,670 - 4,104 - 2,546 - 1,250 - 63,580 5,017 334,306 833,430 9,916,822 199,933 10,517,849 1,038,944 Deletions Governmental Funds Capital Assets .Tune 30, 2003 5,146 7,205,621 10,208 29,340 5.976 45,877 145,411 7,447,579 143,135 52,670 4,104 2,546 1,250 68,597 1,167,736 10,116,755 11,556,793 Community services administration 3,142,603 1,266,431 - 4,409,034 Parks and recreation program 1,998,588 - - 1,998,588 Senior center 2,591 3,852 - 6,443 Total community services 5,143,782 1,270,283 - 6,414,065 Community development: Community development administration 47,625 - - 47,625 Redevelopment agency 57,593,102 272,978 (7,301,373) 50.564,707 Total community development 57,640,727 272,978 (7,301,373) 50,612,332 Public works: Public works administration Development and traffic Street maintenance and operations Lighting and landscape maintenance and operations Capital projects Total public works Total governmental funds capital assets 16,728 - - 16,728 320,681,370 532,821 - 321,214,191 7,846,256 - (988) 7,845,268 5,453,658 5,542,953 - 10,996,611 1,602 - - 1,602 333,999,614 6,075,774 (988) 340,074,400 $ 414,749,551 8,657,979 (7,302,361) 416,105,169 'This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in the internal service funds are excluded from the above amounts. Generally, the capital assets of the internal service funds are included as governmental activities in the statement of net assets. 130 STATISTICAL SECTION 131 TABLE 1 CITY OF LA QUINTA General Fund Expenditures by Function Last Ten Fiscal Years Fiscal Year Ending General Public Public Community Planning & Capital June 30 Government Safety Works Service Development Prfljects Total 1994 $ 2,359,673 2,786,575 673,144 119,265 511,416 - 6,450,073 1995 1,565,265 3,143,697 576,304 199,115 538,610 282,113 6,305,104 1996 1,793,301 3,227,438 813,352 413,142 453,656 201,475 6,902,364 1997 2,376,935 3,442,056 889,694 469,110 455,563 170,000 7,803,358 1998 2,229,389 4,099,523 1,159,372 494,402 345,054 - 8,327,740 1999 2,473,241 4,468,294 1,546,650 732,741 626,074 - 9,847,000 2000 2,814,604 4,992,811 1,704,996 768,528 748,949 - 11,029,888 2001 3,063,640 5,636,154 1,417,529 817,460 733,579 - 11,668,362 2002 2,954,060 7,609,121 1,536,033 1,014,474 726,589 - 13,840,277 2003 3,140,576 8,202,407 2,311,436 991,558 674,450 - 15,320,427 Source: City of La Quinta Audited Financial Statements 132 TABLE 2 CITY OF LA QUINTA General Fund Revenue by Source Last Ten Fiscal Years Fiscal Year Licenses Charges Litigation Ending and Inter- for Settlement June 30 Taxes Permits Qgovernmental Services Proceeds I werem Miscellaneous Total 1994 $ 4,212,604 777,241 1,600,032 469,695 (1) 585,264 1,042,872 8,687,707 1995 4,946,304 902,914 747,784 551,727 477,872 718,310 137,028 8,481,939 1996 5,393,456 998,030 815,980 610,873 12,386 905,420 230,705 8,966,850 1997 5,942,698 793,689 1,072,803 976,897 40,593 941,327 22,712 9,790,719 1998 6,764,355 1,144,562 1,110,553 1,228,269 281,382 1,164,145 114,969 11,808,235 1999 8,101,191 1,951,981 1,466,788 1,965,219 740,985 1,569,796 74,529 15,870,489 2000 8,888,825 2,493,360 2,388,749 1,922,097 - 1,868,073 106,371 17,667,475 2001 10,331,970 2,057,423 2,164,891 1,998,589 - 2,513,789 43,547 19,110,209 2002 10,443,436 1,857,691 3,683,490 1,757,744 - 2,030,346 529,190 20,301,897 2003 11,572,985 1,982,127 4,394,045 2,302,759 - 1,894,303 87,240 22,233,459 (1) 1995 was the first year Litigation Settlement Proceeds was identified as a revenue source Source: City of La Quinta Audited Financial Statements 133 CITY OF LA QUINTA Property Tax Levies and Collections Last Ten Fiscal Years Note: 1. Proposition 13 limits cities to levying a tax rate for bonded indebtedness only after 1978. 