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CITY OF PALM SPRINGS
fComprehensive Annual Financial Report
' Year ended June 30, 2003
' Prepared by
' FINANCE DEPARTMENT
Thomas M. Kanarr
Director of Finance and Treasurer
Nancy E. Klukan
' Accounting Manager
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CITY OF PALM SPRINGS
' Comprehensive Annual Financial Report
Year ended June 30, 2003
tTABLE OF CONTENTS
' Exhibit Page
INTRODUCTORY SECTION:
' Letter of Transmittal VII
List of Principal Officials Xill
' Organizational Chart XIV
Certificate of Award for Outstanding Financial Reporting (CSMFO) XV
Certificate of Achievement for Excellence in Financial Reporting (GFOA) XVI
FINANCIAL SECTION:
Independent Auditors' Report 1
Management's Discussion and Analysis 3
Basic Financial Statements:
' Government-wide Financial Statements:
• Statement of Net Assets AA 17
• Statement of Activities BB 18
Fund Financial Statements:
Govenunental Funds:
• Balance Sheet CC-1 20
• Reconciliation of the Balance Sheet—Statement of Net Assets CC-2 21
• Statement of Revenues,Expenditures and Changes in
' Fund Balance DD-1 22
• Reconciliation of the Revenues,Expenditures and Changes in
Fund Balances—Statement of Activities DD-2 23
' Proprietary Funds:
• Statement of Net Assets EE 24
• Statement of Revenues,Expenses and Changes in
Fund Net Assets FF 26
• Statement of Cash Flows GG 27
I
1
CITY OF PALM SPRINGS
Comprehensive Annual Financial Report '
Year ended Time 30, 2003
TABLE OF CONTENTS, (CONTINUED) '
Exhibit Page ,
Fiduciary Funds: '
• Statement of Fiduciary Net Assets HH 29
• Statement of Changes in Fiduciary Net Assets II 30
Notes to the Basic Financial Statements 31 ,
Required Supplementary Information:
Notes to Required Supplementary Information 78 '
Schedule of Revenues, Expenditures and Changes in Fund Balances—
Budget and Actual:
• General Fund A-1 79
• Community Promotion Fund A-2 80 '
Supplementary Schedules:
Non-Major Governmental Funds: '
• Combining Balance Sheet B-1 82 '
• Combining Statement of Revenues, Expenditures and Changes
in Fund Balances B-2 83
Non-Major Special Revenue Funds:
• Combining Balance Sheet C-1 86 '
• Combining Statement of Revenues, Expenditures '
and Changes in Fund Balances C-2 88
• Forfeiture Fund:
Schedule of Revenues, Expenditures and '
Changes in Fund Balances - Budget and Actual C-3 90
• Safety Augmentation Fund: '
Schedule of Revenues,Expenditures and
Changes in Fund Balances -Budget and Actual C-4 91 '
II ,
1 CITY OF PALM SPRINGS
Comprehensive Annual Financial Report
Year ended bore 30, 2003
TABLE OF CONTENTS, (CONTINUED)
' Exhibit Page
• CSA 152 Fund:
1 Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual C-5 92
• Recycling -AB 939 Fund:
' Schedule of Revenues, Expenditures and
Changes in Fund Balances -Budget and Actual C-6 93
• Villagefest Fund:
' Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual C-7 94
' • Parking Fiord:
Schedule of Revenues, Expenditures and
' Changes in Fund Balances - Budget and Actual C-8 95
• Gas Tax Fund:
' Schedule of Revenues, Expenditures and
Changes in Fund Balances -Budget and Actual C-9 96
' • Measure A Improvements Fimd:
Schedule of Revenues, Expenditures and
Changes in Fiord Balances - Budget and Actual C-10 97
• Drainage Construction Fund:
' Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual C-11 98
' • Community Development Block Grant Fund:
Schedule of Revenues,Expenditures and
' Changes in Fund Balances -Budget and Actual C-12 99
' III
1
CITY OF PALM SPRINGS
Comprehensive Amoral Financial Report '
Year ended June 30, 2003
1
TABLE OF CONTENTS, (CONTINUED) '
Exhibit Page '
• Master Lease Fund:
Schedule of Revenues,Expenditures and '
Changes in Fund Balances - Budget and Actual C-13 100
• Air Quality Management Fund:
Schedule of Revenues, Expenditures and '
Changes in Fund Balances -Budget and Actual C-14 101
• Public Arts Fund:
Schedule of Revenues, Expenditures and
Changes in Fund Balances -Budget and Actual C-15 102
• Library Fund: '
Schedule of Revenues,Expenditures and
Changes in Fund Balances -Budget and Actual C-16 103
• Low and Moderate Housing Fund:
Schedule of Revenues, Expenditures and '
Changes in Fund Balances -Budget and Actual C-17 104
Major and Non-Major Debt Service Funds: '
• Combining Balance Sheet D-1 106 '
• Combining Statement of Revenues, Expenditures
and Changes in Fimd Balances D-2 107 '
• Special Assessments Fund:
Schedule of Revenues, Expenditures and Changes '
in Fund Balances -Budget and Actual D-3 108
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' CITY OF PALM SPRINGS
Comprehensive Annual Financial Report
Year ended June 30, 2003
TABLE OF CONTENTS, (CONTINUED)
' Exhibit Page
• General Debt Service Fund:
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual D-4 109
' • Community Redevelopment Agency Fund:
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual D-5 110
Major and Non-Major Capital Projects Funds:
• Combining Balance Sheet E-1 112
• Combining Statement of Revenues, Expenditures
and Changes in Fund Balances E-2 113
• Capital Projects Fund:
' Schedule of Revenues, Expenditures and
Changes in Fund Balances -Budget and Actual E-3 114
' • Panting Projects Fund:
Schedule of Revenues, Expenditures and
Changes in Fund Balances -Budget and Actual E-4 115
• Community Redevelopment Agency Fund:
' Schedule of Revenues,Expenditures and
Changes in Fund Balances - Budget and Actual E-5 116
' Internal Service Funds:
• Combining Statement of Net Assets F-1 118
' • Combining Statement of Revenues, Expenses
and Changes in Net Assets F-2 120
' • Combining Statement of Cash Flows F-3 121
' v
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CITY OF PALM SPRINGS t
Comprehensive Annual Financial Report
Year ended June 30, 2003
TABLE OF CONTENTS, (CONTINUED)
Exhibit Page '
Agency Fund:
Statement of Changes in Assets and Liabilities G-1 124 '
Table No. Page '
STATISTICAL SECTION:
General Governmental Expenditures by Function 1 126 '
General Governmental Revenues by Source 2 128
General Governmental Tax Revenues by Source 2A 129
Property Tax Levies and Collections 3 130
Schedule of Assessed Valuation 4 131
Property Tax Rates - Direct and Overlapping Governments 5 132
Principal Taxpayers 6 133 '
Special Assessment Billings and Collections 7 134
Computation of Legal Debt Margin 8 135
Ratio of Net General Obligation Bonded Debt to Assessed '
Value and Net General Obligation Bonded Debt per Capita 9 136
Ratio of Annual Debt Service Expenditures for Governmental '
Obligation Bonded Debt to Total General Governmental
Expenditures 10 137
Computation of Direct and Overlapping Bonded Debt 11 138 '
Revenue Bond Coverage -Airport 12 139
Major Employers 13 140 '
Demographic Statistics 14 141
Property Value, Construction and Business Activity 15 142
Schedule of Insurance in Force 16 143 '
Miscellaneous Statistics 17 146
Schedule of Credits 18 147 '
VI ,
1
' of PALM SA
City of Palm Springs
* * Department of Finance and Treasury
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* hC���ORAiEO`y9 3200 Tahqurtz Canyon Way•Palm Springs,Calif.,.,. 92262
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I \P` TEL (760)323-8229 •FAX (760)322-8320•TDD (760)864-9527
FOP,
' December 1, 2003
' To the citizens of The City of Palm Springs, California:
The comprehensive annual financial report (CAFR) of the City of Palm Springs for the fiscal year
1 ended June 30, 2003, is hereby submitted. Responsibility for both the accuracy of the data, and the
completeness and fairness of the presentation, including all disclosures, rests with the City. To the
best of our knowledge and belief, the enclosed data are accurate in all material respects and are
reported in a manner designed to present fairly the financial position and results of operations of the
various funds and account groups of the City. All disclosures necessary to enable the reader to gain
an understanding of the City's financial activities have been included. This report has been
reformatted to comply with the new financial reporting model outlined in the Governmental
Accounting Standards Board (GASB) Statement 34, which significantly changes the content and
format of the City's financial statements.
The report includes the City's government-wide financial statements and fund financial statements.
The government-wide financial statements include two new statements. the Statement of Net
Assets showing the total net equity of the City, including infrastructure, and the Statement of
Activities that shows the cost of providing government services. Both of these statements have
been prepared using the accrual basis of accounting, used by most businesses, as compared to the
modified accrual method used in fund financial statements (the traditional governmental financial
' reports). A reconciliation report is provided to the differences between the two reporting methods.
In addition, the new reporting model includes an emphasis on the City's major funds as shown in the
Governmental fund Statements. The new statements, combined with other information, are further
' analyzed in a new narrative called Management's Discussion and Analysis (MD & A). MD & A
provides "financial highlights" and a financial interpretation of trends, fluctuations and variances in
the financial data. The MD&A further discusses any events or decisions that significantly affect the
financial condition of the City.
The City of Palm Springs is required to undergo an annual single audit in conformity with the
provisions of the Single Audit Act of 1984 and U.S. Office of Management and Budget (OMB)
Circular A-133, Audits of State, Local Governments, and Non-Profit Organizations. Information
related to this single audit, including the schedule of federal financial assistance, findings and
recommendations, and auditor's reports on the internal control structure and compliance with
' applicable laws and regulations, are included in a separate report.
VII
Post Office Box 2743 0 Palm Springs, California 92263-2743
1
The City of Palm Springs provides a full range of services including public safety, highways and '
streets, sanitation, culture and recreation, aviation, public improvements, planning and zoning,
community development and general administrative services. In addition to general government '
activities, the City is considered to be financially accountable for the Community Redevelopment
Agency of the City of Palm Springs, Palm Springs Public Facilities Corporation and the Palm Springs
Financing Authority; therefore, these activities are included in the reporting entity. '
GENERAL INFORMATION
The City of Palm Springs, incorporated in 1938, is located in the western part of the Coachella
Valley, one of the fastest growing regions of the State. The full time population of 43,997 increases
substantially in the winter season (approximately Novemberthrough May)with the influx of part-time
residents and hotel visitors. '
At 96.2 square miles, the City is one of the largest in area in the State.
ECONOMIC CONDITION AND OUTLOOK '
There were good results in the City's major revenue sources.
Transient Occupancy Tax, including a rate increase that was effective January 1, 2002, was up
about 3.1%.
Sales Tax collections were up just over 3%, even with the loss of one of the City's larger taxpayers, a
new car dealership.
Property Taxes in the General Fund increased by about 7.5% over the prior year.
Overall, the combined revenue from the General Fund and Community Promotion Fund went from ,
$46.5 million in Fiscal Year 2001-02 to $50.2 million in Fiscal Year 2002-03, an increase of about
7.8%.
Unfortunately, the increased revenue was matched by increases in expenditures, primarily in '
pension costs, workers compensation and health and liability insurance. These higher costs were
anticipated in the budget for the current year, and were somewhat offset by the elimination of 17
positions Citywide, and other cost containment measures.
The continued high level of building activity combined with a rapid rise in property values will likely
allow revenues to keep pace with the additional expected increases in City costs. After Fiscal Year '
2004-05, the expense side of the ledger should stabilize, and the General Fund should produce a
surplus.
MAJOR INITIATIVES
For the Year
The 388-space downtown parking structure was completed on time and within budget. The $6.2
million facility opened in November, 2002.
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' The City concluded labor negotiations with two of the bargaining units: the Management,
Professional and Supervisory employees and the General Unit. Together,these represent about two
thirds of the total employees. The agreements are both for two years (through June 30, 2005), and
called for no cost of living increase for FY 03-04, and a 2% increase in FY 04-05. The Police Safety
and fire Safety units have contracts which extend until June 30, 2004.
' The Phase I expansion of the Convention Center was completed at a cost of $3 1 million. It
reconfigured the Springs Theatre into meeting rooms, and completely remodeled the kitchen area.
' The City took over sponsorship of the Palm Springs International Film Festival, increasing its
commitment to this important showcase from $150,000 to $350,000 per year.
' The historically significant, Albert Frey designed, building at the City's western entrance was
purchased for$638,000,with another$550,000 committed to its rehab. The building will be used to
house the Visitor Information Center, and is slated to be ready for occupancy by late November,
' 2003. Since its inception 10 years ago, the VIC has rented space in a nearby building.
FOR THE FUTURE
An increase in the Transient Occupancy Tax (TOT) rate for Group Meeting Hotels from 12.5% to
13.5%was approved by the voters in the November 4, 2003 election. The additional 1%increase for
approximately 12 hotels is effective January 1, 2004, and should raise about $600,000 more
' annually. This revenue, added to the TOT revenue generated by the January 1, 2002 TOT rate
increase, is intended to fund the $27 million Phase II expansion of the Convention Center. The
Center will be almost doubled in size, and will be better able to attract larger conventions
Construction is expected to start in the spring of 2004, with an estimated completion date of
November, 2005. The Convention Center will remain open for business during the new
construction.
' The City partnered with the owner of the Desert Fashion Plaza to start the rehabilitation of that
downtown shopping center. The public improvements and the creation of additional parking spaces
in front of the DFP cost the City about$450,000. The owner rebuilt the fagade of the mall to make it
' more"open"to the public. The hope is that this will be the beginning of a comprehensive upgrade of
the mall, turning it into an important economic engine of the downtown.
The Agua Caliente Band of Cahuilla Indians opened their$90 million Spa Resort Casino in downtown
Palm Springs in November, 2003. Combined with the soon to be expanded Convention Center and
a remodeled Desert Fashion Plaza, the business and marketing potential for the City is greatly
increased.
With the help of about$700,000 in State grants, the$1.2 million Palm Springs Skate Park became a
reality in November, 2003. The state-of-the-art Skate Park is the largest and best in the Coachella
Valley. The balance of the funding came from a dedication of a portion of the City's Utility Users Tax
(Measure Y funding) and private donations.
' FINANCIAL INFORMATION
Management of the City is responsible for establishing and maintaining an internal control structure
' designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure
that adequate accounting data are compiled to allow for the preparation of financial statements in
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conformity with generally accepted accounting principles. The internal control structure is designed '
to provide reasonable, but not absolute, assurance that these objectives are met. The concept of
reasonable assurance recognizes that: (1)the cost of a control should not exceed the benefits likely '
to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by
management.
Single Audit As a recipient of federal, state and county financial assistance, the City also is '
responsible for ensuring that an adequate internal control structure is in place to ensure compliance
with applicable laws and regulations related to those programs. This internal control structure is '
subject to periodic evaluation by management and the internal audit staff of the City
As a part of the City's single audit, described earlier, tests are made to determine the adequacy of
the internal control structure, including that portion related to federal financial assistance programs,
as well as to determine that the government has complied with applicable laws and regulations The
results of the government's single audit for the fiscal year ended June 30, 2003 provided no
instances of material weaknesses in the internal control structure or signification violations of '
applicable laws and regulations.
Budgeting Controls. In addition, the City maintains budgetary controls. The objective of these '
budgetary controls is to ensure compliance with legal provisions embodied in the annual
appropriated budget approved by the City's governing body. The level of budgetary control (that is,
the level at which expenditures cannot legally exceed the appropriated amount) is at the fund level.
The City maintains an encumbrance accounting system as one technique of accomplishing t
budgetary control. Encumbered amounts are carried over at year end.
As demonstrated by the statements and schedules included in the financial section of this report, the
City continues to meet its responsibility for sound financial management.
Appropriation Limitation. As required by Article XIII B of the California Constitution, the City's
appropriation limitation for 2002-03 expenditures was calculated at $89,561,323 million.
Appropriations subject to limitation totaled $42,705,800 million or about $46,855,523 million below
the City's legal appropriation limit. All of the City's proprietary funds are exempt as are federal funds.
Debt Administration. The City issued $8 million in taxable variable interest rate bonds in '
August,2002 to pay for the downtown parking structure. Due to lower than anticipated interest rates,
the capitalized interest will be sufficient to cover debt service at least through June 30, 2004.
As of June 30, 2003, the total long-term debt of the City and its related entities is $98,087,120.
Cash Management. The City had $47,067,912 available for investment on June 30, 2003 '
compared to $43,073,615 as of June 30, 2002. The current year amount does not include
$15,801,073 held by the City's fiscal agent for various long-term debt issues. The City of Palm '
Springs invests its temporarily pooled idle investments underthe Prudent Man Rule(Civil Code Sect
2261, et seq.), which in essence states that "in investing property for benefit of another, a trustee
shall exercise the judgment and care, under circumstances then prevailing,which men of'prudence',
or discretion, and intelligence exercise in the management of their own affairs " This affords the City '
a broad spectrum of investment opportunities as long as the investment is deemed prudent and is
allowable under current legislation of the State of California. The City's investment portfolio consists
of certificates of deposit, State of California Local Agency Investment Fund, Bankers Acceptances,
United States Government Securities and Corporate Notes.
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As stated in Note 3 in the Notes to the Combined Financial Statements, the City's total cash deposits
' have been broken down into Category 1, 2 or 3. These three categories are provided to comply with
the GASB Statement Number 3, which in essence, requires risk disclosures assumed by the entity.
A description of each category and the possible risk associated with it is found in Note 3 of the Notes
' to the Financial Statements.
Risk Management. The City is self-insured for general liability in the amount of$300,000 per
' occurrence and for worker's compensation in the amount of $500,000 per occurrence. Individual
claims in excess of the self-insured amounts for general liability (up to a maximum of$10,000,000
per incident) and worker's compensation (up to the statutory limit of$5,000,000 per claim) fall under
the insurance policies purchased by the City.
The City purchased commercial Worker's Compensation Insurance from Employee Reinsurance.
This provides workers'compensation coverage for claims in excess of$1,000,000 with a maximum
' of$5,000,000 per claim. Further information can be found in Note 15 of the Notes to the Financial
Statements.
' A schedule listing the insurance in force is contained in the Statistical Section (Table 16) of the
Comprehensive Annual Financial Report.
' OTHER INFORMATION
Independent Audit. State statute requires an annual audit by independent certified public
accountants. The accounting firm of Conrad and Associates, L.L.P., was selected by the City
' Council with the recommendation of the Finance Director. In addition to meeting the requirements
set forth in state statutes, the audit was also designed to meet the requirements of the Federal
Single Audit Act of 1984 and related OMB Circular A-133. The auditor's report on the general
' purpose financial statements and combining, individual fund and account group statements and
schedules are included in the financial section of this report. Once again the City's independent
auditors, Conrad and Associates, L.L.P., has issued an unqualified opinion. The auditor's reports
' related specifically to the single audit are included in the Single Audit Report.
Awards. The Government Finance Officers Association (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City of Palm Springs for its Comprehensive
' Annual Financial Report for the fiscal year ended June 30,2002. This was the 12th consecutive year
that the City has received this prestigious award. In order to be awarded a Certificate of
Achievement,the City published an easily readable and efficiently organized comprehensive annual
financial report. This report satisfied both generally accepted accounting principles and applicable
legal requirements.
' A Certificate of Achievement is valid for one year only. We believe that our current comprehensive
annual financial report 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.
' In addition, the City also received the Certificate of Award for outstanding Financial Reporting from
the California Society of Municipal Finance Officers.
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Acknowledgments. The preparation of this report on a timely basis could not have been 1
accomplished without the efficient and dedicated services of the entire Finance Department staff.
Special recognition is given to Nancy Klukan, Accounting Manager; Rita Gustafson, Senior 1
Accountant; and all the Accounting division staff for their services in the coordination and preparation
of this year's report. Our independent auditors, Conrad and Associates, L.L.P., provided expertise
and advice in preparing an outstanding report this year.
Respectfully submitted, 1
Thomas M. Kanarr
Director of Finance and Treasurer 1
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XII 1
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CITY OF PALM SPRINGS
' List of Principal Officials
June 30, 2003
CITY COUNCIL
William G. Kleindienst, Mayor
' Ronald Oden, Mayor Pro Tern
Deyna L. Hodges
' Jeanne Reller-Spu gin
Christopher S. Mills
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' EXECUTIVE MANAGEMENT
City Manager David H. Ready
Assistant City Manager Troy L. Butzlaff
' City Clerk Patricia A. Sanders
City Librarian Margaret K. Roades
Director of Community/Economic Development John S. Raymond
Director of Finance and Treasurer Thomas M. Kanarr
Director of Human Resources Susan E. Mills
' Director of Parks, Recreation and Facilities Paul S. Mikesell
Director of Planning and Building Douglas R. Evans
' Director of Procurement and Contracting Harold E. Good
Director of Public Works/City Engineer David J. Barakian
' Executive Director—Airport Allen F. Smoot
Fire Chief Bary A. Freet
Police Chief Gary M. Jeandron
' XIII
OFtALM a r
c City of Palm Springs City Council
FoaN, Functional Organization Chart � -�,ty
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- - - - - - - - - - - - - I
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Assistant City Manager PubIO Affadmy
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California Society of
�114nnicipal finance Oft-tcers
Certificate of Award
Outstanding Financial Reporting 2001-2002
Presented to the
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City of Palm Springs
This certificate is issued in recognition of meeting professional standards and criteria in reporting
which reflect a high level of quality in the annual financial statements
and in the underlying accounting system from which the reports were prepared
February 24, 2003
Chair,Professional&Technical Standards Committee
Dedicated to Excellence in Municipal Financial Management =2
1
1
Certificate of '
Achievement
for Excellence 1
in Financial 1
Reporting 1
Presented to
City of Palm Springs, 1
California 1
For its Comprehensive Annual 1
Financial Report
for the Fiscal Year Ended
June 30, 2002 1
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers 1
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial 1
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
1
Uhl..ixfF�Oey "GGCGn^'(1ai'v�t�+l/tl 1
UHIh �iAiES
President
s CUMCMIIUN H
LXILA40 / 2 �f
Executive Director 1
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XVI 1
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1
COl RAD AND CERTIFIED PUBLIC ACCOUNTANTS
VE,SUITE 200
ASSOCIATES, L.L.P. 2301 RVINOE,CALIFORNIA 92612
' (949)474-2020
Fat(949)263-5520
City Council
' City of Palm Springs
Palm Springs, California
Independent Auditor's Report
We have audited the accompanying financial statements of the govermnental activities, the
' business-type activities, each major fund, and the aggregate remaining fund information of the
City of Palm Springs, California, as of and for the year ended June 30, 2003, which collectively
comprise the City's basic financial statements, as listed in the table of contents. These financial
' statements are the responsibility of the management of the City of Palm Springs. Our
responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
' States of America and 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 arnormts 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 fiord information of the City of Palm Springs,
California, as of June 30, 2003, and the respective changes in financial position and cash flows,
where applicable, of the City of Palm Springs, California for the year then ended in conformity
' with accoumting principles generally accepted in the United States of America.
