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2006-2007 ACFR (July 1 - June 30 Annual Comprehensive Financial Report)CITY OF LA OU:NTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2007• ElLance So it Lunghard LLP Certified Public Accountants r]Lr COPY ff ` L copy must ke rcturned, tliankyou) CITY OF LA QUINTA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2007 Prepared By FINANCE DEPARTMENT JOHN M. FALCONER Director of Finance THIS PAGE INTENTIONALLY LEFT BLANK CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2007 TABLE OF CONTENTS INTRODUCTORY SECTION Page Number Letterof Transmittal .............................................. ........ .................................................................... - List of Principal Officialsviii OrganizationalChart .............. ....................... .---- --- .............. ......... .-............................................... ix Certificate of Achievement for Excellence in Financial Reporting(GFOA)........................................ x FINANCIAL SECTION IndependentAuditors' Report .................................................................................................................1 Management's Discussion and Analysis.................................................................................................3 Basic Financial Statements: Government -Wide Financial Statements: Statementof Net Assets.................................................................................................................15 Statementof Activities....................................................................................................................16 Fund Financial Statements: Balance Sheet - Governmental Funds..........................................................................................18 Reconciliation of the Balance Sheet of Governmental Funds tothe Statement of Net Assets.......................................................................................................20 Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds...................................................................................................21 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities .......................23 Budgetary Comparison Statement by Department - General Fund..............................................24 Budgetary Comparison Statement - Low/Moderate Income Housing PA No. 2 ............................26 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30;-2007 TABLE OF CONTENTS Continued Page Number Statement of Net Assets — Proprietary Funds.............................................................................27 Statement of Revenues, Expenses and Changes in Fund Net Assets — Proprietary Funds ...... 28 Statement of Cash Flows — Proprietary Funds...........................................................................29 Statement of Fiduciary Net Assets - Fiduciary Funds ... ...... .............. .......... ........................ ........ 31 Notes to Financial Statements ................................................. ................... ................................33 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Non -Major Governmenta[ Funds..................................................68 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non -Major Governmental Funds..................................................................76 Budgetary Comparison Schedules — Special Revenue Funds StateGas Tax........................................................................................................................84 Library.....................................................................................................................................85 FederalAssistance .................................................................................................................86 SLEBG....................................................................................................................................87 IndianGaming ........................................................................................................................88 Lightingand Landscape............................................................................................... .........89 RCTC......................................................................................................................................90 Quimby...................................................................................................................................91 PublicSafety...........................................................................................................................92 ArtsIn Public Places........................................................................................-----..................93 SouthCoast Air Quality..........................................................................................................94 AB939...........................................................................................................................•---.....95 Low/Moderate Income Housing PA No. 1..............................................................................96 CV Violent Crime Task Force.................................................................................•...............97 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2007 TABLE OF CONTENTS (Continued) Page Number Budgetary Comparison Schedules — Capital Projects Funds CapitalImprovement...................................................................................................... ....... 98 Redevelopment Agency PA No. 1........................................................................................99 2004 Low/Mod Bond...........................................................................................................100 Infrastructure.......................... . ...... . ............. ... .......... ...........................................................101 Transportation.....................................................................................................................102 Parks and Recreation............................................................................. ...................103 CivicCenter .......................... ..............................................................................................104 LibraryDevelopment...........................................................................................................105 CommunityCenter.............................................................................................................106 StreetFacility....................................................................................... ...............107 ParkFacility........................................................................................................................108 FireFacility.........................................................................................................................109 Redevelopment Agency PA No. 2......................................................................................110 Financing Authority Projects ................................................... ................111 Budgetary Comparison Schedules — Debt Service Funds Redevelopment Agency PA No. 1......................................................................................112 Redevelopment Agency PA No. 2......................................................................................113 FinancingAuthority.............................................................................................................114 Combining Statement of Net Assets — Internal Service Funds ...............................................116 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets — Internal Service Funds..........................................................................117 Statement of Cash Flows — Internal Service Funds................................................................118 Combining Balance Sheet — Agency Funds............................................................................120 Combining Statement of Changes in Assets and Liabilities — Agency Funds .........................121 CITY OF LA QUINTA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2007 TABLE OF CONTENTS Continued Page Number STATISTICAL SECTION NetAssets by Component............................................................................................................124 Changesin Net Assets.................................................................................................................125 Changes in Net Assets — Governmental Activities.......................................................................126 Changes in Net Assets — Business -type Activities.......................................................................127 Fund Balances of Governmental Funds.......................................................................................128 Changes in Fund Balances of Governmental Funds....................................................................129 Assessed Value and Estimated Actual Value of Taxable Property..............................................130 Assessed Value and Estimated Actual Value of Taxable Property - RedevelopmentAgency...............................................................................................................131 Direct and Overlapping Property Tax Rates.................................................................................132 Principal Property Taxpayers.......................................................................................................133 Property Tax Levies and Collections............................................................................................134 Ratios of Outstanding Debt by Type.............................................................................................135 Ratio of General Bonded Debt Outstanding.................................................................................136 Directand Overlapping Debt........................................................................................................137 LegalDebt Margin Information.....................................................................................................138 Pledged -Revenue Coverage........................................................................................................139 Demographic and Economic Statistics.........................................................................................140 PrincipalEmployers......................................................................................................................141 Full-time City Employees..............................................................................................................142 OperatingIndicators.....................................................................................................................143 CapitalAsset Statistics.................................................................................................................144 Schedule of Insurance in Force....................................................................................................145 r /E� ` ,(r . P.O. Box 1504 i kuu"4 � LA QUINTA, CALIFORNIA 92247-1504 78-495 CALLE TAMPICO (760) 777-7000 LA QUINTA, CALIFORNIA 92253 FAX (760) 777-7101 November 20, 2007 To the Honorable Mayor, Members of the Governing Council, and Citizens of the City of La Quinta, California Government Code 26909 (a) requires that the City, as a local agency of the County, contract with a certified public accountant to perform an annual audit of the accounts and records of the City and that the audit conform to generally accepted auditing standards. Further, Government Code 26909 (b) states that an audit report shall be filed with the State Controller and with the County Auditor of the County in which the district is located within 12 months of the end of the fiscal year. This report is published to fulfill these requirements for the fiscal year ended June 30, 2007. In addition, City Ordinance 2.12.040 requires an annual audit be performed by a certified public accountant. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Lance Soll & Lunghard LLP Certified Public Accountants have issued an unqualified opinion on the City of La Quinta financial statements for the year ended June 30, 2007. The independent auditor's report is located at the front of the financial section of this report. Management's discussion and analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements the letter of transmittal and should be read in conjunction with it. Profile of the Government The City of La Quinta is located 120 miles east of Los Angeles in the eastern portion of Riverside County known as the Coachella Valley. The City motto is "The Gem of the Desert." The City is governed by a five -member City Council under the Council/Manager form of government. The Mayor is directly electedby the citizens. The Mayor serves a two-year term and the four Council Members serve four-year terms, with two Council Members elected every two years. The Mayor and four Council Members are elected at large. The City was originally incorporated in 1982 as a general law City and it became a charter City in November 1996. The Council appoints the City Manager, who in turn appoints the Assistant City Managers and the heads of the various departments. The City of La Quinta provides a range of services which include: construction and maintenance of streets and other infrastructure; community development and planning, construction and code compliance; various recreational and cultural activities; and general municipal services. Services are also provided to the City and its citizens by contract and by the direct services of other government agencies and organizations. These services include police and fire protection through the County of Riverside, library services through the County of Riverside, visitor and tourist information through Palm Springs Desert Resort Communities Convention and Visitors Authority, City promotion through the La Quinta Chamber of Commerce, water and sewer service through the Coachella Valley Water District, electricity service through the Imperial Irrigation District, refuse collection through Burrtec Waste Industries, public transit through Sunline Transit Agency, and cable service through Time Warner, The City of La Quinta also is financially accountable for a legally separate Redevelopment Agency and Financing Authority. Additional information on these two legally separate entities can be found in the notes to the financial statements. Pursuant to City Ordinance 2.08.060 and 2.12.080, the City Manager and Finance Director are responsible for the preparation of the annual budget for City Council consideration prior to the start of the fiscal year. The annual budget serves as the foundation for the City of La Quinta's financial planning and control. The budget is prepared by fund, function, department and line item. Department heads may transfer line item resources within a division with the approval of the City Manager. Transfers between divisions and departments need approval from the City Council and the City Manager. Local economy According to the State of California Economic Development Department (EDD), as of July 2007, the total workforce for the City of La Quinta was 15,300 of which 14,900 were employed for a 2.6% unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 5.7% and the statewide unemployment rate of 5.2%. During the last ten years, the City of La Quinta has been in a growth phase with net assessed values increasing from $2.32 billion in FY 97/98 to $11.95 billion (over 514%). This major increase in assessed value consists primarily of residential development; however, in the last three years major commercial development has occurred along the Highway 1 1 1 corridor. New commercial development includes the recent opening of the following retailers in alphabetical order: Costco, Embassy Suites Hotel, and Sam's Club. These compliment the Home Depot, Lowes, Wal-Mart, and Target that have previously located in the City. In addition, the City is anticipating the opening of a Homewood Suites Hotel, J.C. Penney, Mimi's Cafe, Applebees Restaurant, and Cost Plus World Market. The City of La Quinta is also home to many fine restaurants, which include the Hogs Breath Inn, Arnold Palmer Restaurant, LG's and The Falls Prime Steak houses, and the Cliff House. The City of La Quinta has transformed itself from a retirement community known as the "Gem of the Desert" and the western home of golf to a year-round full- service community. Major employers include the hospitality industry - the La Quinta Resort and Club, PGA West, Home Depot, Wal-Mart, Rancho La Quinta, and Lowe's. During the past ten years, the City of La Quinta general fund expenditures have increased 364%. Two Departments that have exceeded the average include Community Services (606%), and Planning and Development (401 %). In the case of Community Services, much of the increase can be attributed to adding library services and park maintenance functions to the Department. In the case of Planning and Development, much of the increase is reflected in increased personnel costs. During the same ten-year period, the City of La Quinta general fund revenues increased 330%. Sources that exceeded the average include intergovernmental (667%), and interest earnings (446%). In the case of intergovernmental revenues, most of the increase is attributable to the way the fire service contract is accounted for and an increase in motor vehicle fees. In the case of interest earnings, the increase is due to greater General Fund reserves and additional advances between the General Fund and the Redevelopment Agency. Lon -term financial plannina Each year the City embarks on a strategic planning process which begins in the spring with a discussion of the City Council goals and ends with adoption of the budget in June. The documents that are generated in this strategic planning process include a presentation of the financial achievements for the past fiscal year, a five-year cash flow projection for each City, Redevelopment Agency and Financing Authority fund, and a financial management strategies and recommendation report for the coming fiscal year. Within the financial strategies and recommendation report, a "build out" analysis is included, which estimates the annual General Fund revenue (inflows) and expenditures (outflows) in thirty years. This build out analysis is updated every three years based upon future land use designations, existing land use and population projections. This build out report projects that in twenty (20) years, with an estimated population of 85,940 versus the current 41,092, the annual revenues into the General Fund will be $30 million less than expenditures. With this information, the City of La Quinta is attempting to attract revenue-producing businesses and hotels consistent with its land use planning, while at the same time providing current and future residents a level of service that makes them proud to call La Quinta their home. During Fiscal Year (FY) 06/07, the General Fund balance increased by $7.6 million consisting of revenue increases in each category; taxes, license and permit fees, charges for services, and interest earnings. In addition, expenditures were less than budgeted in the police, fire and planning administration divisions. The General Fund Balances as of June 30, 2007 was $84.6 million of which $28.4 million was reserved and $56.2 million was unreserved with designations. These designations include an emergency reserve set at 35% of the annual budget plus $4,000,000 and a cash flow reserve of 8.25% of the annual budget. Other designations of the General Fund balances at year end can be found in the Footnotes to the Financial Statements. Additional components of the strategic planning process include the Economic Development Plan, the Capital Improvement Program, the Annual Budget and the Five -Year Resource Allocation Plan. An explanation of each of these documents is provided below. Economic Development Plan This plan outlines a vision and direction for the City's economic development activities. It presents the mission statement, implementation policies, projected resources, and business plan the City and the La Quinta Redevelopment Agency will follow to sustain a comprehensive economic development effort. It is goal - iv oriented in that the economic development efforts specified in the plan are a key to generating the financial resources necessary to support both the Resource Allocation Plan and the Capital Improvement Plan. Capital Improvement Plan This plan is primarily a planning document that establishes five-year funding priorities for capital improvements. This plan also includes a listing of all the other desired capital improvements that cannot, or need not, be funded within the five- year horizon and totaled $67.3 million. Five -Year Resource Allocation Plan This plan is primarily a planning document that provides a five-year horizon for forecasted operational needs of each department, as well as the City as a whole. This plan is a cyclical review of all operations expenditures to reassess funding mechanisms behind personnel responsibilities and the various service levels of all programs. Annual Budget This document is the annual implementation tool for the overall planning process. The budget will encompass each element of the strategic planning effort and will implement: the goals of the Economic Development Plan; the resource and demand allocation outlined in the Five -Year Resource Allocation Plan; and the capital improvement investment for a given year. Relevant Financial Policies The State of California has mandated in the past that the City of La Quinta, pursuant to State of California Revenue and Taxation Code Section 97.70, contribute $332,000 from the General Fund in FY 05/06 with a similar amount in FY 04/05 to meet the State budget crisis. Also, since FY 02/03 through FY 05/06, the La Quinta Redevelopment Agency has contributed $7.8 million to the State of California pursuant to State of California Health and Safety Code 33681.12 to meet its budget shortfalls. The $7.8 million of funds that have been diverted to the State will not be refunded and are not be available for use within the City of La Quinta. No State mandated contribution in FY 06/07 was made and no FY 07/08 contribution is anticipated. Major Initiatives The City has been working with the Coachella Valley Association of Governments on a multi-year project to acquire right of way ($6 million) in the City of La Quinta to widen Jefferson Street between Highway 1 1 1 and Interstate 10 from two lanes to six lanes. The construction phase ($23 million) is nearing completion with improvements consisting of a six -lane bridge over the Whitewater Channel, which v will provide an all-weather crossing. In addition, the $13.3 million City Hall expansion is 40% complete with an expected completion in January 2008 which will add an additional 15,000 sq. feet of office space and Emergency Operations Center (EOC). Another major initiative is the construction of the Vista Dunes Courtyard Homes ($35.2 million) on a former mobile home park which is utilizing the latest energy saving "Green" technologies in its design and construction. The La Quinta Financing Authority has issued $90 million in bonds ($65 million in new funds) to develop low and moderate income housing to meet State mandates. The La Quinta Redevelopment Agency will be repaying the debt service of the bond issue with property tax increment funds. The Agency will be spending a considerable amount of effort to acquire sites and facilitate the development of these units in the upcoming years. The La Quinta Redevelopment Agency has acquired a 525 -acre parcel at Avenue 52 and Jefferson Street for the development of two golf courses, a clubhouse, and future hotel resort development. The first golf course was dedicated in January 2005 and the Agency is working with a developer in the planning stages for a future hotel(s) and the second golf course. Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of La Quinta for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2006. This was the tenth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only, We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated service of the finance department staff.. Credit also must be given to the Mayor and City Council for their support in maintaining the highest standards of professionalism in the management of the City of La Quinta's finances. V1 Respectfully submitted, Thomas P. Genovese City Manager John M. Falconer Finance Director Vii City of La Quinta Directory of Officials June 30, 2007 CITY COUNCIL Don Adolph, Mayor Stanley Sniff, Mayor Pro Tem Terry Henderson, Council Member Lee Osborne, Council Member Tom Kirk, Council Member ADMINISTRATION Thomas P. Genovese, City Manager Bret Plumlee, Assistant City Manager -Management Services Doug Evans, Assistant City Manager — Development Services John M. Falconer, Finance Director Tom Hartung, Building & Safety Director Les Johnson, Planning Director Kathy Jenson, City Attorney Edie Hylton, Community Services Director Veronica Montecino, City Clerk Tim Jonasson, Public Works Director/City Engineer X Community Services Administration Director Recreation Supervisor - 1 1/2 Time Recreation Activities Coordinator - 1/2 Time Secretary Office Assistant Recreation Recreation Supervisor- 1/2 Time Recreation Activities Coordinator- 1/2 Time Senior Center Senior Center Supervisor Senior Center Activities Coordinator Senior Center Assistant Park Maintenance x Goff Operations Golf d Pz kfLarndscape Manager Mainlanance Manager - IM Time Maintenance Foreman - 114 Time Maintenance Worker I - 114 Time Police County Contract City. of La Quinta, California Organizational Chart Fiscal Year 2006/2007 F Mayor and City Council edevelopment Agency Board Financing Authority Board City Attorney _ ...... General Government Assistant City Manager - 2 Positions Management Analyst - 3 Positions Management Assistant Executive Assistant - 1 1/2 Positions Risk Management PersonnelfRisk Manager Executive Assistant - 1/2 Positions Public Works Administration Director Management Analyst Senior Secretary Development Services Principal Engineer Senior Engineer Associate Engineer - 2 Positions Assistant Engineer II Counter Technician Secretary - 112 Position Engineering Services Principal Engineer Assistant Engineer II Assistant Engineer I Secretary - 1/2 Position Traffic Traffic Engineer Assislant Engineer 11 Maintenance a Operations Maintenance Manager - 3/4 Position Maintenance Foreman - 2 314 Positions Maintenance Worker II - 3 Positions Maintenance Worker I - 4 75 Positions Finance Fiscal Services Finance Director Accounting Manager Financial Services Assistant Account Technician- Two Positions Information Services Analyst Secretary Senior Account Clerk -Two Positions City Clerk City Clerk Deputy City Clerk - Two Positions Secretary Office Assistant Building 8 Safety Administration Director Special Project Assistant Senior Secretary Code Compliance Community Safety Manager Senior Code Compliance Officer Code Compliance Officer II - 2 Positions Code Compliance Officer 1 Animal Control/Code Compliance Officer I - 2 Positions Counter Technician Office Assistant - 1!2 positron Animal Control Animal Control Officer II Animal Conlrol/Code Compliance Officer I - 2 Positions Building 3uilding 8 Safety Manager Senior Building Inspector Plan Examiner Building Inspector It - 2 Positions Counter Technician - 2 Positions Office Assistant - 1/2 Position Civic Center Building Operations Facilities Maintenance Coordinator Emergency Services Community Development 1 Administration Director Planning Manager Executive Secretary Secretary Office Assistant Planning Principal Planner - 3 Positions Associate Planner- 1 Positions Assistant Planner- 3 Positions Certificate of Achievement for Excellence in Financial Reporting Presented to City of La Quinta California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2006 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. ai!