2. Levies and collections are for General Fund only excluding supplemental property taxes. Source: City of La Quinta and County of Riverside 134 Percent of Fiscal Year Total Current Percent Delinquent Total Ending Tax Tax of Levy Tax Collections June 30 LevyCollection Collec ed Collections to Tax l,evv 1994 $288,407 275,752 95.6% 900 95.9% 1995 549,273 487,043 88.7% 786 88.8% 1996 670,398 643,309 96.0% 2,312 96.3% 1997 824,073 760,350 92.3% - 92.3% 1998 886,175 980,838 110.7% 110.7% 1999 991,001 1,148,040 115.8% - 115.8% 2000 1,001,074 1,005,983 100.5% - 100.5% 2001 1,071,723 1,091,128 101.8% - 101.8% 2002 1,218,823 1,409,828 115.7% - 115.7% 2003 1,432,528 1,437,908 100.4% - 100.4% Note: 1. Proposition 13 limits cities to levying a tax rate for bonded indebtedness only after 1978. 2. Levies and collections are for General Fund only excluding supplemental property taxes. Source: City of La Quinta and County of Riverside 134 TABLE 4 CITY OF LA QUINTA Schedule of Net Taxable Value Last Ten Fiscal Years Fiscal Year Assessed Less Less Net Ending Secured Unsecured Property Property Homeowner's Taxable June 30 PropejU PropejU Value Exenip'tion5 Exemptions Value 1994 $ 1,872,768,156 8,119,527 1,880,887,683 3,946,378 18,901,202 1,858,040,103 1995 1,927,834,908 22,822,285 1,950,657,193 4,357,954 20,518,400 1,925,780,839 1996 2,043,276,054 23,801,872 2,067,077,926 6,936,774 22,399,068 2,037,742,084 1997 2,164,204,951 22,511,720 2,186,716,671 6,919,376 22,407,418 2,157,389,877 1998 2,305,593,987 18,844,880 2,324,438,867 9,676,787 24,877,018 2,289,885,062 1999 2,674,887,437 18,756,736 2,693,644,173 10,998,340 27,581,722 2,655,064,111 2000 2,665,520,656 18,712,736 2,684,233,392 11,655,584 28,259,200 2,644,318,608 2001 3,162,945,116 30,599,753 3,193,544,869 19,757,668 30,391,400 3,143,395,801 2002 3,789,678,041 32,607,713 3,822,285,754 20,732,503 33,993,800 3,767,559,451 2003 5,412,382,710 40,940,877 5,453,323,587 50,878,475 44,541,600 5,357,903,512 Source: County of Riverside 135 CITY OF LA QUINTA Property Tax Rates - Direct and Overlapping Governments Last Five Fiscal Years (per $100 of Assessed Value) General County of Riverside Riverside County Office of Education Desert Sands Unified Coachella Valley Unified School District Coachella Valley Water District Coachella Valley Recreation & Park District Total Tax Rate Source: County of Riverside TABLE 5 2002/03 2001/02 2000/01 1999/00 1998/99 1.00000 1.00000 1.00000 1.00000 1.00000 0.00938 0.00985 - - - 0.00938 0.00985 - - - 0.46088 0.35177 0.09750 0.09750 0.09750 0.06845 0.05022 - - - 0.62057 0.56885 0.02080 0.02080 0.02080 0.07856 2.24722 1.99054 1.11830 1.11930 1.11830 136 TABLE 6 CITY OF LA QUINTA Special Assessment Billings and Collections Last Ten Fiscal Years Year Special Special Ratio of Ended Assessment Assessment Collections June 30 Billlijgs Collections ( 1 ) to t3illin s 1994 $ 766,011 734,560 95.9% 1995 836,502 737,700 88.2% 1996 729,647 699,351 95.9% 1997 791,012 757,256 95.7% 1998 791,012 761,109 96.2% 1999 790,532 770,164 97.4% 2000 833,630 800,825 96.0% 2001 835,577 803,756 96.2% 2002 1,068,994 992,226 92.8% 2003 860,684 790,555 91.9% (1) Includes Prepayments and Foreclosures Source: Muni Financial Services 137 Note Source: CITY OF LA QUINTA Schedule of Direct and Overlapping Bonded Debt June 30, 2003 Direct and Ovcrlappina Bonded Debt Riverside County General Fund Obligations Riverside County Board of Education Certificates of Participation Desert Sands Unified School District Certificates of Participation Desert Sands Unified School District Lease Tax Obligation Desert Sands Unified School District Community Facilities No.I Desert Sands Unified School