As discussed further in the notes to the basic financial statements, the accompanying financial
statements reflect certain changes in the presentation of financial data required as a result of the
' implementation of GASB Statement No. 34 for the year ended June 30, 2003.
The information identified in the accompanying table of contents as management's discussion
and analysis and required supplementary information are not a required part of the basic
financial statements, but are supplementary information required by the Govermmental
Accormting 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.
1
MEMBERS OF AICPA AND CALIFORNIA SOC ETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
1
City Council
City of Palm Springs
Palm Springs, California
Our audit was conducted for the purpose of forming opinions on the financial statements that ,
collectively comprise the City of Palm Springs's basic financial statements. The introductory
section, combining and individual nonmajor fund financial statements and statistical tables are
presented for purposes of additional analysis and are not a required part of the basic financial
statements. The combining and individual nonmajor fund financial statements have been '
subjected to the auditing procedures applied in the audit of the basic financial statements and, in
our opinion, are fairly stated in all material respects in relation to the basic financial statements
taken as a whole. The introductory section and statistical tables have not been subjected to the '
auditing procedures applied in the audit of the basic financial statements and, accordingly, we
express no opinion on them.
In accordance with Government Auditing Standards, we have also issued a report dated '
October 31, 2003 on our consideration of the City's internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
That report is an integral part of an audit performed in accordance with Government Auditing ,
Standards and should be read in conjunction with this report in considering the results of our
audit.
October 31, 2003
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' MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis of the financial performance of the City of Example
provides an overview of the City's financial activities for the fiscal year ended June 30, 2003.
Please read it in conjunction with the financial statements identified in the accompanying table of
' contents.
Using the Accompanying Financial Statements
' This annual report consists of a series of financial statements. The Statement of Net Assets and
the Statement of Activities provide information about the activities of the City as a whole and
present a longer-term view of the City's finances. Also included in the accompanying report are
fund financial statements. For governmental activities, the Rind financial statements tell how
these services were financed in the short term as well as what remains for flrture spending. Fund
financial statements also report the City's operations in more detail than the government-wide
statements by providing information about the City's most significant funds. The remaining
statements provide financial information about activities for which the City acts solely as a
trustee or agent for the benefit of those outside of the government.
' OVERVIEW OF THE FINANCIAL STATEMENTS
' The annual report consists of four parts — management's discussion and analysis (this section),
the basic financial statements, required supplementary information, and an optional section that
presents combining statements for nonmajor governmental fimds and internal service funds. The
' basic financial statements include two kinds of statements that present different views of the
City:
' • The first two statements are government-wide financial statements that provide both long-
term and short-term information about the City's overall financial status.
• The remaining statements are fund financial statements that focus on individual parts of the
City government, reporting the City's operations in more detail than the government-wide
statements.
• The governmental funds statements tell how general government uses services like
public safety were financed in the short term as well as what remains for future
spending.
• Proprietary fund statements offer short- and long-term financial information about
' the activities the government operates like businesses, such as the water and sewer
system.
• Fiduciary fund statements provide information about the fiduciary relationships—like
the agency funds of the City—in which the City acts solely as agent or trustee for the
' benefit of others,to whom the resources in question belong.
The financial statements also include notes that explain some of the information in the financial
' statements and provide more detailed data. The statements are followed by a section of required
supplementary information that provided additional financial and budgetary information.
Figure A-1 summarizes the major features of the City's financial statements, including the
t portion of the City government they cover and the types of information they contain. The
remainder of this overview section of management's discussion and analysis explains the
structure and contents of each of the statements.
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Figure A-1 '
Major Features of the City's Government-wide and Fund Financial Statements
Fund Statements '
Government-wide
Statements Governmental Funds Proprietary Funds Fiduciary Funds
Scope Entire City The activities of the Activities the City Instances in which
government(except City that are not operates similar to the City is the trustee
fiduciary funds)and proprietary or private businesses or agent for someone '
the City's fiduciary else's resources
component units
Required financial Statement of net • Balance sheet Statement of net • Statement of
statements assets Statement of assets fiduciary net
• Statement of revenues, • Statement of assets
activities expenditures revenues, • Statement of '
and changes in expenses and changes in
fund balances changes in net fiduciary net
assets assets '
• Statement of
cash flows
Accounting basis Accrual accounting Modified accrual Accrual accounting Accrual accounting '
and measurement and economic accounting and and economic and economic
focus resources focus current financial resources focus resources focus
resources focus '
Type of asset/ All assets and Only assets expected All assets and All assets and
liability information liabilities,both to be used up and liabilities,both liabilities,both '
financial and capital, liabilities that come financial and capital, short-term and long-
and short-term and due during the year and short-term and term;the City's
long-term or soon thereafter; long-term fiduciary funds do
no capital assets or not currently contain '
long-tern debt capital assets,
included although they can
Type of inflow/ All revenues and Revenues for which All revenues and All revenues and
outflow information expenses during cash is received expenses during the expenses during
year,regardless of during or soon after year,regardless of year,regardless of '
when cash is the end of the year; when cash is when cash is
received or paid expenditures when received or paid received or paid.
goods or services
have been received '
and payment is due
during the year or
soon thereafter '
Reporting the City as a Whole
The accompanying government-wide financial statements include two statements that present '
financial data for the City as a whole. One of the most important questions asked about the
City's finances is, "Is the City as a whole better off or worse off as a result of the year's
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activities?" The Statement of Net Assets and the Statement of Activities report information about
the City as a whole and about its activities in a way that helps answer this question. These
' statements include all assets and liabilities using the accrual basis of accounting, which is
similar to the accounting used by most private-sector companies. All of the current year's
revenues and expenses are taken into account regardless of when cash is received or paid.
' These two statements report the City's net assets and changes in them. The net assets — the
difference between assets and liabilities—is one way to measure the City's financial health. Over
time, increases and decreases in the City's net assets are one indicator of whether its financial
' health is improving or deteriorating. Other nonfinancial factors, however, such as changes in the
City's property tax base and the condition of the City's roads should be considered, to assess the
overall health of the City.
' In the Statement of Net Assets and the Statement of Activities, we divide the City into three
kinds of activities:
• Governmental activities — Most of the City's basic services are reported here. Sales taxes,
transient occupancy taxes, property taxes, state subventions, and other revenues finance most
of these activities.
• Business-type activities — The City charges a fee to customers to help it cover all or most of
the cost of the services accounted for in these funds.
• Component units — The City includes four separate legal entities in its report — the
Community Redevelopment Agency, the Palm Springs Financing Authority, the Public
Finance Corporation and the Palm Springs Housing Authority. Although legally separate,
these "component units" are important because the City is financially accountable for them.
Reportingthe e City's Major Funds
' The fund financial statements provide detailed information about the City's most significant
funds — not the City as a whole. Some funds are required to be established by State law or by
bond covenants. However, City Council establishes many other funds to help it control and
manage money for particular purposes or to show that it is meeting administrative
' responsibilities for using certain taxes, grants, or other money (like grants received). The City's
two kinds of funds—governmental and proprietary—use different accounting approaches.
' • Governmental funds — Most of the City's basic services are reported in governmental funds,
which focus on how money flows into and out of those funds and the balances left at year
end that are available for spending. These funds are reported using an accounting method
called modified accrual accounting, which measures cash and all other current financial
' assets that can readily be converted to cash. The governmental fund statements provide a
detailed short-term view of the City's general government operations and the basic services it
provides. Governmental fund information helps you determine whether there are more or
' fewer financial resources that can be spent in the near future to finance the City's programs.
We describe the relationship or differences between governmental activities (reported in the
Statement of Net Assets and the Statement of Activities) and governmental funds in a
' reconciliation at the bottom of the fund financial statements.
• Proprietary funds — When the City charges customers for the services it provides — whether
to outside customers or to other units of the City — these services are generally reported in
' proprietary fimds. Proprietary funds are reported in the same way that all activities are
reported in the Statement of Net Assets and the Statement of Activities. In fact, the City's
enterprise funds (a component of proprietary funds) are the same as the business-type
' activities reported in the government-wide statements but provide more detail and additional
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information, such as cash flows, for proprietary funds. Internal service finds (the other
component of proprietary funds) are used to report activities that provide supplies and
services for the City's other programs and activities. ,
Reporting the City's Fiduciary Responsibilities
The City is an agent for certain assets held for, and under the control of, other organizations and t
individuals. All of the City's fiduciary activities are reported in a separate Statement of Fiduciary
Assets. We exclude these activities from the City's other financial statements because the City
cannot use these assets to finance its operations. The City is responsible for ensuring that the '
assets reported in these funds are used for their intended purposes.
GOVERNMENT-WIDE FINANCIAL STATEMENTS '
A summary of the government-wide statement of net assets follows:
Table 1 -Net Assets (in thousands)
Governmental Business Type
Activities Activities Total
2003 2002 2003 2002 2003 2002
Current and other assets 68,877 - 18,808 - 87,685 -
Capital assets 185,436 - 122,670 - 308,106 -
Total assets 254,313 - 141,478 - 395,791 - '
Long-term debt outstanding 90,402 - 44,159 - 134,561 -
Other liabilities 18,492 - 7,733 - 26,225 - '
Total liabilities 108,894 - 51,892 - 160,786 -
Net assets: '
Invested in capital assets 107,153 - 82,620 - 189,773 -
(net of debt) - - '
Restricted 25,521 - - - 25,521 -
Unrestricted 12,745 - 6,966 - 19,711 -
Total net assets 145,419 - 89,586 - 235,005 '
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A summary of the government-wide statement of activities follows:
Table 2 - Changes in Net Assets (in thousands)
Governmental Activities Business Type Activities Total
2003 2002 2003 2002 2003 200'
' Revenues -
Program revenues:
Charges for services 8,498 21,012 29,510
Operating contributions &grants 5,966 276 6,242
Capital contributions &grants 1,327 7,023 8,350
General revenues -
' Property taxes &tax increment 15,283 - 15,283
Sales taxes 9,179 9,179
Transient occupancy taxes 12,421 - 12,421
Other taxes 9,969 - 9,969
Gain (loss) on sale of capital asset 1,685 1,685
Other general revenues 1,907 315 2,222
iTotal revenues 66,235 28,626 94,861
Program expenses
General government 9,930 9,930
Culture and convention center 3,289 - 3,289
Public safety 23,916 - 23,916
Public Works 15,073 15,073
Parks and recreation 5,115 - 5,115
' Library 2,474 - 2,474
Master land lease 873 873
Interest 5,091 - 5,091
' Airport - 16,987 16,987
Wastewater 4,340 4,340
Golf Course - 3,580 3,580
Total expenses 65,761 - 24,907 - 90,668
Excess (deficiency) before
Special items and transfers 474 3,719 4,193
Special items
Transfers (200) 200
Increase (decrease) in net assets 274 - 3,919 - 4,193
Beginning net assets 145,145 85,667 230,812
Ending net assets 145,419 - 89,586 - 235,005
7
The increase or decrease in net assets can provide an indication as to whether the overall
financial position of the City improved or deteriorated during the year. Net assets of the City's '
governmental activities increased by less than 1% ($145.4 million compared to $145.1 million).
The reasons for significant changes in the revenues and expenses of the City's governmental
activities presented above are as follows:
• The City's property tax collections increased by 7.5%. The increase was attribLitable to
continued double digit increase in the selling prices of new and existing property, especially '
residential property, and the statutory 2% increase in the value of virtually all other property
which did not change hands during the year.
• The Transient Occupancy Tax rate was increased effective January 1, 2002 to 12.5% for
Group Meeting Hotels (generally, hotels with more than 125 units) and 11.5% for all other
hotels. The rates previously were 10.8% and 10.0%, respectively. With the rate increase,
TOT collections were up 3.1% over the prior year. Without the rate increase, collections
would have been down about 2.5%.
• During the fiscal year, the City eliminated a net of 17 full time positions. Most of the savings
will be realized in the following year.
• Sales tax collections increased slightly faster than the general inflation rate.
Revenues by Source—Governmental Activities
Other general
revenues
Gain(loss)on sale of 3% Charges for services
capital asset 13%
3%
Othertaxes 15% Operating
,r' '' contributions&grants ,
9%
w.,m
Capital contributions&
t grants
zA ,
acSed-�i.'pt*�
Transient occupancy
taxes J
19%
Property taxes&tax
increment
22%
Sales taxes
14%
8
Expenses by Function—Governmental Activities
' Interest
8% General government
Master land lease 15%
1%
' Library
Parks and recreation
4% Culture and convention
center
5%
Public Works J
23%
' Public safety
36%
Business-Type Activities
Revenues of the City's business-type activities (see Table 2) decreased slightly from the previous
year, from $29.0 million to $28.6 million. Expenses increased from $23.8 million to $24.9
million.
' The primary reasons for these changes are:
• Revenue from capital grants in the Airport decreased from $9.1 million to $6.7 million. This
reflects the substantial completion of the Airport's security enhancements and other
improvements in the prior year.
• The Airport's operating revenues increased from $11.6 million to $12.8 million, as the airline
' industry continued its gradual improvement.
• The Wastewater Treatment Plant Fund's operating revenue improved from $5.4 million to
$5.9 million almost entirely because of a doubling of the revenue from sewer connection
' charges (from $585,000 to $1.1 million). This, in hum, is due to a dramatic rise in building
activity.
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• The Golf Course's operating revenue increased from $2.2 million to $2.6 million as a result i
of increased play. Greens fees and other rates were not changed.
• Operating expenses were impacted by higher personnel costs, especially for health insurance i
and workers' comp insurance. Total personnel services increased from $4.2 million to $4.6
million.
• Higher energy costs, especially for the recently expanded Airport terminal and other security i
enhancements, contributed to the $543,000 increase in other charges and services.
• Depreciation expense increased from $6.98 million to $7.24 million.
i
Revenues by Source—Business-type Activities i
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Other general revenues i
1%
Capital contributions&
grants
25% i
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t N
Y y
Operating contributions&
grants
%
'¢vN�� uiw:m—Wyrt sAah. r.
iL.v ^.:.va+we aaYu�eb c
+rP44":4+W� 4+E-
Ym::aiVi
bp"lFeq`r{ki
6nl> cbiiu
Charges for services i
73%
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Expenses by Function—Business-type Activities
' Goff Course
14%
1 Wastewater -
17%
' Airport
69%
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MAJOR FUNDS
As noted earlier, the City uses fund accounting to provide proper financial management of the
City's resources and to demonstrate compliance with finance-related legal requirements.
' Major Governmental Funds. The General Fund is the chief operating fund of the City. At the
end of the current fiscal year, unreserved fund balance of the general fund was $4.3 million,
while total fund balance reached $11.6 million. As a measure of the general fund's liquidity,
unreserved fund balance represents I percent of total general fund expenditures, while total
fiord balance represents 29 percent of that same amount.
The reasons for significant changes in the revenues and expenditures of the City's General Fund
from the prior year are as follows:
• An increase in the Transient Occupancy Tax, effective mid year, resulted in an increase
of about$460,000 in the TOT dedicated to the General Fund.
' • Licenses and permits increased by almost $500,000, attributable mostly to gains in
Building Permits and related fees.
• General Fund property tax collections increased from $10.3 million to $11.1 million due
to higher assessed valuations, which in turn resulted from a very active real estate market.
Major Enterprise Funds. The Unrestricted net assets of the Airport, Wastewater and Golf
Course Funds total $6.97 million.
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GENERAL FUND BUDGET
There was only a minor difference in between the original budget and final budget for revenue in '
the General Rind.
On the expenditure side, the overall budget increased by about $1.6 million, primarily due to the '
mid year allocation of finds to buy a building to house the Visitor Information Center, and new
Police Department grants which were awarded during the year.
Exhibit A-1 shows additional detail. '
The actual operating results for revenue compared to the final budget had a positive variance of '
slightly more than $1 million ($40.1 million budget vs. $41.1 million actual). All revenue
categories exceeded budget with the exception of Investment Income ($500,000 budget
compared to $228,000 actual). The biggest percentage increase was in Licenses and Permits,
which exceeded the $1.7 million budget by $363,000, an increase of more than 20%. Most of '
the increase in this category was building fee related.
All categories of expenditures showed a positive variance compared to the final budget, with the ,
actual total $3.54 million under budget. The savings were primarily the result of the elimination
of 17 full-time positions in the fourth quarter of the year, a freeze on hiring for most of the year,
and various other cost cutting measures.
The above deviations from budget did not significantly affect the City's liquidity, or its ability to '
provide future services to its residents.
CAPITAL ASSETS
(in thousands, net of depreciation) t
Governmental
Activities Business Type Activities Total
2003 2002 2003 2002 2003 2002
Buildings 41,861 37,652 6,957 7,478 48,818 45,130 '
Improvements 11,512 7,659 60,307 58,962 71,819 66,621
Furniture and equipment 1,981 1,925 302 332 2,283 2,257
Vehicles 3,270 3,646 92 126 3.362 3,772
Infrastructure 96,392 100,528 23,948 24,895 120,340 125,423
Right-of-way 14,614 14,614 - - 14,614 14,614
Land 15,366 14,774 31,064 30,954 46,430 45,728
Construction in progress 440 850 - 440 850
Total 185,436 181,648 122,670 122,747 308,106 304,395
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The major additions to capital assets during the year ended June 30, 2003 were as follows:
• A 208 square parking structure was completed in November 2002. The total cost,
including land and equipment, was $6.2 million and was financed with a taxable variable
rate bond issue.
' • The City purchased a building in January 2003 to house the Visitor Information Center.
The cost of the land and building was $638,000, and was paid for using existing cash
reserves.
LONG-TERM DEBT
' As of June 30, 2003, the City had bonded debt outstanding of$137.4 million. The City has no
General Obligation debt. The table below summarizes the information presented in Notes 8 and
' 9 to the financial statements.
Long Term Debt(in thousands)
' Governmental Activities Business Type Activities Total
' 2003 2002 2003 2002 2003 2002
Certificates of participation (COP's) 17,886 10,211 14,576 17,255 32,462 27,466
Tax Allocation Bonds 23,345 24,075 - - 23,345 24,075
Lease Revenue Bonds 43,754 44,949 32,540 33,288 76,294 78,237
Special Assessment Bonds 5,310 6,045 - - 5,310 6,045
' 90,295 85,280 47,116 50,543 137,411 135,823
' The major addition to the total debt was the $8 million taxable variable rate issue used to finance
the construction of the new 208-space downtown parking structure and some other parking
improvements. The facility was completed in November 2002.
State statutes limit the amount of general obligation debt a city may issue to 15% of its total
assessed valuation. The current debt limitation for the City is $206.9 million. The City has no
' outstanding general obligation debt. See Tables 8 and I in the Statistical Section accompanying
the financial statements.
' Contactingthe e City's Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, investors and
creditors with a general overview of the City's finances and to show the City's accountability for
' the money it receives. If you have questions about this report or need additional financial
information, contact the Department of Finance, City of Palm Springs, P.O. Box 2743, Palm
Springs, CA 92263; or visit our website at www.ci.pahn-springs.ca.us, and click on
' "Departments"—'Finance &Treasury"; or call us at (760) 323-8229.
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1 BASIC FINANCIAL STATEMENTS
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' EXHIBIT AA
' CITY OF PALM SPRINGS
Statement of Net Assets
June 30, 2003
Governmental Business-Type
Activities Activities Total
Assets:
Cash and investments (note 2) $ 37,612,048 8,044,271 45,656,319
Deposits 238,044 660,255 998,299
Receivables:
Accounts 2,639,896 602,061 3,241,957
Accrued interest 1,521,962 74,913 1,596,875
Special assessments 5,383,586 - 5,383,586
Notes 304,609 304,609
Internal balances 921,476 (921,476)
Due from other governments 4,004,144 1,739,639 5,743,783
' Inventories 87,269 - 87,269
Unamortized debt issuance costs 516,593 1,255,512 1,772,105
Property held for resale 7,199,572 - 7,199,572
Restricted assets:
' Cash and investments with
fiscal agent(note 2) 8,448,379 7,352,694 15,801,073
Capital assets (note 5):
' Land and rights of way 29,980,339 31,064,065 61,044,404
Construction in progress 439,774 439,774
Other capital assets,net 155,015,715 91,605,492 246,621,207
' Total assets 254,313,406 141,477,426 395,790,832
Liabilities:
' Accounts payable 4,141,699 1,460,344 5,602,043
Accrued wages payable 632,100 81,711 713,811
Accrued interest payable 1,526,960 2,191,848 3,718,808
' Due to other governments 975,599 - 975,599
Deposits payable 160,834 500,000 660,834
Claims and judgments payable(note 15) 3,200,251 - 3,200,251
' Deferred revenue 169,595 - 169,595
Noncurrent liabilities (notes 8 to 13):
Due within one year 7,684,374 3,499,242 11,183,616
Due in more than one year 90,402,746 44,158,723 134,561,469
' Total liabilities 108,894,158 51,891,868 160,786,026
' Net assets:
Invested in capital assets,net of related debt 107,152,640 75,011,592 182,164,232
Restricted for:
' Public safety 616,337 - 616,337
Public works 9,744,130 9,744,130
Debt service 5,637,233 - 5,637,233
Redevelopment agency projects 9,523,544 - 9,523,544
Unrestricted 12,745,364 14,573,966 27,319,330
Total net assets $ 145,419,248 89,585,558 235,004,806
' See accompanying notes to the basic financial statements.