�E QFp� 2 1na1 1,71ATU �. `w President SEAL& pp��Y Executive Director X INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of La Quinta, California We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta, California, as of and for the year ended June 30, 2007, which collectively comprise the City's basic financial statements as listed in the accompanying table of contents. These financial statements are the responsibility of the City of La Quinta's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta as of June 30, 2007, and the respective changes in financial position and cash flows, where applicable, and the respective budgetary comparisons for the General Fund and the Low/Moderate Income Housing PA No. 2 for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 31, 2007, on our consideration of the City of La Quinta's internal control over financial reporting and our tests of its compliance with certain laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis is not a required part of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 75 YEARS 19M9F 0203 N. Brea Blvd., Suite 203 0 Brea, CA 92821-4056 • (714) 672-0022 0 Fax (714) 672-0331 • www.lslc ap s.com Brandon W. Burrows Donald L. Parker JaLance il & DavMicid E. Hale u n g h a rd Donald G`. Slater LLP Richard K. Kikuchi Certified Public Accountants Retired Robert C. Lance 1914-1994 Richard C. Soll Fred J. Lunghard, Jr. 1928-1999 INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of La Quinta, California We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta, California, as of and for the year ended June 30, 2007, which collectively comprise the City's basic financial statements as listed in the accompanying table of contents. These financial statements are the responsibility of the City of La Quinta's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of La Quinta as of June 30, 2007, and the respective changes in financial position and cash flows, where applicable, and the respective budgetary comparisons for the General Fund and the Low/Moderate Income Housing PA No. 2 for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 31, 2007, on our consideration of the City of La Quinta's internal control over financial reporting and our tests of its compliance with certain laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis is not a required part of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 75 YEARS 19M9F 0203 N. Brea Blvd., Suite 203 0 Brea, CA 92821-4056 • (714) 672-0022 0 Fax (714) 672-0331 • www.lslc ap s.com LLS I Lanee Sall s Lunghard LLP CCRTINED PUDUC ACCOUNTAWS To the Honorable Mayor and Members of the City Council City of La Quinta, California Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying introductory section, the combining and individual fund statements, schedules and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying combining and individual nonmajor fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements, and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The accompanying introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. October 31, 2007 2 Management's Discussion and Analysis As management of the City of La Quinta, we offer readers of the City of La Quinta's financial statements this narrative, overview and analysis of the financial activities for the fiscal year ended June 30, 2007. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in an earlier section of this report. All amounts, unless otherwise indicated, are rounded to the nearest thousands of dollars. Financial Highlights • The assets of the City of La Quinta exceeded its liabilities at the close of the most recent fiscal year by $496,744,000 (net assets). Of this amount, $104,554,000 (unretricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The governmental activities total net assets increased by $51,589,000 and the Business -Type total net assets decreased by $103,000 attributable to SilverRock Golf Course. • As of the close of the current fiscal year, the City of La Quinta's governmental funds reported combined ending fund balances of $202,004,000, a decrease of $14,193,000 in comparison with the prior year. Approximately 70 percent of this total amount, $142,403,000, is available for spending at the government's discretion (unreserved fund balance). • At the end of the current fiscal year, the operations/projects/transfers designations comprised $29,271,000 or 82 percent of total general fund budgeted expenditures. • The City of La Quinta's total debt decreased by $5,787,000 during the current fiscal year from $253,265,000 to $247,478,000 through normally scheduled debt service payments. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of La Quinta's basic financial statements. The City of La Quinta's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 3 Government -wide financial statements The government -wide financial statements are designed to provide readers with a broad overview of the City of La Quinta's finances, in a manner similar to a private - sector business. The statement of net assets presents information on all of the City of La Quinta's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of La Quinta is improving or deteriorating. The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City of La Quinta that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover :all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of La Quinta include general government, public safety, community services, planning and development and public works. The business -type activities of the City of La Quinta include the SilverRock Golf course operations. The government -wide financial statements include not only the City of La Quinta itself (known as the primary government), but also the La Quinta Redevelopment Agency and the La Quinta Financing Authority. Although legally separate entities they function for all practical purposes as departments of the City of La Quinta, and therefore have been included as an integral part of the primary government. The government -wide financial statements can be found in the table of contents under the Financial Section of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of La Quinta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of La Quinta can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. 4 Governmental funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near- term financing requirements. Because the focus of governmental funds is narrower than that of the government - wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of La Quinta maintains thirty three (33) individual governmental funds, which are distinguished between major and non -major funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund bal- ances for the general fund, one (1) special revenue fund, two (2) debt service funds and two (2) capital project funds. These six (6) funds are considered to be major funds. Data from the other twenty seven (27) governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non - major governmental funds is provided in the form of combining statements elsewhere in this report. The City of La Quinta adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found in the table of contents under the heading Basic Financial Statements. Proprietary funds Proprietary funds can be broken down into enterprise and internal service funds. The City of La Quinta maintains one (1) proprietary fund. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of La Quinta uses an enterprise fund to account for its SilverRock Golf Course operations, which is considered to be a major fund. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of La Quinta's various functions. The City of La Quinta has three (3) internal service funds to account for its major equipment replacement including vehicles, for its information technology 5 systems, and for its park equipment and facility needs. Because these three services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the government -wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report The basic proprietary fund financial statements can be found on the pages listed in the table of contents for Proprietary Funds: Statement of Net Assets, Statement of Revenues, Expenditures and Changes in Net Assets, and Statement of Cash Flows. Fiduciary funds Fiduciary funds, also called agency funds, are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statement because the resources of those funds are not available to support the City of La Quinta's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on the pages listed in the table of contents for Fiduciary Funds: Statement of Fiduciary Assets and Liabilities — Agency Funds. Notes to the financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements: The notes to the financial statements can be found on the pages listed in the table of contents for Notes to the Basic Financial Statements. Other information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of La Quinta's General Fund and its budget appropriations. Required supplementary information can be found in the table of contents under the section Required Supplemental Information and includes Notes to the Required Supplementary Information and a General Fund Budgetary Comparison Schedule. The combining statements referred to earlier in connection with non -major govern- mental funds, internal service funds, and agency funds are presented immediately following the required supplementary. Combining and individual fund statements and schedules can be found in the table of contents under Supplementary Schedules. E Government -wide financial analysis As noted earlier, net assets may serve over time as a useful indicator of a govern- ment's financial position. In the case of the City of La Quinta, assets exceeded liabilities by $496,744,000 at the close of the most recent fiscal year, which is $51,486,000 greater than the previous year. The largest portion of the City of La Quinta's net assets, which remained at 66% from the prior year, reflects its investment in capital assets (e.g., land, buildings; machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. The City of La Quinta uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of La Quinta's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of La Quinta Net Assets Governmental activities Business -type activities Total 365,469 2007 2006 2007 2006 2007 2006 Current and other assets $ 244,280,997 $ 241,756,724 $ (2,019,993) $ (1,152,519) $ 242,261,004 S 240,604,205 Capital assets 477,813,364 420,791,784 43,517,873 43,165,774 521,331,237 463,957,558 Total assets 722,094,361 662,548,508 41,497,880 42,013,255 763,592,241 704,561,763 Current liabilities 19,882,003 11,377,874 365,469 513,127 20,247,472 11,891,001 Non-current liabilities 245,774,853 246,321,774 625,848 1,090,602 246,600,701 247,412,376 Total liabilities 266,656,856 257,699,648 1,191,317 1,603,729 266,848,173 259,303,377 Net assets: Invested in capital assets, net of related debt 30[x,220,033 253,559,117 42,692,025 42,075,172 342,912,058 295,634,289 Restricted 49,277,895 65,278,776 - - 49,277,895 65,278,776 Unrestricted 106,939,577 86,010,967 (2,385,462) (1,665,646) 104,554,115 84,345,321 Total net assets 0 456,437,505 $ 404, 48,860 $ 40,306,563 $ 40,409,526 $ 496,744,068 $ 445,258,386 An additional portion of the City of La Quinta's net assets (10 percent versus 16 percent in the prior year) represents resources .that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets = $106,940,000 (24 percent) may be used to meet the government's ongoing obligations to citizens and creditors. 7 At the end of the current fiscal year, the City of La Quinta is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental activities; however, the business type unrestricted net assets had a deficit of $2,385,000. Governmental activities Governmental activities increased net assets by $51,589,000 accounting for a 13 percent change in the net assets from the previous year. Key elements of these changes are as follows: tncrease in net assets before transfers and restatements 67 —10¢ }a15-WOU14vUI 51 Revenues decreased by $6,487,000 with the two largest category decreases in capital grants and contributions ($16,318,000) and charges for services ($4,689,000). Capital grants and contributions decreased as a result of less received from developer impact fee collections, Quimby fee collections and interest income generated from unspent bond capital proceeds. The charges for services decrease stemmed from decreased building and public works licenses and fees from construction activities. Expenditures increased by $10,591,000 with the two largest category increases in Public Safety ($3,659,000) and Community Services ($2,873,000). The increase in the Public Safety costs is a result of higher police costs ($1,970,000) fire ($459,000) and Code Compliance costs ($227,000), H City of La Quinta Changes in Net Assets Governmental Business -type Revenues: 2007 activities activities 2006 Change 2007 Total ogram revenues: 2006 Change 2007 2006 Change Charges for services Aerating grants and 5,520,909 10,210,057 (4;689,148) 3,540,748 3,120,728 420,020 9,061,657 13,330,785 (4,269,128) contributions 3,796,495 3,603,173 193,322 - apnai grants an 3,796,495 3,603,173 193,322 contributions 17,601,131 33,918,901 (16,317,770) General revenues: 17,601,131 33,918,901 (16,317,770) ope y axes 4,999,U51 3.679,079 1.319,972— Uther taxes 8. 18. 4,999,051 Investment income 5UID_OU.1jV F.7797Tr ear va tc e in I au L -an on safe 01 capital ass s --p—licellaneous 1.944.115 o a revenues - penses: - I,zenars govemment Vublic gap ey 12324.1ULP 9.05511, 44 mmUnl y serv[cas ' - anntng an ova opmen - cwar s tncrease in net assets before transfers and restatements 67 —10¢ }a15-WOU14vUI 51 Revenues decreased by $6,487,000 with the two largest category decreases in capital grants and contributions ($16,318,000) and charges for services ($4,689,000). Capital grants and contributions decreased as a result of less received from developer impact fee collections, Quimby fee collections and interest income generated from unspent bond capital proceeds. The charges for services decrease stemmed from decreased building and public works licenses and fees from construction activities. Expenditures increased by $10,591,000 with the two largest category increases in Public Safety ($3,659,000) and Community Services ($2,873,000). The increase in the Public Safety costs is a result of higher police costs ($1,970,000) fire ($459,000) and Code Compliance costs ($227,000), H • A transfer out of $875,000 in assets from the governmental activities to the business -type activities which consist of land and improvements for the SilverRock Golf course. 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 Expenses and Program Revenues - Government Activities 18,628,602 General Public safety Community Planning and Public works government services development 15,163,422 Interest expense Expenses and Program Revenues - Business -type Activities Golf N. ❑ Expenses * Program revenues Business -type activities This was the second full year of operations for the SilverRock Golf fund since the golf course began early operation in 2005. Net assets decreased by $ (103,000) from the net effects of a transfer of assets from the governmental activities of $875,000 and an operating loss of $(978,000). Charges for services primarily consisted of green fees and totaled $3,541,000 which was $420,000 greater than the previous year with golf course expenses of $4,520,000 ,which was $3,000 less than the previous year. Financial Ana]Vsis of the Government's Funds As noted earlier, the City of La Quinta uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds - The focus of the City of La Quinta's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of La Quinta's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of La Quinta's governmental funds reported combined ending fund balances of $202,004,000, a decrease of $13,494,000 in comparison with the prior year. Approximately 70 percent of this total amount ($142,404,000) constitutes unreserved, which is available for spending at the government's discretion. The remainder of fund balance ($59,600,000) is reserved or designated to indicate that it is not available for new spending because it has already been committed to 1) to pay debt service ($24,299,000), 2) to advance funds to other funds ($32,421,000), or 3) for a variety of other restricted purposes ($2,880,000). General Fund The general fund is the chief operating fund of the City of La Quinta. At the end of the current fiscal year, unreserved fund balance of the general fund was $56,252,000, while total fund balance reached $84,641,000. As a measure of the general fund's liquidity, it may be useful to compare the fund balance total budgeted expenditures (including transfers out). The total fund balance represents 238 percent of the total budgeted expenditures. The City of La Quinta's general fund balance increased by $8,372,000 during the current fiscal year. Key factors in this growth are as follows: • An increase of $2,599,000 in taxes over the final budget, of which $1,848,000 was in property taxes, $209,000 was in sales taxes (1 percent of the 7.75 percent collected going to the City), $373,000 was in transient occupancy taxes with the balance in other taxes. 10 • An increase of $1,462,000 in licenses and permits over the final budget, which represents increased development and building activity in the Building and Safety department. • An increase of $1,201,000 in interest income over the budget, which is a result of higher than budgeted interest rates and larger amounts under investment. Actual expenditures were $3,775,000 less than the final budget. Divisions that were under budget for the year were Police ($923,000), Fire ($423,000), Planning & Development Administration ($509,000), and the Current Planning Division ($488,000). Redevelopment Agency Project Area 1 Debt Service Fund The Redevelopment Agency Project Area 1 Debt Service Fund is used to accumulate resources, primarily property taxes, to pay debt service. The fund balance increased by $11,838,000 during the current fiscal year. The key factor in this growth was the increase in tax increment property tax generated in the project area, an increase in interest income based upon higher available cash balances and higher interest rates, and not having to pay to the State of California an Educational Relief Augmentation Fund (ERAF) payment. 2004 Low/Mod Bond Fund The 2004 Low/Mod Bond Fund is used to account for the promotion of low and moderate income capital projects in the La Quinta Redevelopment Project Area 1 and 2. The funds were obtained by issuing a bond in 2004 with available fund balances representing unspent bond proceeds. The fund balances decreased by $18,564,000 during the Fiscal Year which represented the Agencies efforts to increase the number of these housing units in the City. The two primary projects funded during the year were the Vista Dunes Courtyard Homes ($14,637,000) and the Ave 48th and Adams Apartments ($1,786,000). Low/Moderate Income Housing PA No. 2 Fund The Low/Moderate Income Housing No. 2 Fund is used to account for the promotion of low and moderate income capital projects in the La Quinta Redevelopment Project Area 2 from 20% of the tax increment property tax generated in this Project Area. During the Fiscal Year this fund purchased twenty acres (20) for $19,966,000 which represented the major expenditures in this Fund. 11 Proprietary funds The City of La Quinta's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The financial activities of the City enterprise fund have already been addressed in the discussion of the City of La Quinta's business -type activities. In addition, the City has three (3) internal service funds to accumulate resources for equipment and vehicle replacement, information technology activities, and for park equipment and facility replacement. General Fund Budgetary Highlights During the year there was a $2,301,000 increase in appropriations and transfers out between the original ($33,194,000) and final amended budget ($35,495,000). Following are the main components of the increase: • $380,000 supplemental appropriation to the planning & administration division for additional planning contract services; and, • $1,163,000 in additional transfers out for. capital projects funded by the General Fund. Which included the Ave 54 Airport Blvd Rehabilitation Program ($954,000) and the Embassy Suites Transient Occupancy Tax Rebate ($150,000). The increase was possible because of additional anticipated revenues. Capital Asset and Debt Administration Capital assets The City of La Quinta's investment in capital assets for its governmental and business - type activities as of June 30, 2007, amounts to $521,331,000 (net of accumulated depreciation). This investment in capital assets includes land, right of way, buildings and improvements, machinery and equipment, streets and bridges, and construction in progress. The investment in capital assets increased this fiscal year from the purchase of properties which exceeded the depreciation expenses. The following chart lists the asset categories for governmental and business like activities net of depreciation. 12 City of La Quinta Capital Assets (net of depreciation) Governmental Business -type activities activities Total 2007 2006 2007 2006 2007 2006 Land builOings an improvements 28,033,383 28,682,380 6,021,704 6,234,276 34,055,087 34,916,656 Equipment and turniture Vehicles 522,281 38b,4Ub 10,175 14,244 532,462 399,650 n ras ructure 33UJU,340 110'.198,188 - 2,3 Construction in progress 42,662,144 26,621,331r, Major capital asset events during the current fiscal year included the following: Governmental activities - Recording the new expansion of the Eisenhower Bridge, which totaled $4,103,000; • Recording the land, park buildings and equipment in the park equipment and facility internal service fund, which totaled $656,000,- 0 656,000; • Recording infrastructure improvements, including developer dedications of $8,918,000, to street improvements, street right of way, street sidewalks and curbs and gutters, and street median, which total $24,356,000; - Began the construction phase of the City Hall and Museum expansion, - Recording the transfer of assets, which was primarily land from the Redevelopment Agency to the SilverRock Golf Enterprise Fund had a cost basis of $875,000. Business -type activities • Recording improvements to the golf course, temporary clubhouse, and the maintenance building for the first golf course at SilverRock Resort totaled $875,000. Additional information on the City of La Quinta's capital assets can be found in Footnote 6 to the financial statements. Long-term debt At the end of the current fiscal year, the City of La Quinta had outstanding of $246,652,000. $145,170,000 of this debt amount secured solely by specified revenue sources (i.e., tax allocati $93,645,000 of the debt represents revenue bonds that will be paid increment property tax housing funds. In addition, $826,000 in capital are outstanding in connection with SilverRock Golf Course. 13 total bonded debt represents bonds on bonds); while, from pledged tax equipment leases City of La Quinta Outstanding Debt The City of La Quinta's total outstanding debt decreased by $5,787,000 during the fiscal year. Additional information on the City of La Quinta's long-term debt can be found in notes 7 and 8 of the financial statements. Economic Factors and Next Year's Budgets and Rates These factors were considered in preparing the City of La Quinta's budget for the 2008 fiscal year: • The City of La Quinta had a 2.6 percent unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 5.7 percent and the statewide unemployment rate of 5.2 percent. During the last ten years, the City of La Quinta has been in a growth phase with net assessed values increasing from $2.32 billion in FY 97/98 to $11.95 billion or over 514 percent. • During the current fiscal year, the general fund net income was $7,610,000. $1,478,000 of this amount has been designated to the general fund for carry over appropriations and encumbrances. The City of La Quinta adopted a balanced general fund budget for FY 07/08. Requests for Information This financial report is designed to provide a general overview of the City of La Quinta's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of La Quinta, John Falconer, Finance Director, P.O. Box 1504, La Quinta, CA, 92247. 14 Governmental Business -type activities activities Total Debt type: 2007 2006 2007 2006 2007 2006 Capital leases - u,ouz $ 62*,64b 4, .b Gompensated absences 732r,055 600,200 734,055 o evetoper agreement 643,539 b x,53 i b, ss through agreement _66—e—to 4,431.178 5,1869627 4,431,176 5, 186.62 government agencies 2,028,311 2,178,311 2,028,311,178,x11 t ax allocation oonas 145,11 10,OOU 141,915,000 14b, iU,UUO I 14 f,91 5,000 Revenue Donas 77-67-0,710 3,b 5,u U 5,5 I otas $ 246757161 S 252.174.234 The City of La Quinta's total outstanding debt decreased by $5,787,000 during the fiscal year. Additional information on the City of La Quinta's long-term debt can be found in notes 7 and 8 of the financial statements. Economic Factors and Next Year's Budgets and Rates These factors were considered in preparing the City of La Quinta's budget for the 2008 fiscal year: • The City of La Quinta had a 2.6 percent unemployment rate. This rate is significantly lower than the Riverside County unemployment rate of 5.7 percent and the statewide unemployment rate of 5.2 percent. During the last ten years, the City of La Quinta has been in a growth phase with net assessed values increasing from $2.32 billion in FY 97/98 to $11.95 billion or over 514 percent. • During the current fiscal year, the general fund net income was $7,610,000. $1,478,000 of this amount has been designated to the general fund for carry over appropriations and encumbrances. The City of La Quinta adopted a balanced general fund budget for FY 07/08. Requests for Information This financial report is designed to provide a general overview of the City of La Quinta's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of La Quinta, John Falconer, Finance Director, P.O. Box 1504, La Quinta, CA, 92247. 