District Coachella Valley County Water District, I.D. #71 Storm Water Unit Certificates of Participation Coachella Valley County Water District, I.D. #55 Coachella Valley County Water District, I.D. #58 Coachella Valley Unified School District Certificates of Participation Coachella Valley Unified School District Coachella Valley Water District, AD No. 68 Coachella Valley Recreation and Park District Certificates of Participation City of La Quinta General Fund Obligations (Finance Authority) City of La Quinta 1915 Act Bonds Total Direct and Overlapping Bonded Debt (1) Excludes tax and revenue anticipation notes, revenue, mortgage revenue, tax allocation bonds and nonbonded capital lease obligations. California Municipal Statistics, Inc. 138 TABLE 7 Percent June 30, 2003 AP12licable Bonded Debt 4.163% 0.938% $5,969,143 0.938% 135,640 8.175% 1,344,788 8.175% 3,492,360 100.000% 2,200,000 8.175% 5,068,500 6.338% 722,532 63.718% 4,861,683 4.163% 189,000 6.845% 1,060,975 6.845% 1,248,479 86.247% 2,207,903 7.856% 212,898 100.000% 7,190,000 100.000% 4,180,000 $40,083,901 (1) CITY OF LA QUINTA Computation of Legal Debt Margin June 30, 2003 Net Assessed Valuation $5,357,903,512 Debt Limit - 15 % of Assessed Valuation 803,685,527 Amount of Debt Applicable to Debt Limit -0- Legal Debt Margin $803,685,527 TABLE 8 Notes: Section 43605 of the Government Code of the State of California limits the amount of indebtedness for public improvements to 15% of the assessed valuation of all real and personal property of the City. The City of La Quinta has no general bonded indebtedness. Source: City of La Quinta 139 TABLE 9 CITY OF LA QUINTA Revenue Bond Coverage Local Agency Revenue Bonds (City Hall Project) Last Ten Fiscal Years Fiscal Year Debt Service Requirements Ending Revenue Available June 30 for Debt Service Principal Interest Total Coverage 1994 $ 548,352 - 548,352 548,352 1.00 1995 699,477 155,000 544,477 699,477 1.00 1996 696,402 160,000 536,402 696,402 1.00 1997 607,950 170,000 437,950 607,950 1.00 1998 734,623 285,000 449,623 734,623 1.00 1999 684,573 245,000 439,573 684,573 1.00 2000 679,670 250,000 429,670 679,670 1.00 2001 678,955 260,000 418,955 678,955 1.00 2002 682,178 275,000 407,178 682,178 1.00 2003 679,435 285,000 394,435 679,435 1.00 Note: Revenue available consists of lease payments made by the City of La Quinta to the La Quinta Financing Authority. Source: City of La Quinta 140 CITY OF LA QUINTA Demographic Statistics Last Ten Fiscal Years 141 TABLE 10 City Riverside Total Fiscal Year Percent Population (2) Population Ending Square 1.2% Percent June 30 Miles (1) Population (2) Change 1994 28.2 16,680 7.0% 1995 31.2 17,591 5.5% 1996 31.2 18,050 2.6% 1997 31.2 18,931 4.9% 1998 31.2 20,444 8.0% 1999 31.2 21,763 6.5% 2000 31.2 24,240 10.77% 2001 31.2 26,321 8.58% 2002 31.8 28,715 9.09% 2003 34.8 30,452 6.00% Source; (1) City of La Quinta (2) State of California Department of Finance 141 TABLE 10 City Riverside Population County Percent Population (2) Of County 1,357,400 1.2% 1,393,500 1.3% 1,381,879 1.3% 1,379,956 1.4% 1,441,237 1.4% 1,473,307 2.2% 1,522,900 1.6% 1,545,387 1.7% 1,545,387 1.9% 1,653,564 1.8% Fiscal Year Ending June 30 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 (1) Source: CITY OF LA QUINTA Property Value and Construction Activity Last Ten Fiscal Years Property Valuell) $ 1,872,768,156 1,927,834,908 2,043,276,054 2,164,204,951 2,305,593,987 2,674,887,437 2,665,520,656 3,162,945,116 3,789,678,041 5,412,382,710 Commercial ©nstrUC loll Units Value 13 6,081,796 4 1,100,119 8 1,018,940 11 1,876,747 14 2,689,642 19 8,894,767 40 13,071,684 39 15,289,134 66 6,739,720 69 27,184,625 From Schedule of