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CITY OF PALM SPRINGS '
Statement of Activities
Year ended June 30,2003
Program Revenues i
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants aid Grants
Governmental activities:
General government $ 9,929,475 1,400,995
Cultural and convention center 3,288,781 341,465 -
Public safety 23,916,193 1,385,647 2,041,051 -
Public works 15,073,298 3,924,009 3,757,269 1,265,413 '
Parks and recreation 5,114,675 562,802 - 61,515
Library 2,474,431 153,863 167,646 -
Lease 872,687 729,694 - ,
Interest expense 5,091,203 - - -
Total governmental activities 65,760,743 8,498,475 5,965,966 1,326,928 ,
Business-type activities:
Airport 16,987,327 12,502,760 275,877 6,911,092
Wastewater 4,339,653 5,948,238 - 34,140
Golf Course 3,579,841 2,560,521 77,816
Total business-type activities 24,906,821 21,011,519 275,977 7,023,048 '
$ 90,667,564 29,509,994 6,241,843 8,349,976
General revenues: '
Taxes:
Property taxes t
Tax increment
Sales taxes
Transient occupancy taxes 1
Utility users tax
Other taxes
Motor vehicle in lieu '
Investment income
Rental income
Gann(loss) on sale of capital assets '
Miscellaneous revenues
Transfers
Total general revenues '
Change in net assets
Net assets at beginning of year
Net assets at end of year
See accompanying notes to the basic financial statements. '
18 t
1
EXHIBIT BB
' Govenunental Business-type
Activities Activities Total
' (8,528,480) - (8,528,480)
(2,947,316) (2,947,316)
(20,489,495) - (20,489,495)
(6,126,607) - (6,126,607)
(4,490,358) (4,490,358)
(2,152,922) - (2,152,922)
' (142,993) _ (142,993)
(5,091,203) (5,091,203)
' (49,969,374) - (49,969,374)
' = 2,702,402 2,702,402
1,642,725 1,642,725
(941,504) (941,504)
3,403,623 3,403,623
(49,969,374) 3,403,623 (46,565,751)
11,272,094 - 11,272,094
4,011,275 4,011,275
9,179,359 - 9,179,359
' 12,421,094 - 12,421,094
5,764,379 5,764,379
1,676,001 - 1,676,001
2,528,936 - 2,528,936
735,847 314,662 1,050,509
447,557 - 447,557
1,684,715 1,684,715
722,546 722,546
(200,000) 200,000
' 50,243,803 514,662 50,758,465
274,429 3,918,285 4,192,714
' 145,144,819 85,667,273 230,812,092
$ 145,419,248 89,585,558 235,004,806
' 19
EXHIBIT CC-1 '
CITY OF PALM SPRINGS
Balance Sheet-Governmental Funds
June 30,2003 '
Special Total
Community Assessments Capital Non-Major Governmental
General Promotion Debt Service Projects Governmental Funds '
Assets:
Cash and investments $ 2,474,890 1,169,694 1,034,642 5,198,026 22,541,659 32,418,911
Restricted assets: '
Cash and investments with
fiscal agent - - 495,028 - 7,554,379 8,049,407
Deposits - 200,000 - - 33,044 233,044 '
Receivables:
Accounts 1,050,411 864,460 - 3,803 193,417 2,112,091
Accrued interest 1,030,479 - 4,830 1,130 160,029 1,196,468
Special assessments - 5,383,586 - - 5,383,586 ,
Notes - - - 304,609 304,609
Due from other funds(note 3) 288,920 - - - - 288,920
Due from other governments 2,459,676 - 45,920 843,216 632,263 3,981,075 '
Advances to other funds(note 4) 7,132,343 - - - 2,115,992 9,248,335
Property held for resale - 7,199,572 7,199,572
Total assets $ 14,436,719 2,234,154 6,964,006 6,046,175 40,734,964 70,416,018
Liabilities and Fund Balance '
Liabilities: '
Accounts payable $ 862,228 342,498 - 1,458,344 876,650 3,539,720
Accrued wages payable 568,662 - 6,337 20,887 595,886
Accrued interest payable 200,703 - - 200,703
Due to other funds(note 3) - - 288,920 288,920 '
Due to other governments - - 149,153 149:153
Deposits payable - 160,334 - - 500 160,834
Deferred revenue 1,243,259 - 5,383,586 844,885 110,598 7,582328 '
Pass-through payable - - - 826,446 826:446
Advances from other
funds(notes 4) - - 3,700,000 5,416,850 9,116,850
Total liabilities 2,874,852 502,832 5,383,586 6,009,566 7,690,004 22,460,840 '
Fund balance:
Reserved for:
Encumbrances 155,922 63,494 - 2,950,475 2,393,673 5,563,564
Non-current assets 7,132,343 200,000 - - 9,645,189 16,977,532
Debt service requirements - - 1,580,420 6,101,574 7,681,994
Low and moderate housing - - 1,617,092 1,617,092 '
Unreserved,reported in:
General fund 4,273,602 - - 4,273,602
Special revenue funds - 1,467,828 14,756,777 16,224,605 '
Capital projects funds - (2,913,866 (1,469,345) (4,383,211)
Total fund balance 11,561,867 1,731,322 1,580,420 36,609 33,044,960 47,955,178
Total liabilities and '
fund balance $ 14,436,719 2,234,154 6,964,006 6,046,175 40,734,964 70,416,018
See accompanying notes to the basic financial statements. '
20 '
1
EXHIBIT CC-2
CITY OF PALM SPRINGS
' Governmental Funds
Reconcilation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
' June 30, 2003
Fund balances of governmental fiords $ 47,955,178
' Amounts reported for governmental activities in the statement of
net assets are different because:
iCapital assets,net of depreciation, have not been included
as financial resouces in governmental fand activity.
' Capital assets 272,314,846
Accumulated depreciation (93,917,931)
' Long term debt and compensated absences that have not been included
in the governmental fund activity:
Long-term debt (85,266,896)
Compensated absences (5,590,921)
Accrued interest payable for the current portion of interest due on
' bonds payable has not been reported in the governmental fiords. (1,240,385)
Revenues that are measurable but not available. Amounts are recorded
' as deferred revenue corder the modified accrual basis of accounting. 7,455,967
Internal service funds are used by mangement to charge the costs of
certain activities, such as equipment management,to individual fiords.
The assets and liabilities of the internal service funds must be added
to the statement of net assets 3,709,390
Net assets of governmental activities $ 145,419,248
i
1
1
' See accompanying notes to the basic financial statements.
1 21
1
CITY OF PALM SPRINGS EXHIBIT DD-1 '
Statement of Revenues,Expenditures and Changes in Fund Balances-
Govenamental Funds
Year ended June 30,2003 '
Special Non-Major Total
Community Assessments Capital Governmental Governmental
General Promotion Debt Service Projects Funds Funds '
Revenues:
Taxes $ 26,586,087 - 704,176 8,068,244 35,358,507
Licenses and permits 2,102,736 - - 680,046 2,782,782 '
Fines and penalties 287,455 - - - 372,340 659,795
Investment income 228,076 - 23,626 33,154 978,560 1,263,416
Rental income 272,412 22,344 - - 178,038 472,794 '
Intergovernmental 3,187,531 - - 737,315 1,705,069 5,629,915
Charges for services 2,855,670 13,251 - - 1,614,720 4,483,641
Transient occupancy taxes 5,191,029 7,230,065 - - 12,421,094
Special assessments - - 766,388 - 263,073 1,029,461 '
Donations and contributions 107,440 - 190,085 281,184 578,709
Master lease - - - - 1,078,389 1,078,389
Miscellaneous 280,337 362,162 115,400 4,194 167,727 929,820 '
Total revenues 41,098,773 7,627,822 905,414 1,668,924 15,387,390 66,688,323
Expenditures:
Current: '
General government 6,168,566 2,799,927 3,368 85,622 873,662 9,931,145
Cultural and
convention center - 1,336,429 - 4,379,085 - 5,715,514 '
Public safety 21,710,615 - - 304,027 1,038,710 23,053,352
Public works 5,756,243 - - 1,042,924 4,616,229 11,415,396
Parks and recreation 3,918,454 538,071 - 469,012 271,416 5,196,953
Library 2,083,320 - - - 396,546 2,479,866 '
Lease - - - - 1,221,382 1,221,382
Capital outlay - 693,678 - - 5,328,164 6,011,842
Debt service: '
Principal - - 735,000 - 2,613,662 3,348,662
Interest - 305,681 - 4,009,643 4,315,324
Bond issuance costs - - - 342,195 342,195 '
Pass-through payments - - 1,910,074 1,910,074
Total expenditures 39,637,198 5,358,105 1,044,049 6,280,670 22,621,683 74,941,705
Excess(deficiency)of 1
revenues over(under)
expenditures 1,461,575 2,269,717 (138,635) (4,611,746) (7,234,293) (8,253,382)
Other financing sources(uses):
Transfers in(note 18) 1,850,000 20,000 - 2,130,000 5,062,949 9,062,949
Transfers out(note 18) (3,235,674) (2,830,000) - - (1,947,275) (8,012,949)
Sale of general fixed assets 558,701 - 50,750 997,065 1,606,516
Issuance of bonds - - 8,000,000 8,000,000 '
Total other financing
sources(uses) (826,973) (2,810,000) 2,180,750 12,112,739 10,656,516
Net change in '
fundbalances 634,602 (540,283) (138,635) (2,430,996) 4,878,446 2,403,134
Fund balances at beginning of year 10,927,265 2,271,605 1,719,055 2,467,605 28,166,514 45,552,044
Fund balances at end of year $ 11,561,867 1,731,322 1,580,420 36,609 33,044,960 47,955,178 ,
See accompanying notes to the basic financial statements.
22 '
1
1 EXHIBIT DD-2
CITY OF PALM SPRINGS
Reconcilation of the Statement of Revenues, Expenditures,
1 and Changes in Find Balances of Governmental Finds
to the Statement of Activities
1 Year ended June 30, 2003
1 Net changes in fund balances-total governmental finds $ 2,403,134
Amounts reported for governmental activities in the statement of
1 activities is different because:
Governmental fiords report capital outlay as expenditures. However,in
1 the statement of activities,the cost 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.
1 Capital outlay 11,104,675
Depreciation expense (6,748,431)
1 Proceeds from the issuance of bonds is reported as other financing soirees in
governmental funds. The issuance of bonds increases liabilities in the statement
of net assets,but does not result in an increase in net assets in the statement
1 of activities. (8,000,000)
Repayment of bond principal is an expenditure in the governmental funds,
but the repayment reduces long-tern liabilities in the statement of net assets. 3,380,226
1 The statement of net assets includes accrued interest on long term debt. (39,470)
1 To record as an expense the net change in compensated absences in the
statement of activities. (1,522,148)
1 Revenues that are measurable but not available. Amounts are not recorded
as revenue under the modified accrual basis of accounting. (30,279)
1 Internal service fimds are used by management to charge the costs of certain
activities, such as equipment management,to individual funds, The net revenues
(expenses)of the internal service funds is reported with governmental activities. (273,278)
1 Change in net assets of governmental activities $ 274,429
i
1
1 See accompanying notes to the basic financial statements.
1 23
EXHIBIT EE '
CITY OF PALM SPRINGS
Statement of Net Assets ,
Proprietary Finds
June 30,2003
Governmental '
Business-Type Activities-Enterprise Finds Activities
Golf Internal
Airport Wastewater Course Total Service Funds
Assets
Current assets: '
Cash and investments $ 4,738,539 3,305,732 - 8,044,271 5,193,137
Deposits - - 660,255 660,255 5,000
Receivables:
Accounts 577,545 17,467 7,049 602,061 527,805
Accrued interest 26,379 29,896 18,638 74,913 325,494
Due from other funds (note 3) - 2,945,205 - 2,945,205 - '
Due from other governments 1,370,508 369,131 1,739,639 23,069
Inventories - - - 87,269
Total current assets 6,712,971 6,667,431 685,942 14,066,344 6,161,774
Restricted assets: '
Cash and investments
with fiscal agents 4,010,389 2,197,003 1,145,302 7,352,694 398,972 '
Property,plant and equipment:
Land 19,446,338 6,945,502 4,672,225 31,064,065 - '
Buildings 15,987,291 21,910,847 292,972 38,091,110 8,442,135
Improvements other than buildings 103,740,230 26,068,048 10,829,758 140,638,036 236,203
Machinery and equipment 1,014,548 206,137 88,995 1,309,680 656,989 '
Motor vehicles 1,172,833 47,923 1,220,756 9,932,616
Accumulated depreciation (59,734,265) (24,183,711) (5,736,114) (89,654,090) (12 229,030)
Net property,plant '
and equipment 81,626,975 30,894,746 10,147,836 122,669,557 7,038,913
Other assets:
Advances to other finds (note 4) - 1,227,000 - 1,227,000 1,430,000
Unamortized debt issuance cost 781,850 81,753 391,909 1,255,512 174,398
Total other assets 781,850 1,308,753 391,909 2,482,512 1,604,398
Total assets 93,132,185 41,067,933 12,370,989 146,571,107 15,204,057 ,
(Continued)
24 '
EXHIBIT EE
(Continued)
' CITY OF PALM SPRINGS
Statement of Net Assets
Proprietary Funds
(Continued)
Governmental
Business-Type Activities-Enterprise Funds Activities
' Golf Internal
Airport Wastewater Course Total Service Funds
Liabilities and Net Assets
' Liabilities:
Current liabilities:
' Accounts payable 1,058,195 401,760 389 1,460,344 601,979
Accrued wages payable 80,510 1,201 81,711 36,214
Accrued interest payable 908,816 1,283,032 2,191,848 85,872
' Due to other funds (note 3) - 2,305,196 2,305,196 640,009
Deferred revenue 43,234
Capital leases -current portion - - 495,690
' Bonds payable- current portion 800,000 - - 800,000 -
Certificates of participation-
current portion - 2,124,778 300,000 2,424,778 185,000
Total current liabilities 2,847,521 2,526,538 3,889,818 9,263,877 2,087,998
Long-term liabilities:
Deposits payable 500,000 500,000
Compensated absences payable 542,534 - 542,534 149,632
Claims and judgements payable - - - 3,200,251
Advances from other
funds (note 4) 148,485 2,640,000 2,788,485 -
' Capital leases -long-term portion - - _ - 1,271,183
Bonds payable-long-term portio 31,739,793 31,739,793
Certificates of participation-
long-term portion - - 12,150,860 12,150,860 4,785,603
Total long-term liabilities 32,430,812 - 15,290,860 47,721,672 9,406,669
Total liabilities 35,278,333 2,526,538 19,180,678 56,985,549 11,494,667
Net assets:
' Invested in capital assets,
net of related debt 53,879,421 31,048,724 (765,813) 84,162,332 874,807
Unreserved 3,974,431 7,492,671 (6,043,876) 5,423,226 2,834,583
Total net assets $ 57,853,852 38,541,395 (6,809,689) 89,585,558 3,709,390
' See accompanying notes to the basic financial statements.
25
'CITY OF PALM SPRINGS EXIIlBIT FF
Statement of Revenues,Expenses and Changes in Fund Net Assets-Proprietary Funds
Year ended June 30,2003
Governmental
Business-Type Activities-Enterprise Funds Activities-
Golf Internal
Airport Wastewater Course Total Service Funds
Operating revenues:
Charges for services:
Rentals $ 8,120,224 - 390,535 9,510,759 - '
Landing fees 1,500,010 - - 1,500,010 -
Concessions 460,599 - - 460,599 -
Green fees and cart rentals - - 2,155,836 2,155,836 -
Sewer service charges 4,817,204 - 4,817,204 - ,
Sewer connection and main charges - 1,131,034 - 1,131,034 -
Passenger facility charge 2,131,451 - 2,131,451 -
Intemal service charges - - - - 17,237,482 t
Sale of electricity - - - 146,014
Miscellaneous 566,354 - 14,150 580,504 23,602
Total operating revenues 12,778,638 5,948,238 2,560,521 21,287,397 17,407,098 ,
Operating expenses:
Personnel services 4,519,351 15,988 62,490 4,597,829 5,833,947
Material and supplies 175,289 - 962 176,251 -
Heat,light and power 801,003 - - 801,003 - '
Other charges and services 3,248,333 2,611,842 2,064,782 7,924,957 9,738
Administration 719,371 402,046 39,281 1,160,698 2,004,432
Cogeneration project costs - - - - 2,017,745 '
Facilities maintenance - - - - 2,375,757
Maintenance shop operations - - - - 1,698,158
Worker's compensation - - - - 629,697
Other claims and insurance - - - - 718,966 '
Depreciation 5,631,451 1,105,858 504,639 7,241,948 1,095,229
Total operating expenses 15,094,798 4,135,734 2,672,154 21,902,686 16,383,669
Operating income(loss) (2,316,160) 1,812,504 (111,633) (615,289) 1,023,429 '
Nonoperating revenues(expenses):
Investment income 345,705 217,447 77,820 640,972 151,182
Interest expense (1,892,529) (203,919) (907,687) (3,004,135) (425,778) '
Gain(loss)on sale of assets - - - - 78,199
Total nonoperating
revenues(expenses) (1,546,824) 13,528 (829,867) (2,363,163) (196,397)
Income(loss)before transfers
and capital contributions (3,862,984) 1,826,032 (941,500) (2,978,452) 827,032
Transfers in - - 200,000 200,000 -
Transfers out - - - - (1,250,000)
Capital contributions:
Capital grants 6,696,737 6,696,737 50,000 '
Assets contributed from other funds - - 99,690- -
Change in net assets 2,833,753 1,826,032 (741,500) 3,918,285 (273,278)
Net assets at beginning '
of year,as restated(note 6) 55,020,099 36,715,363 (6,068,189) 85,667,273 3,982,668
Net assets at end of year $ 57,853,852 38,541,395 (6,809,689) 89,585,558 3,709,390
See accompanying notes to the basic financial statements, ,
26 '
EXHIBIT GG
CITY OF PALM SPRINGS
Statement of Cash Flows-Proprietary Funds
Year ended June 30,2003
Governmental
Business-Type Activities-Enteprise Funds Activities-
Golf Internal
Airport Wastewater Course Total Service Funds
Cash flows from operating activities:
' Cash received from customers $ 13,010,457 5,848,290 2,510,962 21,369,709 -
Cash received from user departments 16,969,887
Cash payments to suppliers for
' goods and services (4,340,504) (3,659,705) (2,104,639) (10,104,848) (13,956,180)
Cash payments to employees
for services (4,525,124) (15,988) (62,285) (4,603,397) (1,972,942)
Net cash provided by(used for)
' operating activities 4,144,829 2,172,597 344,038 6,661,464 1,040,765
Cash flows from noncapital
financing activities:
Cash receiveded from other funds 698,635 698,635 437,182
Cash paid to other funds (170,000) (935,817) (1,105,817) (1,250,000)
Net cash provided by(used for)
noncapitalfmancing activities (170,000) (935,817) 698,635 (407,182) (812,818)
Cash flows from capital and related
financing activities:
Cash paid for acquisition and
construction of capital assets (7,004,687) (160,000) (7,164,687) (526,913)
Proceeds from sale of capital assets - - - - 78,199
Capital contributions received 6,133,774 6,133,774 149,690
Principal paid on debt (765,000) (2,235,000) (285,000) (3,285,000) (160,381)
Interest paid on debt (1,856,591) (805,932) (2,662,523) (429,471)
' Repayment on capital lease obligations - - - - (741,498)
Net cash proved by(used for)capital
slid related financing activities (3,492,504) (2,395,000) (1,090,932) (6,978,436) (1,630,374)
Cash flows from investing activities:
Purchase of investments (305,206) - - (305,206) -
Proceeds from sale and maturities
' of investments - 2,162,446 - 2,162,446 35,591
Interest received on investments 352,647 230,241 77,820 660,708 165,333
Net cash provided by(used for)
1 investing activities 47,441 2,392,687 77,820 2,517,948 200,924
Net increase(decrease)in cash
and cash equivalents 529,766 1,234,467 29,561 1,793,794 (1,201,503)
Cash and cash equivalents at
begimung of year 5,600,613 4,268,268 411 9,869,292 6,394,640
' Cash and cash equivalents at end of year $ 6,130,379 5,5023735 29,972 11,663,086 5,193,137
(Continued)
27
EXEIIBIT GG '
(Continued)
CITY OF PALM SPRINGS
Statement of Cash Flows-Proprietary Funds
(Continued) '
Govemmental
Business-Type Activities-Enterprise Funds Activities- ,
Golf Internal
Airport Wastewater Course Total Service Funds
Reconciliation of cash and cash equivalents to '
amounts reported on the Statement of Net Assets:
Reported on Statement of Net Assets:
Cash and investments $ 4,738,539 3,305,732 - 8,044,271 5,193,137 '
Cash and investments with fiscal agent 4,010,389 2,197,003 1,145,302 7,352,694 398,972
Cash and investments reported
on Statement of Net Assets 8,748,928 5,502,735 1,145,302 15,396,965 5,592,109 '
Less non-cash equivalents (2,618,549) (1,115,330) (3,733,879) (398,972)
Cash and cash equivalents at end of year $ 6,130,379 5,502,735 29,972 11,663,086 5,193,137
Reconciliation of operating income(loss)
to net cash provided by(used for)
operating activities: t
Operating income(loss) $ (2,316,160) 1,812,504 (111,633) (615,289) 1,023,429
Adjustments to reconcile operating
income(loss)to net cash provided '
by(used for)operating activities:
Depreciation 5,631,451 1,105,858 504,639 7,241,948 1,095,229
(Increase)decrease in
accounts receivable 231,819 (11,612) (7,049) 213,158 (423,983)
(Increase)decrease in deposits - - (42,510) (42,510) -
(Increase)decrease in due from
other governments - (98,336) - (98,336) (13,228)
(Increase)decrease in inventories - - - - 2,822 '
Increase(decrease)in
accounts payable 603,492 (645,817) 386 (41,939) (265,791)
Increase(decrease)in accrued '
wages payable 16,470 205 16,675 8,424
Increase(decrease)in
compensated absences (22,243) - - (22,243) (62,578)
Increase(decrease)in claims '
and judgements payable - - - (323,559)
Total adjustments 6,460,989 360,093 455,671 7,276,753 17,336
Net cash provided by(used for)
operating activities $ 4,144,929 2,172,597 344,038 6,661,464 1,040,765
Noncash capital,financing and investing activities: ,
Fixed assets contributed by other funds $ - - - - 99,690
Change in market value of investments 18,925 3,982 22,907 277
Total noncash capital,financing ,
and investing activities $ 18,925 3,982 - 22,907 99,967
See accompanying notes to the basic financial statements. '
28 '
' EXHIBIT HH
' CITY OF PALM SPRINGS
Statement of Fiduciary Net Assets
June 30, 2003
Private-Purpose Agency
' Trust Fund Fund
Historical Special
Society Deposits Total
' Assets
Cash and investments (note 2) $ 250,000 1,161,593 1,411,593
Receivables:
Accrued interest 911 - 911
' Total assets 250,911 1,161,593 1,412,504
' Liabilities and Net Assets
Liabilities:
Deposits payable - 1,161,593 1,161,593
Total liabilities - 1,161,593 1,161,593
Net assets:
' Reserved for historical society 250,911 250,911
Total net assets $ 250,911 250,911
i
' See accompanying notes to the basic financial statements.