14 CITY OF LA QUINTA STATEMENT OF NET ASSETS JUNE 30, 2007 Assets: Cash and investments Receivables: Accounts Taxes Loans and notes Accrued interest Internal balances Prepaid costs Inventories Deposits Due from other governments Deferred charges Restricted assets: Cash with fiscal agent Capital assets not being depreciated Capital assets, net of depreciation Total Assets Liabilities: Accounts payable Accrued liabilities Accrued interest Deposits payable Due to other governments Retentions payable Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Total Liabilities Net Assets: Invested in capital assets, net of related debt Restricted for: Public safety Planning and development Community services Public works Debt service Unrestricted Total Net Assets See Notes to Financial Statement 15 Primary Government Governmental Business -Type Activities Activities Total $ 150,403,664 $ 97,577 $ 150,501,241 282,452 30,900 313,352 3,234,536 - 3,234,536 13,066,117 - 13,066,117 774,980 250 775,230 2,466,003 (2,466,003) - 19,751 1,865 21,616 - 65,192 65,192 211,953 250,000 461,953 7,575,817 226 7,576,043 4,753,409 - 4,753,409 61,492,315 - 61,492,315 378,457,741 36,458,147 414,915,888 99,355,623 7,059,726 106,415,349 722,094,361 41,497,880 763,592,241 9,940,774 334,896 10,275,670 298,622 1,412 300,034 4,239,107 - 4,239,107 2,502,217 25,000 2,527,217 573,495 - 573,495 1,843,513 - 1,843,513 484,275 4,161 488,436 6,711,341 371,444 7,082,785 239,063,512 454,404 239,517,916 265,656,856 1,191,317 266,848,173 300,220,033 182,715 21,246,291 1,031,838 26,597,703 219,348 106, 939, 577 $ 456,437,505 42,692,025 (2,385,462) $ 40,306,563 342,912,058 182,715 21,246,291 1,031,838 26,597,703 219,348 104, 554,115 $ 496,744,068 CITY OF LA QUINTA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2007 Functions/Programs Primary Government: Governmental Activities: General government Public safety Planning and development Community services Public works Interest on long-term debt Total Governmental Activities Business -Type Activities: Golf Course Total Business -Type Activities Total Primary Government 4,520,173 3,540,748 - 4,520,173 3,540,748 - $ 61,239,884 $ 9,061,657 $ 3,796,495 $ 17,601,131 General Revenues: Taxes: Property taxes, levied for general purpose Tax increment Sales taxes Transient occupancy taxes Franchise taxes Business licenses taxes Other taxes Use of money and property Motor vehicle in lieu, unrestricted Other Transfers Total General Revenues and Transfers Change in Net Assets Net Assets at Beginning of Year Restatement of Net Assets Net Assets at End of Year See Notes to Financial Statement 16 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants $ 6,284,342 $ 60,530 $ - $ _ 12,724,100 2,659,515 353,202 29,289 7,736,520 169,643 327,166 9,699 4,299,453 387,065 1,902,631 2,391,193 10,511,874 2,244,156 1,213,496 15,170,950 15,163,422 - - 56,719,711 5,520,909 3,796,495 17,601,131 4,520,173 3,540,748 - 4,520,173 3,540,748 - $ 61,239,884 $ 9,061,657 $ 3,796,495 $ 17,601,131 General Revenues: Taxes: Property taxes, levied for general purpose Tax increment Sales taxes Transient occupancy taxes Franchise taxes Business licenses taxes Other taxes Use of money and property Motor vehicle in lieu, unrestricted Other Transfers Total General Revenues and Transfers Change in Net Assets Net Assets at Beginning of Year Restatement of Net Assets Net Assets at End of Year See Notes to Financial Statement 16 Net (Expenses) Revenues and Changes in Net Assets Primary Government (979,425) Governmental Business -Type Activities Activities Total $ (6,223,812) $ - $ (6,223,812) (9,682,094) - (9,682,094) (7,230,012) - (7,230,012) 381,436 - 381,436 8,116,728 - 8,116,728 (15,163,422) - (15,163,422) (29,801,176) - (29,801,176) - (979,425) (979,425) - (979,425) (979,425) (29,801,176) (979,425) (30,780,601) 4,999,051 - 4,999,051 42,583,031 - 42,583,031 8,896,716 - 8,896,716 5,448,361 - 5,448,361 1,259,985 - 1,259,985 307,032 - 307,032 872,753 - 872,753 11,854,951 1,817 11,856,768 3,291,055 - 3,291,055 2,052,246 - 2,052,246 (874,645) 874,645 - 80,690,536 876,462 81,566,998 50,889,360 (102,963) 50,786,397 404,848,882 40,409,526 445,258,408 699,263 - 699,263 $ 456,437,505 $ 40,306,563 $ 496,744,068 See Notes to Financial Statement 17 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2007 Liabilities and Fund Balances: Liabilities: Accounts payable $ 6,416,714 $ 26,636 $ 3,384,130 $ - Accrued liabilities 296,895 - _ Deposits payable 2,185,846 - 84,826 Due to other governments 12,797 - _ Retentions payable 75,391 - 1,768,122 Deferred revenues 5,887,737 9,500,000 40,001 Unearned revenue - - 182,052 Due to other funds - - - 6,186,049 Advances from other funds _ Total Liabilities 14,875,380 9,526,636 5,459,131 6,186,049 Fund Balances: Reserved: Reserved for encumbrances 779,530 _ _ Reserved for prepaid costs 11,774 1,504 Reserved for notes receivable _ Reserved for advances to other funds 27,597,329 Reserved for debt service - Unreserved: Unreserved, reported in: General Fund 56,251,887 - _ Special revenue funds - 10,075,452 _ _ Capital projects funds - - 38,283,337 Debt service funds _ Total Fund Balances 84,640,520 10,076,956 - 38,283,337 Total Liabilities and Fund Balances $ 99,515,900 $ 19,603,592 $ 5,459,131 $ 44,469,386 See Notes to Financial Statement 18 Special Revenue Fund Capital Projects Funds Low/Moderate 2004 Income Housing Capital Low/Mod General PA No. 2 Improvement Bond Assets: Cash and investments $ 62,370,184 $ 10,020,157 $ 4,949,566 $ - Receivables: Accounts 8,819 8,500 194,294 - Taxes 3,234,536 - _ _ Notes - 9,500,000 - Accrued interest 412,365 12,875 - Prepaid costs 11,774 1,504 Deposits 5,903 - _ Due from other governments 5,856,210 60,556 315,271 - Due from other funds 18,780 - _ Advances to other funds 27,597,329 Restricted assets: Cash and investments with fiscal agents - - - 44,469,386 Total Assets $ 99,515,900 $ 19,603,592 $ 5,459,131 $ 44,469,386 Liabilities and Fund Balances: Liabilities: Accounts payable $ 6,416,714 $ 26,636 $ 3,384,130 $ - Accrued liabilities 296,895 - _ Deposits payable 2,185,846 - 84,826 Due to other governments 12,797 - _ Retentions payable 75,391 - 1,768,122 Deferred revenues 5,887,737 9,500,000 40,001 Unearned revenue - - 182,052 Due to other funds - - - 6,186,049 Advances from other funds _ Total Liabilities 14,875,380 9,526,636 5,459,131 6,186,049 Fund Balances: Reserved: Reserved for encumbrances 779,530 _ _ Reserved for prepaid costs 11,774 1,504 Reserved for notes receivable _ Reserved for advances to other funds 27,597,329 Reserved for debt service - Unreserved: Unreserved, reported in: General Fund 56,251,887 - _ Special revenue funds - 10,075,452 _ _ Capital projects funds - - 38,283,337 Debt service funds _ Total Fund Balances 84,640,520 10,076,956 - 38,283,337 Total Liabilities and Fund Balances $ 99,515,900 $ 19,603,592 $ 5,459,131 $ 44,469,386 See Notes to Financial Statement 18 CITY OF LA QUINTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2007 Assets: Cash and investments Receivables: Accounts Taxes Notes Accrued interest Prepaid costs Deposits Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deposits payable Due to other governments Retentions payable Deferred revenues Unearned revenue Due to other funds Advances from other funds Total Liabilities Fund Balances: Reserved: Reserved for encumbrances Reserved for prepaid costs Reserved for notes receivable Reserved for advances to other funds Reserved for debt service Unreserved: Unreserved, reported in: General Fund Special revenue funds Capital projects funds Debt service funds Total Fund Balances Debt Service Funds Redevelopment Redevelopment Agency Agency PA No. 1 PA No. 2 Other Total Governmental Governmental Funds Funds $ 33,187,356 $ 6,810,617 $ 28,090,490 $ 145,428,370 - - 70,839 282,452 - - - 3,234,536 - - 3,566,117 13,066,117 133,761 61,246 133,075 753,322 - - 6,473 19,751 - - 206,050 211,953 335,329 244,927 763,194 7,575,487 - 6,186,049 - 6,204,829 - - 4,823,543 32,420,872 17, 022,929 61,492,315 $ 33,656,446 $ 13,302,839 $ 54,682,710 $ 270,690,004 $ $ - $ 86,566 $ 9,914,046 - 296,895 231,545 2,502,217 168,201 392,497 - 573,495 - - - 1,843,513 - - 1,484,472 16,912,210 302,223 484,275 - - 18,780 6,204,829 12,100,001 10,000,000 7,854,868 29,954,869 12,268,202 10,392,497 9,978,454 68,686,349 - - 779,530 - - 6,473 19,751 - - 2,081,645 2,081,645 - - 4,823,543 32,420,872 21,388,244 2,910,342 - 24,298,586 - - - 56,251,887 17,695,100 27,770,552 - - 20,086,861 58,370,198 - 10,634 10,634 21,388,244 2,910,342 44,704,256 202,003,655 Total Liabilities and Fund Balances $ 33,656,446 $ 13,302,839 $ 54,682,710 $ 270,690,004 See Notes to Financial Statement 19 CITY OF LA QUINTA GOVERNMENTAL FUNDS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30, 2007 Fund balances of governmental funds $ 202,003,655 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity: Infrastructure 390,911,723 Other capital assets 137,571,588 Accumulated depreciation (67,160,261) Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable (238,815,000) Unamortized bond premium/discount 877,230 Unamortized cost of issuance 4,753,409 Other long-term liabilities (7,103,029) Compensated absences (729,886) Accrued interest payable for the current portion of interest due on long-term debt has not been reported in the governmental funds. (4,239,107) Revenues reported as deferred revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity. 16,912,210 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net assets. 21,454,973 Net assets of governmental activities $ 456,437,505 See Notes to Financial Statement 20 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2007 See Notes to Financial Statement 21 Special Revenue Fund Capital Projects Funds Low/Moderate 2004 Income Housing Capital Low/Mod General PA No. 2 Improvement Bond Revenues: Taxes $ 21,594,996 $ 5,194,289 $ - $ - Assessments - _ _ Licenses and permits 2,788,882 - _ Intergovernmental 7,400,101 - 4,056,049 - Contribution from property owners 151,785 - - _ Charges for services 1,544,190 - Use of money and property 5,188,103 343,073 - 2,706,511 Fines and forfeitures 337,521 - - - Miscellaneous 14,836 - _ Developer participation - - 292,415 - Loan repayments - 59,409 - - Total Revenues 39,020,416 5,596,771 4,348,464 2,706,511 Expenditures: Current: General government 5,246,378 - - - Public safety 15,634,761 - _ - Planning and development 1,384,466 20,513,194 - 4,705,800 Community services 2,994,586 - - Public works 5,019,859 - - Capital outlay - - 36,311,020 - Debt service: Principal retirement - - 182,491 - Interest and fiscal charges - 65,963 Pass-through agreement payments - _ - - Total Expenditures 30,280,050 20,513,194 36,559,474 4,705,800 Excess (Deficiency) of Revenues Over (Under) Expenditures 8,740,366 (14,916,423) (32,211,010) (1,999,289) Other Financing Sources (Uses): Transfers in 308,686 16,000,000 32,211,010 - Transfers out() 1,439 506 (3,127,770 ) - (16,564,295) Proceeds from sale of capital assets Total Other Financing Sources (Uses) (1,130,820) 12,872,230 32,211,010 (16,564,295) Net Change in Fund Balances 7,609,546 (2,044,193) - (18,563,584) Fund Balances, Beginning of Year, as previously reported 76,269,124 12,121,149 - 56,846,921 Restatements 761,850 - - - Fund Balances, Beginning of Year, as restated 77,030,974 12,121,149 - 56,846,921 Fund Balances, End of Year $ 84,640,520 $ 10,076,956 $ - $ 38,283,337 See Notes to Financial Statement 21 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007 Expenditures: Current: General government Debt Service Funds 184,484 213,781 6,150,699 Redevelopment Redevelopment Other Total 15,685,493 Agency Agency Governmental Governmental 28,994,177 PA No. 1 PA No. 2 Funds Funds Revenues: Public works - 1,735,648 Taxes $ 42,029,504 $ 20,777,158 $ 10,507,377 $ 100,103,324 Assessments - - 877,191 877,191 Licenses and permits - - - 2,788,882 Intergovernmental - - 3,347,821 14,803,971 Contribution from property owners - - 913,193 1,064,978 Charges for services - - 277,604 1,821,794 Use of money and property 1,054,152 556,329 2,844,182 12,692,350 Fines and forfeitures - - - 337,521 Miscellaneous - - 59,994 74,832 Developer participation - - 5,018,025 5,310,440 Loan repayments - - 987,611 1,047,020 Total Revenues 43,083,656 21,333,487 24,832,998 140,922,303 Expenditures: Current: General government 506,056 184,484 213,781 6,150,699 Public safety - - 50,732 15,685,493 Planning and development - 2,390,717 28,994,177 Community services - - 1,032,716 4,027,302 Public works - 1,735,648 6,755,507 Capital outlay - - 109,397 36,420,417 Debt service: Principal retirement 3,395,449 205,000 1,865,000 5,647,940 Interest and fiscal charges 8,678,900 1,314,785 5,000,329 15,059,977 Pass-through agreement payments 19,044,700 17,453,875 - 36,498,575 Total Expenditures 31,625,105 19,158,144 12,398,320 155,240,087 Excess (Deficiency) of Revenues Over (Under) Expenditures 11,458,551 2,175,343 12,434,678 (14,317,784) Other Financing Sources (Uses): Transfers in 4,448,138 1,954,560 6,032,182 60,954,576 Transfers out (4,068,349) (1,954,560) (33,800,096) (60,954,576) Proceeds from sale of capital assets - - 124,097 124,097 Total Other Financing Sources (Uses) 379,789 - (27,643,817) 124,097 Net Change in Fund Balances 11,838,340 2,175,343 (15,209,139) (14,193,687) Fund Balances, Beginning of Year, as previously reported 9,549,904 734,999 59,975,982 215,498,079 Restatements - (62,587) 699,263 Fund Balances, Beginning of Year, as restated 9,549,904 734,999 59,913,395 216,197,342 Fund Balances, End of Year $ 21,388,244 $ 2,910,342 $ 44,704,256 $ 202,003,655 See Notes to Financial Statement 22 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, 2007 Net change in fund balances - total governmental funds $ (14,193,687) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period: Capital outlay 61,507,862 Depreciation expense (4,209,852) Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. 5,426,098 Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 82,253 Compensated absences expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (121,620) Revenues reported as deferred revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity. 1,846,249 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities. 552,057 Change in net assets of governmental activities $ 50,889,360 See Notes to Financial Statement 23 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT BY DEPARTMENT GENERAL FUND YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1, as restated Resources (Inflows): Taxes Licenses and permits Intergovernmental Contributions from property owners Charges for services Use of money and property Fines and forfeitures Other Transfers from other funds Amounts Available for Appropriation Charges to Appropriation (Outflow): General Government Legislative City Manager Development services Management services City Clerk Fiscal services Central services Total general government Public Safety Police Building & safety admin Building Code compliance Animal control Civic Center Building Fire Emergency services Total public safety Community Services Community services admin Senior center Park & recreation Park maintenance Total community services Planning and Develo ment Administation Current planning Total planning and development Variance with Final Budget Budget Amounts Actual Positive Original _ Final Amounts (Negative) $ 77,030,974 $ 77,030,974 $ 77,030,974 $ - 18,695,950 1,327,100 7,421,730 938,700 3,987,300 306,500 332,542 $110,040,796 $ 862,350 1,005,586 1,585,500 1,093,904 546,604 770,921 315,879 6,180, 744 9,455,117 343,212 967,210 905,277 386,980 480,148 4,214,373 182,949 16,935,266 1,058,779 388,971 173,196 1,210,810 2,831,756 1,044,249 850,976 1,895,225 See Notes to Financial Statement 24 18, 995, 879 1,327,100 7,743,650 115,000 1,599,600 3,987,300 314,087 5,500 332,542 $111,451,632 $ 906,250 1,008,289 1,652,000 916,267 548,271 782,174 429,517 6,242,768 9,455,117 297,370 1,152,255 918,672 417,381 485,433 4,284,545 184,216 17,194,989 1,187,481 397,857 187,316 1,249,685 3,022,339 1,424,252 957,317 2,381,569 21,594,996 2,788,882 7,400,101 151,785 1,544,190 5,188,103 337,521 14,838 308,686 $116,360,076 $ 734,131 895,591 1,405,639 643,485 490,849 738,103 338,580 5,246,378 8,531,775 266,984 1,276,504 807,484 326,195 443,670 3,861,487 120,662 15,634,761 1,174,940 342,491 170,748 1,306,407 2,994,586 914,988 469,478 1,384,466 2,599,117 1,461,782 (343,549) 36,785 (55,410) 1,200,803 23,434 9,338 (23,856) $ 4,908,444 $ 172,119 112,698 246,361 272,782 57,422 44,071 90,937 996,390 923,342 30,386 (124,249) 111,188 91,186 41,763 423,058 63,554 1,560,228 12,541 55,366 16,568 56,722 27,753 509,264 487,839 997,103 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT BY DEPARTMENT GENERAL FUND YEAR ENDED JUNE 30, 2007 Public Works Administration Development services Maintenance/operations - Street Maintenance/operations - Lighting Traffic Construction management Total public works Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) $ 477,975 $ 546,934 $ 397,992 $ 148,942 927,341 1,066,679 926,063 140,616 1,395,343 1,473,513 1,308,480 165,033 967,071 1,132,722 1,047,228 85,494 373,542 376,183 189,800 186,383 684,445 369,729 1,150,296 780,567 4,825,717 4,965,760 5,019,859 (54,099L 525,454 1,687,564 1,439,506 248,058 33,194,162 35,494,989 31,719,556 3,775,433 $ 76,846,634 $ 75,956,643 $ 84,640,520 $ 1,133,011 See Notes to Financial Statement 25 CITY OF LA QUINTA BUDGETARY COMPARISON STATEMENT LOW/MODERATE INCOME HOUSING PA NO.2 YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Other financing sources Loan repayments Transfers from other funds Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers to other funds Total Charges to Appropriations $17,266,849 $46,705,852 $ 33,717,920 $ (12,987,932) $ 741,534 $25,541,534 $20,513,194 Variance with 1,954,642 7,091,916 3,127,770 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $12,121,140 $12,121,149 $12,121,149 $ - 4,870,400 5,401,800 5,194,289 (207,511) 275,300 441,000 343,073 (97,927) - 12,641,903 - (12,641,903) 100,000 59,409 (40,591) - 16,000,000 16,000,000 - $17,266,849 $46,705,852 $ 33,717,920 $ (12,987,932) $ 741,534 $25,541,534 $20,513,194 $ 5,028,340 1,954,642 7,091,916 3,127,770 3,964,146 2,696,176 32,633,450 23,640,964 8,992,486 Budgetary Fund Balance, June 30 $14,570,673 $14,072,402 $10,076,956 $ (3,995,446) See Notes to Financial Statement 26 CITY OF LA QUINTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2007 Business -Type 28,455 Activities - 2,466,003 Enterprise Funds Governmental 4,168 Activities - Golf Internal Course Service Funds Assets: Current: Cash and investments Receivables: Accounts Accrued interest Prepaid costs Inventories Deposit Due from other governments Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Assets: Liabilities: Current: Accounts payable Accrued liabilities Deposits payable Unearned revenue Total Current Liabilities Noncurrent: Advances from other funds Compensated absences Capital leases payable Total Noncurrent Liabilities Total Liabilities Net Assets: Invested in capital assets, net of related debt Unrestricted Total Net Assets Total Liabilities and Net Assets See Notes to Financial Statement 27 $ 97,577 $ 4,975,294 30,900 - 250 21,658 1,865 - 65,192 - 250,000 - 226 330 446,010 4,997,282 43,517,873 16,490,314 43,517,873 16,490,314 $ 43,963,883 $ 21,487,596 $ 334,896 $ 26,728 1,412 1,727 25,000 - 4,161 - 365,469 28,455 2,466,003 - - 4,168 825,848 - 3,291,851 4,168 3,657,320 32,623 42,692,025 16,490,314 (2,385,462) 4,964,659 40,306,563 21,454,973 $ 43,963,883 $ 21,487,596 CITY OF LA QUINTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2007 Operating Revenues: Sales and service charges Total Operating Revenues Operating Expenses: Salaries and benefits Fuel and oil Maintenance and parts Contract services Software and supplies Depreciation Other Total Operating Expenses Operating Income (Loss) Non-operating Revenues (Expenses): Interest revenue Interest expense Gain (loss) on disposal of fixed assets Total Non-operating Revenues(Expenses) Income (Loss) Before Contributions and Transfers Capital contributions Transfers in Changes in Net Assets Net Assets: Beginning of Year Changes in Net Assets End of Fiscal Year See Notes to Financial Statement 28 Business -Type 1,211,222 Activities - 68,320 Enterprise Funds Governmental 71,491 Activities - Golf Internal Course Service Funds $ 3,540,748 $ 1,211,222 3,540,748 1,211,222 68,320 87,166 - 71,491 - 109,665 3,720,778 107,554 - 125,056 614,648 695,068 60,058 31,722 4,463,804 1,227,722 (923,056) (16,500) 1,817 238,164 (56,369) - 1.327 (54,552) 239,491 (977,608) 222,991 - 960,593 874,645 - (102,963) 1,183,584 40,409,526 20,271,389 (102,963) 1,183,584 $ 40,306,563 $ 21,454,973 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2007 Cash Flows from Operating Activities: Cash received from customers and users Cash paid to supplies for goods and services Cash paid to employees for services Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Repayment made to other funds Advance from other funds Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Proceeds from sales of capital assets Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year See Notes to Financial Statement 29 Business -Type Activities - Enterprise Funds Governmental Activities - Golf Internal Course Service Funds $ 3,507,675 $ 1,211,221 (3,876,124) (389,649) (80,525) (74,358) (448,974) 747,214 (875,674) 1,765,042 889,368 (356,856) (56,369) (101,094) 12,850 (413,225) (88,244) 1,706 234,710 1,706 234,710 28,875 893,680 68,702 4,081,614 $ 97,577 $ 4,975,294 CITY OF LA QUINTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2007 Business -Type Activities - Enterprise Funds Governmental Activities - Golf Internal Course Service Funds Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) $ (923,056) $ (16,500) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation 614,648 695,068 (Increase) decrease in accounts receivable (18,993) - (Increase) decrease in prepaid expense 50,724 (Increase) decrease in inventories 26,311 (Increase) decrease in due from other governments (226) (330) Increase (decrease) in accounts. payable (121,599) 14,689 Increase (decrease) in accrued liabilities (12,205) (605) Increase (decrease) in unearned revenue (13,854) Increase (decrease) in compensated absences - 4,168 Total Adjustments 474,082 763,714 Net Cash Provided (Used) by Operating Activities $ (448,974) $ 747,214 Non -Cash Investing, Capital, and Financing Activities: Capital assets contributed by other funds Increase of assets/liabilities resulting from the initiation of a capital lease See Notes to Financial Statement 30 168,308 $ 960,593 CITY OF LA QUINTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2007 Assets: Cash and investments Receivables: Taxes Interest Total Assets Liabilities: Deposits Total Liabilities See Notes to Financial Statement 31 Agency Funds $ 908,482 23,317 3,736 $ 935,535 $ 935,535 $ 935,535 THIS PAGE INTENTIONALLY LEFT BLANK 32 CITY OF LA QUINTA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1: Summary of Significant Accounting Policies a. Reporting Entity The City of La Quinta ("the City") was incorporated May 1, 1982, under the general laws of the State of California. In November 1996, the City became a charier City. The City operates under the Council — Manager form of government. The City provides many community services including public safety, highway and street maintenance, health and social services, cultural and leisure services, public improvements, planning and zoning services, and community development services. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. As required by generally accepted accounting principles, these financial statements present the government and its component units, which are entities for which the government is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization's governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. All of the City's component units are considered to be blended component units. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are reported with the interfund data of the primary government. The following organizations are considered to be component units of the City: La Quinta Redevelopment Agency The La Quinta Redevelopment Agency (Agency) has established two redevelopment project areas pursuant to the State of California Health & Safety Code, Section 33000 entitled "Community Redevelopment Law". On November 29, 1983 and May 16, 1989, the City Council approved and adopted the Redevelopment Plans for the La Quinta Redevelopment Project Areas No. 1 and No. 2, respectively. These plans provide for the elimination of blight and deterioration, which was found to exist in the project areas. Although the Agency is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Agency. Separate financial statements of the Agency can be obtained at City Hall. 33 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) City of La Quinta Public Financing Authority The La Quinta Public Financing Authority (Authority) was established pursuant to a Joint Exercise of Powers Agreement dated November 19, 1991, between the City of La Quinta and the La Quinta Redevelopment Agency. The purpose of the Authority is to provide financing necessary for the construction of various public improvements through the issuance of debt. Although the Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Authority, Separate financial statements of the Authority are not prepared. b. Government -Wide and Fund Financial Statements The basic financial statements of the City are composed of the following: • Government -wide financial statements • Fund financial statements • Notes to the financial statements Financial reporting is based upon all GASB pronouncements, as well as the FASB Statements and Interpretations, APB Opinions, and Accounting Research Bulletins that were issued on or before November 30, 1989, that do not conflict with or contradict GASB pronouncements. Government -wide Financial Statements The government -wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government's citizenry if that money is restricted to a particular program. Program revenuE:s are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not properly included among program revenues are reported instead as general revenues. Amounts paid to acquire capital assets are capitalized as assets in the government -wide financial statements, rather than reported as expenditure. Proceeds of long-term debt are recorded as a liability in the government -wide financial statements, rather than as other financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditure. 34 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Fund Financial Statements The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the governmental, proprietary, and fiduciary funds are presented after the government -wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial information for fiduciary funds and similar components units. Fiduciary funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation Government -wide Financial Statements The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental Funds In the fund financial statements, governmental funds are presented using the modified-accural 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 accured for the reporting period. The City uses a 30 day availability period. Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed delivered tax revenues are recognized as revenues in the period in which the underlying exchange transaction on which they are based takes place. Imposed 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. 35 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Non-current portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources," since they do not represent net current assets. Recognition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables. Noncurrent portions of other long-term receivables. are offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term deist are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. When both restricted and unrestricted resources are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources. Proprietary Funds The City's enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net assets. Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness of the proprietary funds are reported as a reduction of the related liability, rather than as expenditures. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Enterprise Funds are 36 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) charges to customers for sales and services. Operating expenses for Enterprises Funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Private -sector standards of accounting and financial reporting issued prior to December 1989, generally are followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private -sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private -sector guidance. Fiduciary Funds The City's fiduciary funds are agency funds. Agency funds are custodial in nature. Assets equal liabilities. Agency funds are presented using the accrual basis of accounting. d. Major Funds, Internal Service Funds and Fiduciary Fund Types The City's major governmental funds are as follows: General Fund — This fund is the primary fund of the City and is used to account for all revenue and expenditures of the City not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Manager, City Attorney, Finance, City Clerk, Community Development, Police Services, Public Works, Building and Safety, and Community Services. Low f Moderate Income Housino — Proiect Area No 2 Fund — This fund is used to account for the required 20% set aside of property tax increments that is legally restricted for increasing and improving housing for low and moderate income households. Capital Improvement Fund — This capital projects fund is used to account for the planning, design and construction of various capital projects throughout the City of La Quinta and the La Quinta Redevelopment Agency. 2004 Low I Mod Bond Fund — To account for the 2004 revenue bond proceeds that will be used to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and Project Area No. 2. Redeveio rnent Agency Project Area No. 1 - Debt Service Fund — This debt service fund is used to account for the accumulation of resources for the payment of debt service for bond principal and interest and trustee fees for Project Area No. 1. Redevelopment Agency Proiect Area No. 2 - Debt Service Fund — This Debt service fund is used to account for the accumulation of resources for the payment of debt service for bond principal, interest and trustee fees for Project Area No. 2. The City's major proprietary fund is as follows: Golf Course — To account for the activities of the SilverRock Golf Resort. 37 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Other fund types of the City are as follows: Internal Service Funds: Equipment Replacement Fund — This fund accounts for equipment and vehicle maintenance and replacement services provided to other departments on a cost -reimbursement basis. Information. Technology Fund — This fund is used to account for the acquisition for computer equipment, maintenance, and services to support information systems within, the City. Costs are reimbursed by the benefiting departments. Park Equipment and Facilities Fund — This fund is used to account for the purchase and replacement of City owned park facility infrastructure. Costs are reimbursed by the benefiting departments. Agency Funds: These funds account for assets held by the City as an agency for assessment district bondholders. e. Assets, Liabilities and Net Assets or Equity Investments - For Financial reporting purposes, investments are adjusted to their fair value. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments., Some investments are valued on an unamortized cost basis. For these investments, there is no material difference from fair value. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance. Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary fund's share in the cash and investment pool of the City of La Quinta. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the statement of cash flows, the entire balance of cash and investments on the combined balance sheet for the proprietary funds is considered cash and cash equivalents. Inventory Inventory is valued at cost using the first in / first out (FIFO) method. The City uses the consumption method of accounting for inventories. 38 City of La Quinta Notes to Financial Statements (Continued) Note 1: Summary of Significant Accounting Policies (Continued) Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. Capital Assets Capital assets (including infrastructure) are recorded at cost where historical records are available and at an estimated historical cost where no historical records exist. Contributed capital assets are valued at their estimated fair market value at the date of the contribution. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of three years or more. Capital Assets include public domain (infrastructure) consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains. Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government -wide financial statements and in the fund financial statements of the proprietary funds. Depreciation is charged as an expense against operations and accumulated depreciations is reported on the respective balance sheet. The following schedule summarizes capital asset useful lives: Buildings and improvements 10-30 years Equipment and furniture 3-20 years Vehicles 5-10 years Infrastructure 10-50 years Software 5-10 years Compensated Absences Sick time is vested on a percentage based on number of years employed at the City. Maximum accumulation of sick and vacation is 30 and 40 days, respectively. Upon termination or retirement, permanent employees are entitled to receive compensation at their current base salary for all unused vacation leave. If an employee terminates with a minimum of two years service, the employee is entitled to receive 25% of the value of his unused sick leave. The percentage increases by 25% for each five-year period until the employee is entitled to 75% of the value of his unused sick leave. This will occur upon the completion of ten years of continuous employment. Fund Balance In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. 39 City of La Quinta Notes to Financial Statements (Continued) II. STEWARDSHIP Note 2: Stewardship, Compliance and Accountability a. Budgetary Data General Budget Policies The City adopts an annual budget prepared on the modified accrual basis of accounting for its governmental funds and on the accrual basis of accounting for its proprietary funds. The City manager or his designee is authorized to transfer budgeted amounts between the accounts of any department or fund are approved by City Council. Additional appropriations in the amount of $254,404,081 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. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue, and similar governmental funds. Encumbrances outstanding at year-end are reported as a reservation of fund balance. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year end are completed. They do not constitute expenditures or estimated liabilities. Budget Basis of Accounting Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). b. At June 30, 2007, the following funds had deficit fund balances: Capital Projects Funds: Parks and Recreation (1,853,442) Civic Center (3,031,324) Library Development (2,025,431) Fire Facility (944,671) 40 City of La Quinta Notes to Financial Statements (Continued) Note 2: Note 3 Stewardship, Compliance and Accountability (Continued) c. Excess of expenditures over appropriations are as follows: Expenditures for the year ended June 30, 2007, exceeded the appropriations of the General Fund and major special revenue funds as follows: General Fund: Public Safety Building Community Services Park maintenance Public Works Construction management Budget Actual Variance $ 1,152,255 $ 1,276,504 $ (124,249) 1,249,685 1,306,407 369,729 1,150,296 III. DETAILED NOTES ON ALL FUNDS Cash and Investments (56,722) (780, 567) Cash and investments as of June 30, 2007, are classified in the accompanying financial statements as follows: Statement of Net Assets: Cash and investments Cash with fiscal agent Statement of Fiduciary Net Assets: Cash and investments Total cash and investments $ 150,501,241 61,492,315 908,482 $ 212,902,038 Cash and investments as of June 30, 2007, consist of the following: Cash on hand $ 500 Deposits with financial institutions (2,340,173) Investments 215,241,711 Total cash and investments $ 212,902,038 investments Authorized by the California Government Code and the Entity's Investment Policy The table below identifies the investment types that are authorized by the California Government Code and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. 41 City of La Quinta Notes to Financial Statements (Continued) Note 3: Cash and Investments (Continued) Authorized By Investment Types Investment *Maximum Authorized by State Law Policy Maturity *Maximum *Maximum Percentage of Investment In One Portfolio Issuer Local Agency Bonds No 5 years None None U.S. Treasury Obligations Yes 5 years None None U.S. Agency Securities Yes 2 years None $10 million Banker's Acceptances No 180 days 40% 30% Commercial Paper Yes 90 days 30% $3 million Negotiable Certificates of Deposit No 5 years 60% None Repurchase Agreements No 1 year None None Reverse Repurchase Agreements No 92 days 20% of base value None Medium -Term Notes Yes 2 years 15% $3 million Mutual Funds No N/A 20% 10% Money Market Mutual Funds Yes N/A 20% 10% Mortgage Pass -Through Securities No 5 years 20% None County Pooled Investment Funds No N/A None None Local Agency Investment Fund (LAIF) Yes N/A 25% $40 million JPA Pools (other investment pools) No N/A None None * Based on state law requirements or investment policy requirements, whichever is more restrictive Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Maximum Maximum Percentage Authorized Investment Type Maturity Allowed U.S. Treasury Obligations None None U.S. Agency Securities None None Banker's Acceptance 360 days None Commercial Paper 270 days None Money Market Mutual Funds N/A None Negotiable Certificates of Deposit 360 days None Disclosures „Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates, One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of short term and tong term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. 42 City of La Quinta Notes to Financial Statements (Continued) Note 3: Cash and Investments (Continued) Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Investment Type U.S. Treasury notes Federal agency securities: Federal Home Loan Mortgage Corp Federal Home Loan Bank Federal Farm Credit Bank Commercial paper State investment pool Held by bond trustee: Money market funds U.S. Treasury bills Total Total - Remaining Maturity (in Months) 3 Months 4 to 6 or Less Months 7 to 12 Months $ 40,857,602 $ 40,857,602 9,714,000 2,496,750 - 7,217,250 9,984,375 - - 9,984,375 9,904,188 4,999,500 4,904,688 31,762,935 28,828,815 - 2,934,120 51,526,296 51,526,296 _ 6,683,837 6,683,837 - - 54,808,478 7,911,300 46,897,178 $ 215,241,711 $ 143,304,100 $ 46,897,178 $ 25,040,433 Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's investment policy limits investments in commercial paper and federal agency securities to those rated "A" or higher by Standard and Poor's (S&P) or by Moody's. As of June 30, 2007, the City invested in,Federal Home Loan Mortgage Corp., Federal Home Loan Bank and Federal Farm Credit Bank which were all rated "AAA" by Moody's and by S&P. All securities were investment grade and were legal under State law. Investments in U.S. treasuries are not considered to have credit risk and, therefore, their credit quality is not disclosed. As of June 30, 2007, the City's investments in money market mutual funds are rated "Aaa" by Moody's and the City's investments in external investment pools are unrated. Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code, except for U.S. Agency Securities (limited to a face value of $10 million) and Commercial Paper and Medium -Term Notes (limited to a face value of $3 million). As of June 30, 2007, there were no investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments. 43 City of La Quinta Notes to Financial Statements (Continued) Note 3: Cash and Investments (Continued) Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. Investment in State Investment Pool The Entity is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relations to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. GASB Statement No. 31 The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Under California law, property taxes are assessed and collected by the counties up to 1 % of assessed value, plus other increases approved by the voters. The property taxes are recorded initially in a pool, and are then allocated to the cities based on complex formulas. Accordingly, the City of La Quinta accrues only those taxes that are received from the County within sixty days after year-end. Lien date January 1 Levy date July 1 Due dates November 1 and February 1 Collection dates December 10 and April 10 44 City of La Quinta Notes to Financial Statements (Continued) Note 4: Property Taxes The La Quinta Redevelopment Agency's primary source of revenue comes from property taxes. Property taxes allocated to the Agency are computed in the following manner: a) The assessed valuation of all property within the project area is determined on the date of adoption of the Redevelopment Plan. b) Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are allocated to the Agency; all taxes on the "frozen" assessed valuation of the property are allocated to the City and other districts. The Agency has no power to levy and collect taxes and any legislative property tax shift might reduce the amount of tax revenues that would otherwise be available to pay the principal of, and interest on, debt. Broadened property tax exemptions could have a similar effect. Conversely, an increase in the tax rate or assessed valuation, or any reduction or elimination of present exemptions would increase the amount of tax revenues that would be available to pay principal and interest on debt. Note 5: Notes Receivable In September 1994, the Redevelopment Agency sold certain real property to LINC Housing for $2,112,847. The property was used to construct single-family homes and rental units to increase the City's supply of low and moderate income housing. The note bears interest at 6% per annum and is due in full on June 15, 2029. In December 2000, the Redevelopment Agency entered into an agreement with LINC Housing to receive $9,500,000 as a reimbursement for Agency costs incurred for the construction of infrastructure related to the development of senior apartments. Payments are due to the Agency based on annual positive cash flow generated by the rental of the units. All unpaid principal and interest on the note are due fifty-five years after the completion of the project. Interest on the note accrues at 3% per annum. Other notes receivable Total notes receivable balance at June 30, 2007. 45 Outstanding Balance at June 30, 2007 $ 3,519,860 9,500,000 46,257 $ 13,066,117 City of La Quinta Notes to Financial Statements (Continued) Note 6: Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2007, is as follows: Beginning Ending Balance at Balance at July 1, 2006 Additions Deletions Transfers June 30, 2007 Governmental Activities: Capital assets, not being depreciated: Land $ 53,943,514 $ 21,270,271 $ 136,000 $ $ 75,077,785 Right of way 255,685,006 5,032,806 - - 260,717,812 Construction -in -progress 26,827,331 36,559,473 3,889,746 (16,834,914) 42,662,144 Total Capital Assets, Not Being Depreciated 336,455,851 62,862,550 4,025,746 (16,834,914) 378,457,741 Capital assets, being depreciated: Buildings and improvements 36,661,655 24,540 40,000 617,726 37,263,921 Equipment and furniture 1,907,787 180,801 - (42,493) 2,046,095 Vehicles 1,141,717 224,821 56,103 56,294 1,366,729 Infrastructure 113,346,331 3,994,635 2,475,797 15,328,742 130,193,911 Total Capital Assets, Being Depredated 153,057,490 4,424,797 2,571,900 15,960,269 170,870,656 Less accumulated depreciation: Buildings and improvements 7,979,275 1,267,263 16,000 - 9,230,538 Equipment and furniture 1,152,822 137,848 - 1,290,670 Vehicles 756,311 132,710 44,579 844,442 Infrastructure 58,833,149 3,367,099 2,050,865 - 60,149,383 Total Accumulated Depreciation 68,721 ,557 4,904,920 2,111,444 - 71,515,033 Total Capital Assets, Being Depredated, Net 84,335,933 (480,123) 460,456 15,960,269 99,355,623 Governmental Activities Capital Assets, Net $ 420,791 ,784 $ 62,382,427 $ 4,486,202 $ (874,645) " $ 477,813,364 (") Relates to transfers between Governmental activities and Business -Type activities. Depreciation expense was charged to the following functions in the Statement of Activities: General government $ 94,697 Public safety 572,017 Planning and development 19,040 Community services 758,873 Public works 3,460,293 Total governmental activities $ 4,904,920 City of La Quinta Notes to Financial Statements (Continued) Note 6: Capital Assets (Continued) Capital asset activity for business -type activities for the year ended June 30, 2007, is as follows: Business -Type Activities: Capital assets, not being depreciated Land Total Capital Assets, Not Being Depreciated Capital assets, being depreciated: Buildings and improvements Equipment and furniture Vehicles Software Total Capital Assets, Being Depreciated Less accumulated depreciation: Buildings and improvements Equipment and furniture Vehicles Software Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Governmental Activities Capita I Assets, Net Beginning Ending Balance at Balance at July 1, 2006 Additions Deletions Transfers June 30, 2007 $ 35,603,648 $ $ $ 854,499 $ 36,458.147 35,603 ,648 - 854,499 36,458,147 6,571 ,285 - 20,146 6,591,431 1,678,748 92,101 - 1,770,849 20,348 - - 20,348 20,255 - - - 20.255 8,290,636 92,101 20,146 8,402.883 337,009 232,719 - 569,728 379,321 373,809 753,130 6,104 4,069 10,173 6,076 4,051 10,127 728,510 614,648 7,562,126 (522,547) $ 43,1.65,775 $ (522,547) $ 1,343,158 20,146 7,059,726 $ 874,645 $ 43,517,873 (*) Relates to transfers between Governmental activities and Business -Type activities. Depreciation expense was charged to the following function in the Statement of Activities: Golf Course 47 $ 6'14,648 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long -Term Liabilities = Governmental Activities a. Changes in Long -Term Debt The following is a summary of changes in governmental long-term liabilities of the City for the fiscal year ended June 30, 2007: Beginning Adjusted Balance at Beginning Balance at Due within July 1, 2007 Adjustments" Balance Additions Deletions June 30, 2007 one year City Compensated ansences payable $ 608,266 $ $ 608,266 $ 806,305 $ 680,516 $ 734,055 $ 762,030 Due to the Coachella Valley Association of Governments 328,311 328,311 - 50,000 278,311 50,000 Developer Agreement Payable 776,030 776,030 132,491 643,539 143,753 Redevelopment Agency: RDA Project Area No. 1: Tax allocation bonds 138,985,520 2,799,480 141,785,000 2,640,000 139,145,000 2,795,000 Pass-through agreements payable: Coachella Valley Unified School District 5,186,627 - 5,186,627 755,449 4,431,178 770,558 RDA Project Area No. 2: Tax allocation bonds 6,130,000 6,130,000 105,000 6,025,000 110,000 Due to County of Riverside 1,850,000 1,850,000 100,000 1,750,000 150,000 Financing Authority: Revenue bonds 93,370,392 2,139,608 95,510,000 1,865,000 93,645,000 1,930,000 Total $ 247,235,146 $ 4,939,088 $ 252,174,234 $ 806,305 $ 6,328,456 246,652,083 $ 6,711,341 Less: Unamortized premiums/discounts (877,230) Net Long -Term Debt $ 245,774,853 Adjustments were made to remove the unamortized cost of issuance from the long-term debt balance. For the governmental activities, accrued employee benefits are generally liquidated by the general fund. b. A description of individual issues of debt (excluding defeased bonds) outstanding as of June 30, 2007, is as follows: Due to the Coachella Vallev Association of the Governments The City of La Quinta entered into an Interchange Reimbursement Agreement with the Coachella Valley Association of Governments (CVAG) to finance capital improvements at the Washington Street 1-10 interchange. The City has agreed to reimburse CVAG $828,311 over a period of seventeen years beginning July 31, 1996. The annual payments to CVAG range from $28,311 to $50,000. At June 30, 2007, the balance payable was $278,311. M City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) The minimum annual requirements to amortize the payable to Coachella Valley Association of Governments as of June 30, 2007, are as follows: Principal 2007-2008 $ 50,000 2008-2009 50,000 2009-2010 50,000 2010-2011 50,000 2011 -2012 50,000 2012-2017 28,311 Totals $ 278,311 Developer Agreement Payable In December 1998, the City entered into a tax sharing agreement with Stamko Development Co. in relation to the development of an auto mall located within the City. For a period of ten years, the agreement requires the City to make quarterly payments to the developer in the amount of 33% of the sales and use tax revenues generated by the site up to a maximum amount of $122,250 in any twelve month period. Additionally, if the sales and use tax revenues generated exceed $530,000, adjusted annually by the CPI index, the City is required to pay $76,204 for that year for a maximum of ten years, based upon a $500,000 note at an interest rate of 8.5%. For the year ended June 30, 2007, the City paid the developer $122,250 in sales tax reimbursement and $76,204 since the sales tax generated exceeded the required amount. The balance at June 30, 2007, is $643,539. The minimum annual requirements to amortize the developer agreement payable as of June 30, 2007, are as follows: Totals $ 643,539 $ 150,277 Tax Allocation Bonds As of June 30, 2007, the following issuances of Tax Allocation Bonds were outstanding: Series 1994 Proiect Area No. 1 Tax Allocation Refunding Bonds, Series 1994, were issued by the Agency on May 5, 1994, in the amount of $26,665,000 to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1989 and 1990. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. 49 Principal Interest 2007-2008 $ 143,753 $ 54,701 2008-2009 155,972 42,482 2009-2010 169,230 29,224 2010-2011 174,584 23,870 Totals $ 643,539 $ 150,277 Tax Allocation Bonds As of June 30, 2007, the following issuances of Tax Allocation Bonds were outstanding: Series 1994 Proiect Area No. 1 Tax Allocation Refunding Bonds, Series 1994, were issued by the Agency on May 5, 1994, in the amount of $26,665,000 to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1989 and 1990. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. 49 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) Interest rates on the bonds range from 3.80% to 8% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest on and principal of the bonds are payable solely from pledged tax increment revenues. The bonds are not just subject to redemption prior to maturity. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was Used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2007, is $12,525,000. The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: 2007-2008 2008-2009 2009-2010 2010-2011 2011 -2012 2012-2017 Series 1998 Proiect Area No. 1 Principal $ 1,740,000 1,865,000 2,000,000 2,145,000 2,305,000 2,470,000 Interest $ 850,815 719,233 578,160 426,868 264,443 90,155 $ 12,525,000 $ 2,929,674 Tax allocation refunding bonds, Series 1998, in the amount of $15,760,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1991. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. Interest rates on the bonds range from 5.20% to 5.25% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 1. Term Bonds maturing September 1, 2028, are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2013, and on each September 1 thereafter, through September 1, 2028, at a price equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2007, is $15,760,000. 50 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: Series 1998, Proiect Area No. 2 Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1992. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 2. Interest rates on the bonds range from 3.75% to 5.28% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 2. Term Bonds maturing September 1, 2028 and September 1, 2033, are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2009 and September 1, 2019, respectively, and on each September 1 thereafter at a price equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2007, is $6,025,000. The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: Principal Interest 2007-2008 $ - $ 819,520 2008-2009 - 819,520 2009-2010 - 819,520 2010-2011 - 819,520 2011 -2012 - 819,520 2012-2017 2,835,000 3,812,250 2017-2022 4,455,000 2,805,270 2022-2027 5,740,000 1,485,900 2027-2032 2,730,000 143,780 Totals $ 15,760,000 $ 12,344,800 Series 1998, Proiect Area No. 2 Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1992. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 2. Interest rates on the bonds range from 3.75% to 5.28% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 2. Term Bonds maturing September 1, 2028 and September 1, 2033, are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2009 and September 1, 2019, respectively, and on each September 1 thereafter at a price equal to the principal amount thereof plus accrued interest. There are certain limitations regarding the issuance of parity debt as further described in the official statement. A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2007, is $6,025,000. The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: Totals $ 6,025,000 $ 5,194,482 51 Principal Interest 2007-2008 $ 110,000 $ 310,135 2008-2009 115,000 305,184 2009-2010 120,000 299,550 2010-2011 125,000 293,272 2011-2012 130,000 286,738 2012-2017 765,000 1,322,859 2017-2022 975,000 1,100,075 2022-2027 1,270,000 807,188 2027-2032 1,635,000 428,006 2032-2037 780,000 41,475 Totals $ 6,025,000 $ 5,194,482 51 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) Series 2001 Promect 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, 2007, is $48,000,000 with an unamortized discount of $419,452. The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: Series 2002, Project Area No. 1 On June 12, 2002, the Agency issued tax allocation bonds in the amount of $40,000,000 to finance capital projects benefiting the La Quinta redevelopment Project Area No. 1. The 2002 tax allocation bonds were issued at a discount of $360,000 and issuance costs of $1,250,096. The bonds consist of $6,355,000 of serial bonds and $33,645,000 of term bonds. Interest Rates on serial bonds range from 1.75% and 4.00% and are payable semi-annually on March 1 and September 1 of each year until maturity. Term bonds accrue interest at 5.00% and 5.125% and mature on September 1, 2022 and September 1, 2023. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2007, is $37,675,000 with an unamortixed discount of $368,432. 52 Principal Interest 2007-2008 $ - $ 2,430,720 2008-2009 - 2,430,720 2009-2010 2,430,720 2010-2011 2,430,720 2011-2012 - 2,430,720 2012-2017 6,755,000 11,498,975 2017-2022 10,525,000 9,200,475 2022-2027 13,455,000 6,186,173 2027-2032 17,265,000 2,288,753 Totals $ 48,000,000 $ 41,327,976 Series 2002, Project Area No. 1 On June 12, 2002, the Agency issued tax allocation bonds in the amount of $40,000,000 to finance capital projects benefiting the La Quinta redevelopment Project Area No. 1. The 2002 tax allocation bonds were issued at a discount of $360,000 and issuance costs of $1,250,096. The bonds consist of $6,355,000 of serial bonds and $33,645,000 of term bonds. Interest Rates on serial bonds range from 1.75% and 4.00% and are payable semi-annually on March 1 and September 1 of each year until maturity. Term bonds accrue interest at 5.00% and 5.125% and mature on September 1, 2022 and September 1, 2023. The interest and principal on the bonds are payable from pledged tax increment revenues. A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of outstanding bonds at June 30, 2007, is $37,675,000 with an unamortixed discount of $368,432. 52 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: Totals $ 37,675,000 $ 34,446,819 Series 2003, Project Area No. 1 On September 1, 2003, the Agency issued tax allocation bonds in the amount of $26,400,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2003 tax allocation bonds were issued at a discount of $277,200 and issuance costs of $629,191. Interest is payable semi-annually on March 1 and September 1 of each year, commencing March 1, 2004. Interest payments range from 4.24% to 6.44% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2013 through September 1, 2032, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2004, September 1, 2014, and September 1, 2024, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. The principal balance of outstanding bonds at June 30, 2007, is $25,185,000 with an unamortized discount of $241,180. The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: Principal Interest 2007-2008 $ 615,000 $ 1,849,616 2008-2009 635,000 1,829,914 2009-2010 660,000 1,807,556 2010-2011 680,000 1,782,926 2011 -2012 705,000 1,756,429 2012-2017 3,755,000 8,287,856 2017-2022 4,710,000 7,245,156 2022-2027 6,025,000 5,899,091 2027-2032 12,385,000 3,795,959 2032-2037 7,505,000 192,316 Totals $ 37,675,000 $ 34,446,819 Series 2003, Project Area No. 1 On September 1, 2003, the Agency issued tax allocation bonds in the amount of $26,400,000 to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The 2003 tax allocation bonds were issued at a discount of $277,200 and issuance costs of $629,191. Interest is payable semi-annually on March 1 and September 1 of each year, commencing March 1, 2004. Interest payments range from 4.24% to 6.44% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2013 through September 1, 2032, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2004, September 1, 2014, and September 1, 2024, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. The principal balance of outstanding bonds at June 30, 2007, is $25,185,000 with an unamortized discount of $241,180. The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: Totals $ 25,985,000 $ 25,995,146 53 Principal Interest 2007-2008 $ 440,000 $ 1,549,882 2008-2009 460,000 1,530,802 2009-2010 475,000 1,508,106 2010-2011 505,000 1,481,401 2011 -2012 530,000 1,453,198 2012-2017 3,130,000 6,763,557 2017-2022 4,220,000 5,636,456 2022-2027 5,730,000 4,085,165 2027-2032 7,815,000 1,926,043 2032-2037 1,880,000 60,536 Totals $ 25,985,000 $ 25,995,146 53 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) Pass-through Agreements Payable - Coachella Valley Unified School District An agreement was entered into in 1991 between the Agency, the City of La Quinta and the Coachella Valley Unified School District (District), which provides for the payment to the District a portion of tax increment revenue associated with properties within District confines. Such payments are subordinate to other indebtedness of the Agency incurred in furtherance of the Redevelopment Plan for Project Area No. 1. This tax increment is paid to the District over a payment schedule through August 1, 2012, in amounts ranging from $421,168 to $834,076, for a total amount of $15,284,042. Tax increment payments outstanding at June 30, 2007, totaled $4,431,179. The District agrees to use such funds to provide classroom and other construction costs, site acquisition, school busses, and expansion or rehabilitation of current facilities. The minimum annual requirements to amortize payable to Coachella Valley Unified School District as of June 30, 2007, are as follows: Totals $ 4,431,178 Due to County of Riverside - Pro'ect Area No. 2 Based on an agreement dated July 5, 1989, between the Agency and the County of Riverside, until the tax increment reaches $5,00,000 annually in Project Area No. 2, the Agency will pay to the County 50% of the County portion of tax increment. At the County's option, the County's pass-through portion can be retained by the Agency to finance new County facilities or land costs that benefit the County and serve the La Quinta population. Per the agreement, the Agency must repay all amounts withheld from the County. The tax increment is to be paid to the County in amounts ranging from $100,000 to $250,000 over a payment schedule through June 30, 2015, Interest does not accrue on this obligation. The balance at June 30, 2007, Is $1,750,000. The minimum annual requirements to amortize amounts due to the County of Riverside as of June 30, 2007, are as follows: Principal 2007-2008 $ 770,558 2008-2009 785,968 2009-2010 801,688 2010-2011 817,722 2011-2012 834,076 2012-2017 421,166 Totals $ 4,431,178 Due to County of Riverside - Pro'ect Area No. 2 Based on an agreement dated July 5, 1989, between the Agency and the County of Riverside, until the tax increment reaches $5,00,000 annually in Project Area No. 2, the Agency will pay to the County 50% of the County portion of tax increment. At the County's option, the County's pass-through portion can be retained by the Agency to finance new County facilities or land costs that benefit the County and serve the La Quinta population. Per the agreement, the Agency must repay all amounts withheld from the County. The tax increment is to be paid to the County in amounts ranging from $100,000 to $250,000 over a payment schedule through June 30, 2015, Interest does not accrue on this obligation. The balance at June 30, 2007, Is $1,750,000. The minimum annual requirements to amortize amounts due to the County of Riverside as of June 30, 2007, are as follows: Totals $ 1,750,000 54 Principal 2007-2008 $ 150,000 2008-2009 200,000 2009-2010 200,000 2010-2011 200,000 2011-2012 250,000 2012-2017 250,000 2017-2022 250,000 2022-2027 250,000 Totals $ 1,750,000 54 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) 1996 Lease Revenue Refunding Bonds On November 15, 1996, the Authority issued $8,790,000 of 1996 Lease Revenue Refunding Bonds to defease the remaining 1991 Local Agency Revenue Bonds in the amount of $8,200,000 and to provide funds for construction of remaining improvements to the La Quinta Civic Center site. The bonds consist of $3,630,000 of serial bonds and $5,150,000 of term bonds. The serial bonds will accrue interest at rates between 3.70% and 5.30% and principal amounts mature between October 1, 1997 and October 1, 2008, in amounts ranging from $285,000 to $380,000. The term bonds accrue interest at a rate of 5.55% and mature on October 1, 2018. A surety agreement has been purchased to satisfy the bond reserve requirement. There are certain limitations regarding the issuance of parity debt as further described in the official statement. The amount of principal outstanding at June 30, 2007, is $5,900,000. The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: Totals $ 5,900,000 $ 2,171,880 2004 Series A Local Agency Revenue Bonds On June 29, 2004, the La Quinta Financing Authority issued revenue bonds in the amount of $90,000,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2 and to advance refund the Agency's Redevelopment Project Areas No. 1 and 2, 1995 Housing Tax Allocation Bonds. The 2,004 local agency revenue bonds were issued with issuance costs of $2,600,229 and a premium of $476,496. Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2005. Interest payments range from 3% to 5.25% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2024, September 1, 2029 and September 1, 2034, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2017, September 1, 2025, and September 1, 2030, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. 55 Principal Interest 2007-2008 $ 360,000 $ 315,880 2008-2009 380,000 296,450 2009-2010 400,000 275,280 2010-2011 420,000 252,525 2011 -2012 445,000 228,521 2012-2017 2,630,000 732,045 2017-2022 1,265,000 71,179 Totals $ 5,900,000 $ 2,171,880 2004 Series A Local Agency Revenue Bonds On June 29, 2004, the La Quinta Financing Authority issued revenue bonds in the amount of $90,000,000 to finance projects benefiting low and moderate income housing in La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2 and to advance refund the Agency's Redevelopment Project Areas No. 1 and 2, 1995 Housing Tax Allocation Bonds. The 2,004 local agency revenue bonds were issued with issuance costs of $2,600,229 and a premium of $476,496. Interest is payable semi-annually on March 1 and September 1 of each year, commencing September 1, 2005. Interest payments range from 3% to 5.25% per annum. The interest and principal on the bonds are payable from pledged tax increment revenues. Term bonds maturing on September 1, 2024, September 1, 2029 and September 1, 2034, are subject to mandatory redemption from minimum sinking fund payments, in part by lot, on September 1, 2017, September 1, 2025, and September 1, 2030, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. 55 City of La Quinta Notes to Financial Statements (Continued) Note 7: Changes in Long -Term Liabilities — Governmental Activities (Continued) 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, 2007, is $87,745,000 with an unamortized premium of $151,834. The minimum annual requirements to amortize the bond payable as of June 30, 2007, are as follows: 2007-2008 2008-2009 2009-2010 2010-2011 2011 -2012 2012-2017 2017-2022 2022-2027 2027-2032 2032-2037 Principal $ 1,570,000 1,615,000 1,670,000 1,740,000 1,805,000 10,405,000 13,385,000 17,280,000 22,115,000 16,160,000 Interest $ 4,356,806 4,304,994 4,243,331 4,175,131 4,099,719 19,076,413 16,001,125 12,014,144 7,061,797 1,269,975 Totals 1 87,745,000 $ 76,603,435 Note 8: Changes in Long -Term Liabilities — Business -type Activities Changes in business -type long-term liabilities for the year ended June 30, 2007, were as follows: Balance at Balance at Due within Golf Course: July 1, 2006 Additions Deletions Jules, 2007 one year Capital leases payable $ 1,090,602 $ 164,308 $ 429,062 $ 825,848 $ 371,444 The City of La Quints entered into several capital lease agreements for the operation of the SilverRock Golf Resort, These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. 56 City of La Quinta Notes to Financial Statements (Continued) Note 8: Changes in Long -Term Liabilities — Business -type Activities (Continued) Obligations under capital leases are as follows: National City Golf Finance The present value of the minimum lease payment on golf carts was capitalized at $211,035 using an incremental borrowing interest rate of 6.5% at the inception of the lease. The lease is payable in 36 monthly installments of $6,468, which began May 30, 2005. $ 62,794 The present value of the minimum lease payment on golf equipment was capitalized at $273,642 using an incremental borrowing interest rate of 9.68% at the inception of the lease. The lease is payable in 60 monthly installments of $5,771, which began May 1, 2005. 153,232 The present value of the minimum lease payment on golf equipment was capitalized at $543,118 using an incremental borrowing interest rate of 9.0% at the inception of the lease. The lease is payable in 60 monthly installments of $9,318, which began January 1, 2005. 275,466 The present value of the minimum lease payment on golf equipment was capitalized at $50,911 using an incremental borrowing interest rate of 8.0% at the inception of the lease. The lease is payable in 48 monthly installments of $1,243, which began November 28, 2004. 18,803 The present value of the minimum lease payment on golf carts was capitalized at $26,674 using an incremental borrowing interest rate of 7.0% at the inception of the lease. The lease is payable in 36 monthly installments of $824, which began February 1, 2006. 14,771 The present value of the minimum lease payment on lawn equipment was capitalized at $90,554 using an incremental borrowing interest rate of 6.99% at the inception of the lease. The lease is payable in 36 monthly installments of $2,796, which began October 1, 2006. 69,658 The present value of the minimum lease payment on golf equipment was capitalized at $21,569 using an incremental borrowing interest rate of 7.5% at the inception of the lease. The lease is payable in 48 monthly installments of $522, which began December 1, 2005. 13,793 VGM Financial Services The present value of the minimum lease payment on software was capitalized at $63,525 using an incremental borrowing interest rate of 10.74% at the inception of the lease. The lease is payable in 60 monthly installments of $1,373, which began April 1, 2005. 35,982 TFG-California, L.P. The present value of the minimum lease payment on a GPS system was capitalized at $284,650 using an incremental borrowing interest rate of 7.3% at the inception of the lease. The lease is payable in 48 monthly installments of $6,840, which began November 11, 2005. 181,349 Total capital leases payable as of June 30, 2007 $ 825,848 57 City of La Quinta Notes to Financial Statements (Continued) Note 8: Note 9 Note 10: Changes in Long -Term Liabilities — Business -type Activities (Continued) The following schedule summarizes the debt to maturity payments for capital leases: Principal Interest 2007-2008 $ 371,444 $ 38,085 2008-2009 312,570 18,217 2009-2010 141,834 2,288 Total $ 825,848 $ 58,590 Debt Without Governmental Commitment The City of La Quinta sold Improvement Bonds issued pursuant to the California State Improvement Act of 1915. The Bonds are payable from the annual installments collected on the regular property tax bills sent to owners of property having unpaid assessments levied against land benefited by the projects. The bonds are neither general obligations of the City nor any other political subdivision and the full faith and credit of the City is not pledged for repayment thereof, therefore, they are not included in the long-term liabilitys in the accompanying financial statements. The City is not liable for repayment of the debt, but is only acting as agent for the property owners .in collecting the assessments and forwarding the collections to bondholders. The following is a summary of Improvement Bonds outstanding at June 30, 2007: Amount Outstanding at Proceeds Maturity Date Interest Rate June 30, 2007 Assessment District No. 92-1 1,880,891 Assessment District No. 97-1 705,262 Assessment District No. 2001-1 2,285,000 Conduit Debt Financing 9/2/2008 5.00% - 5.40% 240,000 9/2/2018 4.10% - 5.20% 490,000 9/2/2015 5.00% - 6.60% 1,210,000 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, 2007, are $2,910,000. The bond is secured solely by the credit facility, Fannie Mae, and by a pledge of the trust estate comprised of bond proceeds and property. The bond is not an obligation of the issue, but payable solely from the security. 58 City of La Quinta Notes to Financial Statements (Continued) Note 11: Interfund Receivables and Payables The composition of current interfund receivable and payable as of June 30, 2007, are as follows: DUE TO OTHER FUNDS 2004 Low/Mod Non -Major Bond Governmental TOTAL DUE FROM OTHER FUNDS General Fund $ - $ 18,780 $ 18,780 RDA PA #2 Debt Service 6,186,049 - 6,186,049 Total: $ 6,186,049 $ 18,780 $ 6,204,829 The due to the General Fund and RDA PA#2 Debt Service Fund were the results of routine interfund transactions not cleared prior to year-end. The composition of non-current interfund receivable and payable as of June 30, 2007, are as follows: ADVANCES FROM OTHER FUNDS RDA PA #1 RDA PA #2 Non -Major Debt Service Debt Service Golf Course Governmental TOTAL ADVANCES TO OTHER FUNDS General Fund $ 12,000,001 $ 10,100,000 $ 2,466,003 $ 3,031,325 $ 27,597,329 Non -Major Governmental - - - 4,823,543 4,823,543 Total: $ 12,000,001 $ 10,100,000 $ 2,466,003 $ 7,854,868 $ 32,420,872 a) As of June 30, 2007, the amount due to the General Fund from RDA PA No. 1 Debt Service was $12,000,001. This consists of an outstanding advance of $6,000,001 loaned to the Redevelopment Agency with repayment beginning in 2030/31 and accrued interest at 10% per annum. The other outstanding advance of $6,000,000 loaned to the Redevelopment Agency requires repayments beginning in 2030/31 and accrues interest at 7% per annum. b) As of June 30, 2007, the amount due to the General Fund from RDA PA No. 2 Debt Serviced was $10,100,000. The advance loaned to the Redevelopment Agency with repayment beginning in 2035/36 and accrued interest at 10% per annum. c) As of June 30, 2007, the General Fund has advanced to the Golf Course fund $2,466,003. The advances accrue interest at the City's investment pool rate and are to be repaid by the golf course out of future profits. d) In July 2002, an advance of $4,167,912 was made to provide funding for the development of the publicly owned improvements to the La Quinta Community Park. The advance accrues interest at the earnings rate of the City's investment pool fund. As of June 30, 2007, the remaining balance of the advance for the La Quinta Community Park is $1,853,442. e) In April 2005, another advance of $2,490,273 was made to provide funding for the construction of the public library. The advance accrues interest at the earnings rate of the City's investment pool fund. The remaining balance of this advance at June 30, 2007, is $2,025,431. f) In February 2003, the Redevelopment Agency Capital Projects — PA No. 2 Fund advanced $1,350,131 to the Fire Facility Fund to provide funding for the development of the City's north fire station. The advance accrues interest equal to the earning rate of the City's Investment Pool Funds and is to be repaid by the year 2039. As of June 30, 2007, the remaining balance of the advances is $944,671. 59 City of La Quinta Notes to Financial Statements (Continued) Note 11: Interfund Receivables and Payables (Continued) g) In September 2006, an advance up to $9,615,094 for the City Hall expansion from the General Fund to the Civic Center Developer Impact Fee Fund was approved. As of June 30, 2007 the Civic Center expansion was under construction and the amount of the advance was $3,031,324 outstanding. The advance accrues interest that would have been earned by the Local Agency Investment Fund. Note 12: Interfund Transfers a) $4,448,138 was transferred from the Low/Moderate Housing Project Area No. 1 Fund to the RDA Project Area No.1 Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. b) $1,173,210 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the Capital Improvement Fund to pay for various capital projects. $1,954,560 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the RDA Project Area No. 2 Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. C) $4,068,439 and $1,954,560 was transferred from the RDA Project Area No. 1 and 2 Debt Service Funds, respectively, to the Financing Authority Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. d) $4,336,775 was transferred to the Capital Improvement Fund from the RDA Capital Projects — PA No. 1 Fund to fund various capital projects throughout the City. e) $16,564,295 was transferred to the Capital Improvement Fund from the RDA 2004 Low/Mod Bond Fund for various capital projects funded by bond proceeds. f) The Transportation Fund transferred to the Capital Improvement Fund $1,597,775 to fund various transportation related capital projects fund. . g) $1,437,506 was transferred to the Capital Improvement Fund from the General Fund to fund various capital projects throughout the City, .E TRANSFERS OUT Low/Moderate Income Housing RDA PA #1 RDA PA #2 2004 Non -Major General Fund PA #2 Debt Service Debt Service Low/Mod Bond Governmental TOTAL TRANSFER5IN General Fund RDA PA #1 Debt Service $ $ $ - $ - $ - $ 308,686 $ 308,686 RDA PA #2 Debt Service - 1,954,560 - - - - 4,448,138 4;448,138 Capital Improvement 1,437,506 1,173,210 - - 16,564,295 - 13,035,999 1,954,560 32,211,010 Low/Moderate Income Housing PA #2 - - Non -Major Governmental 2,000 - - 4,068,349 1,954,560 - 16„000,000 16,000,000 Total: $ 1,439,505 $ 3.127,770 $ 4,068,349 $ 1,954,560 - $ 16,5 44,295 7273 $ 33,800,096 6,032,182 $ 60,954,576 The following describes the major transfers in and transfers out included in the financial statements: a) $4,448,138 was transferred from the Low/Moderate Housing Project Area No. 1 Fund to the RDA Project Area No.1 Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. b) $1,173,210 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the Capital Improvement Fund to pay for various capital projects. $1,954,560 was transferred from the Low/Moderate Housing Project Area No. 2 Fund to the RDA Project Area No. 2 Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. C) $4,068,439 and $1,954,560 was transferred from the RDA Project Area No. 1 and 2 Debt Service Funds, respectively, to the Financing Authority Debt Service Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. d) $4,336,775 was transferred to the Capital Improvement Fund from the RDA Capital Projects — PA No. 1 Fund to fund various capital projects throughout the City. e) $16,564,295 was transferred to the Capital Improvement Fund from the RDA 2004 Low/Mod Bond Fund for various capital projects funded by bond proceeds. f) The Transportation Fund transferred to the Capital Improvement Fund $1,597,775 to fund various transportation related capital projects fund. . g) $1,437,506 was transferred to the Capital Improvement Fund from the General Fund to fund various capital projects throughout the City, .E City of La Quinta Notes to Financial Statements (Continued) IV. OTHER INFORMATION Note 13: Defined Benefit Pension Plan Plan Description The City of La Quinta contributes to the California Public Employees Retirement System (PERS), a cost sharing multiple -employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost -of -living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of PERS' annual financial report may be obtained from their executive office: 400 P Street, Sacramento, CA 95814. Funding Policy Participants are required to contribute 8% of their annual covered salary. The City makes the contributions required of City employees on their behalf and for their account. The City is required to contribute at an actuarially determined rate; the current rate is 12.856% 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 2007, the City's annual pension cost of $763,527 for PERS was equal to the City's required and actual contributions. Three -Year Trend Information for PERS Required Percentage Fiscal Year Contributions Contributed 6/30/2005 $ 336,348 100% 6/30/2006 400,631 100% 6/30/2007 763,527 100% For fiscal years 2003-2007, the City of La Quinta participated in risk pooling. Risk pooling consists of combining assets and liabilities across employers to produce large groups where the impact of a catastrophic demographic event is shared among all employers of the same risk pool. Participation in risk pools is mandatory for all rate plans with less than 100 active members. Mandated participation in risk pools was initially based on the active membership of each rate plan as of June 30, 2003. The implementation of risk pools was done in a way that minimizes the impact on employer contribution rates. The first year in risk pools, the employer contribution rates are almost identical to what the rates would have been outside pools. Future rates will be based on the experience of each pool. Pooling will reduce the volatility of future employer rates. Mandated participation will occur on an annual basis. If on any valuation date, starting with the June 30, 2003, valuation, a rate plan has less than 100 active members, it will be mandated in one of the risk pools effective on that valuation date. 61 City of La Quinta Notes to Financial Statements (Continued) Note 14: Self Insurance The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 114 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other 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. Self -Insurance Programs of the Authority General Liability Each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year). 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. Claims are pooled separately between police and non -police. Costs are spread to members as follows: the first $30,000 of each occurrence is charged directly to the member's primary deposit; costs from $30,000 to $750,000 and the loss development reserves associated with losses up to $750,000 are pooled based on the member's share of losses under $30,000. Losses from $750,000 to $10,000,000 $18,000,000 to $23,000,000, and $45,000,000 to $50,000,000 and the associated loss development reserves are pooled based on payroll. Costs of covered claims from $10,000,000 to $18,000,000 and $23,000,000 to $45,000,000 are currently paid by excess insurance. Costs of covered claims for subsidence losses from $15,000,000 to $25,000,000 are paid by excess insurance. The protection for each member is $50,000,000 per occurrence and $50,000,000 annual aggregate. Administrative expenses are paid from the Authority's investment earnings. Workers Compensation The City of La Quinta also participates in the workers' compensation pool administered by the Authority. Each member 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. Claims are pooled separately between public safety and non-public safety. Each member has a retention level of $50,000 for each loss and this is charged directly to the member's primary deposit. Losses from $50,000 to $100,000 and the loss development reserve associated with losses up to $100,000 are pooled based on the member's share of losses under $50,000. Losses from $100,000 to $2,000,000 and loss development reserves associated with those losses are pooled based on payroll. Losses from $2,000,000 to $5,000,000 are pooled with California State Association of Counties — Excess Insurance Authority members. Costs from $2,000,000 to $200,000,000 are transferred to reinsurance carriers. Costs in excess of $200,000,000 are pooled among the Members based on payroll. Protection is provided per statutory liability under California Workers' Compensation law. Administrative expenses are paid from the Authority's investment earnings. In addition to coverage with the Authority, the City also carries additional coverage for earthquake & flood and real and personal property with Pacific Insurance Co, Coverage is $5,000,000 with a $25,000 deductible. The total insured value of real and personal property, is $27,076,000. An excess earthquake & flood and real and personal property policy is held with Endurance American Specialty Insurance Company. Coverage is $2,500,000 in excess of the $5,000,000 covered by the primary policy. 62 City of La Quinta Notes to Financial Statements (Continued) Note 14: Self Insurance (Continued) Employee dishonesty, forgery and computer fraud insurance is held with Hartford Insurance Company. Coverage is $1,000,000 with a $5,000 deductible. All risk property insurance, including auto physical damage is held with Lexington Insurance Company. Coverage is up to $10,000,000 per occurrence with various sublimits depending on the property. The total insured value of real and personal property is $40,878,900. During the past three fiscal years none of the above programs of protection have had settlements or judgments that exceed pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. Note 15: 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. Note 16: Construction Commitments The following material construction commitments existed at June 30, 2007: 63 Expenditures to Contract date as of June Remaining Project Name Amount 30, 2007 Commitments Silver Rock Resort $ 97,817,803 $ 85,025,951 $ 12,791,852 Vista Dunes Mobile Home Park 35,201,778 23,180,407 12,021,371 Dune Palms Road and Ave 48 Housing 30,153,435 2,158,488 27,994,947 Phase 2 - Jefferson Street Improvement 22,118,525 20,912,507 1,206,018 City Hall Expansion 13,308,000 6,410,338 6,697,662 Museum Expansion 3,330,500 510,719 2,819,781 Highway 111 - Adams to Jefferson 2,714,986 342,889 2,372,097 Ave 52 Bridge Improvement 2,348,876 186,074 2,162,802 Silverrock Resort Phase II Golf Course 2,106,000 421,943 1,684,057 Adams Street Bridge Improvements 1,526,000 5,709 1,520,291 Ave 52 & Ave 54 Median Island Landscaping 1,306,142 18,969 1,287,173 Sound Attenuation Hall 1,202,704 43,724 1,158,980 63 City of La Quinta Notes to Financial Statements (Continued) Note 17: Unreserved Fund Balances Unreserved fund balances at June 30, 2007, consisted of the following: The City entered into an agreement with Landmark Golf Management LLC (operator) to manage the golf operations at the city -owned SilverRock Gold Course. The Agreement entered into on April 6, 2004, sets forth a five year term commencing upon the completion of the golf course. On January 14, 2005, the golf course was deemed to be complete and management was turned over to the operator. The contract provides that the operator will manage the day to day operations, hire employees, provide golf pro shop and food services, manage all marketing and promotional activities, prepare the annual budget report for Council consideration, and manage accounting and payroll functions. In addition to the annual payment for management services, the City has advanced the operator $250,000 to pay for golf course expenses. Twice a month the operator submits a request for reimbursement to the City to replenish the City's advance. In addition, the agreement sets forth the establishment of a capital reserve fund of 2% of green fees. For the fiscal year ending June 30, 2007, the Golf Course had an operating loss before contributions and transfers of $977,608. Note 19: Reimbursement Agreements The City entered into a transient occupancy tax (TOT) revenue reimbursement agreement on August 31, 2006, with Village Resort LLC, the owner of an Embassy Suites Hotel. The hotel owner is required to remit on a monthly basis any TOT collected to the City, thirty days after each month. Under terms of the agreement, the City shall make quarterly payments of 40% of any TOT generated from the Motel in an amount not to exceed $1,000,000 over a five year period. The agreement terminates when either the $1,000,000 limit is reached or in 5 years whichever comes first. In addition, the hotel may not assign or transfer this agreement without the City's prior written consent, which it may withhold at its discretion. The hotel opened in November 2006. As of June 30, 2007, the City made $118,851 in reimbursement payments to the owner leaving an outstanding balance of $881,149. 64 Low/Moderate Other Income 2004 Low/ Mod RDA PA #1 RDA PA #2 Governmental General Fund Housing PA #2 Bond Debt Service Debt Service Funds Total Designated for: Emergency reserve $ 18,722,524 $ - $ $ - $ - $ - $ 18,722,524 Cash flows 3,470,309 - - - 3,470,309 Capital improvements 482,718 - - - - 482,718 Educational purposes 500,000 - - 500,000 Economic development 2,327,430 - - 2,327,430 Encumbrances/carryover appropriations 1,477,670 - - 1,477,670 Operations/projects/ transfers 29,271,236 - - 29,271,236 Undesignated 10,075,452 38,283,337 21,388,244 2,910,342 37,792,595 110,449,970 Total unreserved fund balances (deficit) $ 56,251,887 $ 10,075,452 $ 38,283,337 $ 21,388,24.4 $ 2,910,342 $ 37,792,595 $ 166,701,857 Note 18: Golf Course Management Agreement The City entered into an agreement with Landmark Golf Management LLC (operator) to manage the golf operations at the city -owned SilverRock Gold Course. The Agreement entered into on April 6, 2004, sets forth a five year term commencing upon the completion of the golf course. On January 14, 2005, the golf course was deemed to be complete and management was turned over to the operator. The contract provides that the operator will manage the day to day operations, hire employees, provide golf pro shop and food services, manage all marketing and promotional activities, prepare the annual budget report for Council consideration, and manage accounting and payroll functions. In addition to the annual payment for management services, the City has advanced the operator $250,000 to pay for golf course expenses. Twice a month the operator submits a request for reimbursement to the City to replenish the City's advance. In addition, the agreement sets forth the establishment of a capital reserve fund of 2% of green fees. For the fiscal year ending June 30, 2007, the Golf Course had an operating loss before contributions and transfers of $977,608. Note 19: Reimbursement Agreements The City entered into a transient occupancy tax (TOT) revenue reimbursement agreement on August 31, 2006, with Village Resort LLC, the owner of an Embassy Suites Hotel. The hotel owner is required to remit on a monthly basis any TOT collected to the City, thirty days after each month. Under terms of the agreement, the City shall make quarterly payments of 40% of any TOT generated from the Motel in an amount not to exceed $1,000,000 over a five year period. The agreement terminates when either the $1,000,000 limit is reached or in 5 years whichever comes first. In addition, the hotel may not assign or transfer this agreement without the City's prior written consent, which it may withhold at its discretion. The hotel opened in November 2006. As of June 30, 2007, the City made $118,851 in reimbursement payments to the owner leaving an outstanding balance of $881,149. 