Net Taxable Value City of La Quinta 142 Residential Construction Units Value 531 79,318,969 238 29,163,494 336 53,973,239 322 36,971,047 461 70,403,691 770 132,521,054 1,590 292,524,629 1,069 195,774,186 858 171,189,651 831 176,514,682 CITY OF LA QUINTA Principal Taxpayers June 30, 2003 Taxpayer Type of Actiyity KSL La Quinta Hotel Corp. Hotel KSL PGA West Corporation Residences Sunrise Desert Partners Condominiums KSL Landmark Corporation Vacant Land KSL Land Corporation Residential Land KSL La Quinta Corporation Golf Courses TD Desert Development Residential Land La Quinta Golf Properties, Inc. Golf Course M & H Realty Partnership Shopping Centers Washington Adams Partnership Commercial Source: City of La Quinta 143 TABLE 12 'TABLE 13 CITY OF LA QUINTA Major Employers June 30, 2003 Employer ELn 1 ee Activity La Quinta Hotel and Golf Resort 1,500 Resort Hotel PGA West 1,100 Golf Resort Desert Sands Unified School District 550 School District Administration Wal-Mart 250 Retailer Rancho La Quinta 200 Golf Resort The Home Depot 180 Retailer Lowe's Home Improvement 150 Retailer Stater Brothers 126 Groceries Imperial Irrigation District 110 Utility Company Vons 103 Groceries Ralph's 100 Groceries Tradition 97 Golf Resort City of La Quinta 76 Municipal Government Cliff House 75 Restaurant Source: City of La Quinta 144 CITY OF LA QUINTA Schedule of Insurance in Force June 30, 2003 Company Name Policy Number Coveraize Hartford PEBAO7068 Employee Dishonesty, 29,307,900 07/01/03 - 04 Forgery, Computer Fraud General Star IAG371828C All Risk Property Insurance Indemnity & Westchester D35925612 Including Auto Physical Damage Fire (Excluding Earthquake) Royal Indemnity K2HQ407478 Earthquake & Flood Real & Personal Property Including Contigent Tax Interruption California Certificate #5 Comprehensive General Joint Powers Liability Insurace Authority California Certificate Worker's Compensation Joint Powers #5009-056 Insurance Authority Source: City of La Quinta 145 TABLE 14 Limits Term Premium $1,000,000 12/03/02 - 03 $2,750 29,307,900 07/01/03 - 04 27,524 7,500,000 02/07/02 - 03 15,780 $0 Deductible Retention 07/01/03 - 04 260,611 $50 Million 5,000,000 07/01/03 - 04 175,328 CITY OF LA QUINTA Miscellaneous Statistical Data June 30, 2003 Date of Incorporation Type of City Form of Government City Employees City Land Area (square miles) Population Number of Parks Total Acreage Miles of Streets Miles of Bike Paths Number of Major Intersections Number of Traffic Signals and Safetv I TABLE 15 May 2, 1982 Charter City Council / Manager ...... 76 ............. 34.8 30,450 9 40 170.0 9.7 .................... 45 ing.................. 41 Number of Traffic Signs 2,672 Number of Street Lights .................... 69 Public Schools 4 Private Schools 1 Churches .................... 3 Banks / Savings and Loan 7 Number of Single Family Units - Detache .................... 12,368 Number of Single Family Units - Attached .................... 2,360 Number of Multiple Family Units 953 Number of Mobile Homes 259 Source: City of La Quinta 146 TABLE 16 CITY OF LA QUINTA General Fund Balance Trends Last Ten Fiscal Years Fiscal Year Ending e ery d Unreserved Totals June 30 Dcaiianated Undesignated 1994 $ 4,354,139 3,792,864 -- 8,147,003 1995 6,100,309 4,228,680 -- 10,328,989 1996 6,680,048 5,686,027 -- 12,366,075 1997 8,202,641 5,936,591 -- 14,139,232 1998 8,915,742 8,568,017 -- 17,483,759 1999 8,879,558 14,439,998 -- 23,319,556 2000 10,565,563 18,111,835 -- 28,677,398 2001 11,746,211 23,878,259 -- 35,624,470 2002 15,351,251 25,522,073 -- 40,873,324 2003 21,099,910 26,584,773 -- 47,684,683 Source: City of La Quinta 147 (This page intentionally left blank)