29
'CITY OF PALM SPRINGS EXDBTI'II
Statement of Changes in Fiduciary Net Assets '
Fiduciary Funds
Year ended June 30, 2003
1
Private-Purpose
Trust Fund
Historical
Society '
Additions:
Investment income 8,000
Total additions 8,000 ,
Deductions: '
Library 8,000
Total deductions 8,000 '
Changes in net assets -
Net assets at beginning of year 250,911 ,
Net assets at end of year 250,911
i
See accompanying notes to the basic financial statements.
30
CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
Year ended June 30, 2003
' (1) Summary of Significant Accounting Policies
The basic financial statements of the City of Palm Springs, California (City) have been
' prepared in conformity with generally accepted accounting principles (GAAP) as applied
to government units. The Governmental Accounting Standards Board (GASB) is the
accepted standard-setting body for establishing governmental accounting and financial
reporting principles. The more significant of the City's accounting policies are described
' below.
(a) Reporting Entity
' The City of Palm Springs was incorporated in 1938 under the general laws of the
State of California. Effective July 12, 1994, the City of Palm Springs became a
Charter City which was approved by the citizens of the City of Palm Springs on
June 7, 1994. The City operates under the Council-Administrator form of
government.
' As required by generally accepted accounting principles, these financial
statements present the City of Palm Springs and its component units, entities for
which the City is considered to be financially accountable. The City is considered
' to be financially accountable for an organization if the City appoints a voting
majority of that organization's governing body and the City is able to impose its
will on that organization or there is a potential for that organization to provide
specific financial benefits to or impose specific financial burdens on the City. The
' City is also considered to be financially accountable for an organization if that
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.
Included within the financial reporting entity of the City of Palm Springs are the
Community Redevelopment Agency of the City of Palm Springs, Palm Springs
Public Facilities Corporation and the Palm Springs Financing Authority because
' each component unit meets the above-mentioned criteria.
1
' 31
1
CITY OF PALM SPRINGS '
Notes to the Basic Financial Statements '
(Continued)
1
(1) Srmnnary of Significant Accounting Policies, (Continued) '
A brief description of each component unit follows:
Community Redevelopment Agency of the City of Palm Springs '
The Community Redevelopment Agency's financial activity commenced in
September, 1972. The primary purpose of the Agency is to eliminate blighted '
areas by encouraging development of residential, commercial, industrial,
recreational and public facilities. The City Council appoints the Agency director
and has full accountability for the Agency's fiscal matters. The Agency's ,
financial data and transactions are included with the special revenue fund type,
debt service fund type and capital projects Rind type. Revenues of the Agency
consist primarily of property tax allocations on the incremental increase of '
property values in the redevelopment area and interest income.
City of Palm Springs Public Facilities Corporation '
The Public Facilities Corporation was incorporated as a nonprofit corporation
under the laws of the State of California on February 23, 1981. The Corporation '
was formed for the purpose of financing the City of Palm Springs wastewater
treatment facilities, water system, and other public buildings. Although the
Corporation functions independently from the City, it is governed by a five
member Board of Directors appointed by the City Council of the City of Palm '
Springs. The Corporation's sole source of income is lease payments received
from the City which are used to meet the debt service requirements on debt issues.
The Corporation is blended into the Wastewater Enterprise Fund of the City. '
City of Palm Springs Financing Authority
The City of Palm Springs Financing Authority was created by a joint exercise of
joint powers agreement between the City of Palm Springs and the Community
Redevelopment Agency of the City of Palm Springs on February 1, 1991. The
purpose of the Authority is to provide, through the issuance of debt, financing
necessary for various capital improvements. The Authority is administered by the
Board who are the members of the City Council and the Mayor. The Authority's
sole source of income is installment sale, loan and lease payments received from '
the City and Community Redevelopment Agency which are used to meet the debt
service requirements on debt issues. The Authority is blended into various frmds
of the City.
32
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
' (1) Summary of Significant Accounting Policies, (Continued)
Since the City Council serves as the governing board for these component units,
all of the City's component units are considered to be blended component units.
Blended component units, although legally separate entities, are in substance, part
of the City's operations and so data from these units are reported with the
' interfund data of the primary government. The Community Redevelopment
Agency of the City of Palm Springs, Palm Springs Public Facilities Corporation
and the Palm Springs Financing Authority issue separate component unit financial
statements. Upon their completion, financial statements of these component units
can be obtained at City Hall.
' (b) Basis of Accounting and Measurement Focus
The basic financial statements of the City are composed of the following:
• Government-wide financial statements
• Fund financial statements
' Notes to the basic financial statements
Financial reporting is based upon all GASB pronouncements, as well as the FASB
' Statements and Interpretations, APB Opinions, and Accounting Research
Bulletins that were issued on or before November 30, 1989 that do not conflict
with or contradict GASB pronouncements. FASB pronouncements issued after
November 30, 1989 are not followed in the preparation of the accompanying
' financial statements.
Government-wide Financial Statements
' Government-wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements
include separate columns for the governmental and business-type activities of the
' primary government (including its blended component units). Governmental
activities include governmental funds and proprietary internal service funds.
Business-type activities include proprietary enterprise funds. Eliminations have
been made in the Statement of Activities so that certain allocated expenses are
recorded only once (by the function to which they were allocated). However,
general government expenses have not been allocated as indirect expenses to the
' various functions of the City.
33
1
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements '
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
Government-wide Financial Statements, (Continued) '
Government-wide financial statements are presented using the economic '
resources measurement focus and the accrual basis of accounting. Under the
economic resources measurement focus, all (both current and long-term)
economic resources and obligations of the reporting government are reported in
the government-wide financial statements. Basis of accounting refers to when '
revenues and expenses are recognized in the accounts and reported in the financial
statements. Under the accrual basis of accounting, revenues, expenses, gains,
losses, assets, and liabilities resulting from exchange and exchange-like '
transactions are recognized when the exchange takes place. Revenues, expenses,
gains, losses, assets and liabilities resulting from nonexchange transaction are
recognized in accordance with the requirements of GASB Statement No. 33 which '
requires that local governments defer grant revenue that is not received within 60
days after the fiscal year ended to meet the "available" criteria of revenue
recognition.
Program revenues include 1) charges to customers or applicants who purchase, '
use, or directly benefit from goods, services, or privileges provided by a given
function and 2) grants and contributions that are restricted to meeting the
operational or capital requirements of a particular function. Program revenues are
netted with program expenses in the statement of activities to present the net cost
of each program. Taxes and other items not 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 an expenditure. The issuance of ,
long-term debt is recorded as a liability in the government-wide financial
statements, rather than as an other financing source. Amounts paid to reduce long-
term indebtedness of the reporting government are reported as a reduction of the '
related liability, rather than as an expenditure.
Fund Financial Statements
The underlying accounting system of the City is organized and operated on the
basis of separate funds, each of which is considered to be a separate accounting
entity. The operations of each fiord 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.
34 '
' CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
1
Fund Financial Statements, (Continued)
' Fund financial statements for the primary government's governmental,
proprietary, and fiduciary fiords are presented after the government-wide financial
statements. These statements display information about the major fund
' individually and nonmajor fiords in the aggregate for governmental and enterprise
Rinds. Fiduciary statements include financial information for fiduciary fiords and
similar component units. Fiduciary fiords of the City primarily represent assets
' held by the City in a custodial capacity for other individuals or organizations.
Govermmental Funds
' In the fund financial statements, governmental fiords are presented using the
modified-accrual basis of accounting. Their revenues are recognized when they
become measurable and available as net current assets. Measurable means that
the amounts can be estimated, or otherwise determined. Available means that the
amounts were collected during the reporting period or soon enough thereafter to
be available to finance the expenditures accrued for the reporting period. The City
' uses an availability period of 60 days.
Revenue recognition is subject to the measurable and availability criteria for the
governmental fiords in the fiord financial statements. Exchange transactions are
' recognized as revenues in the period in which they are earned (i.e., the related
goods or services are provided). Locally imposed derived tax revenues are
recognized as revenues in the period in which the underlying exchange transaction
upon which they are based takes place. Imposed nonexchange transactions are
recognized as revenues in the period for which they were imposed. If the period of
use is not specified, they are recognized as revenues when an enforceable legal
claim to the revenues arises or when they are received, whichever occurs first.
Government-mandated and voluntary nonexchange transactions are recognized as
revenues when all applicable eligibility requirements have been met.
' In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
assets and current liabilities are generally included on their balance sheets. The
' reported 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.
35
1
CITY OF PALM SPRINGS '
Notes to the Basic Financial Statements '
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
Governmental Funds (Continued) 1
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.
Revenues, expenses, assets, and liabilities resulting from nonexchange
transactions are recognized in accordance with the requirements of GASB '
Statement No. 33 which requires that local governments defer grant revenue that
is not received within 60 days after the fiscal year ends to meet the "available"
criteria of revenue recognition. In the past, the industry practice for grants was to ,
recognize revenue in the fiscal year in which the related expense was inctured.
Therefore recognition of governmental fund type revenue represented by non-
current receivables are deferred until they become current receivables. Non-
current portions of other long-term receivables are offset by fund balance reserve
accounts.
Sales taxes, property taxes, franchise taxes, intergovernmental, rental income,
transient occupancy taxes and special assessments are all considered to be
susceptible to accrual and have been recognized as revenues in the current fiscal
period to the extent normally collected within the availability period. Other '
revenue items are considered to be measurable and available when cash is
received by the government.
Due to the nature 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 issuance of '
long-tern debt is 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. ,
36 '
1
' CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
Governmental Funds (Continued)
Proprietary and Fiduciary Funds
The City's enterprise and internal service funds are proprietary funds. In the farad
financial statements, the proprietary funds and fiduciary fands 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 find 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.
Proprietary fund operating revenues, such as charges for services, result from
exchange transactions associated with the principal activity of the fund. Exchange
transactions are those in which each party receives and gives up essentially equal
values. Non-operating revenues, such as subsidies, taxes, and investment earnings
result from nonexchange transactions or ancillary activities. Arnounts paid to
' acquire capital assets are capitalized as assets in the enterprise fund financial
statements, rather than reported as an expenditure. Proceeds of long-term debt are
recorded as a liability in the enterprise fund financial statements, rather than as an
other financing source. Amounts paid to reduce long-tern indebtedness of the
' enterprise fund are reported as a reduction of the related liability, rather than as an
expenditure. Agency funds are custodial in nature (assets equal liabilities) and do
not involve the recording of City revenues and expenses.
(c) Fund Classifications
' The City reports the following major governmental finds:
General Fund This is the primary operating fimd of the City. It accounts for all
activities of the general government, except those required to be accounted for in
another fimd.
' Community Promotion Fund This fund is used to accomit for revenues and costs
related to the promotional efforts of the City with regard to tourism and related
activities.
Special Assessment Fund This debt service fimd is used to account for the
payment of principal and interest on 1915 Act Assessment District bond issues.
37
CITY OF PALM SPRINGS '
Notes to the Basic Financial Statements '
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(c) Fund Classifications, (Continued)
Capital Projects Fund This fund is used to account for the acquisition and '
construction of major capital facilities other than those financed by proprietary
and trust funds.
The City of Palm Springs reports the following major proprietary funds: '
Airport Fund Used to account for operations of the City's international airport.
Wastewater Fund Used to account for operation of the City's wastewater '
treatment plan and related capital expenditures, such as trunk lines.
Golf Course Fumd Used to account for operations of the City's two municipal golf '
courses.
Additionally, the City reports the following fund types: '
Internal Service Funds These funds are used to account for motor vehicle
replacement, facilities maintenance, employee benefits, risk management and the '
City's cogeneration plan. Departments of the City are charged for the services
provided or benefits received from these funds.
Private-Purpose Trust Fund Used to account for monies held in trust by the City '
for various purposes related to the Palm Springs Historical Society.
Agency Frmds. Used to account for monies held for various purposes ranging
from bid bonds to donations for animal shelter activities.
(d) Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other ,
commitments for the expenditure of finds are recorded in order to reserve that
portion of the fund balance, is employed in the governmental funds. '
Encumbrances are reported as reservations of fund balances since they do not
constitute expenditures or liabilities.
(e) Cash and Investments '
Investments are reported in the accompanying balance sheet at fair value, except
for certain certificates of deposit and investment contracts that are reported at cost '
because they are not transferable and they have terms that are not affected by
changes in market interest rates.
38
1
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
1
(1) Summary of Significant Accounting Policies, (Continued)
(e) Cash and Investments, (Continued)
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.
1 The City pools cash and investments of all funds, except for assets held by fiscal
agents. Each fiund'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 finds based on each fund's average cash
and investment balance, except for approximately $181,500 of investment income
' (associated with funds not legally required to receive pooled investment income)
that has been assigned to and recorded as revenue of the general fund, as provided
by California Government Code Section 53647.
(f) 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, and have an original
maturity date of 3 months or less. Cash equivalents represent the proprietary
funds' share in the cash and investment pool of the City of Palm Springs. Certain
restricted assets and deposits of proprietary funds consist of investments which
are not considered to be cash equivalents as defined above and therefore excluded
from the statements of cash flows.
(g) Inventories
Inventories are stated at average cost. Physical counts of inventory are taken on a
cyclical basis during each fiscal year with perpetual records adjusted to actual at
that time. The City uses the consumption method of accounting for inventories.
(h) Property Held for Resale
Property held for resale represents land, structures, and their related improvements
that were acquired for resale in accordance with the objective of the
Redevelopment Project. These costs will be charged to current year project
1 expenditures when the related land and structures are sold. Property held for
resale are valued at the lower of cost or the sales price per contract with the
developer. A portion of fund balance is reserved for property held for resale to
indicate that a portion of find balance is not available for future expenditures.
' 39
CITY OF PALM SPRINGS '
Notes to the Basic Financial Statements '
(Continued)
1
(1) Summary of Significant Accounting Policies, (Continued)
(i) Property Taxes
Under California law, property taxes are assessed and collected by the coumties up '
to 1% of assessed value, plus other increases approved by the voters. The
property taxes go into a pool, and are then allocated to the cities based on complex
formulas. Accordingly, the City of Palm Springs accrues only those taxes which
are received within 60 days after year end. ,
The property tax calendar is as follows:
Lien Date: January 1 '
Levy Date: July I
Due Date: First Installment-November 1 '
Second Installment- February 1
Delinquent Date: First Installment - December 1 I
Second Installment-April 11
Taxes are collected by Riverside County and are remitted to the City periodically. '
Dates and percentages are as follows:
December 10 30%Advance
January 16 Collection No. 1
April 10 10% Advance '
May 15 Collection No. 2
July 31 Collection No. 3
(j) Claims and Judgments
The City records a liability for litigation, judgments, and claims when it is
probable that an asset has been impaired or a liability (including incurred but not '
reported) has been incurred prior to year end and the probable amount of loss (net
of any insurance coverage) can be reasonably estimated. This liability is recorded
in the internal service fund that account for the City's self insurance activities.
(k) Advances to Other Funds ,
Noncurrent portions of long-term interfimd loan receivables are reported as '
advances and are offset equally by a fund balance reserve account which indicates
that they do not constitute expendable available financial resources and therefore
are not available for appropriation. 1
40 '
1
1 CITY OF PALM SPRINGS
1 Notes to the Basic Financial Statements
(Continued)
1
(� Suxnnary of Significant Accounting Policies, (Continued)
1 (1) Employee Leave Benefits
1 In accordance with GASB Statement No. 16, a liability is recorded for unused
vacation and similar compensatory leave balances since the employees'
entitlement to these balances are attributable to services already rendered and it is
probable that virtually all of these balances will be liquidated by either paid time
1 off or payments upon termination or retirement.
Under GASB Statement No. 16, a liability is recorded for unused sick leave
1 balances only to the extent that it is probable that the unused balances will result
in termination payments. This is estimated by including in the liability the Unused
balances of employees currently entitled to receive termination payment, as well
as those who are expected to become eligible to receive termination benefits as a
result of continuing their employment with the City. Other amounts of unused
sick leave are excluded from the liability since their payment is contingent solely
upon the occurrence of a future event (illness) which is outside the control of the
1 City and the employee.
If material, a proprietary fund liability is accrued for all leave benefits relating to
1 the operations of the proprietary funds. A current liability is accrued in the
governmental fiords for material leave benefits due on demand to governmental
fiord employees that have terminated prior to year end. All other amounts are
1 recorded in the government-wide financial statements. These non-current amounts
will be recorded as fund expenditures in the year in which they are paid or become
due on demand to terminated employees.
1 (in) Capital Assets
Capital assets (including infrastructure) greater than $5,000 are capitalized and
1 recorded at cost or at the estimated fair value of the assets at the time of
acquisition where complete historical records have not been maintained.
Contributed capital assets are valued at their estimated fair market value at the
date of the contribution. The costs of normal maintenance and repairs that do not
add to the value of the asset or materially extend asset lives are not capitalized.
Capital assets include public domain (infrastructure) general fixed assets
1 consisting of certain improvements including roads, bridges, curbs and gutters,
streets and sidewalks, medians, sewer and storm drains.
1 Depreciation has been provided using the straight-line method over the estimated
useful life of the asset in the government-wide financial statements and in the
fiord financial statements of the proprietary funds.
1
1 41
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
Interest is capitalized on proprietary fund assets acquired with tax-exempt debt.
The amount of interest to be capitalized is calculated by offsetting interest
expense incurred from the date of the borrowing until completion of the project
with interest earned on invested proceeds over the same period.
The following schedule summarizes capital asset useful lives: '
Governmental Funds:
Infrastructure -pavement 25 years
Infrastructure—curbs and gutters 50 years ,
Infrastructure—sidewalks 50 years
Infrastructure—other 25-75 years
Buildings and improvements 15-50 years
Furniture and equipment 3-10 years
Airport Fund:
Buildings 3-60 years '
Improvements 5-30 years
Machinery and Equipment 3-10 years
Motor Vehicles 5-12 years
Golf Course Fund:
Building 10-25 years
Improvements 5-20 years
Machinery and Equipment 5 years
Wastewater Fund:
Buildings 12-50 years
Meters, metering vaults 50 years
Improvements 10-20 years '
Machinery and Equipment 4-15 years
Motor Vehicles 5-10 years
Motor Vehicle Replacement Fund:
Buildings 10-30 years
Improvements 10 years
Machinery and Equipment 5-20 years
Motor vehicles 3-30 years
Facilities Maintenance Fund: '
Machinery and Equipment 5-10 years
Risk Management Fund:
Machinery and Equipment 3-5 years '
42 '
! CITY OF PALM SPRINGS
! Notes to the Basic Financial Statements
(Continued)
!
(1) Summary of Significant Accounting Policies, (Continued)
Cogeneration Plant Fund:
Buildings 60 years
! Improvements 10 years
Machinery and Equipment 3-15 years
! (n) Bond Discotmts/Issuance Costs
In govermnental fund types, bond discounts and issuance costs are recognized in
the current period for fund financial statements. Bond discounts and issuance
! costs for proprietary fund types are deferred and amortized over the term of the
bonds using the straight-line method, which materially approximates the effective
interest method. Bond discounts are presented as a reduction of the face amount
! of bonds payable whereas issuance costs are recorded as an asset, tmamortized
debt issuance costs.
(o) Allowance for Doubtful Accounts
! For certain receivables, it has been determined that some amounts may not be
collectable and, therefore, an allowance for doubtful accounts was recorded. The
! allowance is presented as a reduction of the receivable.
(p) Post-Retirement Benefits
! The City provides post-retirement health insurance for employees who retire with
at least 20 years of continuous employment with the City. Partial coverage is
available for employees who retire with service years ranging between 7 'h and 20
! years. All employee groups are covered.
! (2) Cash and Investments
Cash and investments are reported in the accompanying financial statements as follows:
Statement of Net Assets:
Cash and investments $45,656,319
Cash and investments with fiscal agent 15,801,073
! 61,457,392
Statement of Fiduciary Net Assets:
! Cash and investments 1,411,593
Total cash and investments $6Z M8.985
!
! 43
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Cash and investments held by the City at June 30, 2003 consisted of the following:
Petty cash $ 2,625
Demand deposits 4,333,761
Certificates of deposit 1,366,438
Local Agency Investment Fund 30,480,116
Federal agency securities 9,858,752
Corporate notes 1,026,220
Total cash and investments held by City $ 47,067,912 '
Cash and investments held by fiscal agents at June 30, 2003 consisted of the following:
Bank investment agreement $ 1,207,600 '
Investment agreements 8,846,943
Mutual funds - money market 5,746,530
Total cash and investments held by fiscal agent $ 15.801,073
Authorized Investments
Under provisions of the City's investment policy and Section 53601 of the California
Government Code, the City and it's component units may invest in the following types of '
investments:
Permitted Investments: Restrictions and Limitations
U.S. Treasury Securities None '
Local Agency Investment Fund None '
Federal Agency Securities Limited to 50% of portfolio.