64 City of La Quinta Notes to Financial Statements (Continued) Note 19: Reimbursement Agreements (Continued) The City entered into a sales tax sharing agreement on January 30, 2006, with Costco Wholesale Corporation. Under the terms of the agreement the City shall make quarterly payments of 40% of the any sales tax generated from the Costco in an amount not to exceed $4,000,000 over a ten year period. Due to the reporting of sales tax information by the State Board of Equalization to the City, the reimbursement payments by the City will lag by one quarter. The agreement terminates when either the $4,000,000 limit is reached or in 10 years whichever comes first. The Costco business opened in November 2006. As of June 30, 2007, the City made $115,040 in reimbursement payments to the owner leaving an outstanding balance of $3,884,960. Note 20: Net Asset and Fund Balance Restatements Beginning fund balances had been restated as follows: Major governmental funds: General Fund To record sales tax revenue in prior year Nonmajor Governmental Funds: State Gas Tax To record gas tax revenue in prior year Indian Gaming To remove prior year revenues from fund balance and record as unearned revenue Total Fund Balances Restatements Beginning net assets has been restated as follows: Governmental activities: To record tax revenue in prior year To remove prior year revenues from fund balance and record as unearned revenue To remove deferred costs from long term liabilities and record as assets To record deferred costs as an asset Total Net Asset Restatements 65 $ 761,850 68,269 (130,856) $ 699.263 $ 830,119 (130,856) (4,939,088) 4,939,088 $ 699,263 OTHER GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues (other than expendable trusts and major capital projects) and the related expenditures that are legally required to be accounted for in a separate fund. The City of La Quinta has the following Special Revenue Funds: State Gas Tax Fund — To account for gasoline allocations made by the State of California. Theses revenues are restricted by the State to expenditures for street -related purposes only. Library Fund — To account for revenues from property tax increment dedicated library services. Federal Assistance Fund — To account for revenues from the Community Development Block Grants received from the Federal Government and the expenditures of those resources. State Law Enforcements Block Grant (SLEBG) Fund — To account for state funded "Citizens for Public Safety" (COPS) program activities, as per Assembly Bill 3229, which supplements frontline police serviced such as anti -gang community crime prevention. Indian Gaming Fund To account for contributions for public safety activities to reduce crime and increase public safety. Lighting and Landsca e Special Assessment District 89-9 Fund — To account for special assessments levied on real property and the expenditure thereof from City-wide lighting and landscape maintenance and improvements. Riverside_ Count Transportation Commission (RCM Fund - To account for grant funds related to transportation projects. Quimby Fund — To account for the accumulation of developer fees received under the provisions of the Quimby Act for park development and improvements. Capital projects to be funded from this source will be budgeted and expended in a separate capital projects fund. La Quinta Public Safety Officer Fund — To account for contributions to be distributed to public safety officers disabled or killed in the line of duty. Arts in Public Places — To account for development fees paid in lieu of acquisition and installation of approved artworks in a development with expenditures restricted to acquisition, installation, maintenance and repair of artworks at approved sites. South Coast Air Quality Fund — To account for contributions from the South Coast Air Quality Management District. Use is limited to reduction and control of airborne pollutants. AB 939 Fund — To account for the State mandated program to reduce waste sent to the landfills through recycling efforts. Redevelopment Agency, Low and Moderate Bond fund P.A. No. I and No. 2 Funds — 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. Development Agreement -Fund — To account for the proceeds of development agreement revenues collected and the related expenditures in accordance with State requirements. Coachella Valley Violent Crime Ganq Task Force - To account for the revenues and expenditures of this valley -wide crime prevention program with funding coming from the member agencies and grant revenue. CAPITAL PROJECT FUNDS Capital projects funds account for the financial resources to be used for the acquisition, construction or improvements of major capital facilities and infrastructure. Redevelopment Agency, Capital 'Proiects Fund Area 1 — To account for the bond proceeds, interest and other funding that will be used for development, planning, construction and land acquisition Infrastructure Fund - To account for the accumulation of resources provided through developer fees for the acquisition, construction or improvement of the City's infrastructure, prior to adoption of the new Developer Impact Fee Structure on August 16, 1999. This fund accounts for all developer resources received prior to this date, and is budgeted by the Council through adoption of the annual capital improvement program budget. Transportation Fund_ Parks and Recreations Fund, Civic Center Fund, Library Development Fund, Community Center Funds 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. Redeveionment Agency, Capital Projects Fund Area 2 - To account for the bond proceeds, interest and other funding that will be used for development, planning, construction and land acquisition. 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. DEBT SERVICE FUNDS Debt Service Funds are used to account for the accumulation of resources for, and the payment of, governmental long-term debt principal and interest. La Quinta Financing Authority Fund — To account for rental activity for the Civic Center and rental income used to pay the Financing Authority civic Center and 2004 Local Agency Revenue Bond debt obligations. 67 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2007 Liabilities and Fund Balances: Liabilities: Accounts payable $ $ _ $ $ Deposits payable Deferred revenues Unearned revenue _ Due to other funds - 18,780 Advances from other funds Total Liabilities - 18,780 Fund Balances: Fund balances: Reserved: Reserved for prepaid costs Reserved for notes receivable _ Reserved for advances to other funds _ Unreserved: Undesignated 72,267 1,481,428 - 17,612 Total Fund Balances 72,267 1,481,428 - 17,612 Total Liabilities and Fund Balances $ 72,267 $ 1,481,428 $ 18,780 $ 17,612 M Special Revenue Funds State Gas Federal Tax Library Assistance SLEBG Assets: Pooled cash and investments $ - $ 967,878 $ $ 17,533 Receivables: Accounts Notes Accrued interest - 5,308 79 Prepaid costs _ Deposits _ Due from other governments 72,267 508,242 18,780 _ Advances to other funds _ Restricted assets: Cash and investments with fiscal agents _ _ _ Total Assets $ 72,267 $ 1,481,428 $ 18,780 $ 17,612 Liabilities and Fund Balances: Liabilities: Accounts payable $ $ _ $ $ Deposits payable Deferred revenues Unearned revenue _ Due to other funds - 18,780 Advances from other funds Total Liabilities - 18,780 Fund Balances: Fund balances: Reserved: Reserved for prepaid costs Reserved for notes receivable _ Reserved for advances to other funds _ Unreserved: Undesignated 72,267 1,481,428 - 17,612 Total Fund Balances 72,267 1,481,428 - 17,612 Total Liabilities and Fund Balances $ 72,267 $ 1,481,428 $ 18,780 $ 17,612 M CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2007 (Continued) Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ Deposits payable - - - 4,300 Deferred revenues - _ _ _ Unearned revenue 302,223 - - Due to other funds _ Advances from other funds Total Liabilities 302,223 - - 4,300 Fund Balances: Fund balances: Reserved: Reserved for prepaid costs Reserved for notes receivable _ Reserved for advances to other funds - - _ _ Unreserved: Undesignated 32,611 - 9,666,026 Total Fund Balances - 32,611 - 9,666,026 Total Liabilities and Fund Balances $ 302,223 $ 32,611 $ - $ 9,670,326 69 Special Revenue Funds Lighting Indian and Gaming Landscape RCTC Quimby Assets: Pooled cash and investments $ 301,034 $ - $ - $ 9,629,035 Receivables: Accounts - - - - Notes - _ _ Accrued interest 1,189 - 41,291 Prepaid costs - - - - Deposits - _ Due from other governments - 32,611 - - Advances to other funds - - - Restricted assets: Cash and investments with fiscal agents - - - Total Assets $ 302,223 $ 32,611 $ - $ 9,670,326 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ Deposits payable - - - 4,300 Deferred revenues - _ _ _ Unearned revenue 302,223 - - Due to other funds _ Advances from other funds Total Liabilities 302,223 - - 4,300 Fund Balances: Fund balances: Reserved: Reserved for prepaid costs Reserved for notes receivable _ Reserved for advances to other funds - - _ _ Unreserved: Undesignated 32,611 - 9,666,026 Total Fund Balances - 32,611 - 9,666,026 Total Liabilities and Fund Balances $ 302,223 $ 32,611 $ - $ 9,670,326 69 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2007 Assets: Pooled cash and investments Receivables: Accounts Notes Accrued interest Prepaid costs Deposits Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Deposits payable Deferred revenues Unearned revenue Due to other funds Advances from other funds Total Liabilities Fund Balances: Fund balances: Reserved: Reserved for prepaid costs Reserved for notes receivable Reserved for advances to other funds Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances Special Revenue Funds Arts in Public Public South Coast Safety Places Air Quality AB 939 $ 15,626 $ 1,062,402 $ 216,232 $ 1,374,936 67 4,519 911 5,996 31,965 $ 15,693 $ 1,066,921 $ 217,143 $ 1,412,897 5,208 $ _ 5,208 15,693 1,066,921 211,935 1,412, 897 15,693 1,066,921 211,935 1,412,897 $ 15,693 $ 1,066,921 $ 217,143 _L1,412,897 70 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2007 (Continued) Capital Projects Special Revenue Funds Funds Low/Moderate CV Violent Redevelopment Income Housing Development Crime Agency PA No. 1 Agreement Task Force PA No. 1 Assets: Pooled cash and investments $ 3,311,795 $ 186,173 $ 109,942 $ 71,795 Receivables: Accounts Notes Accrued interest Prepaid costs Deposits Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Deposits payable Deferred revenues Unearned revenue Due to other funds Advances from other funds Total Liabilities Fund Balances: Fund balances: Reserved: Reserved for prepaid costs Reserved for notes receivable Reserved for advances to other funds Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances 9,939 3,566,117 - - - 25,937 834 490 - 2,484 - - 2,485 206,050 - - - 82,488 - 16,841 - - - - 3,878,873 - - - 17,022,623 $ 7,204,810 $ 187,007 $ 127,273 $ 20,975,776 $ 26,609 $ - $ 6,760 $ 35,408 12,403 187,007 - - 1,484,472 - 1,523,484 187,007 6,760 35,408 2,484 - 2,485 2,081,645 - - - - 3,878,873 3,597,197 - 120,513 17,059,010 5,681,326 120,513 20,940,368 $ 7,204,810 $ 187,007 $ 127,273 $ 20,975,776 71 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2007 Assets: Pooled cash and investments Receivables: Accounts Notes Accrued interest Prepaid costs Deposits Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Deposits payable Deferred revenues Unearned revenue Due to other funds Advances from other funds Total Liabilities Fund Balances: Fund balances: Reserved: Reserved for prepaid costs Reserved for notes receivable Reserved for advances to other funds Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances Capital Projects Funds Parks and Civic Infrastructure Transportation Recreation Center $ 511,217 $ 7,143,127 2,476 30,410 $ 513,693 $ 7,173,537 $ $ - 1,853,442 3,031,324 1,853,442 3,031,324 513,693 7,173,537 (1,853,442) (3,031,324) 513,693 7,173,537. (1,853,442} (3,031,324) $ 513,693 $ 7,173,537 $ $ 72 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2007 (Continued) Assets: Pooled cash and investments Receivables: Accounts Notes Accrued interest Prepaid costs Deposits Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Deposits payable Deferred revenues Unearned revenue Due to other funds Advances from other funds Total Liabilities Fund Balances: Fund balances: Reserved: Reserved for prepaid costs Reserved for notes receivable Reserved for advances to other funds Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances Capital Projects Funds Library Community Street Park Development Center Facility Facility $ - $ 1,050,874 $ 311,092 $ 83,087 4,509 1,397 356 $ - $ 1,055,383 $ 312,489 $ 83,443 2,025,431 2,025,431 (2,025,431) 1,055,383 312,489 83,443 (2,025,431) 1,055,383 312,489 83,443 $ - $ 1,055,383 $ 312,489 $ 83,443 73 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2007 Debt Service Capital Projects Fund Assets: Pooled cash and investments Receivables: Accounts Notes Accrued interest Prepaid costs Deposits Due from other governments Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable Deposits payable Deferred revenues Unearned revenue Due to other funds Advances from other funds Total Liabilities Fund Balances: Fund balances: Reserved: Reserved for prepaid costs Reserved for notes receivable Reserved for advances to other funds Unreserved: Undesignated Total Fund Balances Total Liabilities and Fund Balances s Funds Redevelopment Financing Fire Agency Authority Financing Facility PA No. 2 Projects Authority $ - $ 1,716,384 $ - $ 10,328 50,900 7,306 _ 1,504 - 944,670 _ - 306 $ $ 2,730,764 $ - $ 10,634 $ - $ 12,581 $ 27,835 _ 944,671 944,671 40,416 1,504 944,670 - (944,671) 1,744,174 - 10,634 (944,671) 2,690,348 - 10,634 $ - $ 2,730,764 $ - $ 10,634 74 CITY OF LA QUINTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2007 Liabilities and Fund Balances: Liabilities: Accounts payable Total Deposits payable Governmental Deferred revenues Funds Assets: 302,223 Pooled cash and investments $ 28,090,490 Receivables: 7,854,868 Accounts 70,839 Notes 3,566,117 Accrued interest 133,075 Prepaid costs 6,473 Deposits 206,050 Due from other governments 763,194 Advances to other funds 4,823,543 Restricted assets: Cash and investments with fiscal agents 17,022,929 Total Assets $ 54,682,710 Liabilities and Fund Balances: Liabilities: Accounts payable $ 86,566 Deposits payable 231,545 Deferred revenues 1,484,472 Unearned revenue 302,223 Due to otherfunds 18,780 Advances from other funds 7,854,868 Total Liabilities 9,978,454 Fund Balances: Fund balances: Reserved: Reserved for prepaid costs 6,473 Reserved for notes receivable 2,081,645 Reserved for advances to other funds 4,823,543 Unreserved: Undesignated 37,792,595 Total Fund Balances 44,704,256 Total Liabilities and Fund Balances $ 54,682,710 75 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007 Expenditures: Special Revenue Funds Current: State General government _ Gas Federal _ _ Tax Library Assistance SLEBG Revenues: Community services - 1,002,054 - Taxes 804,238 - _ Capital outlay Assessments Debt service: Intergovernmental 951,316 1,823,751 30,000 100,000 Contribution from property owners - _ _ _ Charges for services _ _ - _ _ Use of money and property 9,791 48,880 Over (Under) Expenditures 552 Miscellaneous - _ Developer participation _ _ _ Loan repayments _ _ - Proceeds from sale of capital assets Total Revenues 961,107 1,872,631 30,000 100,552 Expenditures: Current: General government _ _ Public safety _ _ Planning and development - _ Community services - 1,002,054 - Public works 804,238 - _ Capital outlay - Debt service: Principal retirement Interest and fiscal charges _ Total Expenditures 804,238 1,002,054 - _ Excess (Deficiency) of Revenues Over (Under) Expenditures 156,869 870,577 30,000 100,552 Other Financing Sources (Uses): Transfers in _ _ Transfers out (583,348) (510,719) (30,000) (82,940) Proceeds from sale of capital assets Total Other Financing Sources (Uses) (583,348) (510,719) (30,000) (82,940) Net Change in Fund Balances (426,479) 359,858 - 17,612 Fund Balances, Beginning of Year 430,477 1,121,570 - _ Restatements 68,269 Fund Balances, Beginning of Year, as Restated 498,746 1,121,570 - _ Fund Balances, End of Year $ 72,267 $1,481,428 $ - $ 17,612 W. CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007 (Continued) 77 Special Revenue Funds Lighting Indian and Gaming Landscape RCTC Quimby Revenues: Taxes $ - $ - $ $ Assessments - 877,191 - - Intergovernmental 183,133 - 46,832 - Contribution from property owners - - - Charges for services - - - Use of money and property 12,613 - - 419,462 Miscellaneous - - - - Developer participation - - - 1,790,492 Loan repayments - - - - Total Revenues 195,746 877,191 46,832 2,209,954 Expenditures: Current: General government - - - - Public safety - - - - Planning and development - - - - Community services a - - - Public works - 876,274 - - Capital outlay - - Debt service: Principal retirement - - - - Interest and fiscal charges - - - Total Expenditures 876,274 - - Excess (Deficiency) of Revenues Over (Under) Expenditures 195,746 917 46,832 2,209,954 Other Financing Sources (Uses): Transfers in - - - - Transfers out (195,746) - (46,832) (93,502) Proceeds from sale of capital assets - - - - Total Other Financing Sources (Uses) (195,746) - (46,832) (93,502 Net Change in Fund Balances - 917 - 2,116,452 Fund Balances, Beginning of Year 130,856 31,694 - 7,549,574 Restatements (130,856) - - Fund Balances, Beginning of Year, as Restated - 31,694 7,549,574 Fund Balances, End of Year $ - $ 32,611 $ $ 9,666,026 77 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007 Expenditures: Special Revenue Funds Current: Arts in Public Public South Coast Safety Places Air Quality AB 939 Revenues: Planning and development - - 20,380 Taxes $ _ $ $ $ Assessments Public works Intergovernmental Capital outlay - 45,288 Contribution from property owners Debt service: _ _ Charges for services Principal retirement - - 267,483 Use of money and property 703 47,310 9,058 59,683 Miscellaneous Total Expenditures - 140,059 20,380 Developer participation Excess (Deficiency) of Revenues 133,929 _ Loan repayments _ _ 41,180 33,966 Total Revenues 703 181,239 54,346 327,166 Expenditures: Current: General government _ Public safety - Planning and development - - 20,380 93,446 Community services - 30,662 - Public works Capital outlay - 109,397 Debt service: Principal retirement _ _ Interest and fiscal charges _ - _ Total Expenditures - 140,059 20,380 93,446 Excess (Deficiency) of Revenues Over(Under)Expenditures 703 41,180 33,966 233,720 Other Financing Sources (Uses): Transfers in 2,000 _ _ _ Transfers out - (8,754) Proceeds from sale of capital assets Total Other Financing Sources (Uses) 2,000 - - (8,754) Net Change in Fund Balances 2,703 41,180 33,966 224,966 Fund Balances, Beginning of Year 12,990 1,025,741 177,969 1,187,931 Restatements _ Fund Balances, Beginning of Year, as Restated 12,990 1,025,741 177,969 1,187,931 Fund Balances, End of Year $ 15,693 $ 1,066,921 $ 211,935 $ 1,412,897 78 CITY OF LA DUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007 (Continued) Capital Projects Special Revenue Funds Funds Low/Moderate CV Violent Redevelopment Income Housing Development Crime Agency PA No. 1 Agreement Task Force PA No. 1 Revenues: Taxes $ 10,507,377 $ - $ - $ - Assessments Intergovernmental Contribution from property owners Charges for services Use of money and property Miscellaneous Developer participation Loan repayments Total Revenues Expenditures: Current: General government Public safety Planning and development Community services Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Proceeds from sale of capital assets Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Restatements Fund Balances, Beginning of Year, as Restated Fund Balances, End of Year 234,328 - 505,876 - 987,611 12,235,192 - 167,501 3,744 1,137, 305 - 59,994 22,847 171,245 1,220,146 - - 50,732 1,131,558 - - 1,027,937 1,131,558 - 50,732 1,027,937 11,103,634 - 120,513 192,209 100,000 - - - (20,448,138) - - (4,336,775) 124,097 - (20,224,041) - - (4,336,775) (9,120,407) - 120,513 (4,144,566) 14,801,733 - - 25,084,934 14,801,733 - - 25,084,934 $ 5,681,326 $ - $ 120,513 $ 20,940,368 79 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007 Capital Projects Funds Expenditures: Parks and Civic Infrastructure Transportation Recreation Center Revenues: General government Taxes $ $ $ $ Assessments 203,660 Intergovernmental _ Contribution from property owners _ - 4 Charges for services - Public works 52,100 Use of money and property 25,294 319,372 - 54,710 Miscellaneous Developer participation - 1,682,436 515,128 467,192 Loan repayments _ Total Revenues 25,294 2,001,808 515,128 521,902 Expenditures: Current: General government Public safety _ 203,660 Planning and development - Community services - Public works 52,100 3,036 Capital outlay - Debt service: Principal retirement Interest and fiscal charges - - 108,418 _ Total Expenditures 52,100 - 108,418 206,696 Excess, (Deficiency) of Revenues Over (Under) Expenditures (26,806) 2,001,808 406,710 315,206 Other Financing Sources (Uses): Transfers in Transfers out Proceeds from sale of capital assets (87,674) (1,597,755) - (5,657,436) Total Other Financing Sources (Uses) (87,674) (1,597,755) - (5,657,436) Net Change in Fund Balances (114,480) 404,053 406,710 (5,342,230) Fund Balances, Beginning of Year 628,173 6,769,484 (2,260,152) 2,310,906 Restatements Fund Balances, Beginning of Year, as Restated 628,173 6,769,484 (2,260,152) 2,310,906 Fund Balances, End of Year $ 513,693 $ 7,173,537 $ (1,853,442) $ (3,031,324) CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007 (Continued) Loan repayments Total Revenues Capital Projects Funds 88,776 76,249 16,210 Library Community Street Park $ 1,055,383 Development Center Facility Facility Revenues: Taxes $ - $ - $ $ Assessments - - - Intergovernmental - - - Contribution from property owners - - Charges for services - - - - Use of money and property - 46,446 14,451 3,494 Miscellaneous - - - - Developer participation 204,791 42,330 61,798 12,716 Loan repayments Total Revenues 204,791 88,776 76,249 16,210 Expenditures: $ (2,025,431) $ 1,055,383 $ 312,489 $ 83,443 Cu rre nt: General government - - - - Public safety - - Planning and development - - - - Community services - - - - Public works - - Capital outlay - Debt service: Principal retirement - - - - Interest and fiscal charges 105,823 - - - Total Expenditures 105,823 - - - Excess (Deficiency) of Revenues Over (Under) Expenditures 98,968 88,776 76,249 16,210 Other Financing Sources (Uses): Transfers in - - - - Transfers out - - (47,097) - Proceeds from sale of capital assets - - - - Total Other Financing Sources (Uses) - - (47,097) - Net Change in Fund Balances 98,968 88,776 29,152 16,210 Fund Balances, Beginning of Year (2,124,399) 966,607 283,337 67,233 Restatements Fund Balances, Beginning of Year, as Restated (2,124,399) 966,607 283,337 67,233 Fund Balances, End of Year $ (2,025,431) $ 1,055,383 $ 312,489 $ 83,443 81 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007 Debt Service Capital Projects Funds Funds Redevelopment Financing Fire Agency Authority Financing Revenues: Facility PA No. 2 Projects Authority _ Taxes $ $ $ $ Assessments ' Intergovernmental Contribution from property owners Charges for services - - 678,865 Use of money and property - - 125,421 10,121 Miscellaneous _ 17 Developer participation 84,366 Loan repayments Total Revenues 84,366 125,421 689,003 Expenditures: Current: General government Public safety _ - 10,121 Planning and development 117,396 Community services ' Public works Capital outlay - - Debt service: - Principal retirement Interest and fiscal charges - 49,067 - 1,865,000 - - 4,737,021 Total Expenditures 49,067 117,396 - 6,612,142 Excess (Deficiency) of Revenues Over (Under) Expenditures 35,299 8,025 (5,9231139) Other Financing Sources (Uses): Transfers in Transfers out 5,930,182 Proceeds from sale of capital assets - _ (66,107) (7,273) - Total Other Financing Sources (Uses) - (66,107) 7,273 5,930,182 Net Change in Fund Balances 35,299 (58,082) (7,273) 7,043 Fund Balances, Beginning of Year (979,970) 2,748,430 7,273 3,591 Restatements Fund Balances, Beginning of Year, as Restated (979,970) 2,748,430 7,273 3,591 Fund Balances, End of Year $ (944,671) $ 2,690,348 $ _ $ 10,634 82 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007 83 Total Governmental Funds Revenues: Taxes $ 10,507,377 Assessments 877,191 Intergovernmental 3,347,821 Contribution from property owners 913,193 Charges for services 277,604 Use of money and property 2,844,182 Miscellaneous 59,994 Developer participation 5,018,025 Loan repayments 987,611 Total Revenues 24,832,998 Expenditures: Current: General government 213,781 Public safety 50,732 Planning and development 2,390,717 Community services 1,032,716 Public works 1,735,648 Capital outlay 109,397 Debt service: Principal retirement 1,865,000 Interest and fiscal charges 5,000,329 Total Expenditures 12,398,320 Excess (Deficiency) of Revenues Over (Under) Expenditures 12,434,678 Other Financing Sources (Uses): Transfers in 6,032,182 Transfers out (33,800,096) Proceeds from sale of capital assets 124,097 Total Other Financing Sources (Uses) 27,643,817) Net Change in Fund Balances (15,209,139) Fund Balances, Beginning of Year 59,975,982 Restatements (62,587) Fund Balances, Beginning of Year, as Restated 59,913,395 Fund Balances, End of Year $ 44,704,256 83 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STATE GAS TAX YEAR ENDED JUNE 30, 2007 Variance with 84 Final Budget Budget Amounts Actual Positive _ _Original Final Amounts (Negative) Budgetary Fund Balance, July 1, as restated $ 498,746 $ 498,746 $ 498,746 - Resources (Inflows): Intergovernmental 847,681 921,481 951,316 29,835 Use of money and property 7,900 18,000 9,791 (8,209) Amounts Available for Appropriation 1,354,327 1,_438,227 1,459,853 21,626 Charges to Appropriation (Outflow): Public works 855,581 855,581 804,238 51,343 Transfers to other funds - 584,837 583,348 1,489 Total Charges to Appropriations 855,581 1,440,418 1,387,586 52,832 Budgetary Fund Balance, June 30 $ 498,746 $ (2,191) $ 72,267 $ 74,458 84 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Public works Transfers to other funds Total Charges to Appropriations Variance with Budgetary Fund Balance, June 30 $ 2,364,112 $ (967,387) $ 1,481,428 $ 2,448,815 85 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,121,570 $ 1,121,570 $ 1,121,570 _ $ 2,071,017 2,071,017 1,823,751 (247,266) 40,800 40,800 48,880 8,080 3,233,387 3,233,387 2,994,201 (239,186) 869,275 869,275 1,002,054 (132,779) - 3,331,499 510,719 2,820,780 869,275 4,200,774 1,512,773 2,688,001 Budgetary Fund Balance, June 30 $ 2,364,112 $ (967,387) $ 1,481,428 $ 2,448,815 85 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULES FEDERAL ASSISTANCE YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final Variance with Final Budget Actual Positive Amounts Negative 202,600 454.745 30,000 (424,745 202,600 454,745 30,000 (424,745) 202,588 525,921 30,000 495,921 202,588 525,921 30,000 495,921 $ 12 $ (71,176) $ - $ 71,176 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SLEBG YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers to other funds Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 100,000 100,000 100,000 2,700 2,700 552 (2,148) 102,700 102,700 100,552 (2,148) 101,400 101,400 82,940 18,460 101,400 101,400 82,940 18,460 Budgetary Fund Balance, June 30 $ 1,300 $ 1,300 $ 17,612 $ 16,312 87 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INDIAN GAMING YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1, as restated Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with L -N Final Budget Budget Amounts Actual Positive Oqjincl Final (Negative) $ $ $Amounts s 177,250 177,250 183,133 5,883 8,500 11,300 12,613 1,313 185,750 188,550 195,746 7,196 201,142 201,142 195,746 5,396 201,142 201,142 195,746 5,396 $ (15,392) $ (12,592) $ - $ 12,592 L -N CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIGHTING AND LANDSCAPE YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (inflows): Assessments Amounts Available for Appropriation Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 31,694 $ 31,694 $ 31,694 $ - 890,900 890,900 877,191 (13,709) 922,594 922,594 908,885 (13,709) 890,900 922,594 876,274 46,320 890,900 922,594 876,274 46,320 Budgetary Fund Balance, June 30 $ 31,694 $ - $ 32,611 $ 32,611 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE RCTC YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (NegativeL- 2,374,007 46,832 (2,327,175) - 2,374,007 46,832 2,327,175 1,929,072 46,832 1,882,240 1,929,072 46,832 1,882,240 $ - $ 444,935 $ - $ (444,935 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE QUIMBY YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Developer fees Amounts Available for Appropriation Charges to appropriation (outflow): Community services Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with $ 9,489,474 $ 9,350,124 $ 9,666,026 $ 315,902 91 Final Budget Budget Amounts Actual Positive Original _ Final Amounts (Negative) $ 7,549,574 $ 7,549,574 $ 7,549,574 $ - - 4,300 - (4,300) 272,900 272,900 419,462 146,562 1,667,000 1,672,000 1,790,492 118,492 9,489,474 9,498,774 9,759,528 260,754 - 32,000 - 32,000 - 116,650 93,502 23,148 148,650 93,502 55,148 $ 9,489,474 $ 9,350,124 $ 9,666,026 $ 315,902 91 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Transfers from other funds Amounts Available for Appropriation Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 12,990 $ 12,990 $ 12,990 $ - 300 600 703 103 2,000 2,000 2,000 - 15,290 15,590 15,693 103 2,000 2,000 - 2,000 2,000 2,000 - 2,000 $ 13,290 $ 13,590 $ 15,693 $ 2,103 CITY OF LA QUINTA BUDGET COMPARISON SCHEDULE ARTS IN PUBLIC PLACES YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer fees Amounts available for appropriation Charges to Appropriation (Outflow): Community services Capital outlay Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Ori inal Final $1,025,741 $ 1,025,741 Variance with Final Budget Actual Positive Amounts (Negative) $ 1,025,741 $ - 40,600 40,600 47,310 6,710 97,500 97,500 133,929 36,429 1,163,841 1,163,841 1,206,980 43,139 31,800 36,800 30,662 6,138 255,250 420,150 109,397 310,753 200,000 200,000 - 200,000 487,050 656,950 140,059 516,891 $ 676,791 $ 506,891 $ 1,066,921 $ 560,030 tiki CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE SOUTH COAST AIR QUALITY YEAR ENDED JUNE 30, 2007 Variance with 94 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 177,969 $ 177,969 $ 177,969 $ _. Resources (Inflows): Intergovernmental 45,000 45,000 45,288 288 Use of money and property 7,400 7,400 9,058 1,658 Amounts Available for Appropriation 230,369 230,369 232,315 1,946 Charges to Appropriation (Outflow): Planning and development 26,600 26,600 20,380 