Bankers Acceptances Limited to 40% of portfolio and maximum
maturity of 180 days.
Commercial Paper Must have highest rating, maximum
maturity of 270 days, and limited to 15% of
portfolio.
Negotiable Certificates of Deposit Limited to 30% of portfolio.
44
CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Medium Term Notes Maximum maturity of five years, rated "A"
or better, and limited to 20% of portfolio.
iMutual Funds Must have highest rating and limited to 10%
of portfolio.
The weighted average maturity of the pooled portfolio may not exceed three years.
Under the California Government Code, a financial institution is required to secure
deposits made by state or local governmental units by pledging securities held in the form
of an undivided collateral pool. The market value of the pledged securities in the
collateral pool must equal at least 110% of the total amount deposited by the public
agencies. California law also allows financial institutions to secure City deposits by
pledging first trust deed mortgage notes having a value of 150% of the secured public
deposits.
Deposits of cities and other state or local governments are classified in three categories to
give an indication of the level of custodial risk assumed by the entity. Category 1
includes deposits that are insured or collateralized with securities held by the City or its
' agent in the City's name. Category 2 includes deposits collateralized with securities held
by the pledging financial institution's trust department or agent in the City's name.
Category 2 also includes deposits collateralized by an interest in an undivided collateral
' pool held by an authorized Agent of Depository and subject to certain regulatory
requirements under State law. Category 3 includes deposits collateralized with securities
held by the pledging financial institution, or by its trust department or agent but not in the
City's name. Category 3 also includes any uncollateralized deposits. Deposits are
categorized as follows:
Category Bank Carrying
Form of Deposit 1 2 3 Balance Amount
Deposits held by City:
Demand deposits $100,000 3,569,781 - 3,669,781 4,333,761
' Certificates of deposit 117,042 1,249,396 - 1,366,438 1,366,438
Deposits held by fiscal agents:
Bank investment agreement - 1,207,600 1,207,600 1,207,600
i . 217 042 4,819,177 1 207,600 6.243,819 6,907,799
45
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements '
(Continued)
(2) Cash and Investments, (Continued)
Investments of cities and other state or local governments are classified in three
categories to give an indication of the level of custodial risk assumed by the entity at
year-end. Category 1 includes investments that are insured or registered or for which the
securities are held by the City or the City's custodial agent (which must be a different
institution other than the parry through which the City purchased the securities) in the
City's name. Investments held "in the City's name" include securities held in a separate
custodial or fiduciary account and identified as owned by the City in the custodian's '
internal accounting records. Category 2 includes uninsured and unregistered investments
for which the securities are held by the dealer's agent in the City's name (or by the trust
department of the dealer if the dealer was a financial institution and another department '
of the institution purchased the securities for the City). Category 3 includes uninsured
and unregistered investments for which the securities are held by the dealer's agent,but
not in the City's name. Category 3 also includes all securities held by the broker-dealer '
agent of the City (the party that purchased the securities for the City) regardless of
whether or not the securities are being held in the City's name.
Investments are categorized as follows:
Category Carrying
Form of Investment 1 2 3 Amount '
Investments held by the City:
Federal agency securities $ 9,071,877 786,875 9,858,752
Corporate notes 1,026,220 - 1,026,220
$10,098,097 786.875 10,884,972
Investments held by City not subject to categorization: '
Investment in State Investment Pool - LAIF 30,480,116
Investments held by fiscal agents not subject to categorization:
Investment agreements 8,846,943
Mutual funds - money market 5,746,530
Total investments $55,958,561
46 '
CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
1
(2) Cash and Investments, (Continued)
' The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by California Government Code Section 16429 wider the oversight of the
' Treasurer of the State of California. The fair value of the City's investment in this pool is
reported in the accompanying financial statements at amounts based upon the City's pro-
rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to
the amortized cost of that portfolio). The balance available for withdrawal is based on the
t accounting records maintained by LAIF, which are recorded on an amortized cost basis.
Included in LAIF's investment portfolio are collateralized mortgage obligations,
mortgage-backed securities, other asset-backed securities, loans to certain state funds, and
' floating rate securities issued by federal agencies, govermnent-sponsored enterprises, and
corporations. LAIF's (and the City's) exposure to risk (credit, market or legal) is not
currently available.
' (3) Due From and To Other Funds
' Interfiuid receivable and payable balances at June 30, 2003 are as follows:
Due fi-om Other Funds Due to Other Funds Amount
' General Fund Non-Major Governmental Funds $ 288,920
Wastewater Fund Golf Course Fund 2,305,196
' Internal Service Funds 640,009
Subtotal Wastewater Fund 2,945,205
' Total $3,234,125
' Interfund balances are a result of short-tern borrowing to cover negative cash balances at
June 30, 2003.
1
' 47
1
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements '
(Continued)
1
(4) Interfund Advances
The City has authorized several interfund advances to be used for the operations of the
funds receiving the advances. At June 30, 2003 the outstanding advances are:
Receivable Fund Payable Funds Amount '
General Fund Airport Fund $ 148,485 (a)
Golf Course Fund 1,210,000 (b) '
Capital Projects Fund 3,700,000 (c)
Non-Major Governmental Funds 2,073,858 (e)
Total 7,132,334 '
Wastewater Fund Non-Major Governmental Funds 1,227,000 (e) '
Internal Service Funds Golf Course Fund 1,430,000 (d)
Non-Major Governmental Funds Non-Major Governmental Funds 2,115,992 (e) '
Total $11.905,335
(a) General Fund advanced $318,485 to the Airport Fund to cover Police and Fire '
overhead charges. The advance has no stated interest rate quid will be repaid when
the post "9/11" situation normalizes. At June 30, 2003, the outstanding balance is
$148,485.
(b) The Golf Course Fund initially received $2,000,000 from the General Fund at 6%
over 20 years. At June 30, 2003, the outstanding balance is $1,210,000. ,
(c) In January 2003, the General Fund advanced $3,700,000 to the Capital Projects
Fund to provide funding for the Convention Center and Springs Theatre '
renovations. The advance will be repaid from transient occupancy taxes collected
in the future and bond proceeds. The advance has no stated interest rate or
repayment date.
(d) The Employee Benefits Fund advanced $1,430,000 to the Golf Course Fund to
provide funds for the operation and debt service of the Golf Course. There is no
stipulated repayment date.
(e) Various funds of the City of Palm Springs have advanced monies to the
Community Redevelopment Agency Capital Projects Fund at interest rates of 6% '
to 8%. The outstanding advances totaling $3,337,211 have no stipulated due
dates.
48 ,
1 CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
(4) Interfund Advances, (Continued)
' The Community Redevelopment Agency Debt Service Fund received tax
increment monies totaling $1,532,669 that are owed to the Low and Moderate
' Housing Special Revenue Fund; no stipulated interest rate or repayment date.
The Community Redevelopment Agency Debt Service Fund has outstanding
' advances for unpaid interest of $546,970 to the General Fund, no stipulated
interest rate or repayment date.
' (5) Capital Assets
Capital asset activity for the year ended June 30, 2003 is as follows:
tBalance at Balance at
June 30, 2002 Additions Deletions June 30, 2003
Governmental activities:
Buildings $ 61,774,117 5,558,166 (62,553) 67,269,730
Improvements 17,066,453 4,392,701 (301,393) 21,157,761
' Furniture and equipment 6,478,665 573,494 (282,823) 6,769,336
Vehicles 9,948,472 503,020 (518,876) 9,932,616
Infrastruchue:
' Pavement 91,238,273 905,882 = 92,144,155
Curbs and gutters 33,525,812 33,525,812
Sidewalks 16,862,005 16,862,005
Other 13,359,864 141,397 13,501,261
' Subtotal 250,253,661 12,074,660 (1,165,645) 261,162,676
' Less accumulated depreciation:
Buildings (24,122,644) (1,346,885) 62,553 (25,406,976)
Improvements (9,406,578) (541,184) 301,393 (9,646,369)
Furniture and equipment (4,554,118) (516,860) 282,824 (4,798,154)
Vehicles (6,302,351) (879,417) 518,831 (6,662,937)
Infrastructure:
Pavement (39,918,246) (3,656,478) - (43,574,724)
' Curbs and gutters (7,447,125) (670,516) _ (8,117,641)
Sidewalks (3,448,829) (337,240) (3,786,069)
Other (3,643,520) (520,571 - (4,164,091)
Total accumulated
depreciation (98,843,411) (8,469,151) 1,165,601 (106,146,961)
Net depreciable assets 151,410,250 3,605,509 (44) 155,015,715
' 49
1
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements '
(Continued)
(5) Capital Assets, (Continued)
Balance at Balance at '
June 30, 2002 Additions Deletions June 30, 2003
Capital assets not depreciated: '
Right-of-way 14,614,496 - 14,614,496
Land 14,773,841 622,534 (30,532) 15,365,843 '
Construction in progress 849,357 5,274,847 5 684 430 439,774
30,237,694 5,897,381 5 714 962 30,420,113
Capital assets, net $181,647,944 9,502,890 5 715 006 185,435,828 '
Depreciation expense was charged in the following function in the Statement of '
Activities:
General government $ 508,060
Cultural and convention center 731,734 '
Public safety 1,200,086
Public works 5,737,178
Parks and recreation 205,676 '
Library 86,417
$ 8,469,151
1
1
1
1
50 '
1 CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
1
(5) Capital Assets, (Continued)
' Balance at Balance at
June 30, 2002 Additions Deletions June 30, 2003
' Business-type activities:
Buildings $ 16,280,263 - 16,280,263
Improvements other than
t buildings 107,749,139 6,820,849 114,569,988
Machinery and equipment 1,240,838 74,130 (5,288) 1,309,680
Motor vehicles 1,220,756 - - 1,220,756
Sewage treatment facilities 20,307,789 160,000 _ 20,467,789
Sewage disposal facilities 418,860 418,860
General plant and
' administration 1,084,198 _ _ 1,084,198
Subsurface lines 25,908,048 25,909,048
Total cost of depreciable
' assets 174,209,891 7,054,979 (5,288 181,259,582
Less accumulated depreciation:
' Buildings (8,802,716) (521,039) - (9,323,755)
Improvements other than
buildings (48,786,915) (5,476,919) - (54,263,834)
Machinery and equipment (908,733) (104,814) 5,290 (1,008,257)
Motor vehicles (1,095,278) (33,316) _ (1,128,594)
Sewage treatment facilities (8,940,967) (541,831) (9,482,798)
Sewage disposal facilities (322,885) (8,776) - (331,661)
' General plant and
administration (807,823) (37,092) (844,915)
Subsurface lines (12,752,115) 518161 (13,270,276)
' Total accumulated
depreciation (82,417,432) 7 241 948) 5,290 (89,654,090)
' Net depreciable assets 91,792,459 (186,969) 2 91,605,492
Capital assets not depreciated:
' Land 30,954,357 109,708 - 31,064,065
Capital assets, net $122,746,816 7( 7.261) 2 122,669.557
' 51
1
CITY OF PALM SPRINGS 1
Notes to the Basic Financial Statements '
(Continued)
(5) Capital Assets, (Continued)
Depreciation expense was charged in the following programs of the primary government: '
Airport $ 5,631,451 '
Wastewater 1,105,858
Golf course 504,639
$ 7,241,948 '
(6) Restatement of Beginning Fund Balances/Net Assets '
Fund balances at June 30, 2003 consisted of the following reserves and designations:
The accompanying financial statements reflect adjustments that resulted in the '
restatement of beginning fiord balances/net assets of Proprietary Funds. The following
schedule summarizes the effects of the prior period adjustments to the beginning net
assets of July 1, 2002: '
Airport Wastewater Golf Course Internal
Fund Fund Fund Service Funds '
Net assets at beginning of year,
as restated $16,277,688 9,496,478 (10,193,631) 1,063,983
Adjustment to close accumulated
contributed capital into net
assets 38,742,411 27,218,885 4,125,442 2,918,685 '
Net assets at beginning of year,
as restated $55,020.099 36.715,363 (6,068,189) 3,982.668 '
(7) Accumulated Fund Deficits
The following fiords reported deficits in fund balances/retained earnings as of June 30, 1
2003:
Deficit Balance '
Major Funds: ,
Golf Course Fund $(6,809,689)
Internal Service Funds:
Cogeneration Plant Fund (1,982,942) '
52 '
1
CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
(7) Accumulated Fund Deficits, (Continued)
Deficit Balance
' Special Revenue Funds:
CSA152 (4,709)
Parking (93,819)
' Management's explanation for the resolution of accumulated fund deficits are summarized
as follows:
' Golf Course Enterprise Fund:
The deficit in retained earnings of $6,809,689 was a result of prior years deficit and
current year shortfalls. The course did not open until early 1995 and was closed shortly
thereafter due to a series of storms. The course re-opened during 1996 and it is anticipated
that the losses will be recovered in future years.
Cogeneration Plant Internal Service Fund:
The $1,982,942 deficit in retained earnings constitutes a cumulative loss of$377,697 since
' the opening of the plant and a one-time non-cash loss and expense related to the advance
refunding of the 1984 Cogeneration Facilities and Police Building Certificates of
Participation of$1,605,246. The advance refunding of the 1984 Cogeneration Facilities
and Police Building Certificates of Participation by the City in April 1987 decreases its
total debt service by $1,841,305 over the remaining 19 years of the issue. In
management's opinion, the accumulated deficit will be recovered in future years through
the reduction of interest payments.
' Parking Special Revenue Fund:
' Expected revenue from the leasing of parking spaces to downtown employers for their
employees' use did not occur. The City anticipates either subsidizing the operational costs
of the Parking Structure via an annual transfer from the General Fund or to start charging
for parking. In either case, the deficit should be eliminated by Fiscal Year 2005-06.
CSA152:
' An invoice that was received late in August 2003, after the City had already submitted its
reimbursement request to the County of Riverside, caused the CSA152 deficit. The
additional cost will be included in the Fiscal Year 2003-04 reimbursement request and the
deficit will be eliminated.
1
' 53
CITY OF PALM SPRINGS t
Notes to the Basic Financial Statements ,
(Continued)
(8) Long-Terra Liabilities
Changes in long-term liabilities for the year ended June 30, 2003 (including unamortized '
discounts and refunding costs) are as follows:
Balance at Additions/ Balance at Due within '
Governmental activities: June 30,2002 Accretion Deletions June 30,2003 One vear
Compensated absences payable $ 4,280,983 4,268,385 2 808 815 5,740,553 3,757,786 ,
Special assessment debt with
government commitment 6,045,000 (735,000 5,310,000 615,000 '
Capital lease obligations 2,823,036 (949,633 1,874,403 603,220
Notes payable 183,763 (6,527 177,236 13,368 '
Certificates of participation:
1996 Multiple Capital Facilities '
Refunding Certificates of
Participation 7,445,984 19,619 (225,000) 7,240,603 235,000
1998 Multiple Capital Facilities '
Refunding Certificates of
Participation 2,765,000 - (120,000) 2,645,000 140,000
2002 Taxable Variable Rate '
Certificates of Participation 8,000,000 8,000,000
10,210,984 8,019,619 (345,000 17,885,603 375,000
Bonds payable: '
1994 Tax Allocation Bonds,
Series A and B 18,270,000 - (540,000) 17,730,000 570,000
2001 Housing Tax Allocation '
Bonds 5,805,000 - (190,000) 5,615,000 200,000
1991 Lease Revenue Bonds 4,458,694 310,631 4,769,325 -
1997 Lease Revenue Bonds 11,950,000 (365,000) 11,585,000 380,000
2001 Lease Revenue Bonds 28,540,000 1 140 000 27,400,000 1,170,000
69,023,694 310,631 2 235 000 67,099,325 2,320,000
Total governmental long- '
term liabilities $92.567.460 12.598.635 7 078 975 98 087,120 7 684 374
The above schedule includes $1,766,873 of capital lease obligations, $149,632 of '
compensated absences payable and $4,970,603 of certificates of participation recorded in
the City's internal services funds.
54
1 CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
(8) Long-Term Liabilities, (Continued)
' Changes in long-term liabilities for business-type activities for the year ended June 30,
2003 (including unamortized discounts and refunding costs) are as follows:
' Balance at Accretion/ Balance at Due within
Business-type activities: June 30,2002 Additions Deletions June 30,2003 One year
' Compensated absences payable $ 564,777 263,474 (285,717 542,534 274,464
Bonds payable:
1992 Airport Revenue Bonds 13,815,000 - (330,000) 13,435,000 400,000
1998 Airport Revenue Bonds 7,750,519 8,442 (155,000) 7,603,961 160,000
1998 Airport PFC Revenue Bonds 11,722,267 8,565 (230,000 11,500,832 240,000
33,287,786 17,007 (765,000 32,539,793 900,000
Certificates of participation:
1989 Wastewater Treatment Plant
' Refunding Certificates 4,613,291 187,896 (2,676,409) 2,124,778 2,124,778
1996 Multiple Capital Facilities
Refunding Certificates 12,641,751 94,109 (285,000 12,450,860 300,000
17,255,042 282,005 2 961 409 14,575,638 2,424,778
Business-type long-term
liabilities $51107.605 562,486 4 01 126 47 657 9 5 3.499.242
1
55
1
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements '
(Continued)
(9) Special Assessment Debt with Government Commitment
At June 30, 2003, the City of Palm Springs has two outstanding Assessment District '
(A.D,) Improvement Bonds ("Bonds") issued in the aggregate amount of $5,310,000
pursuant to the Improvement Bond Act of 1915. The proceeds of the Bonds were used to '
fiord construction of street improvements, sewage collection systems and other public
improvements within the A.D. If a delinquency occurs in the payment of any assessment
installment, the City, at or before the end of the fiscal year of delinquency, has a duty to '
transfer into the redemption fiord the amount of the delinquency out of available fiords of
the City. Neither the faith or credit nor the taxing power of the City, the State of
California or any political subdivision thereof is pledged to the payment of the Bonds.
Outstanding at '
June 30, 2003
A.D. 155 t
$5,100,000 Bonds issued 3/2/98; Bonds mature between 9/2/98 and 9/2/09
in amounts ranging from $405,000 through $585,000; Bonds maturing on
any March 2 or September 2 may be redeemed prior to its fixed maturity
date, at the option of the City Treasurer, at a redemption price equal to the
principal amount thereof, plus accrued interest to the date of redemption,
plus a premium; secured by tax bills sent to property owners; interest rates '
range between 4.0% and 5.4%; reserve of $283,300 is required which is
fully funded at June 30, 2003. $3,310,000
A.D. 157/158 '
$2,345,000 Bonds issued 8/9/O1; Bonds mature between 9/2/02 and 9/2/12
in amounts ranging from $95,000 through $290,000; Bonds maturing on ,
any March 2 or September 2 may be redeemed prior to its fixed maturity
date, at the option of the City Treasurer, at 102% of principal amount;
secured by tax bills sent to property owners; interest rates range between
3.80% and 5,70%; reserve of$160,000 is required which is fully funded at
June 30, 2003.
The 2001 Bonds were issued to refrmd the Assessment District 157 Bonds
issued in 1992 and the Assessment District 158 Bonds issued in 1990. 2,000,000 '
Total special assessment debt with government commitment $5,310,000 '
1
56
' CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
(9) Special Assessment Debt with Government Commitment, (Continued)
Annual requirements to amortize outstanding special assessment debt as of June 30, 2003
are as follows:
A.D. 155 A.D. 157/158
June 30 Principal Interest Principal Interest Total
2004 $ 405,000 159,820 60,000 104,340 729,160
2005 425,000 139,688 215,000 95,040 874,728
2006 445,000 118,150 225,000 84,859 873,009
2007 465,000 95,167 240,000 73,515 873,682
2008 485,000 70,700 250,000 61,160 866,840
2009 500,000 44,839 260,000 48,005 852,844
2010 585,000 15,795 280,000 33,685 914,480
2011 290,000 18,150 308,150
2012 85,000 7,795 92,795
2013 - 95,000 2,707 97,707
Total 3 310 000 644,159 2,000,000 529.236 6,483,395
' (10) Obligation Under Capital Leases
The following represents governmental activity obligation under capital leases:
Fire Equipment Lease (Master Lease#0
' In November 1998, the City entered into a lease agreement for the financing of the
acquisition of two aerial fire apparatuses. This lease agreement qualifies as a capital lease
for accounting purposes (title transfers at end of lease) and, therefore, has been recorded
at the present value of the future minimum lease payments as of the date of inception.
The assets acquired under this lease agreement are recorded in the Motor Vehicle
Replacement Fund.
The financing was obtained from CaLease Public Funding Corporation during November
1999 for $1,091,953 with an interest rate of 4.78% and semi-annual payments of$69,724
through the end of the lease (December 2008), The outstanding balance at June 30, 2003
is $667,486.
' 57
CITY OF PALM SPRINGS '
Notes to the Basic Financial Statements '
(Continued)
(10) Obligation Under Capital Leases, (Continued)
Computer Lease (Master Lease#2)
In January 1999, the City entered into a lease agreement for the acquisition of computer '
hardware and software in conjunction with the City's year 2000 remediation efforts. This
lease agreement qualifies as a capital lease for accounting purposes (title transfer at end
of lease) and, therefore, has been recorded at the present value of the firture minimum
lease payments as of the date of inception. The computer hardware and software acquired '
during the fiscal year under this lease agreement is recorded at its acquisition cost of
$964,882.
The financing was obtained from CaLease Public Funding Corporation for $964,882 with '
an interest rate of 5.08% and a semi-annual payment of$110,261 through the end of the
lease (December 2003). The outstanding balance at June 30, 2003 is $107,530.
Fire Vehicles Lease (Master Lease#4)
In September 1999, the City entered into a lease agreement for the financing of the
acquisition of one paramedic unit and two fire trucks. This lease agreement qualifies as a
capital lease for accounting purposes (title transfers at end of lease) and, therefore, has
been recorded at the present value of future minimum lease payments as of the date of
inception. The vehicles acquired under this lease agreement are recorded in the Motor
Vehicle Replacement Fund.