6,220 Total Charges to Appropriations 26,600 26,600 20,380 6,220 Budgetary Fund Balance, June 30 $ 203,769 $ 203,769 $ 211,935 $ 8,166 94 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE AB 939 YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Charges for services Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers to other funds Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $1,187,931 $ 1,187,931 $ 1,187,931 $ - - 450,000 267,483 (182,517) - 50,000 59,683 9,683 1,187,931 1,687,931 1,515,097 (172,834) 79,430 93,446 (14,016) 8,754 8,754 - 88,184 102,200 _ (14,016) Budgetary Fund Balance, June 30 $1,187,931 $ 1,599,747 $ 1,412,897 $ (186,850) 95 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LOW/MODERATE INCOME HOUSING PA NO. 1 YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Contributions from property owners Use of money and property Proceeds from sale of capital assets Loan repayments Transfers from other funds Amounts Available for Appropriation Charges to Appropriation (Outflow): Planning and development Transfers to other funds Total Charges to Appropriations Variance with 24,452,133 27,680,233 27,261,022 (419,211) 8,957,908 10,757,908 1,131,558 Final Budget Budget Amounts Actual Positive Ori final Final Amounts _(Negative) $14,801,733 $ 14,801,733 $ 14,801,733 $ - 8,915,100 10,349,200 10,507,377 158,177 252,000 252,000 234,328 (17,672) 333,300 442,300 505,876 63,576 150,000 645,000 124,097 (520,903) 1,050,000 987,611 (62,389) 140,000 100,000 (40,000 24,452,133 27,680,233 27,261,022 (419,211) 8,957,908 10,757,908 1,131,558 4,448,304 20,448,304 20,448,138 13,406,212 31,206,212 21,579,696 9,626,350 166 9,626,516 Budgetary Fund Balance, June 30 $11,045,921 $ (3,525,979) $ 5,681,326 $ 9,207,305 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CV VIOLENT CRIME TASK FORCE YEAR ENDED JUNE 30, 2007 Variance with 97 Final Budget Budget Amounts Actual Positive Ori iina`I Final Amounts (Negative) Budgetary fund balance, July 1 $ - $ - $ - $ _ a Resources (inflows): Intergovernmental 163,960 176,210 167,501 (8,709) Use of money and property 1,600 1,600 3,744 2,144 Amounts available for appropriation 165,560 177,810 171,245 (6,565) Charges to appropriation (outflow): Public safety 102,700 102,700 50,732 51,968 Total Charges to Appropriations 102,700 102,700 50,732 51,968 Budgetary fund balance, June 30 $ 62,860 $ 75,110 $ 120,513 $ 45,403 97 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Developer fees Transfers from other funds Amounts Available for Appropriation Charges to Appropriation (Outflow): Capital outlay Debt service: Principal Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 9,331,249 115,297,180 36,311,020 78,986,160 182,491 182,491 182,491 65,963 65,963 65,963 9,579,703 115,545,634 36,559,474 78,986,160 $ - $ 44,699 $ - $ (44,699) W. Final Budget Budget Amounts Actual Positive Original Final Amounts {Negative) 1,541,800 7,673,671 4,056,049 (3,617,622) - 563,997 292,415 (271,582) 8,037,903 107,352,665 32,211,010 (75,141,655) 9,579,703 115,590,333 36,559,474 (79,030,859) 9,331,249 115,297,180 36,311,020 78,986,160 182,491 182,491 182,491 65,963 65,963 65,963 9,579,703 115,545,634 36,559,474 78,986,160 $ - $ 44,699 $ - $ (44,699) W. CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO. 1 YEAR ENDED JUNE 30, 2007 99 Variance with Final Budget Budget Amounts Actual Positive _ Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 25,084,934 $ 25,084,934$ $ 25,084,934 _ Resources (Inflows): Use of money and property 512,500 1,199,500 1,137,305 (62,195) Other - - 59,994 59,994 Developer fees - - 22,847 22,847 Transfers from other funds 2,500,000 - _ Amounts Available for Appropriation 28,097,434 26,284,434 26,305,080 20,646 Charges to Appropriation (Outflow): Planning and development 759,626 947,646 1,027,937 (80,291) Transfers to other funds 4,152,554 20,556,057 4,336,775 16,219,282 Total Charges to Appropriations 4,912,180 21,503,703 5,364,712 16,138,991 Budgetary Fund Balance, June 30 $ 23,185,254 $ 4,780,731 $ 20,940,368 $ 16,159,637 99 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE 2004 LOW/MOD BOND YEAR ENDED JUNE 30, 2007 Variance with Final Budget _ Budget Amounts Actual Positive Budgetary Fund Balance, July 1 _ Original $56,846,921 Final $ 56,846,921 Amounts $ 56,846,921 (!Negative) $ - Resources (Inflows): Use of money and property 2,000,000 2,800,000 2,706,511 93,489 Amounts Available for Appropriation 58,846,921 59,646,921 59,553,432 93,489 Charges to Appropriation (Outflow): Planning and development 3,500,000 6,283,000 4,705,800 1,577,200 Transfers to other funds - 53,091,795 16,564,295 36,527,500 Total Charges to Appropriations 3,500,000 59,374,795 21,270,095 38,104,700 Budgetary Fund Balance, June 30 $55,346,921 $ 272,126 $ 38,283,337 $ 38,011,211 100 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE INFRASTRUCTURE YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Public works Transfers to other funds Total Charges to Appropriations Variance with Budgetary Fund Balance, June 30 $ 635,673 $ (1,391) $ 513,693 $ 515,084 101 Final Budget Budget Amounts Actual Positive f=}riginal Final Amounts (Negative) $ 628,173 $ 628,173 $ 628,173 $ - 7,500 20,800 25,294 4,494 635,673 648,973 653,467 4,494 - 52,100 52,100 - - 598,264 87,674 510,590 - 650,364 139,774 510,590 Budgetary Fund Balance, June 30 $ 635,673 $ (1,391) $ 513,693 $ 515,084 101 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE TRANSPORTATION YEAR ENDED JUNE 30, 2007 Variance with 102 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 6,769,484 $ 6,769,484 $ 6,769,484 $ - Resources (Inflows): Use of money and property 294,400 294,400 319,372 24,972 Developer fees 1,096,200 1,096,200 1,682,436 586,236 Amounts Available for Appropriation 8,160,084 8,160,084 8,771,292 611,208 Charges to Appropriation (Outflow): Transfers to other funds 2,914,307 6,655,496 1,597,755 5,057,741 Total Charges to Appropriations 2,914,307 6,655,496 1,597,755 5,057,741 Budgetary Fund Balance, June 30 $ 5,245,777 $ 1,504,588 $ 7,173,537 $ 5,668,949 102 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATION YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Transfers to other funds Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $(2,260,152) $ (2,260,152) $(2,260,152) $ - 446,000 446,000 515,128 69,128 (1,814,152 (1,814,152) (1,745,024) 69,128 120,000 108,418 11,582 125,226 - 125,226 245,226 108,418 136,808 Budgetary Fund Balance, June 30 $ (1,814,152) $ (2,059,378) $(1,853,442) $ 205,936 103 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE CIVIC CENTER YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer fees Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Public works Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with $2,363,246 $_j9,449,852) $(3,031,324) $ 6,418,528 104 Final Budget Budget Amounts Actual Positive _Original Final Amounts (Negative) $2,310,906 $ 2,310,906 $ 2,310,906 $ - - 85,000 54,710 (30,290) 256,000 256,000 467,192 211,192 2,566,906 2,651,906 2,832,808 180,902 203,660 203,660 203,660 - - - 3,036 (3,036) 11,898,098 5,657,436 6,240,662 203,660 12,101,758 5,864,132 6,237,626 $2,363,246 $_j9,449,852) $(3,031,324) $ 6,418,528 104 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE LIBRARY DEVELOPMENT YEAR ENDED JUNE 30, 2007 105 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ (2,124,399) $ (2,124,399) $(2,124,399) $ - Resources (Inflows): Developer fees 177,500 177,500 204,791 27,291 Amounts Available for Appropriation (1,946,89 _ (1,946,899) (1,919,608) 27,291 Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges - 120,000 105,823 14,177 Total Charges to Appropriations - 120,000 105,823 14,177 Budgetary Fund Balance, June 30 $(1,946,899) $ (2,066,899) $(2,025,431) $ 41,468 105 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE COMMUNITY CENTER YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer fees Amounts Available for Appropriation Budgetary Fund Balance, June 30 Variance with 106 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 966,607 $ 966,607 $ 9661,607 $ - 38,300 38,300 46,446 8,146 37,000 37,000 42,330 5,330 1,041,907 1,041,907 1,055,383 13,476 $1,041,907 $ 1,041,907 $ 1,055,383 $ 13,476 106 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE STREET FACILITY YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer fees Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 107 Final Budget Budget Amounts Actual Positive _ Original Final Amounts _ (Negative} $ 283,337 $ 283,337 $ 283,337 $ - 10,200 10,200 14,451 4,251 44,100 44,100 61,798 17,698 337,637 337,637 359,586 21,949 75,000 87,923 47,097 40,826 75,000 87,923 47,097 40,826 $ 262,637 $ 249,714 $ 312,489 $ 62,775 107 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE PARK FACILITY YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer fees Amounts Available for Appropriation Budgetary Fund Balance, June 30 Variance with 108 Final Budget Amounts Actual Positive _Budget Original� Final Amounts (Negative) $ 67,233 $ 67,233 $ 67,233 $ - 2,600 2,600 3,494 894 11,000 11,000 12,716 1,716 80,833 80,833 83,443 2,610 $ 80,833 $ 80,833 $ 83,443 $ 2,610 108 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FIRE FACILITY YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Amounts Available for Appropriation Charges to Appropriation (Outflow): Debt service: Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (979,970) $ (979,970) $ (979,970) $ - 74,500 74,500 84,366 9,866 (905,470) (905,470) (895,604) 9,866 - 50,000 49,067 933 50,000 49,067 933 $ (905,470) $ (955,470) $ (944,671) $ 10,799 109 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO.2 YEAR ENDED JUNE 30, 2007 Variance with 110 Final Budget Budget Amounts Actual Positive Budgetary Fund Balance, July 1 Original $ 2,748,430 Final Amounts $ 2,748,430 (Negative) $ 2,748,430 $ - Resources (Inflows): Use of money and property 105,600 105,600 125,421 19,821 Amounts Available for Appropriation 2,854,030 2,854,030 2,873,851 19,821 Charges to Appropriation (Outflow): Planning and development 172,477 172,477 117,396 55,081 Transfers to other funds - 193,235 66,107 127,128 Total Charges to Appropriations 172,477 365,712 183,503 182,209 Budgetary Fund Balance, June 30 $2,681,553 $ 2,488,318 $ 2,690,348 $ 202,030 110 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FINANCING AUTHORITY PROJECTS YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Charges to Appropriation (Outflow): Transfers to other funds Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 7,273 $ 7,273 $ 7,273 $ - 7,273 7,273 7,273 7,273 Budgetary Fund Balance, June 30 $ 7,273 $ 111 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO.1 YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Use of money and property Transfers from other funds Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Principal Interest and fiscal charges Pass through agreement payments Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 9,549,904 $ 9,549,904 35,430,900 41,396,800 93,100 553,100 4,448,304 4,448,304 49,522,208 55,948,108 457,300 657,300 3,402,855 8,678,900 16,345,791 6,468,515 35,353,361 $14,168,847 112 Actual Amounts $ 9,549,904 42,029,504 1,054,152 4,448,138 57,081,698 506,056 3,402,855 3,395,449 8,678,900 8,678,900 19,187,315 19,044,700 4,108,515 4,068,349 36,034,885 35,693,454 $19,913,223 $ 21,388,244 Variance with Final Budget Positive (Negatived $ 632,704 501,052 (166) 1,133,590 151,244 7,406 142,615 40,166 341,431 $ 1,475,021 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY PA NO.2 YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Transfers from other funds Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Principal Interest and fiscal charges Pass through agreement payments Transfers to other funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 113 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 734,999 $ 734,999 $ 734,999 $ - 19,658,600 21,607,200 20,777,158 (830,042) 273,900 399,900 556,329 156,429 1,954,642 1,954,642 1,954,560 (82) 22,622,141 24,696,741 24,023,046 673;695 176,100 176,100 184,484 (8,384) 105,000 205,000 205,000 - 1,314,785 1,314,785 1,314,785 - 16,519,465 18,146,995 17,453,875 693,120 1,954,642 1,954,642 1,954,560 82 20,069,992 21,797,522 21,112,704 684,818 $ 2,552,149 $ 2,899,219 $ 2,910,342 $ 11,123 113 CITY OF LA QUINTA BUDGETARY COMPARISON SCHEDULE FINANCING AUTHORITY YEAR ENDED JUNE 30, 2007 Budgetary Fund Balance, July 1 Resources (Inflows): Contributions from property owners Charges for services Use of money and property Transfers from other funds Amounts Available for Appropriation Charges to Appropriation (Outflow): General government Debt service: Principal Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original_ Final Amounts Ne ativel $ 3,591 $ 3,591 $ 3,591 $ 678,865 678,865 678,865 15,000 15,000 10,121 (4,879) 100 17 (83) 5,923,157 5,930,430 5,930.182 (248) 6,620,613 6,627,986 6,622,776 A5,2110) 15,125 15,125 10,121 5,004 1,865,000 1,865,000 1,865,000 _ 4,737,021 4,737,021 4,737,021 _ 6,6� 17,146 6,617,146 6,612,142 5,004 $ 3,467 $ 10,840 $ 10,634 $ (206) 114 INTERNAL SERVICE FUNDS Internal service funds are used to account for activities involved in rendering services to departments within the City. Costs of materials and services used are accumulated in this fund and charged to the user departments as such goods are delivered or services rendered. The City of La Quinta has the following Internal Service Funds: Equipment Replacement Fund — used to account for the ultimate replacement of City owned and operated vehicles and equipment Information Technology Fund — used to account for the purchase and replacement of information systems. Park Equipment and Facilities Fund — used to account for the purchase and replacement of City owned park facility infrastructure. 115 CITY OF LA QUINTA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30, 2007 Assets: Current: Cash and investments Receivables: Interest Due from other governments Park Equipment Information Equipment Replacement Technology and Facility Total $ 3,269,503 $ 833,301 $ 872,490 $ 4,975,294 14,054 3,781 3,823 21,658 330 - 330 Total Current Assets 3,283,557 837,412 876,313 4,99.7,282_ Noncurrent: _ 1,727 13,888 Capital assets - net of accumulated depreciation 915,127 479,206 15,095,981 16,490,314 Total Noncurrent Assets 915,127 479,206 15,095,981- 16,490,314 Total Assets $ 4,198,684 $ 1,316,618 $ 15,972,294 $ 21,487,596 Liabilities and Fund Equity: Liabilities: Current: Accounts payable Accrued liabilities Total Current Liabilities Long -Term: Compensated absences Total Long -Term Liabilities: Total Liabilities Net Assets: Invested in capital assets, net of related debts Unrestricted Total Net Assets Total Liabilities and Net Assets $ 13,888 $ 12,840 $ - $ 26,728 - 1,727 _ 1,727 13,888 14,567 - 28,455 - 4,168 - 4,168 - 4,168 - 4,168 13,888 18,735 32,623 915,127 479,206 15,095,981 16,490,314 3,269,669 818,677 876,313 4,964,659 4,184,796 1,297,883 15,972,294 21,454,973_ $ 4,198,684 $ 1,316,618 $ 15,972,294 $ 21,487,596 116 CITY OF LA QUINTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2007 Park Equipment Information Equipment Replacement Technology and Facility Totals Operating Revenues: Sales and service charges Total Operating Revenues Operating Expenses: Salaries and benefits Fuel and oil Maintenance and parts Contract services Software and supplies Depreciation Other Total Operating Expenses Operating Income (Loss) Non -Operating Revenues (Expenses): Interest revenue Gain on disposition of assets Total Non -Operating Revenues $ 487,000 $ 373,500 $ 350,722 $ 1,211,222 487,000 373,500 350,722 1,211,222 - 87,166 - 87,166 71,491 - - 71,491 109,665 - - 109,665 10,374 97,180 - 107,554 - 125,056 - 125,056 210,287 83,750 401,031 695,068 470 19,122 12,130 31,722 609,733 402,287 412,274 413,161 1,227,722 $ 15,972,294 84,713 (38,774) (62,439) (16,500) 151,472 46,047 40,645 238,164 1,327 - - 1,327 152,799 46,047 40,645 239,491 Income Before Contributions and Transfers 237,512 7,273 (21,794) 222,991 Capital contributions 218,512 110,554 631,527 960,593 Change in Net Assets 456,024 117,827 609,733 1,183,584 Net Assets: Beginning of Year 3,728,772 1,180,056 15,362,561 20,271,389 Change in Net Assets 456,024 117,827 609,733 1,183,584 End of Fiscal Year $ 4,184,796 $ 1,297,883 $ 15,972,294 $ 21,454,973 117 CITY OF LA QUINTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2007 Park Equipment Information Equipment Replacement Technology and Facility Totals Cash Flows from Operating Activities: Cash received from customers and users Cash paid to supplies for good and services Cash paid to employees for services Net Cash Provided (Used) by Operating Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Proceeds from sales of capital assets Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: $ 486,999 $ 373,500 $ 350,722 $ 1,211,221 (188,153) (189,366) (12,130) (389,649) - (74,358) - (74,358) Increase (decrease) in accrued liabilities - (605) - (605) 298,846 109,776 338,592 747,214 (59,589) (16,965) (24,540) (101,094) 12,850 - 12,850 (46,739) (16,965) (24,540) (88,244) 150,058 45,537 39,115 234,710 150,058 45,537 39,115 234,710 402,165 138,348 353,167 893,680 2,867,338 694,953 519,323 4,081,614 $ 3,269,503 $ 833,301 $ 872,490 $ 4,975,294 $ 84,713 $ (38,774) $ (62,439) $ (16,500) Depreciation 210,287 83,750 401,031 695,068 (Increase) decrease in prepaid expense - 50,724 - 50,724 (Increase) decrease in due from other governments - (330) - (330) Increase (decrease) in accounts payable 3,846 10,843 - 14,689 Increase (decrease) in accrued liabilities - (605) - (605) Increase (decrease) in compensated absences - 4,168 - 4,168 Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Capital assets contributed by other funds 214,133 148,550 401,031 763,714 $ 298,846 $ 109,776 $ 338,592 $ 747,214 $ 218,512 $ 110,554 $ 631,527 $ 960,593 118 AGENCYFUNDS 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 and their purposes are as follows: The City of La Quinta has the following agency funds: Assessment District No. 92-1.97-1, 2000-1 — To account for assessments paid to the City for debt service payments on bond issues used to finance sewer improvements. 119 CITY OF LA QUINTA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2007 Assessment Assessment Assessment District District District Assets: No. 92-1 No. 97-1 No. 2001-1 Totals Cash and investments $ 318,318 $ 142,572 $ 447,592 $ 908,482 Receivables: Taxes 10,583 2,711 10,023 23,317 Interest 1,320 580 1,836 3,736 Total Assets $ 330,221 $ 145,863 $ 459,451 $ 935,535 Liabilities: Deposits $ 330,221 $ 145,863 $ 459,451 $ 935,535 Total Liabilities $ 330,221 $ 145,863 $ 459,451 $ 935,535 120 CITY OF LA QUINTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2007 As�iessmen Assets: Cash and investments $ Balance $ 77,668 $ 66,802 Balance 142,572 July 1, 2006 Additions Deductions June 30, 2007 Assessment District No. 92-1 Taxes 2,852 Assets: 2,711 2,852 2,711 Interest Cash and investments $ 295,735 $ 319,666 $ 297,083 $ 318,318 Receivables: 135,100 $ 80,959 $ 70,196 $ 145,863 Taxes 5,281 10,583 5,281 10,583 Interest Deposits 1,233 1,320 $ 1,233 $ 1,320 Total Assets $ 302,249 $ 331,569 $ 303,597 $ 330,221 Liabilities: $ 145,863 Deposits $ 302,249 $ 365,612 $ 337,640 $ 330,221 Total Liabilities $ 302,249 $ 365,612 $ 337,640 $ 330,221 As�iessmen Assets: Cash and investments $ 131,706 $ 77,668 $ 66,802 $ 142,572 Receivables: Taxes 2,852 2,711 2,852 2,711 Interest 542 580 542 580 Total Assets $ 135,100 $ 80,959 $ 70,196 $ 145,863 Liabilities: Deposits $ 135,100 $ 90,556 $ 79,793 $ 145,863 Total Liabilities Assessme t District No. 2001-1 $ 135,100 $ 90,556 $ 79,793 $ 145,863 Assets: Cash and investments $ 411,569 $ 288,618 $ 252,595 $ 447,592 Receivables: Taxes 22,180 10,023 22,180 10,023 Interest 1,709 1,836 1,709 1,836 Total Assets $ 435,458 $ 300,477 $ 276,484 $ 459,451 Liabilities: Deposits $ 435,458 $ 336,039 $ 312,046 $ 459,451 Total Liabilities $ 435,458 $ 336,039 $ 312,046 $ 459,451 121 CITY OF LA QUINTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2007 Balance Balance enc Total - All gund July 1, 2006 Additions Deductions June 30, 2007 A v F s Assets: Cash and investments $ 839,010 $ 685,952 $ 616,480 $ 908,482 Receivables: Accounts 30,313 23,317 30,313 23,317 Interest 3,484 3,736 3,484 3,736 Total Assets $ 872,807 $ 713,005 $ 650,277 $ 935,535 Liabilities: Deposits $ 872,807 $ 792,207 $ 729,479 $ 935,535 Total Liabilities $ 872,807 $ 792,207 $ 729,479 $ 935,535 122 STATISTICAL SECTION This part of the City of La Quinta's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Financial Trends Page These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. 124 Revenue Capacity These schedules obtain information to help the- reader assess the government's most significant local revenue source, the property tax. 130 Debt Capacity These schedules present information to help the reader assess the ability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. 135 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities that take place. 140 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. 143 123 CITY OF LA QUINTA Net Assets by Component Last Seven Fiscal Years (accrual basis of accounting) TABLE Business -type activities: Invested in capital assets, net of related debt $ - - - - 41,300,846 42,075,172 42,692,025 Restricted Unrestricted - - (626,658 1,665,64 _ ) (1,665,646) _) (2085,462) Total business -type activities net assets - - 40,674,188 40,409,526 40,306,563 Primary government: _ Invested in capital assets, net ofrelated debt $ 217,419,724 195,474,945 225,818,022 249,059,500 274,661,975 295,634,289 326,421,744 Restricted 45,438,930 74,156,691 40,038,313 44,415,966 43,421,857 65,159,623 49,277,895 Unrestricted 30,698,622 43,025,999 48,290,000 45,169,328 59,734,413 84,463,730 120,870,794 Total primary government net assets $ 293,557,276 312,657,635 314,146,335 338,644,794 377,818,245 445,257,642 496,570,433 The City of Ln Quinta implemented GASB 34 for the fiscal year'ended June 30 2001. Information prior to the implementation of GASB 34 is not available. Source: City of La Quinta 124 Fiscal Year 2001 2002 2003 2004 2005 2006 2007 Governmental activities: Invested in capital assets, net ofrelated debt $ 217,419,724 195,474,945 225,818,022 249,059,500 233,361,129 253,559,117 283,729,719 Restricted 45,438,930 74,156,691 40,038,313 44,415,966 43,421,857 65,159,623 49,277,895 Unrestricted 30,698,622 43.025,999 48,290,000 45,169.328 60,361,071 86,129,376 123,256,256 Total governmental activities net assets $ 243,557,276 312,657,635 314,146,335 338,644,794 337,144.057 404,848,1 16 456,263,870 Business -type activities: Invested in capital assets, net of related debt $ - - - - 41,300,846 42,075,172 42,692,025 Restricted Unrestricted - - (626,658 1,665,64 _ ) (1,665,646) _) (2085,462) Total business -type activities net assets - - 40,674,188 40,409,526 40,306,563 Primary government: _ Invested in capital assets, net ofrelated debt $ 217,419,724 195,474,945 225,818,022 249,059,500 274,661,975 295,634,289 326,421,744 Restricted 45,438,930 74,156,691 40,038,313 44,415,966 43,421,857 65,159,623 49,277,895 Unrestricted 30,698,622 43,025,999 48,290,000 45,169,328 59,734,413 84,463,730 120,870,794 Total primary government net assets $ 293,557,276 312,657,635 314,146,335 338,644,794 377,818,245 445,257,642 496,570,433 The City of Ln Quinta implemented GASB 34 for the fiscal year'ended June 30 2001. Information prior to the implementation of GASB 34 is not available. Source: City of La Quinta 124 CITY OF LA QUINTA TABLE 2 Changes in Net Assets Last Seven Fiscal Years (accrual basis ol'aceouming) Fiscal Year 2001 2002 7003 2004 2005 2006 2007 Expenses 4,319,778 3,595,906 Govemmumal activities 6.284,342 8,547,005 General government S 3.146,699 3,241,576 Public safety 5.776.628 7,522.532 Community services 940,881 1,411,943 P tanning and development 6.146,998 7,110,125 Public works 5;968,911 6.434.239 Interest on long-term debt 5.861.632 7,791.759 Total governmental activities expenses :7,841.749 33,512,174 Business -type activities: 15,494,656 15J63.422 Golf Course 39,212,009 - Total business -type activiiies. expenses 56,719,711 - Total primary government expenses 27;841 749 33,51?,174 Program revenues Governmental activities 4,523.146 4,520_173 Charges for services: 39.212.009 45,262,085 General government 214,601 253,891 Public safety 2,860,434 2,544,528 Community services 123,960 170,865 Planning and development 709,033 565,098 Public works 1,429,942 1,316,373 Operating grants and contributions 1,601,716 1,699,255 Capital grants and contributions 14,375.463 11,662,424 Total governmental activities 169,643 1,594,225 program revenues 21.315,149 18,2t2-434 Business-rype activities 1,797,031 1,799,503 Charges for services: 3,603.173 3,796.495 Golf Course 12,090,143 18,591,423 Total business -type activities 17,601,131 12-385,360 program revenues _ 47,732,131 Total primary government program revenues 21-115,149 13,212,434 3.540,748 (continued) (continued) Net revenues (expenses): 3,120,728 3540,748 Governmental activilies (6,526,600) (15,299,740) Business-lype activities 30,459,263 - Total nel revenues (expenses) 16.526,60oj (15,299,740} General revenues and other changes in net assets: (34,911,952) ' Governmental activities: (14,150,873) 1,603.077 Taxes Property taxes 1,162,634 1,450,196 Tax increment 15124,183 18,899,329 Sales lax 3,778,583 3,093.588 Transient occupancy taxes 4,249,753 3,967,003 Franchise lazes 625,790 654,696 Other taxes 515,310 479,822 Motor vehicle in lieu, unrestricted 1,496,620 1,473,217 Investment income 3,578,206 3,006,097 Gain (loss) on sale of capital assets 4,261,767 (21,397) Miscellaneous 292,036 692,691 Transfers - - Totalgovemmentalactivities 3(.W.1i5 33,695.242. Business -type activities: 1,326,618 1,179,785 Investment income - 2,453,642 Transfers 3,291,055. 1,353,866 Total business -type activities 4,336,050 - Total primary govermment 3 L023,115 33,695,2-02 Changes in net assets 1,967,292 - Governmental activities 24,496,515 18,395,502 Business -type activities 2,052,246 - Total primary government S 24� A9�6.515 18.395.502 3,203.462 4,319,778 3,595,906 4,229.871 6.284,342 8,547,005 10,256,463 8,512,875 9,065,244 12,724,100 1,321,825 1,446,999 1,157,141 1,426,033 4,299,453 19,083,860 7,526,977 5052,239 5,906,915 7.736,520 6,785,759 6,003,013 9.101.582 10;006.335 10,511,874 8,555,401 9.658,779 15,265,051 15,494,656 15J63.422 47,497,312 39,212,009 43.384,794 46,129,054 56,719,711 - - 1;877,291 4,523,146 4,520,173 1,877,291 4,523.146 4,520_173 _ 47,497312 39.212.009 45,262,085 50,652,200 _61,239,884 298,749 337,376, 445,663 717,849. 60,530 2,917,866 4,0(A,621 4,438.115 4,168.206 2,659,515 205,806 252,677 252,501 428.947 387,065 611,278 662,737 754,938 1,873.676. 169,643 1,594,225 1,813,993 2.815,703 3,021,379 2.244.156 1,797,031 1,799,503 1,935,576 3,603.173 3,796.495 5,160,405 r 12,090,143 18,591,423 33,918.901 17,601,131 12-385,360 20,961.050 29.233;921 47,732,131 26,913535 1,091,834 3.120,728 3.540,748 1,091,836 3,120,728 3540,748 ;:,535,}60 20,961,050 30,725757 50,852,859 30,459,263 (continued) (continued) (continued) (continued) (continued) (34,911,952) (18,250,959) (14,150,873) 1,603.077 (29,801,176) p85.4 S.5j 1,402A1$ (979,4 (34,911,9523 (18,250.959] (I41y36,328} 200,659 f, -,30,7'$1j;4011 1,600,616 2,198,141 2,579,245 3,679,079 4,999,051 21,191,832 24,450,337 24,443,112 35,168;329 42,583,031 4,345,381 5,240,037 6,773,566 7.6 13,075 8,721,081 4,036,290 4,261,767 4,831.338 5,417,238 51446.361 690,544 895,810 1,185,087 1,044,470 1,259.985 700,154 867,059 1,392,795 1,326,618 1,179,785 1,768,091 1,603,151 2,453,642 2,740233 3,291,055. 1,353,866 1,738,505 4,336,050 6,319,502 11,854,951 - 3,717,470 1,967,292 - 513,876 1,489,612 2,397,474 1,943,093 2,052,246 .W I (41A59•a135 r 1.137 M1 r (374.645] lgo,516.901 34. 