The financing was obtained from CaLease Public Funding Corporation in September
1999 for$614,572 with an interest rate of 5.58% and semi-annual payments ranging from
$41,542 to $37,327 through the end of the lease (September 2009). The outstanding
balance at June 30, 2003 is $428,826.
Miscellaneous Vehicle Lease (Master Lease#6)
In May 2001, the City entered into a lease agreement for the financing of the acquisition '
of miscellaneous vehicles. This lease agreement qualifies as a capital lease for accounting
purposes (title transfers at end of lease) and, therefore, has been recorded at the present
value of the future minimum lease payments as of the date of inception. The vehicles
acquired under this lease agreement are recorded in the Motor Vehicle Replacement
Fund.
The financing was obtained from CaLease Public Funding Corporation in May 2001 for '
$409,378 with an interest rate of 5.57% and semi-annual payments of $57,808 through
the end of the lease (May 2005). The outstanding balance at June 30, 2003 is $215,825. '
58
1
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
(10) Obligation Under Capital Leases, (Continued)
' Miscellaneous Vehicle Lease (Master Lease #7)
' In May 2002, the City entered into a lease agreement for the financing of the acquisition
of miscellaneous vehicles. This lease agreement qualifies as a capital lease for accotmting
purposes (title transfers at end of lease) and, therefore, has been recorded at the present
value of the future minimum lease payments as of the date of inception. The vehicles
acquired imder this lease agreement are recorded in the Motor Vehicle Replacement
Fund.
' The financing was obtained from CaLease Public Funding Corporation in May 2002 for
$666,479 with an interest rate of 4.84% and semi-annual payments of$120,644 through
the end of the lease (May 2005). The outstanding balance at June 30, 2003 is $454,736.
' The calculation of the present value of the future lease payments for the capital leases is
as follows:
' Year ending Master Master Master Master Master
June 30 Lease 41 Lease #2 Lease#4 Lease 46 Lease 47 Total
2004 $139,449 110,261 83,084 115,616 241,288 689,699
' 2005 139,449 _ 83,084 115,616 241,288 579,437
2006 139,449 83,084 222,533
2007 139,449 - 78,869 - - 218,318
' 2008 139,449 _ 74,654 _ _ 214,103
2009 69,724 74,654 144,378
2010 - - 37,327 37,327
' Subtotal 766,969 110,261 514,756 231,232 482,576 2,105,794
Less amount
representing interest (99,483) (2,731) (85,930 (15,407 (27,840) (231,391
' Present value of
future lease payments $667,486 107,530 428.826 215.825 454,736 1.874.403
' 59
CITY OF PALM SPRINGS '
Notes to the Basic Financial Statements
(Continued)
(11) Notes Payable
Outstanding at '
June 30, 2003
Governmental activities: '
The City entered into an agreement in November 2001 with the California
Energy Commission to borrow $183,763. The note accrues interest at 6% '
per annum. Semi-annual payments of$11,916 are required through the end
of the note in June 2013. ' 177,236
(12) Bonds Payable '
Governmental activities: '
Revenue (Tax Allocation) Bonds, 1994 Series A and B
The Palm Springs Financing Authority (a component unit of the City of Palm Springs) '
sold $16,735,000 of Revenue (Tax Allocation) Bonds, 1994 Series A and $4,375,000 of
Revenue (Tax Allocation) Bonds, 1994 Series B on September 1, 1994. The bond '
proceeds were used to defease a portion of the outstanding Revenue (Tax Allocation)
Bonds, 1991 Series B, retire $8,130,000 of 1987 Refunding Tax Allocation Bonds and
provide for certain public capital improvements for the Community Redevelopment
Agency of the City of Palm Springs. '
The bonds consist of $7,345,000 of serial bonds and $13,765,000 of term bonds. The
serial bonds accrue interest at rates between 5.80% and 6.00% and mature between '
September 1, 1995 and September 1, 2008. The first portion of term bonds with principal
of$4,570,000 accrues interest at a rate of 6.40% and mature on September 1, 2013. The
second portion of term bonds with principal of $4,820,000 accrue interest at a rate of '
6.40% and mature on September 1, 2017. The third portion of term bonds with principal
of$4,375,000 accrue interest at a rate of 6.70% and mature on September 1, 2022.
The required reserve for the 1994 Series A and B Revenue Bonds is $1,682,465. As of '
June 30, 2003, the reserve was fully funded. The amount of bonds outstanding at June
30, 2003 is $17,730,000.
60 '
1 CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
1
(12) Bonds Payable, (Continued)
2001 Housing Tax Allocation Bonds
On July 19, 2001, the Redevelopment Agency issued $5,805,000 of 2001 Housing Tax
Allocation Bonds to provide funds to refund the 1991 Series B Tax Allocation Bonds
issued by the Palm Springs Financing Authority. Proceeds from the 1991 bonds were
' used to make six loans to the Agency. The refunding met the requirements of an in-
substance defeasance, and, consequently, the old debt has been removed from the
financial statements. The new bonds consist of$4,550,000 of serial bonds and $1,255,000
of term bonds. The serial bonds accrue interest at rates between 3.50% and 5.375% and
' mature between August 1, 2002 and August 1, 2018. The term bonds accrue interest at a
rate of 5.50% and mature on August 1, 2021.
The required reserve for the 2001 Housing Tax Allocation Bonds is $468,105 and as of
June 30, 2003 the reserve was fully funded. The amount of bonds outstanding at June 30,
2003 is $5,615,000.
1991, 1997 and 2001 Lease Revenue Bonds
On April 1, 1991, the Palm Springs Financing Authority (a component unit of the City of
' Palm Springs) sold $50,668,512 of Lease Revenue Bonds, 1991 Series A, to provide
finds for the advance refunding of the 1988 $37,995,000 refunding issue of certificates of
participation and to finance the construction and acquisition of certain additional
improvements and land relating to the convention center facilities.
The 1991 issue was partially refinanced twice (in 1997 and 2001) by the issuance of two
subsequent lease revenue bonds. On October 1, 1997, the Authority issued $12,300,000
of Lease Revenue Refunding Bonds, 1997 Series A, to refinance a portion of the 1991
Lease Revenue Bonds. On September 20, 2001, the Authority issued $28,540,000 of
Lease Refunding Bonds, 2001 Series A, to provide for the advance refunding of
' $28,650,000 of the 1991 Series A Lease Revenue Bonds.
1991 Lease Revenue Bonds
t After the reftndings, the 1991 lease revenue bonds only consist of capital appreciation
bonds, which have a face value of $6,140,000. By their nature, there are no regular
interest payments associated with capital appreciation bonds. The "interest" on the debt
' results from the difference between the amounts paid by the investors when the debt was
issued and the significantly larger value at maturity. The $6,140,000 of face value capital
appreciation bonds were initially recorded in the general long-term debt account group at
' the amount of proceeds received, $2,125,540. Each year, the outstanding balance is
increased for the accretion of interest associated with the bonds.
The amount of bonds outstanding at June 30, 2003 is $4,769,325.
' 61
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements '
(Continued)
1
(12) Bonds Payable, (Continued)
1997 Lease Revenue Bonds '
The 1997 bonds consist of$4,845,000 of serial bonds and $7,455,000 of term bonds. The '
serial bonds accrue interest at rates between 4.20% and 5.00% and the principal amounts
mature between November 1, 2001 and November 1, 2011 in amounts ranging from
$350,000 to $550,000. The terms bonds mature between November 1, 2012 and
November 1, 2021. '
Bonds maturing November 1, 2014 and November 1, 2021 are subject to mandatory
redemption, without premium, prior to their maturity date, in part by lot on November 1, '
in each year commencing November 1, 2012 with respect to Bonds maturing November
1, 2014 and November 1, 2015 with respect to the Bonds maturing November 1, 2021
from Sinking Fund payments under Trust Agreement. '
The amount of bonds outstanding at June 30, 2003 is $11,585,000.
2001 Lease Revenue Bonds '
The 2001 bonds consist of$14,315,000 of serial bonds and $14,225,000 of term bonds.
The serial bonds accrue interest at rates between 3.50% and 5.25% and mature between '
November 1, 2002 and November 1, 2019. The first portion of term bonds with principal
of $5,600,000 accrue interest at a rate of 5.00% and mature on November 1, 2022. The
second portion of term bonds with principal of$2,735,000 accrue interest at 4.75% and
mature on November 1, 2023. The third portion of term bonds with principal of '
$5,890,000 accrue interest at a rate of 5.00% and mature on November 1, 2025.
The proceeds of the 2001 refunding bonds, along with a portion of the reserves of the '
1991 Convention Center bonds, were deposited into an irrevocable trust with an escrow
agent to provide for all future debt service payments on the refunded portion of the 1991
Convention Center bonds. As a result, these certain bonds are considered defeased and '
the liability has been removed from the general long-term debt account group. The
amormt of bonds outstanding at Jtme 30, 2003 is $27,400,000.
1
1
1
1
62 ,
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
(12) Bonds Payable, (Continued)
The required reserve for the 1991, 1997 and 2001 Lease Revenue Bonds is $3,462,403.
At June 30, 2003, the reserve fiord was fully funded.
' Fiscal Year 1991, 1997 and 2001
Ending 1994 Revenue Bonds 2001 Housing Bond Lease Revenue Bonds
' June 30, Principal Interest Principal Interest Principal Interest
2004 $ 570,000 1,112,465 200.000 267,280 1,550,000 1,887,108
2005 605,000 1,078,390 205,000 260,280 1,605,000 1,849,773
' 2006 640,000 1,041,965 215,000 253,105 1,625,000 1,831,745
2007 675,000 1,002,835 220,000 245,580 1,650,000 1,812,403
2008 715,000 961,135 230,000 237,440 1,670,000 1,791,933
' 2009 760,000 916,885 235,000 228,700 1,765,000 1,770,305
2010 805,000 868,325 245,000 219,300 1,360,000 1,729,755
2011 855,000 815,205 255,000 208,888 1,420,000 1,669,343
2012 910,000 758,725 270,000 197,668 1,485,000 1,605,868
' 2013 970,000 698,565 280,000 185,517 1,550,000 1,538,793
2014 1,030,000 634,565 295,000 172,218 1,640,000 1,464,980
2015 1,095,000 566,565 310,000 157,836 1,690,000 1,381,430
' 2016 1,165,000 494,245 325,000 142,336 1,805,000 1,289,176
2017 1,240,000 417,285 340,000 125,761 1,905,000 1,190,743
2018 1,320,000 335,365 360,000 108,081 2,005,000 1,087,003
' 2019 1,390,000 246,560 375,000 89,181 2,115,000 977,686
2020 670,000 177,550 395,000 69,025 2,230,000 862,400
2021 720,000 130,985 420,000 47,300 2,350,000 742,703
2022 770,000 81,070 440,000 24,200 2,475,000 618,413
' 2023 825,000 27,637 - - 2,605,000 489,537
2024 2,735,000 359,456
2025 2,810,000 222,750
2026 - 3,020,000 75,500
Totals $17.730,000 12.366,322 5 615 0 00 3 2_. 39.696 45.125,000 28.248,803
1
' 63
CITY OF PALM SPRINGS '
Notes to the Basic Financial Statements '
(Continued)
1
(12) Bonds Payable, (Continued)
Business-type activities: '
1992 Airport Revenue Bonds '
To provide fiords for the payment of certain outstanding revenue bond anticipation notes
and to finance the construction and acquisition of certain additional improvements
relating to the airport system, the Palm Springs Financing Authority (a component unit of '
the City of Palm Springs) sold $16,265,000 Airport Revenue Bonds, Series 1992 on
August 1, 1992.
The bonds consist.of $3,230,000 of serial bonds and $13,035,000 of term bonds. The ,
serial bonds accrue interest at rates between 4.10% and 5.50% and the principal amounts
mature between January 1, 1995 and January 1, 2004 in amounts ranging from $260,000 ,
to $400,000. Term bonds of$4,175,000 accrue interest at 6.00% and mature on January
1, 2012. Term bonds of$8,860,000 accrue interest at 6.00% and mature on January 1,
2022.
The required reserve for the 1992 Airport Revenue Bonds is $1,207,600 and as of June ,
30, 2003 the reserve fund was fully funded. The amount of bonds outstanding at June 30,
2003 is $13,435,000. '
1998 Airport Revenue Bonds
On June 1, 1998, the Authority issued $8,260,000 Airport Revenue Bonds, Series 1998 to ,
provide funds to finance certain improvements to the airport. These bonds were issued
simultaneously with the 1998 Airport Passenger Facility Charge Revenue Bonds which
were also issued to finance certain improvements to the airport. '
The bonds consist of$2,210,000 of serial bonds and$6,050,000 of term bonds. The serial
bonds accrue interest at rates between 4.25% and 5.10% and mature between January 1, '
2001 and January 1, 2012 in amounts ranging from $140,000 to $235,000. The first
portion of term bonds with principal of$1,705,000 accrue interest at a rate of 5.125% and
mature on January 1, 2018. The second portion of term bonds with principal of
$4,345,000 accrue interest at a rate of 5.25% and mature on January 1, 2028. '
Bonds maturing on January 1, 2018 and January 1, 2028 are subject to mandatory
redemption, without premium, prior to their maturity date, in part by lot, on January 1 in '
each year commencing January 1, 2013 with respect to Bonds maturing January 1, 2018,
and commencing January 1, 2019 with respect to bonds maturing January 1, 2028, from
mandatory sinking accoLmt payments at a redemption price equal to the principal amount
thereof to be redeemed, without premium, plus accrued interest thereon to the date fixed ,
for redemption in the aggregate respective principal amounts and on January 1 in the
respective years.
64
1
CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
1
(12) Bonds Payable, (Continued)
' The required reserve for the 1998 Airport Revenue Bonds is $561,221. At June 30, 2003,
the reserve fund was fully funded. The amount of bonds outstanding at June 30, 2003 is
' $7,603,961, which includes $211,039 of unamortized discount.
1998 Airport Passenger Facility Charge Revenue Bonds
' On June 1, 1998, the Authority issued $12,720,000 Airport Passenger Facility Charge
Revenue Bonds, Series 1998 (1998 PFC Bonds) to provide funds to finance certain
improvements to the airport. These bonds were issued simultaneously with the 1998
' Airport Revenue Bonds which were also issued to finance certain improvements to the
airport.
The Bonds consist of $3,640,000 of serial bonds and $9,080,000 of term bonds. The
serial bonds accrue interest at rates between 4.25% and 5.10% and mature between
January 1, 2001 and January 1, 2012 in amounts ranging from $145,000 to $355,000.
' The first portion of term bonds with principal of $2,550,000 accrue interest at 5.125%
and mature on January 1, 2018. The second portion of term bonds with principal of
$2,200,000 accrue interest at a rate of 5.25% and mature on January 1, 2022. The third
' portion of term bonds with principal of$4,330,000 accrue interest at a rate of 5.50% and
mature on January 1, 2028.
' Bonds maturing on January 1, 2018, January 1, 2022 and January 1, 2028 are subject to
mandatory redemption, in part by lot, on January 1 in each year commencing January 1,
2013 with respect to bonds maturing January 1, 2018, commencing January 1, 2019 with
respect to bonds maturing January 1, 2022, and commencing January 1, 2023 with respect
t to bonds maturing January 1, 2028, from mandatory sinking account payments at a
redemption price equal to the principal amount thereof to be redeemed, without premium,
plus accrued interest thereon to the date fixed for redemption in the aggregate respective
principal amounts and on January 1 in the respective years; provided, however, that (i) in
lieu of redemption thereof, the bonds may be purchased pursuant to the provisions of the
Indenture, and (ii) if some but not all of the bonds have been redeemed pursuant to the
optional or special redemption provisions, the total amount of sinking accounts payments
' to be made subsequent to such redemption will be reduced in an amount equal to the
principal amount of the bonds so redeemed, by reducing each such future sinking account
payment in integral multiples of$5,000, in a manner designated by the Authority, in the
' case of an optional redemption, or in inverse order, in the case of a special redemption.
The bonds maturing January 1, 2028 are subject to special mandatory redemption, in part
' by lot each January 1 from certain excess revenues at a redemption price equal to the
principal amount thereof to be redeemed, plus a premium, together with accrued interest
thereon to the date fixed for redemption. The redemption price relating to redemption
dates January 1, 1999 to January 1, 2007 is 103%; January 1, 2008 is 102%; January 1,
2009 is 101%; and January 1, 2010 and thereafter is 100%.
65
1
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements '
(Continued)
1
(12) Bonds Payable, (Continued)
The required reserve for the 1998 Airport Passenger Facility Charge Revenue Bonds is '
$851,908. At Jtme 30, 2003, the reserve fund was frilly funded. The amount of bonds
outstanding at June 30, 2003 is $11,500,932, which includes $214,168 of unamortized t
discount.
Future requirements to amortize outstanding business-type bonds as of Jame 30, 2003 are
as follows: '
Year Ending 1992 Airport Bonds 1998 Airport Bonds 1998 PFC Airport Bonds
June 30 Principal Interest Principal Interest Principal Interest '
2004 $ 400,000 804,100 160,000 401,214 240,000 612,318
2005 420,000 782,100 170,000 394,014 250,000 601,518 ,
2006 445,000 756,900 175,000 386,194 265,000 590,018
2007 475,000 730,200 185,000 377,969 275,000 577,563
2008 505,000 701,700 195,000 369,089 290,000 564,363
2009 530,000 671,400 205,000 359,729 305,000 550,443 '
2010 565,000 639,600 215,000 349,479 320,000 535,193
2011 600,000 605,700 225,000 338,729 335,000 519,193
2012 635,000 569,700 235,000 327,479 355,000 502,443
2013 670,000 531,600 250,000 315,494 375,000 484,338
2014 715,000 491,400 265,000 302,681 390,000 465,119
2015 755,000 448,500 275,000 289,100 415,000 445,131
2016 800,000 403,200 290,000 275,006 435,000 423,863 '
2017 850,000 355,200 305,000 260,144 455,000 401,569
2018 900,000 304,200 320,000 244,513 490,000 378,250
2019 950,000 250,200 340,000 228,113 505,000 353,650
2020 1,010,000 193,200 360,000 210,263 535,000 327,138
2021 1,075,000 132,600 375,000 191,363 565,000 299,050
2022 1,135,000 68,100 395,000 171,675 595,000 269,388 '
2023 - - 420,000 150,938 625,000 238,150
2024 - - 440,000 128,888 660,000 203,775
2025 - - 465,000 105,788 700,000 167,475
2026 - - 490,000 81,375 740,000 128,975 '
2027 - - 515,000 55,650 780,000 88,275
2028 - - 545,000 28,613 825,000 45,375
Total 13,435.000 9.439,600 7,815,000 6,343,500 11,715,000 9.772,573 '
66 '
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
(13) Certificates of Participation
' 1996 Multiple Capital Facilities
' On October 9, 1996, the Palm Springs Financing Authority (a component unit of the City
of Palm Springs) issued $24,135,000 Multiple Capital Facilities Refunding Certificates of
Participation to defease the remaining $14,050,000 of 1991 Golf Course Expansion
Certificates of Participation and the remaining $9,075,000 of 1987 Certificates of
Participation Cogeneration Facilities and Police Building.
The certificates consist of $7,080,000 of serial certificates and $17,055,000 of term
certificates. The serial certificates will accrue interest at rates between 4.00% and
5.375% and the principal amounts mature between April 1, 1998 and April 1, 2010 in
amotwts ranging from $410,000 to $715,000. The term certificates accrue interest at
5.50%to 5.75% and mature between April 1, 2013 and April 1, 2027.
Serial certificates maturing on or after April 1, 2008 may be redeemed prior to maturity
on any payment date on or after April 1, 2007 at redemption prices ranging from 100%to
' 102%. The term certificates that mature on or after April 1, 2013 mature at a redemption
price equal to the principal amount to be redeemed, together with accrued interest to the
date fixed for redemption without premium.
' The activities associated with the police building project and cogeneration plant are
governmental activities while the activities of the golf course are business-type activities.
' The outstanding 1996 Multiple Capital Facilities Refunding Certificates of Participation
at June 30, 2003 are reflected in the accompanying financial statements as follows:
' Balance at
June 30, 2003
Governmental activities:
Police building project $ 2,270,000
Cogeneration plant fund 5,100 000
Less tmamortized discount (129,937)
Total governmental activities $ 7,240,603
Business-type activities:
Golf Course Fund $ 14,020,000
' Less unamortized discount (1,569,140)
Total business-type activities $ 12,450,860
67
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements '
(Continued)
(13) Certificates of Participation, (Continued)
1998 Multiple Capital Facilities Certificates '
On September 17, 1998, the Palm Springs Financing Authority (a component unit of the '
City of Palm Springs) issued $3,065,000 Multiple Capital Facilities Refunding
Certificates of Participation to refired a portion of the Palm Springs Public Facility
Corporation's 1989 Wastewater Certificates of Participation.
The serial certificates accrue interest at rates between 3.70% and 4.90% with principal
amounts maturing between April 1, 1999 and April 1, 2015 in amounts ranging from
$10,000 to $280,000. Certificates maturing on or after April 1, 2008 may be redeemed
prior to maturity on any interest payment date on or after April 1, 2007 at redemption
prices ranging from 100%to 102%.
The required reserve for the 1996 and 1998 Multiple Capital Facilities Certificates is
$2,029,539. At June 30, 2002, the reserve fund was fully finded. The entire amount of
1998 certificates outstanding are reflected as governmental activities at June 30, 2003 in
the amount of$2,645,000,
1989 Wastewater Treatment Plant Refunding Certificates
On September 12, 1989, Certificates of Participation were sold to provide for the advance t
crossover refunding of certain Refunding Certificates of Participation dated February 1,
1984 (the "1984 Certificates"), and to provide funds to acquire a leasehold interest in real '
property. The crossover date for 1984 Certificates was March 1, 1994 on which the City
exercised its purchase option and retired the outstanding certificates. The 1989
Certificates bear interest rates between 6.0% and 7.2% issued under an assignment and
trust agreement dated September 12, 1989 with the First Interstate Bank of California as ,
trustee. These refunding certificates mature between September 1, 1990 and September
1, 2014 in amounts ranging from $155,000 to $2,130,000.
In September, 1998 $3,065,000 of Refunding Certificates of Participation (Multiple ,
Capital Facilities Project) defeased $2,445,000 of the outstanding 1989 Current Interest
Certificates of Participation and $176,795 of unaccreted value of certain 1989 Zero
Coupon Capital Appreciation Certificates of Participation. '
The remaining outstanding 1989 Certificates consist solely of $11,130,000 of zero
coupon certificates. By their nature, there are no regular interest payments associated '
with zero coupon certificates. The "interest" on the debt results from the difference
between the amounts paid by the investors when the debt was issued and the significantly
larger value at maturity. The $11,130,000 of face value zero coupon certificates were ,
initially recorded at the amount of proceeds received, $4,956,606. Each year, the
outstanding balance is increased for the accretion of interest associated with the
Certificates. As of June 30, 2003, the balance outstanding is $2,124,778, which includes
unamortized premium of$95,222. '
68 '
CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
(13) Certificates of Participation, (Continued)
2002 Taxable Variable Rate Certificates of Participation
On July 29, 2002, the Financing Authority issued $8,000,000 Taxable Variable Rate
Demand Certificates of Participation to provide funds to reimburse the City for the costs
of acquisition of the downtown parking projects site and to provide funds to construct,
' famish, equip, and improve the site.
The certificates accrue interest at variable rates not to exceed 12%. The interest rate to be
payable may be converted to a fixed rate at the election of the City. Principal amounts
' mature between August 2010 and August 2027 in amounts ranging from $190,000 to
$755,000.
' The certificates are subject to mandatory sinking account redemption from lease
payments made by the City at a redemption price equal to the principal amount to be
redeemed, together with accrued interest to the redemption date, without premium. At
' June 30, 2003, the outstanding balance is $8,000,000.
� 69
1
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements t
(Continued)
(13) Certificates of Participation, (Continued) ,
Future requirements to amortize outstanding certificates of participation as of June 30,
2003 are as follows (excluding the 1989 Certificates that are payable in 2004):
Year 1996 Multiple 1998 Multiple 2002 Taxable ,
Ending Capital Facilities Capital Facilities Variable Rate
June 30 Principal Interest Principal Interest Principal Interest
2004 $ 535,000 1,194,999 140,000 119,310 - 96,000 t
2005 560,000 1,169,854 185,000 113,710 - 96,000
2006 585,000 1,142,974 190,000 106,125 - 96,000
2007 615,000 1,113,723 200,000 98,145 - 96,000 ,
2008 645,000 1,082,359 210,000 89,645 - 96,000
2009 680,000 1,048,819 220,000 80,720 - 96,000
2010 715,000 1,013,119 225,000 71,040 190,000 93,720 ,
2011 755,000 974,687 230,000 60,915 205,000 93,540
2012 795,000 933,162 240,000 50,335 215,000 93,420
2013 840,000 889,437 255,000 39,055 230,000 93,420
2014 710,000 843,237 270,000 26,815 245,000 93,060 '
2015 750,000 802,412 280,000 13,720 355,000 91,740
2016 795,000 759,287 - - 375,000 91,500
2017 840,000 713,575 - - 400,000 91,200 ,
2018 890,000 665,275 - - 430,000 90,840
2019 940,000 614,100 - - 455,000 90,540
2020 995,000 560,050 - - 485,000 90,180 ,
2021 1,050,000 502,837 - - 520,000 89,760
2022 1,110,000 442,462 - - 550,000 89,400
2023 1,175,000 378,637 - - 590,000 88,920
2024 1,240,000 311,075 - - 625,000 88,500 '
2025 1,310,000 239,775 - - 665,000 88,020
2026 1,390,000 164,450 - - 710,000 87,480
2027 1,470,000 84,525 - 7552000 86,940 '
Totals $21,390,000 17,644,830 2,645,000 869.535 8,000.000 2,208,180
1
70 ,
' CITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
(14) Defeasance of Debt
The Palm Springs Financing Authority and Public Facilities Corporation (component
units of the City of Palm Springs) defeased certain certificates of participation, leasehold
' mortgage bonds and revenue bonds by placing the proceeds of new certificates of
participation and revenue bonds in an irrevocable trust to provide for all future debt
service payments on the old debt issues. Accordingly, the trust account assets and the
liability for the defeased debt issues are not included in the City's financial statements.
As of June 30, 2003,the following debt issues outstanding are considered defeased:
1988 Certificates of Participation(Convention Center) $21,180,000
' 1991 Series B Revenue Bonds (Cormnunity Redevelopment
Agency-Project loans) 12,095,000
1991 Lease Revenue Bonds (Convention Center) 10,940,000
1989 Certificates of Participation (Wastewater) 105,000
$44.320.000
' (15) Claims and Judgments
The City is exposed to various risks of loss related to its operation, including losses
associated with errors and omissions, injuries to employees and members of the public.
The City's Internal Service Risk Management Fund is used to account for and finance its
' uninsured risks of loss. The City purchases commercial insurance from The Insurance
Company of the State of Pennsylvania (ICSP) for general liability claims. Under this
policy, ICSP covers claims in excess of the City's self-insured retention of$300,000 per
occurrence and provides a general liability coverage up to $20,000,000 per claim.
The City of Palm Springs purchases commercial workers' compensation insurance from
Employers Reinsurance Corp. Under this policy, Employers recover claims in excess of
the City's self insured retention of$500,000 and provides employer liability coverage up
to $5,000,000 in addition to workers' compensation statutory limits.
Certain settled claims for general liability and worker's compensation exceeded the self
insurance retention level in 2001, 2002 and 2003. These claims exceeded the self-
insurance retention level of$300,000, but did not exceed the excess insurance coverage
limits.
' 71
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements '
(Continued)
(15) Claims and Judgments, (Continued)
The claims and judgments liability reported in the Internal Service Risk Management
Fund is based on the requirements of Governmental Accounting Standards Board
Statement No. 10, which requires that a liability for claims and judgments be reported if ,
information prior to the issuance of the financial statements indicates that it is probable
that a liability has been incurred at the date of the financial statements and the amount of
loss can be reasonably estimated. As of June 30, 2003, claims and judgments payable, ,
including estimated claims for incurred but not reported claims, amounted to $3,200,251.
Changes in the claims and judgments payable amounts in fiscal years 2002 and 2003 for
the Risk Management Fund are as follows: '
Current Year
Beginning of Claims and
Fiscal Year Changes in Claim Balance at
Liability Estimates Payments Fiscal Year End
2001-02 $2,972,042 2,655,117 (2,103,349) 3,523,810 '
2002-03 3,523,810 1,970,557 (2,294,116) 3,200,251
(16) Defined Benefit Pension Plan i
Plan Description ,
The City of Palm Springs contributes to the California Public Employees Retirement
System (PERS), an agent multiple-employer public employee defined benefit pension
plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments,
and death benefits to plan members and beneficiaries. PERS acts as a common
investment and administrative agent for participating public entities within the State of
California. Benefit provisions and all other requirements are established by state statute
and city ordinance. Copies of PERS' annual financial report may be obtained from their
executive office: 400 P Street, Sacramento, California 95814.
72 '
tCITY OF PALM SPRINGS
' Notes to the Basic Financial Statements
(Continued)
(16) Defined Benefit Pension Plan, (Continued)
Funding Policy
' The employee contribution towards the PERS plan is 8% of covered salary (9% for safety
employees). The City makes the required contribution for all City employees on their
behalf and for their account. For the year ended hire 30, 2003, the amount contributed
by the City on behalf of the employees was $2,085,346, The City is required to contribute
at an actuarially determined rate calculated as a percentage of covered payroll. The
employer contribution rate for the year ended June 30, 2003 was 5.645% for police
employees, 0% for fire employees and 0% for miscellaneous employees. Separately
' funded plans have been established for each employee group. Benefit provisions and all
other requirements are established by state statute and city contract with employee
bargaining groups.
Annual Pension Cost
For the year ending June 30, 2003, the City's annual pension cost(employer contribution)
of$484,837 for police, $0 for fire and $0 for miscellaneous employees was equal to the
City's required and actual contributions. The required contribution was determined as
' part of the Jane 30, 2000, actuarial valuation using the entry age normal actuarial cost
method. The actuarial assrumptions included (a) 8.25% investment rate of return (net of
administrative expenses), (b) projected annual salary increases that vary by duration of
' service, and (c) 3.75% per year cost-of-living adjustments. Both (a) and (b) included an
inflation component of 3.5%. The actuarial value of PERS assets was determined using
teclmiques that smooth the effects of short-term volatility in the market value of
investments over a four-year period (smoothed market value). PERS unfunded actuarial
' accrued liability is being amortized as a level percentage of projected payroll on a closed
basis. PERS has combined the prior service funded liability and the current service
unfunded liability into a single initial unfunded liability. The single funding horizon for
this initial unfunded liability is June 30, 2003.
THREE-YEAR TREND INFORMATION FOR PERS
' Annual Pension Percentage of Net Pension
Fiscal Year Cost(APC) APC Contributed Obligation
' 6/30/01 $264,357 100% 0
6/30/02 484,527 100% 0
6/30/03 484,837 100% 0
1
73
CITY OF PALM SPRINGS '
Notes to the Basic Financial Statements '
(Continued)
(16) Defined Benefit Pension Plan, (Continued)
1
SCHEDULE OF FUNDING PROGRESS FOR PERS ($ Amount in Thousands)
UAAL as '
Actuarial a%of
Actuarial Accrued Covered '
Actuarial Value of Liability(AAL) Unfunded AAL Fended Covered Payroll
Valuation Date Assets A Entry Age(B) (UALL)(B-A) Ratio(A/B) Payroll(C) f(B-A)/Cl
6/30/00: '
Misc. $ 86,457 62,687 (23,770) 137.9% 11,740 (202.467)%
Police 59,899 55,754 (4,145) 107.4% 5,205 (79.646)%
Fire 39,092 32,879 (6,213 118.90/0 3,261 190.531
Total 185 448 151,320 34 128) 122.60% 20206 168.900 °/u
6/30/O1: '
Misc. $ 92,273 76,914 (15,359) 120.0% 13,628 (112.702)%
Police 60,836 60,554 (282) 100.5% 5,750 (4.904)%
Fire 40,195 36,347 (3,848 110.60/a 3,661 105.106 % ,
Total $193,304 1 33 815 (19 489 111.2% 2 L4_6)%
6/30/02: '
Misc. $ 83,122 85,481 2,359 97.2% 14,503 16.3%
Police 56,422 67,100 10,678 84.1% 5,917 180.5%
Fire 37,837 44,174 6,337 85.7% 4,024 157.5% '
Total 177 381 196.755 1� 90.1% 24 79.2%
(17) Leasehold Interest
SENCA Palm Springs, Inc., a California Corporation, was the lessee Linder Business '
Lease No. PSL-315 and a certain letter dated May 1, 1984, which are collectively referred
to as the "Master Lease." Under this Master Lease, the Agua Caliente (Palm Springs)
Reservation is the "lessor"while SENCA is the "lessee." ,
1
1
74 '
CITY OF PALM SPRINGS
Notes to the Basic Financial Statements
(Continued)
1
(17) Leasehold Interest, (Continued)
t
On September 28, 1989 the City of Palm Springs entered into an agreement with SENCA
' to assume SENCA's lease. The agreement provided for, among other things, the
assignment by SENCA to the City of all of SENCA's right, title and interest in and to the
Master Lease and the three subleases in exchange for $3,000,000. In addition, the City
' subleased to SENCA the remainder of the Master Lease Property (the "New Sublease
Property"). SENCA's interest in that sublease was eventually sold, and is now owned by
Tom and Jacqueline Suitt. Until the site is developed, the rent is $1 per year. The City
assumed the responsibility of collecting the rent of the three remaining subleases:
' Wyndham Hotel, Convention Center and Voss Properties. Voss Properties eventually
went into foreclosure, and the sublease was turned into a direct lease with the Bureau of
Indian Affairs. The basic rent of$470,450 for the Wyndham Hotel has been adjusted by
' increases in the Consumer Price Index to $729,082. The Convention Center's basic rent
of$225,000 is now $348,695. The rents paid to the City are due each December 20"' for
the succeeding calendar year. The next CPI adjustment will affect the December 20,
' 2004 payment for the year 2005. The subleases expire in 2059.
Subsequently, the City pays the lessor in accordance with the Master Lease. Basic rent is
adjusted every five years using the "Base Index" (Price Index of December, 1984) issued
by the Bureau of Labor Statistics of the United States Department of Labor. The current
annual rent is $872,756. In addition to the basic rent, sublessees may pay additional rent
equal to any and all rent or percentage rent payable under the Master Lease relating to
' any and all business activities conducted on the leased property. The Master Lease and
subleases are considered for accounting purposes to be operating leases.
1
75
CITY OF PALM SPRINGS 1
Notes to the Basic Financial Statements '
(Continued)
(18) Transfers In/Transfers Out
The following schedule summarizes the City's transfer activity: '
Transfers In Transfers Out Amount
General Fund Non-Major Governmental Funds $ 600,000
Internal Service Funds 1,250,000 (a)
Community Promotion Fund General Fund 20,000 '
Capital Projects Fund General Fluid 2,000,000 (b)
Community Promotion Fund 130,000 ,
Non-Major Governmental Funds General Fund 1,215,674 (c)
Community Promotion Fund 2,500,000 (d)
Non-Major Governmental Funds 1,347,275 (e) '
Golf Course Fund Community Promotion Fund 200,000
Total . 9 262 949
(a) Various Internal Service Funds transferred monies to the General Fund for ,
reimbursement of PERS payments and insurance costs.
(b) The General Fund transferred money to the Capital Projects Fluid for certain
capital projects.
(c) The General Fund transferred $1,205,674 to the General Debt Service Fund for '
the Convention Center debt payment and transferred $10,000 to other Non-Major
Governmental Funds. ,
(d) The Community Promotion Fund transferred money to the General Debt Service
Fund for the Convention Center debt payment.
(e) These transfers include a $1,077,092 transfer from the Community '
Redevelopment Agency Debt Service Fund to the Community Redevelopment
Agency Capital Project Fund to repay advances to the General Fund. '
(19) Change in Accounting Principle
During the year ended June 30, 2003, the City implemented GASB Statement No. 34. '
GASB Statement No. 34 changed the financial reporting model of local governmental
traits. As a result of GASB Statement No. 34, fund financial statements are required to be
presented with a focus on the major funds of that local government. Previously, financial
reporting for the local governments had focused on reporting by fund type. The modified
accrual basis of accounting and the current financial resources measurement focus is used
in the fund financial statements for the governmental finds of the City.
76 '
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' REQUIRED SUPPLEMENTARY INFORMATION
77
1
1
CITY OF PALM SPRINGS 1
Notes to the Required Supplementary Information 1
Year Ended June 30, 2003
1
(1) Budgets and Budgetary Data
The adopted budget of the City consists of a resolution specifying the total appropriation 1
for each departmental activity, (e.g., Police Administration, Airport Administration,
Street Maintenance, etc.). 1
Total appropriations for each fund may only be increased or decreased by the City
Council by passage of a resolution amending the budget, with the exception of budget
adjustments which involve offsetting revenues and expenditures. In cases involving 1
offsetting revenues and expenditures, the Finance Director is authorized to increase or
decrease an appropriation for a specific purpose where said appropriation is offset by
unbudgeted revenue which is designated for said specific purpose. During the year, there 1
were supplemental budgetary appropriations amounting to $10,359,217.
The City Manager and Assistant City Manager have authority to adjust the amounts 1
appropriated between the departments and activities of a fund, objects within each
departmental activity and between accounts within the objects, provided, however, that
the total appropriations for each fund may not exceed the amounts provided in the budget
resolution. 1
The level on which expenditures may not legally exceed appropriations is the fund level.
All appropriations lapse at fiscal year-end unless City Council takes formal action in the 1
form of a resolution to continue the appropriation into the following fiscal year.
Budgets for the various funds are adopted on a basis consistent with generally accepted 1
accounting principles (GAAP). Annual appropriated budgets are legally adopted for the
general, special revenue, debt service, capital projects, and proprietary fiord types.
1
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CITY OF PALM SPRINGS EXI-IIBIT A-1
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003
' Variance- Prior
Budget Positive Year
Original Final Actual (Negative) Actual
Revenues:
Taxes $ 26,362,000 26,362,000 26,586,087 224,087 25,249,447
Licenses and permits 1,738,000 1,739,840 2,102,736 362,896 1,644,225
Fines and penalties 222,000 222,000 287,455 65,455 204,576
' Investment income 500,000 500,000 228,076 (271,924) 272,357
Rental income 269,000 269,000 272,412 3,412 329,675
Intergovernmental 3,132,205 3,034,313 3,187,531 153,218 2,930,123
Charges for services 2,472,636 2,589,636 2,855,670 266,034 3,356,554
Transient occupancy taxes 5,000,000 5,000,000 5,191,029 191,029 4,728,905
Donations and contributions 5,100 82,100 107,440 25,340 47,164
Miscellaneous 296,000 255,580 280,337 24,757 299,265
Total revenues 39,996,941 40,054,469 41,098,773 1,044,304 39,062,291
Expenditures:
Current:
General government 6,551,945 7,147,950 6,168,566 979,384 6,600,586
Public safety 23,032,828 23,392,302 21,710,615 1,681,687 21,524,353
Public works 5,940,267 6,461,414 5,756,243 705,171 5,333,122
Parks and recreation 3,886,309 4,012,775 3,918,454 94,321 3,619,980
Library 2,148,004 2,163,041 2,083,320 79,721 2,017,308
Total expenditures 41,559,353 43,177,482 39,637,198 3,540,284 39,095,349
Excess (deficiency) of
revenues over (under)
expenditures (1,562,412) (3,123,013) 1,461,575 4,584,588 (33,058)
Other financing sources (uses):
Transfers in 2,020,000 1,850,000 1,850,000 - 2,455,356
' Transfers out (3,215,674) (3,235,674) (3,235,674) - (2,248,185)
Sale of general fixed assets 470,000 470,000 558,701 88,701 10,974
' Total other financing
sources (uses) (725,674) (915,674) (826,973) 88,701 218,145
' Net change in fund balance (2,288,086) (4,038,687) 634,602 4,673,299 185,087
Fund balances at beginning
of year 10,927,265 10,927,265 10,927,265 - 10,742,178
Fund balances at end of year $ 8,639,179 6,888,578 11,561,867 4,673,289 10,927,265
79
CITY OF PALM SPRINGS EXHIBIT A-2
Community Promotion Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003 '
Variance- Prior
Budget Positive Year
Original Final Actual (Negative) Actual
Revenues:
Rental income $ 27,000 27,000 22,344 (4,656) 32,827
Charges for services 25,000 25,000 13,251 (11,749) 31,300 '
Transient occupancy taxes 8,400,000 8,400,800 7,230,065 (1,170,735) 7,366,114
Miscellaneous 55,200 182,840 362,162 179,322 40,323
Total revenues 8,507,200 8,635,640 7,627,822 (1,007,818) 7,470,564
Expenditures:
Current:
General government 2,853,516 2,860,516 2,799,927 60,589 2,900,717
Cultural and convention center 1,444,588 1,672,070 1,336,429 335,641 1,750:585 ,
Parks and recreation 410,486 1,205,699 538,071 667,628 491543
Capital outlay - 125,427 683,678 (558,251) -
Total expenditures 4,708,590 5,863,712 5,358,105 505,607 5,142,845 '
Excess (deficiency) of
revenues over (under)
expenditures 3,798,610 2,771,928 2,269,717 (502,211) 2,327,719
Other financing sources (uses):
Transfers in - 20,000 20,000 - -
Transfers out - 2,830,000 (2,830,000) - (2,700,000)
Total other financing
sources (uses) - 2,810,000 (2,810,000) - (2,700,000) ,
Net change in fund balances 3,798,610 (38,072) (540,283) (502,211) (372,281) '
Fund balances at beginning of year 2,271,605 2,271,605 2,271,605 - 2,643,886
Fund balances at end of year $ 6,070,215 $ 2,233,533 1,731,322 502,211 2,271,605 '
80
1
1
1
1
t
' SUPPLEMENTARY SCHEDULES
1
1
1
' 81
'CITY OF PALM SPRINGS EXHIBIT B-1
Combining Balance Sheet -Non-Major Governmental Funds
June 30, 2003 '
Special Debt Capital ,
Revenue Service Projects Total
Assets '
Cash and investments 18,993,943 2,030,307 1,517,409 22,541,659
Restricted assets:
Cash and investments '
with fiscal agent 702,022 6,261,069 591,288 7,554,379
Deposits 33,044 - - 33,044
Receivables:
Accounts 193,417 - - 193,417
Accrued interest 97,954 44,056 18,019 160,029
Notes 304,609 - - 304,609 '
Due from other governments 585,579 46,684 632,263
Advances to other funds 2,115,992 - - 2,115,992
Property held for resale 908,690 6,290,882 7,199,572 '
Total assets 23,935,250 8,382,116 8,417,598 40,734,964
Liabilities and Fund Balances '
Liabilities: '
Accounts payable 628,488 - 248,162 876,650
Accrued wages payable 19,984 - 903 20,887
Due to other funds 212,441 76,479 - 288,920 t
Due to other governments 149,153 - - 149,153
Deposits payable - 500 500
Deferred revenue 110,598 - - 110,598 '
Pass-through payable - 826,446 - 826,446
Advances from other funds - 2,079,639 3,337,211 5,416,850
Total liabilities 1,120,664 2,982,564 3,586,776 7,690,004 '
Fund balances:
Reserved for: '
Encumbrances 2,384,388 - 9,285 2,393,673
Non-current assets 3,354,307 - 6,290,882 9,645,189
Debt service requirements 702,022 5,399,552 - 6,101,574 '
Low and moderate housing 1,617,092 - - 1,617,092
Unreserved-designated 14,894,601 - 996,754 15,891,355
Unreserved-undesignated 137,824 - (2,466,099) (2,603,923) '
Total fund balances 22,814,586 5,399,552 4,830,822 33,044,960
Total liabilities and fund balances 23,935,250 8,382,116 8,417,598 40,734,964 '
82 ,
CITY OF PALM SPRINGS EXHIBIT B-2
Combined Statement of Revenues, Expenditures and Changes in Fund Balances -
' Non-Major Governmental Funds
Year ended 7nie 30, 2003
' Special Debt Capital
Revenue Service Projects Total
Revenues:
Taxes $ 3,287,951 4,780,293 8,068,244
Licenses and permits 680,046 - 680,046
' Fines and penalties 372,340 - - 372,340
Investment income 533,237 358,644 86,679 978,560
Rental income 33,570 144,468 178,038
Intergovernmental 1,705,069 - - 1,705,069
' Charges for services 1,167,820 - 446,900 1,614,720
Special assessments 263,073 263,073
Donations and contributions 281,184 - 281,194
' Master lease 1,078,399 _ - 1,078,399
Miscellaneous 133,727 34,000 167,727
Total revenues 9,536,406 5,138,937 712,047 15,387,390
Expenditures:
Current:
' General government 188,299 65,038 620,325 873,662
Public safety 1,038,710 1,038,710
Public works 3,846,305 - 769,924 4,616,229
Parks and recreation 271,416 - - 271,416
' Library 396,546 - _ 396,546
Lease 872,687 348,695 1,221,382
Capital outlay - - 5,328,164 5,328,164
' Debt service:
Principal 291,920 2,331,742 2,613,662
Interest 372,273 3,518,132 119,238 4,009,643
' Bond issuance costs _ - 342,195 342,195
Pass-through payments 1,910,074 1,910,074
Total expenditures 7,268,156 9,173,681 7,179,946 22,621,683
Excess (deficiency) of revenues
over(under) expenditures 2,268,250 (3,034,744) (6,467,799) (7,234,293)
Other financing sources (uses):
Transfers in 10,000 3,975,857 1,077,092 5,062,949
Transfers out (600,000) (1,347,275) - (1,947,275)
' Sale of general fixed assets 997,065 = - 997,065
Issuance of bonds 8,000,000 8,000,000
Total other financing sources (uses) 407,065 2,628,582 9,077,092 12,112,739
' Net change in fund balances 2,675,315 (406,162) 2,609,293 4,878,446
Fund balances at beginning of year 20,139,271 5,805,714 2,221,529 28,166,514
' Fund balances at end of year $ 22,814,586 5,399,552 4,830,822 33,044,960
' 83
' NON-MAJOR SPECIAL REVENUE FUNDS
' Special Revenue Funds are used to account for specific revenues that are legally restricted to
expenditure for particular purposes.