32 42r7A941$- 12„4301`36 66,101.726 _ 553 1.817 t 41 459,64.k t 1,137,203 t 874,645 41,459,643 1.137,756 876,462 36,400,652 42749,418 54,109,779 67,239,482 81,393,363 1,486,700 24,498,459 (1,500,737) 67,704,803 50,715,725 40,674,188 (:64:662) (102,963) 1,488.700 24,498.459 39,173.451 67.440,141 50,612.762 The City of La Quints implemented GASB 34 for the fiscal year ended June 30, 2007. brfonnation prior to the implemeurntion of GASB 34 is not nvmilahle. The transfer was for land & golf course improvements transferred to the Enterprise Fund Source: Cityol-La Quintu 125 CITY OF LA QUINTA Changes in Net Assets - Governmental Activities Last Seven Fiscal Years (accrual basis of accounting) Expenses: General government Public safety Community services Planning and development Public works Interest on long-term debt Total governmental activities expenses Program revenues: Charges for services; General government Public safety Community services Planning and development Public works Operating grants and contributions Capital grants and contributions Total governmental activities TABLE 214,601 253,891 298,749 Fiscal Year 445,663 717,849 60,530 2001 2002 2003 2004 2005 2006 2007 3,146,699 3,241,576 3,203,462 4,319,778 3,595,906 4,229,871 6,284,342 5,776,628 7,522,532 8.547,005 10,256,463 8.512;875 9,065,244 12,724.100 940,881 1,411.943 1,321.825 1,446,999 1,157,141 1,426,033 4,299,453 6.146.998 7,110,125 19,083,860 7,526,977 5,752,239 5,906,915 7.736.520 5,968,911 6.434,239 6,785,759 6,003,013 9,101,582 10,006.335 10.511,874 5,861,632 7,791,759 8,555,401 9,658,779 15,265,051 15,494,656 15,163,422 27,841,749 33,512,174 47,497,312 39,212,009 43,384,794 46,129,054 56,719,711 214,601 253,891 298,749 337,376 445,663 717,849 60,530 2,860,434 2,544,528 2,917,866 4,004,621 4,438,115 4,168,206 2,659,515 123.960 170,865 205,806 252,677 252,501 428,947 387,065 709,033 565,098 611,278 662.737 754,938 1,873,676 169,643 L.429,942 1,316,373 1,594,225 1,813,993 2,815,703 3,021,379 2,244,156 1,601,716 1,699,255 1,797,031 1,799,503 1,935,578 3,603,173 3,796,495 14,375,463 11 .662,424 5,160,405 12,090,143 18,591,423 33,918,901 17,601,131 program revenues 21.315,149 18,212,434 Net program revenues (expenses) (6,526, (15,299,740] General revenues and other changes in net assets: 14,150,873 Taxes: (29,8011176) Property taxes 1,162,634 1,450,196 Tax increment 15,324,183 18,899,329 Sales tax 3,778,583 3,093,588 Transient occupancy taxes 4,249,753 31967,003 Franchise tax 625,790 654,696 Other tax 515,310 479,822 Motor vehicle in lieu, unrestricted 1,496,620 1,473,217 Investment income 3,578,206 3,006,097 Gain (loss) on sale of capital assets - (21,397) Miscellaneous 292,036 692,691 Transfers 1,326,618 1,179,785 Total governmental activities 31,023,115 33,695,242 12,585,360 20,961,050 29,233,921 47,732.131 26,918.535 i301 L,952] (18,250,959) 14,150,873 1.643,077 (29,8011176) 1,800.616 2,198,141 2,579,245 3,679;079 4.999,051 21,191,832 24,450,337 24,443,112 35,168,329 42,583,031 4,345,381 5,240,037 6,773.566 7,613.075 8,723,081 4,036,290 4,261,767 4,831,338 5,437,238 5,448,361 690,544 895,810 1,185,087 1,044,470 1,259,985 700,154 867,058 1,392,795 1,326,618 1,179,785 1,768,091 1,608,151 2,453,642 2,740,233 3,291,055 1,353,868 1,738,505 4,336,050 6,319,502 11,854,951 - - 3,717,470 1,967,292 - 513,876 1,489,612 2,397,474 1,943,093 2,052,246 (81,459:043) (1,137.203) (874,645] 36,400,652 42,749,418 12,650,136 66,101,726 80,516,901 Changes in net assets - govemmental activities $ 24,496,515 18,395,502 1.488,700 24 _08,41 (1,500,737) 67,704,803 50,715,725 The City of La Qui.nta implemented GASB 34 for the fiscal),ear ended June 30, 2001, Information nrior to the imnlementation ofGASR 34 is not available. Source: City of La Quinta 126 CITY OF LA QUINTA Changes in Net Assets - Business -type Activities Last Three Fiscal Years (accrual basis of accounting) The City of La Quinta implemented the business type activities in FY 2004/2005. The transfer was for land & golf course improvements transferred to the Enterprise Fund. 2 This was the first full year of operations for the Golf Course Source: City of La Quinta 127 1rr34011 Fiscal Year 2005 2006 2007 Expenses: Golf Course 1,877,291 2 4,523,146 4,520,173 Total business -type activities expenses 1,877,291 4,523,146 4,520,173 Program revenues: Charges for services: Golf Course 1,091,836 2 3,120,728 3,540,748 Total business -type activities program revenues 1,091,836 3,120,728 3,540,748 Net revenues (expenses) (785,455) (1,402,418) (979,425) General revenues and other changes in net assets: Investment income- - 553 1,817 Transfers - 164,190 874,645 Capital contributions ' 41,459,643 973,013 979,425 .Total business -type activities 41,459,643 1,137,756 1,855,887 Changes in net assets - business -type activities 40,674,188 (264,662) 876,462 The City of La Quinta implemented the business type activities in FY 2004/2005. The transfer was for land & golf course improvements transferred to the Enterprise Fund. 2 This was the first full year of operations for the Golf Course Source: City of La Quinta 127 1rr34011 CITY OF LA QUINTA Fund Balances of Govemmental Funds Last Seven Fiscal Years (modified accrual basis of accounting) TABLE 5 The increase was primarily the result of the issuance of the 2004 Financing Authority bonds. Source: City of La Quinta 128 Fiscal Year 2001 2002 2003 2004 2005 2006 20,07 General fund: Reserved $ 11,746,211 12,897,893 21,099,910 29,210,757 32,412,590 23,210,506 28,388,633 Unreserved 23,878,259 27,981,710 26,584,773 25,494,479 31,514,377 53.058,618 56,251,887 Total general fund S 35.624.470 40,879,603 47,684,683 54,705.236 63.926,967 76,269,124 84,640.520 All other governmental funds: Reserved $ 13,480,545 45,508,787 38,404,982 98,476,000 99.,751,862 95,515,445 31,211,751 Unreserved, reported in: Special revenue funds 6,352,995 12,107,305 9,382,431 9,286,459 19,267,394 36,475,093 27,770,552 Debt service funds (6,800,030) (5,622,884) (6,182,506) (11,099,245) (7,236,054) 738,590 10,634 Capital projects funds 18,712,013 12,423,247 16,368,205 28,600,240 1,831,415 6,499,827 58,370,198 Total all other governmental funds S 31.745.573 64,416.455 57,973,112 125.263.454 113.614;617 139.228.955 117,363,135 The City of La Quinta has elected to show only seven years of data for this schedule. The increase was primarily the result of the issuance of the 2004 Financing Authority bonds. Source: City of La Quinta 128 The City of La Quinta has elected to show only seven years of data for this schedule. Source: City of La Quinta 129 CITY OF LA QWNTA TABLE 6 Changes in Fund Balances of Governmental Funds Last Seven Fiscal Years (modified accrual basis of accounting) Fiscal Year 2001 2002 2003 2004 2005 2006 2007 Revenues: Taxes $ 36,605,534 43,011,931 50,326,811 58,301,082 68,175,347 89,704,947 100,103,324 Licenses and permits 2,057,423 1,857,691 1,982,127 3,096,145 3,226,167 5,145,430 2,788,882 Charges for services 1,998,589 1,757,744 2,302,759 2,619,578 3,402,602 3,367,989 1,821,794 Developer fees 2,592,398 2,298,647 3,021,245 5,718,073 6,091,156 12,473,440 5,310,440 Intergovernmental 9,400,340 9,583,451 7,194,521 11,858,627 10,242,876 18,585,468 14,803,971 Investment income 4.,893,919 4,135,009 3,368,709 3,735,984 6,215,291 9,946,212 12,692,350 Special assessments 782,610 757,619 780,259 816,045 825,292 818,526 877,191 Rental income 1,067,076 1,001,389 1,094,510 1,118,744 1,201,463 1,103,600 1,064,978 Loan repayments - - - - 2,381,602 1,621,850 1,047,020 Other 502,717 584,197 483,777 1,359,539 528,903 637,054 412,353 Total revenues 59,900,606 64,987,678 70,554,718 88,623,817 102,290,699 143,404,516 140,922,303 Expenditures Current: General government 3,275,624 3,161,596 3,344,407 4,099,376 3,970,921 4,644,954 6,150,699 Public satiety 5,636,154 7,610,308 8,344,428 9,672,708 12,364,583 13,029,187 15,685,493 Community services 817,460 1,067,837 993,964 1,025,397 1,104,509 1,248,308 4,027,302 Planning and development 6,344,764 10,693,374 7,804,294 7,480,421 5,719,373 5,847,563 28,994,177 Public works 2,613,928 2,897,312 3,685,050 4,536,589 6,206,769 6,987,014 6,755,507 Capital projects 14,456,314 57,342,978 16,057,578 43,331,919 40,012,387 25,445,550 36,420,417 Debt service: Principal retirement 4,510,420 11,453487 2,931,952 3,610,538 3,793,660 4,777,748 5,647,940 interest and fiscal charges 5,942,929 7,017,016 9,469,314 13,961,721 14,355,577 15,554,612 15,059,977 Payment to bond escrow - - - 1,591,107 - Payments under pass-through obli 10,949,381 13,669,166 17,561,994 21,448,147 25,756,321 35,958,291 36,498,575 Total expenditures 54,546,974 114,913,074 70,192,981 110,757,923 113,284,100 113,493,227 155,240,087 Excess (deficiency) of revenues over (under) expenditures 5,353,632 4'2� 925,396) 361,737 (22,134,10 (109 993,4OI) 29,91I,289 14,317,784) Other financing sources (uses): Issuance of tax allocation bonds - 88,000,000 - 26,400,000 - - Issuance of revenue bonds - 90,000,000 - Payment to bond escrow - - (19,955,000) - - Transfers in 17,911,515 64,255,590 23,887,256 154,613,662 49,248,081 35,828,335 60,954,576 Transfers out (17,911,515) (65.255,590) (23,887,256) (154,613,662) (49,248,081) (35,992,525) (60,954,576) Proceeds from sale of capital assets - 146,603 - - 8,566,295 8,209,396 124,097 Total other financing sources (uses) - 87,146,603 - 96,445,000 8,566,295 8,045,206 124,097 Net change in fund balances $ 5,353,632 37,221,207 361,737 74,3 L21ELS (427,106) 37,956,49514( ,193,687) Debt service as a percentage of noncapital expenditures 49.1% 54.2% 43.5% 57.9% 62.0% 65.5% 59.7% The City of La Quinta has elected to show only seven years of data for this schedule. Source: City of La Quinta 129 CITY OF LA QUINTA Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in dollars) NOTE: In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of I% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re- assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Source: County of Riverside Auditor -Controller 130 TABLE 7 Entire City (including Redevelopment Agenc 1 Fiscal Year Taxable Ended Less: Assessed June 30 Secured Unsecured Exenmtions Value Percent Change 1998 2,305,593,987 18,844,880 (34,553,805) 2,289,885,062 N/A 1999 2,674,887,437 18,756,736 (38,580,062) 2,655,064,111 15.95% 2000 2,665,520,656 18,712,736 (39,914,784) 2,644,318,608 -0.40% 2001 3,162,945,116 30,599,753 (50,149,068) 3,143,395,801 18.87% 2002 3,789,678,041 32,607,713 (54,726,303) 3,767,559,451 19.86% 2003 5,412,382,710 40,940,877 (95,420,075) 5,357,903,512 42.21% 2004 6,289,493,552 44,014,548 (113,037,003) 6,220,471,097 16.10% 2005 7,856,383,375 72,554,357 (115,071,146) 7,813,866,586 25.62% 2006 9,986,151,525 88,740,840 (99,245,721) 9,975,646,644 27.67% 2007 11,854,669,637 101,433,002 (89,688,505) 11,866,414,134 18.95% NOTE: In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of I% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re- assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Source: County of Riverside Auditor -Controller 130 TABLE 7 CITY OF LA QUINTA TABLE 8 Assessed Value and Estimated Actual Value of Taxable Property - Redevelopment Agency Last Two Fiscal Years (in dollars) Source: County of Riverside Auditor -Controller 131 Redevelopment Agency Project Area 1 Fiscal Year Taxable Ended Less: Assessed Base Taxable June 30 Secured Unsecured Exemptions Value Year Increment 2006 3,962,433,928 29,248,534 (11,604,295) 3,980,078,167 199,398,233 3,780,679,934 2007 5,223,508,114 34,250,061 (36,913,004) 5,220,845,171 199,398,233 5,021,446,938 Redevelopment Agenev Project Area 2 Fiscal Year Taxable Ended Less: Assessed Base Taxable June 30 Secured Unsecured Exemptions Value Year Increment 2006 2,132,426,502 32,999,788 (54,125,422) 2,111,300,868 95,182,755 2,016,118,113 2007 2,764,306,278 50,616,017 (40,774,044) 2,774,148,251 95,182,755 2,678,965,496 Source: County of Riverside Auditor -Controller 131 Overlapping Rales �: CITY OF LA QUR4TA Tax Rale Alm 021-1 a Rale Arca 021015 Tax Ram Arca 020-144 Tax Rale Arca 020-144 City of La Qainta TABLE 9 Direct and Overlapping Propeny Tax Rales County of Riverside (Rale per SI GO of assessed value) Riverside (..manly O1fee Of Palacallatl Last Two Fiscal Year Riverside County Pension Obligation City City Redevelopment RWcvelopnrcnt Redcvclnpmun Redcvelapmnn 0.0761 Non-Projccl Arca Noa-Project Arca Project Area I Project Area I Projal Area 2 Project Area 2 2006 2007= 2006 2007 2006' 2007' _ Direct Rates 0 0442 0,0132 Coachella Valley Recreation & Park District City of La Quinti 00760 00695 00000 0.0000 (lootto 0,0000 Redevelopment Agency Project Arca 1 0,0000 00000 05830 0.5880 00000 Il nMxl Redeveleprnenl agency Project Area 2 000M 0.0000 00000 0 0000 0.2860 01910 County of Rivcrsidc 0.1960 0,2303 03470 03460 034711 03470 Counly Free Library 00250 00272 0.0010 11.00111 1101110 00010 County Structure Fire Protan.,, 00540 00564 00030 00020 00020 00020 Coachella Valley lCV1 Unified School 04320 0.1533 00170 0.0150 00000 00000 D-rl Sands Unified School 000OD 02414 00160 00140 02000 01980 Desert Community College 00700 0,0749 0.0030 00030 00420 00410 Riverside County Office ofEduealion 0.0380 0.0406 0.0030 00030 00230 00220 Riverside County Regional Pule & Opel Space 0,0040 00016 0 0000 00000 00000 00000 CV Public Cemetery 0.0032 00034 00000 00000 00000 D0000 CV Mosquito 00127 0.0136 0,0120 0.0120 00150 00140 CV Park & Recreation 0.0192 00206 0.0010 00020 0.0060 00060 CV Water District 00250 00272 00130 0.0130 0.0770 00760 CV Resource Conservation 0,0003 00003 00000 00000 0.0000 0 owl CVWD District l Debt ScrvicO 00118 00081 0.0000 00000 0.0000 0.0000 CVWD Siong Water Unit 0.0320 00313 00010 00010 00010 00010 Total Direct Rale 0.9992 1 0000 10000 1 0000 1.0000 1 0000 Overlapping Rales �: Tax Rate Area 020-005 Tax Rale Arco 020.005 Tax Rale Alm 021-1 a Rale Arca 021015 Tax Ram Arca 020-144 Tax Rale Arca 020-144 City of La Qainta County of Riverside Riverside (..manly O1fee Of Palacallatl Riverside County Pension Obligation Dcsen Sands Unified 00767 00761 0,0767 0.0761 0.0767 0.0761 Coachella Valley Unified School District _ Coachella Valley Water District 0.0442 0.0332 00199 0,0208 0 0442 0,0132 Coachella Valley Recreation & Park District Desert Cann] College District 0.0199 0.0199 0,0208 0.0199 0.0199 00199 Total Overlapping Rate 0.1409 0,1293 0.1175 0,1169 0.1409 0-1293 Trull Direct and Overlapping Rule 1.1401 1.1293 1 1175 1.1169 _ 1.1409 1.1293 NOTE: In 1978, California Boles passed Preposition 13 which sell the properly tax rule At a I OMA fixed amount for direct luxes This I.00% is shared by all taxing agencies for which the ssubjeel properly resides within 1 0203 Sources ConntyofRivetsidc Audimr Controller's Office I Direct rale front Tax Ralo Amp (TRA) 020-059 provided by Hill Caren & Conc and overlapping debt rates from California Municipal SluGrti4 ' Direct rate taken from all nor -RDA TRA's provided by We County of Riverside and do not include ERAF deductions unit overlapping rales provided by California Municipal Statistics I Direct ram mkot Corin an analysis by den City of Lq Qatirda Finance Depnm vent stalfofall TRA'( in the Ploject area and do not include Som RRAF deduoitnt4 and amilipping rout provided by California Munic pal Stwiaaica 4 Direct rule taken from an analysis by the City of La Qainta Finance Department staffafall TRA's in the Project arca and do not include Sole ERAF delnc60119 and overlapping rates provided by California Municipal Slatislics 132 CITY OF LA QUINTA Principal Property Taxpayers Current Year and Nine Years Ago (in dollars) $ 593,836,539 5.01% NOTE :The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Coren & Cone 133 TABLE 10 2007 1998 Percent of Percent of Total City Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Value Value Value KSL Desert Resort, Inc $ 389,142,025 3.28% 251,572,474 10.99% Sams Real Estate Trust/Wal Mart 29,878,467 0.25% CNL Desert Resort 26,280,884 0.22% Watermark Granite La Quinta 24,480,000 0.21% TD Desert Development 25,611,489 0.22% 21,758,698 0.95% Quarry at La Quinta, Inc. 23,145,749 0.20% Aventine Development 21,911,864 0.18% Apartments at La Quinta Village II 18,969,865 0.16% Target Corporation 18,465,969 0.16% One Eleven La Quinta 15,950,227 0.13% $ 593,836,539 5.01% NOTE :The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Coren & Cone 133 TABLE 10 CITY OF LA QUINTA Property Tax Levies and Collections Last Fiscal Year ( in dollars) Collected within the Fiscal Taxes Levied Fiscal Year of Levy Collections in Year Ended for the Percent Subsequent June 30 Fiscal Year Amount of Levy Years TABLE I 1 Total Collections to Date Percent Amount of Levy 2006 60,716,047 73,097,360 120.39% 2,092,065 75,189,425 123.84% 2007 79,752,191 74,533,984 93.46% 1,802,076 76,336,060 95.72% NOTE: The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed -through to other agencies. Source:_ County of Riverside Auditor Controller's Office 134 CITY OF LA QUINTA Ratios of Outstanding Debt by Type Last Two Fiscal Year (in dollars) Governmental Activities Reimbursement Agreement Compensated Absences Due to Coachella Valley Unified School District Due to County of Riverside Developer Agreement Tax Allocation Bonds Project Area I Tax Allocation Bonds Project Area 2 2004 Local Agency Revenue Bonds! City Hall Lease Revenue Bonds Unamortized Discount and Issuance Costs Total Governmental Business -type Activities Capital Leases Total Business -type activities Total Primary Government Population - State Department of Finance January I Number of Households Median Household Income Percentage of Personal Income Debt Per Capita TABLE l2 Fiscal Year Ended Fiscal Year Ended 2006 2007 $ 328,311 $ 278,311 608,266 734,055 5,186,627 4,431,178 1,850,000 1,750,000 776,030 643,539 141,785,000 139,145,000 6,130,000 6,025,000 89,265,000 87,745,000 6,245,000 5,900,000 (877,230) (877,230) 251,297,004 245,774,853 1,090,602 825,848 1,090,602 825,848 $ 252,387,606 $ 246,600,701 38,340 41,092 18,762 20,176 $ 65,906 $ 67,754 20.41% 18.04% $ 6,583 $ 6,001 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. ' The debt service payment for the 2004 Lease Revenue Bonds are made from Redevelopment Project Area 1 & 2 low & moderate income tax increment. 135 CITY OF LA QUINTA TABLE 13 Ratio of General Bonded Debt Outstanding Last Two Fiscal Years (In Dollars) General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). Assessed value has been used because the actual value of taxable property is not readily available in the State of California. Source: City of La Quinta 136 Outstanding General Bonded Debt Fiscal Year City Hall Lease 2004 Tax Percent of Ended Lease Local Agency Allocation Assessed Per June 30 Obligation Revenue Bonds 1 Bonds Total Value 1 Capita 2006 6,245,000 89,265,000 147,915,000 243,425,000 2.44% $ 6,349 2007 5,900,000 87,745,000 145,170,000 238,815,000 2.01% $ 5,812 General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). Assessed value has been used because the actual value of taxable property is not readily available in the State of California. Source: City of La Quinta 136 TABLE 14 CITY OF LA QUINTA Direct and Overlapping Debt June 30, 2007 City Assessed Valuation $ 4,166,001,700 Redevelopment Agency Incremental Valuation 7,700,412,434 Total Assessed Valuation $ 11,866,414,134 Source: Riverside County Auditor Controller Estimated Share of Percentage Outstanding Overlapping Applicable Debt 6/30/07 Debt Overlapping Debt Repaid with Property Taxes And Assessments: Desert Community College District 6.420% $ 63,006,886 4,045,042 Coachella Valley Unified School District 25.590% 94,897,458 24,284,260 Desert Sands Unified School District (DSUSD) 7.628% 236,666,277 18,052,904 DSUSD Lease Tax Obligations 7.628% 16,625,000 1,268,155 Coachella Valley County Water District I.D. No. 55 80.771% 4,995,000 4,034,511 Coachella Valley County Water District I.D. No. 58 7.095% 2,345,000 166,378 DSUSD Community Facilities District No. 1 100.000% 2,000,000 2,000,000 City of La Quinta 1915 Act Bonds . 100.000% 1,940,000 1,940,000 Coachella Valley Water District Assessment District No. 68 86.247% 2,320,000 2,000,930 Total overlapping debt repaid with property taxes 424,795,621 57,792,180 Overlapping Other Debt including Certifications of Participation (COP) Riverside County General Fund Obligations 1.293% $ 643,021,333 8,314,266 Riverside County Pension Obligations 1.239% 392,890,000 4,867,907 Riverside County Board of Education COP 1.239% 10,275,000 127,307 Coachella Valley Unified School District COP 25.590% 54,930,000 14,056,587 DSUSD COP 7.628% 13,220,000 1,008,422 Coachella Valley County Water District I.D. No. 71 COP 9.475% 7,485,000 709,204 Coachella Valley Recreation and Park District COP 11.029% 2,565,000 282,894 Total overlapping other debt 1,124,386,333 29,366,587 Total overlapping debt $ 1,124,386,333 87,158,767 City direct debt Total direct and overlapping debt 252,387,606 $ 339,546,373 Notes: For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value, Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. Source: California Municipal Statistics, Inc.- overlapping debt Source: City of La Quinta - City Direct debt 137 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 al I real and personal property of the City. The City of La Quinta has no general bonded indebtedness. Source: City of La Quinta Finance Department based upon the Assessed valuation received from the County of Riverside Auditor Controllers Office 138 CITY OF LA QTITNTA TABLE 15 Legal Debt Margin Information Last Seven Fiscal Years ( in dollars ) Fiscal Year 2001 2002 2003 2004 2005 2006 2007 Assessed valuation $ 3,143,395,801 3,767,559,451 5,357,903,512 6,220,471,097 7,813,866,586 9,975,646,644 11,866,414,134 Debt limit percentage 15% 15% 15% 15% 15% 15% 15% Debt limit 471,509,370 565,133,918 803,685,527 933,070,665 1,172,079,988 1,496,346,997 1,779,962,120 Total net debt applicable to limit: General obligation bonds _ - Legal debt margin $ 471,509,370 565,133,918 803,685,527 933,070,665 1,172,079,988 1,496.346,997 1,779,962,120 Total debt applicable to the limit as a percentage of debt limit 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Section 43605 of the Government Code of the State of California limits the amount of indebtedness for public improvements to 15% of the assessed valuation of al I real and personal property of the City. The City of La Quinta has no general bonded indebtedness. Source: City of La Quinta Finance Department based upon the Assessed valuation received from the County of Riverside Auditor Controllers Office 138 nn1.MWA CITY OF LA QUINTA Pledged -Revenue Coverage Last Fiscal Year (In Dollars) Tax Allocation Bonds - Project Area 1 Fiscal Year Debt Payments Increment I Principal Ended Tax Less: Other Net Tax Debt Service June 30 Increment Debt Payments Increment 1 Principal Interest Coverage 2006 36,506,201 20,638,731 15,867,470 2,500,000 7,805,905 1.54 2007 42,029,503 20,820,149 21,209,354 2,640,000 7,658,900 2.06 Tax Allocation Bonds - Project Area 2 Fiscal Year Ended June 30 2006 2007 Tax Less: Other Net Tax Debt Service Increment Debt Payments Increment I Principal Ended Tax Less: Other 19, 849, 893 17,3 25,411 2,524,482 100,000 20,777,158 18,553,875 2,223,283 105,000 2004 Local Agency Revenue Bonds Interest Coverage 1 319,168 6.02 314,785 5.30 Fiscal Year Ended Tax Less: Other Net Tax Debt Service June 30 Increment 3 Debt Payments Increment Principal Interest Coverage 2006 14,089,024 0 14,089,024 735,000 4,436,981 2.72 2007 15,701,664 0 15,701,664 1,520,000 4,402,909 2.65 Local Agency Revenue Bonds (City Hall Project) Fiscal Year Ended Lease Less: Other Net Lease Debt Service June 30 Revenue 2 Debt Payments Revenue Principal Interest Coverage 2006 680,575 0 680,575 330,000 350,575 1.00 2007 678,865 0 678,865 345,000 333,865 1.00 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Tax increment has been reduced by other debt payments, which may or may not be subordinated to Tax Allocation Bonds 2 Lease revenues consist of payments from the City General Fund, Civic Center Development Impact Fee Fund and the Redevelopment Agency Capital Projects Fund 3 Tax increment revenues from both Project Area 1 and Project Area 2 Low & Moderate Income Funds are used to pay the annual debt service payments. 139 CITY OF LA QUINTA Demographic and Economic Statistics Last Two Calendar Years Sources- (1) State of California Department of Finance - January 1 of each year (2) State of California Economic Development Department website (3) City of La Quinta Building & Safety and Community Development Departments (4) Desert Wheeler's [Newsletter City Overview 140 TABLE 17 Calendar Calendar Year Year 2006 2007 City Land (Sq Miles) (3) 35.1 35.1 Population (1) 38,340 41,092 Median Household Income (in dollars) (4) $65,906 $67,754 Number of Dwelling Units (3) 18,762 20,176 Persons per Household (3) 2.855 2.846 Average Income per person per household $23,084 $23,807 Labor Force (2) 14,500 15,300 Employment (2) 14,100 14,900 Unemployment Kate (2) 2.76% 2.61% Median age (3) 36 36.4 Sources- (1) State of California Department of Finance - January 1 of each year (2) State of California Economic Development Department website (3) City of La Quinta Building & Safety and Community Development Departments (4) Desert Wheeler's [Newsletter City Overview 140 TABLE 17 TABLE 18 CITY OF LA QUINTA Principal Employers Current Year and Nine Years Ago "Total Employment" as used above represents the total employment of all employers located within City limits with over 100 employees Source: Riverside County Economic Development Department and the City of La Quinta Source: Riverside County Economic Development Department and the City of La Quinta 1 The Albertsons Grocery Story was sold to Stater Brothers and is no longer located in the City 2 The total City employment and % applicable for 1997 was not available 141 2007 19982 Percent of Percent of Number of Total Number of Total Employer Activity Employees Ernployment Employees Employment La Quinta Resort & Club Hotel & Golf Resort 1,600 10.74% 1,500 Wal-Mart Super Center Retail 800 5.37% 250 Rancho La Quinta Golf Resort 700 4.70% PGA West Club Golf Resort 500 3.36% 1,100 Home Depot Retailer 240 1.61% - Imperial Irrigation District Public Utility 200 1.34% Lowe's Horne Improvement Retailer 150 1.01% Albertsons 1 Grocery Store - 0.00% 126 Stater Brother's Grocery Store 150 1.01% Tradition Golf Club Golf Resort 100 0.67% Ralph's Grocery Store 88 0.59% 100 Total employment listed 4,528 30.39% 3,076 Not Available Total City Employment - July 1 14,900 Not Available "Total Employment" as used above represents the total employment of all employers located within City limits with over 100 employees Source: Riverside County Economic Development Department and the City of La Quinta Source: Riverside County Economic Development Department and the City of La Quinta 1 The Albertsons Grocery Story was sold to Stater Brothers and is no longer located in the City 2 The total City employment and % applicable for 1997 was not available 141 Function CITY OF LA QUINTA Full-time City Employees by Function Last Three Fiscal Years Fiscal Year Ending June 30 2005 Fiscal Year Fiscal Year Ending Ending June 30 June 30 2006 2007 Administration 8.00 9.00 10.00 City Cleric 5.00 5.00 5.00 Finance 8.00 9.00 9.00 Community Services 8.00 10.25 10.25 Building and Safety 21.00 22.00 24.00 Planning and Development 9.00 12.00 12.00 Public Works 23.50 26.25 26.25 Golf Course 0.50 n 50 n cn Total 83.00 94.00 Source: City of La Quinta NOTE: The City of La Quinta contracts with the County of Riverside for Police Services and with the California Department of Forestry through a contract with the County of Riverside for Fire Services. In addition the City -owned Golf Course is operated by Landmark Golf. These positions have not been included as these positions are not City employees. 142 97.00 TABLE 19 Finance: Number of Active Business Licenses Number of Active Animal Licenses Number of Accounts Payable Checks Processed Number of investment purchases Par value of investments Number of cleared checks Number of outgoing bank wires Public Works: Encroachment permits issued Request for services Building & Safety: Permi ts: Single family Detached Single family Attached Residential Pool Wall/Fence Other Total Permits Code Compliance: Animal Control Incidents Handled Vehicle abatements Garage Sale Permits Weed abatements Nuisance abatements Community Services: Library activities: Library Volume Library books checked out Library Cards Issued Number of School Children Visiting Library Library Volunteer Hours Senior Center: Number of visits Senior Center Volunteer Hours Recreation activities: Participants: Leisure Classes Special events Adult Sports Golf course: Golf rounds played Average $ Green fee Planning and Development: Number of residential units approved Commercial square footage approved Source: City of La Quinta CITY OF LA QUINTA Operating Indicators by Function Last Two Fiscal Years 2006 2007 3,208 3,424 892 1,022 4,696 4,722 39 73 $327,417,000 $392,729,000 5,081 4,837 202 158 304 218 618 419 1,044 526 227 38 866 612 1,502 963 1,607 1,404 5,246 3,543 143 1,901 687 909 296 1,190 1,444 141 76 1,611 2,032 42,050 44,981 55,002 99,659 5,550 5,325 745 260 1,891 1,583 14,305 12,955 3,481 4,192 1,373 1,192 4,668 7,809 3,402 6,827 38,934 40,548 71.12 76.97 1,063 534 533,726 124,821 TABLE- 20 CITY OF LA QUINTA Capital Asset Statistics by Function Last Two Fiscal Years Parks and recreation: Parks Fiscal Year Fiscal Year Park Acreage Ending Ending Senior Center June 30 June 30 Museum 2006 2007 Public works: 1 1 Streets (miles) 118.40 122 Bikepaths (miles) 22.00 22 Streetlights 73 85 Traffic signals 44 47 Traffic Signs 2,799 2,845 Bridges 12 12 Parks and recreation: Parks 12 12 Park Acreage 234 226 Senior Center 1 1 Museum 1 1 Library 1 1 Golf Course: Municipal golf courses 1 Source: City of La Quinta 144 TABLE 21 TABLE 22 CITY OF LA QUINTA Schedule of Insurance in Force June 30, 2007 Company Name Policy Number Coverage Limits Term Premium Hartford PEBAO7068 Employee Dishonesty, $1,000,000 02/03/07 - 08 $2,976 Forgery, Computer Fraud Lexington 1115849 All Risk Property Insurance 40,900,000 07/01/07 - 08 43,869 Including Auto Physical Damage (Excluding Earthquake) Pacific Ins ZG0036449 Earthquake & Flood 7,500,000 02/07/07 - 08 113,000 Endurance Ins 10000326200 Real & Personal Property Including Contingent Tax Interruption California Certificate #5 Comprehensive General $0 Deductible Retention 07/01/07 - 08 255,568 Joint Powers Liability $50 Million Insurance Authority California Certificate Joint Powers #5009-056 Insurance Authority Worker's Compensation 145 5,000,000 07/01/07-08 172,288 THIS PAGE INTENTIONALLY LEFT BLANK 146