The City of Palm Springs has the following Non-Major Special Revenue Funds:
' Forfeiture Fund - To account for revenues and costs related to special narcotics investigations
and seizure of assets as a result of these investigations.
' Safety Augmentation Fund - To account for revenues and costs related to Proposition 172, which
authorized a special ''/2% sales tax to be used for safety purposes only.
' CSA 152 Fund - To account for revenues and costs related to the implementation of the National
Pollutant Discharge Elimination System. This program is designed to reduce pollutants entering
the various storm channels and washes throughout the community.
Recycling -AB 939 Fund- To account for revenues and expenditures related to the operations of
the City's recycling activities.
' Villagefest Fund- To account for revenues and costs related to the Palm Springs Villagefest.
' Parking Fund - To account for revenues and costs related to the parking lot facilities located
within the City.
Gas Tax Fund - To account for revenue received from the State of California and other sources to
' be used for street maintenance and improvements only.
Measure A Improvements Fund - To account for revenue received from the State of California
' from a special 1/2% sales tax to be used for street maintenance and improvements only.
Drainage Construction Fund - To account for revenue received from fees assessed on new
construction for the purpose of building and maintaining a drainage and flood control system
' within the City.
Community Development Block Grant Fund - To account for revenue and costs related to the
' activities approved and funded by the Block Grant Program.
Master Lease Fund - To account for revenue and expenditures related to the Master Lease held
' by the City on land adjacent to the Convention Center.
Air Quality Management Fund - To account for revenue received from the County for enacting
air quality improvement policies.
Public Arts Fund - To account for revenue and expenditures related to fees collected on new
construction for the purpose of procuring art objects for public benefit.
' Library Fund - To account for revenues received for various purposes related to the library
activities.
Low and Moderate Housing Fund - To account for revenue and expenditures related to the
development of facilities within the City for citizens of low or moderate means.
1
' 85
CITY OF PALM SPRINGS '
Special Revenue Funds
Combining Balance Sheet '
June 30,2003
Safety Recycling Measure A '
Forfeiture Augmentation CSA 152 AB 939 Villagefest Parking Gas Tax hirprovements
Assets
Cash and investments $ 395,881 199,984 - 4,598,626 19,991 - 831,495 3,908,160 '
Restricted assets:
Cash and investments
with fiscal agents - - - - - - - - '
Deposits - - - - - - - -
Receivables:
Accounts - - - 185,031 - - - 5,764
Accrued interest 2,266 1,575 - 24,338 - - 5,214 20,477 '
Notes
Due from other governments - 40,634 114,619 - - 2,025 114,739 300,634
Advances to other funds - - - - - 36,353 - -
Property held for resale - - - - - - - - '
Total assets $ 398,147 242,193 114,619 4,807,995 19,991 38,378 951,448 4,235,035
Liabilities and Fund Balances '
Liabilities:
Accounts payable $ 11,818 4,536 8,298 455 1,665 30,170 79,961 350,794 '
Accrued wages payable - 7,649 616 2,419 2,899 - - 26
Due to other funds - - 110,414 - - 102,027 - -
Due to other governments - - - - - - - -
Deferred revenue 21,199 - - - - - - 89,399
Total liabilities 33,017 12,185 119,328 2,874 4,564 132,197 79,961 440,219
Fund balances(deficit): t
Reserved for:
Encumbrances 22,607 29,111 - 33,078 - 2,943 360,385 1,905,002
Deposits - - - - - - - -
Notes receivable - - - - - - '
Advances to other funds - - - - - 36,353 - -
Property held for resale - - - - - - - -
Debt service requirements - - - - - - - -
Low and moderate housing - - - - - -
Unreserved:
Designated for:
Special purposes 25,738 200,897 - 4,754,639 15,427 - 102,979 -
Conthruing appropriations 316,785 - - 17,404 - - 408,123 1,989,914
Undesignated - - (4,709 - - 133,115 - -
Total fund balances
(deficit) 365,130 230,008 4,709 4,805,121 15,427 (93,819) 871,487 3,794,816 ,
Total liabilities and
fund balances $ 398,147 242,193 114,619 4,807,995 19,991 38,378 951,448 4,235,035
1
86
1
' EXHIBIT C-1
1
Community Air Low and
' Drainage Development Master Quality Public Moderate Totals
Construction Block Grant Lease Management Arts Library Housing 2003 2002
3,519,142 182,891 20,245 10,085 277,510 2,411,989 2,618,054 18,993,943 16,250,836
' _ - 229,990 _ _ _ 472,132 702,022 702,254
33,044 33,044 90,735
- 112 - - - - 2.1510 193,417 180,008
' 18,557 - - 54 1,509 14,955 9,009 97,954 135,072
8,028 296,581 304,609 247,322
12,928 585,579 582,082
- - - - - - 2,079,639 2,115,992 2,115,992
' - - - - - - 909,690 909,690 674,419
3,537,699 191,021 250,135 23,067 279,019 2,426,844 6,419,659 23,935,250 20,978,720
- 11,787 - 4,309 6,099 20,092 98,504 628,488 340,687
' = 1,396 _ 552 2,237 417 1,773 19,984 14,403
212,441 173,539
9,028 - - - - 141,125 149,153 228,922
- - - - - - - 110,598 81,898
' - 21,211 - 4,861 8,336 20,509 241,402 1,120,664 839,449
' - 3,520 - - 19,151 790 7,811 2,384,398 1,343,804
- - - - - 33,044 33,044 90,735
2,079,639 2,115,992 2,115,992
908,690 908,690 674,419
- - 229,890 - - - 472,132 702,022 471,963
t - - - - - - 1,617,092 1,617,092 1,615,162
1,123,552 - 20,245 18,206 237,680 2,405,555 - 9,904,919 7,286,790
2,414,147 166,290 _ _ 13,852 _ 763,268 5,989,683 6,996,092
(137,824) (702,998)
' 3,137,699 169,810 250,115 18,206 270,611 2,406,331 6,171,217 22,814,586 21,139,271
3,537,699 191,021 250,135 23,067 279,019 2,426,844 6,419,659 23,935,250 20,978,720
1
87
1
CITY OF PALM SPRINGS '
Special Revenue Funds
Combining Statement of Revenues,Expenditures and Changes in Fund Balances
Year ended June 30,2003 '
Safety Recycling Measure
Forfeiture Augmentation CSA 152 AB 939 Villagefest Parking Gas Tax Improvements
Revenues:
Taxes $ - 513,391 - - - - - 1,633,504
Licenses and permits - - - - 318,114 - - -
Fines and penalties 204,441 15,365 - - - 114,208 -Investment income 10,943 6,377 - 118,279 - 2,541 23,602 101,381
Rental income - - - - - -
Intergovernmental - - - 12,431 - - 1,023,581 70,301
Charges for services - 3,702 - 775,947 - 2,504 - -
Special assessments - - 263,073 - - - - -
Donations and contributions - 142,409 - 27,940
Master lease - - - - - - - -
Miseell<aieous - - - - 10,100 2,925
Total revenues 215,384 681,244 263,073 934,597 328,214 119,253 1,047,183 1,808,111 '
Expenditures:
Current:
General government - - - - - - - -
Public safety 267,345 771,365 - - - - - -
77 254 '
Public works - - 271,9 ,930 - 252,645 431,075 1,268,524
Parks and recreation - - - - 271,416 - - -
Library - - - - - - - -
Lease - - - - - - - -
Debt service:
Principal - - - - - - - -
Interest - - - - - - - -
Payment to bond escrow - - - - - -
Total expenditures 267,345 771,365 271,977 254,930 271,416 252,645 431,075 1,268,524
Excess(deficiency)
of revenues over
(under)expenditures (51,961) (90,121) (8,904) 679,667 56,79E (133,392) 616,108 539,587
Other financing sources(uses):
Transfers in - - - - - 10,000 - -
Transfers out - - - - - - (600,000) -
Sale of general fixed assets - - - - - - - -
Issuance of bonds - - - - - - - -
Payment to bond escrow - - - - - -
Total other financing
sources(uses) - - - 10,000 (600,000) -
Net change in '
fund balances (51,961) (90,121) (8,904) 679,667 56,798 (123,392) 16,108 539,587
Fund balances(deficit)at
beginning of year 417,091 320,129 4,195 4,125,454 (41,371) 29,573 855,379 3,255,229 '
Fund balances(deficit)at
end of year $ 365,130 230,008 (4,709) 4,805,121 15,427 (93,819 871,487 3,794,816
88
EXHIBIT C-2
Community Air Low and
Drainage Development Master Quality Public Moderate Totals
Construction Block Grant Lease Management Arts Library Housing 2003 2002
' _ _ - _ _ - 1,141,056 3287,951 2,927,444
361,932 680,046 501,848
- - 38,326 - 372,340 506,680
89,375 7,867 1,943 252 7,558 60,489 102,630 533,237 722,085
' _ _ _ - _ - 33,570 33,570 50,442
415,625 50209 132,922 1,705,069 2,276,064
- - - 270,130 115,537 - 1,167,820 1,074,323
- - - 263,073 324,758
_ - - 89,525 21,310 - 281,184 333,303
1,078,389 1,078,389 1,078,389
92,178 - - - 13,414 15,110 133,727 43,151
' 451,307 515,670 1,080,332 50,461 367213 381,999 1292,366 9,536,406 9,838,487
- - 2,990 - - - 185,309 188,299 275,736
' _ _ _ _ - _ - 1,038,710 927,300
66 598,
067 49,013 407,790 240,918 3,846,305 4,540,161
_ - - - - 271,416 306,590
- - 396,546 - 396,546 286,825
- - 872,687 - - - - 872,687 872,687
91,920 - - - 190,000 281,920 84,297
97,548 - - - 274,725 372,273 457,654
' _ _ _ _ _ - - - 852,418
71,366 598,067 1,065,145 49,013 407,790 396,546 890,952 7,268,156 8,603,668
1 379,941 (82,397) 15,187 1,448 (40,577) (14,548) 401,414 2268,250 1234,819
_ _ - - - - _ 10,000 50,000
(600,000) (1,128,000)
- 165,807 - - - 297,750 533,508 997,065 -
- - 5,805,000
- (5,106,225)
- 165,807 - - - 297,750 533,508 407,065 (379225)
379,941 83,410 15,187 1,448 (40,577) 283202 934,922 2,675,315 855,594
' 3,157,758 86,400 234,948 16,759 311,260 2,123,133 5,243,335 20,139,271 19283,677
3,537,699 169,810 250,135 18206 270,683 2,406,335 6,178,257 22,814,586 20,139,271
1
' 89
t
CITY OF PALM SPRINGS EXHIBIT C-3
Forfeiture Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003
Variance- Prior '
Positive Year
Budget Actual (Neg Actual '
Revenues: ative)
Fines and penalties $ 204,441 204,441 - 375,114 '
Investment income 3,000 10,943 7,943 17,176
Total revenues 207,441 215,384 7,943 392,290 ,
Expenditures:
Current: '
Public safety 632,046 267,345 364,701 227,095
Total expenditures 632,046 267,345 364,701 227,095 r
Net change in fund balances (424,605) (51,961) 372,644 165,195 '
Fund balances at beginning of year 417,091 417,091 - 251,896
Fund balances at end of year $ 7,514 365,130 372,644 417,091 '
1
1
90 ,
CITY OF PALM SPRINGS EXHIBIT C-4
' Safety Augmentation Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
' Year ended June 30, 2003
Variance- Prior
Positive Year
' Budget Actual (Negative) Actual
Revenues:
' Taxes $ 480,000 513,391 33,391 477,041
Fines and penalties 15,365 15,365 13,376
Investment income 5,000 6,377 1,377 12,887
' Charges for services 3,702 3,702 - 693
Donations and contributions 142,189 142,409 220 148,063
' Total revenues 646,256 681,244 34,988 652,060
' Expenditures:
Current:
Public safety 1,059,865 771,365 288,500 700,205
' Total expenditures 1,059,865 771,365 288,500 700,205
' Net change in fund balances (413,609) (90,121) 323,488 (48,145)
' Fund balances at beginning of year 320,129 320,129 - 368,274
Fund balances at end of year $ (93,480) 230,008 323,498 320,129
' 91
1
EX[IBIT C-5 '
CITY OF PALM SPRINGS
CSA 152 Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003 '
Variance- Prior
Positive Year
Budget Actual (Negative) Actual '
Revenues:
Special assessments $ 365,000 263,073 (101,927 324,758 ,
Total revenues 365,000 263,073 (101,927 324,758
Expenditures:
Current:
Public works 324,821 271,977 52,844 322,832 '
Total expenditures 324,821 271,977 52,844 322,832 ,
Net change in fund balances 40,179 (8,904) (49,083) 1,926
Fund balances at beginning of year 4,195 4,195 - 2,269 '
Fund balances (deficit) at end of year $ 44,374 (4,709 49,083 4,195 ,
1
92 '
CITY OF PALM SPRINGS EXHIBIT C-6
' Recycling - AB 939 Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
' Year ended June 30, 2003
Variance- Prior
Positive Year
Budget Actual (Negative) Actual
Revenues:
' Investment income $ 180,000 118,279 (61,721) 162,539
Intergovernmental 12,431 12,431 12,431
Charges for services 750,000 775,947 25,947 804,357
' Donations and contributions 28,000 27,940 (60 -
Total revenues 958,000 934,597 23,403) 979,327
Expenditures:
Current:
Public works 342,569 254,930 87,639 239,155
Total expenditures 342,569 254,930 87,639 239,155
Net change in fund balances 615,431 679,667 64,236 740,172
Fund balances at beginning of year 4,125,454 4,125,454 - 3,385,282
Fund balances at end of year $ 4,740,885 4,805,121 64,236 4,125,454
93
'CITY OF PALM SPRINGS EXHIBIT C-7
Villagefest Fund '
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003 '
Variance- Prior
Positive Year
Budget Actual (Negative) Actual
Revenues:
Licenses and permits $ 350,000 318,114 (31,886) 264,093 '
M scellaneous 6,000 10,100 4,100 7,439
Total revenues 356,000 328,214 27,786 271,532 t
Expenditures:
Current:
Parks and recreation 359,272 271,416 87,856 306,590
Total expenditures 359,272 271,416 87,956 306,590
Net change in fund balances (3,272) 56,798 60,070 (35,058)
Fund balances (deficit) at beginning of year (41,371 41,371 6,313
Fund balances (deficit) at end of year $ 44,643 15,427 60,070 (41,371
i
94
i
i EXHIBIT C-8
CITY OF PALM SPRINGS
Parking Fund
iSchedule of Revenues, Expenditures and Changes in Find Balances - Budget and Actual
iYear ended June 30, 2003
iVariance- Prior
Positive Year
iBudget Actual (Negative) Actual
Revenues:
i Fines and penalties $ 120,000 114,208 (5,792) 79,679
Investment income 2,541 2,541 8,340
Charges for services 78,000 2,504 (75,496 12,589
iTotal revenues 198,000 119,253 (78,747 100,608
iExpenditures:
Current:
iPublic works 302,502 252,645 49,857 211,042
Total expenditures 302,502 252,645 49,857 211,042
iExcess (deficiency) of
i revenues over (under)
expenditures 104,502 133,392 28,890 110,434
i Other financing sources (uses):
Transfers in 10,000 10,000 50,000
Transfers out - - 378,000
iTotal other financing
isources (uses) 10,000 10,000 - 328,000
Net change in fund balances (94,502) (123,392) (28,890) (438,434)
iFund balances at beginning of year 29,573 29,573 - 468,007
iFund balances (deficit) at end of year $ 64,929 (93,819 (28,890 29,573
1
i95
'
CITY OF PALM SPRINGS EXHIBIT C-9
Gas Tax Fund '
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003 '
Variance- Prior '
Positive Year
Budget Actual (Negative) Actual
Revenues:
Investment income $ 30,000 23,602 (6,398) 43,697 '
Intergovernmental 820,265 1,023,581 203,316 860,340
Total revenues 850,265 1,047,183 196,918 904,037 '
Expenditures:
Current:
Public works 1,204,518 431,075 773,443 509,917
Total expenditures 1,204,518 431,075 773,443 509,917 f
Excess (deficiency) of '
revenues over (under)
expenditures 354,253 616,108 970,361 394,120 '
Other financing sources (uses):
Transfers out 600,000) 600,000 - 600,000
Total other financing
sources (uses) 600,000 (600,000 600,000 '
Net change in fund balances (954,253) 16,108 970,361 (205,880) ,
Fund balances at beginning of year 855,379 855,379 - 1,061,259
Fund balances at end of year $ (98,874) 871,487 970,361 855,379 '
96 ,
CITY OF PALM SPRINGS EXHIBIT C-10
Measure A Improvements Fund
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
' Year ended June 30, 2003
Variance- Prior
Positive Year
' Budget Actual (Negative) Actual
Revenues:
Taxes $ 1,350,000 1,633,504 283,504 1,315,316
Investment income 10,000 101,381 91,381 121,969
Intergovernmental 702,540 70,301 (632,239) 517,255
Miscellaneous - 2,925 2,925
Total revenues 2,062,540 1,808,111 254,429 1,954,440
' Expenditures:
' Current:
Public works 5,059,995 1,268,524 3,791,371 696,407
' Total expenditures 5,059,895 1,268,524 3,791,371 696,407
' Net change in fund balances (2,997,355) 539,587 3,536,942 1,258,033
Fund balances at beginning of year 3,255,229 3,255,229 - 1,997,196
Fund balances at end of year $ 257,874 3,794,816 3,536,942 3,255,229
1
1
97
'CITY OF PALM SPRINGS EXI-IIBIT C-11
Drainage Construction Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 1
Year ended June 30, 2003 '
Variance- Prior ,
Positive Year
Budget Actual (Negative) Actual ,
Revenues:
Licenses and permits $ 40,000 361,932 321,932 237,755 '
Investment income 51,000 89,375 38,375 132,196
Total revenues 91,000 451,307 360,307 369,951 '
Expenditures:
Current: '
Public works 2,485,513 71,366 2,414,147 6,754
Total expenditures 2,485,513 71,366 2,414,147 6,754 '
Net change in fund balances (2,394,513) 379,941 2,774,454 363,197 '
Fund balances at beginning of year 3,157,758 3,157,758 - 2,794,561
Fund balances at end of year $ 763,245 3,537,699 2,774,454 3,157,758 '
1
98
' CITY OF PALM SPRINGS EXI-IIBIT C-12
Community Development Block Grant Fund
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
' Year ended June 30, 2003
' Variance- Prior
Positive Year
' Budget Actual (Negative) Actual
Revenues:
' Investment income $ - 7,867 7,867 1,478
Intergovernmental 665,225 415,625 (249,600) 678,187
Miscellaneous 92,178 92,178 -
' Total revenues 665,225 515,670 (149,555 679,665
' Expenditures:
Current:
' General government - - - 13,760
Public works 1,256,767 598,067 658,700 665,905
' Total expenditures 1,256,767 598,067 658,700 679,665
Excess (deficiency) of
' revenues over (under)
expenditures (591,542) 82,397 509,145 -
' Other financing sources (uses):
Sale of general fixed assets - 165,807 165,807 -
' Total other financing
' sources (uses) - 165,807 165,807 -
Net change in fund balances (591,542) 83,410 674,952 -
Fund balances at beginning of year 86,400 86,400 - 86,400
tFund balances at end of year $ (505,142) 169,810 674,952 86,400
1
99
,
CITY OF PALM SPRINGS EXIIIBIT C-13
Master Lease Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual '
Year ended June 30, 2003 '
Variance- Prior '
Positive Year
Budget Actual (Negative) Actual ,
Revenues:
Investment income $ 12,000 1,943 (10,057) 4,621 '
Master lease 1,078,389 1,078,389 - 1,078,389
Total revenues 1,090,389 1,080,332 (10,057 1,083,010
Expenditures: '
Current: '
General government 4,281 2,990 1,291 2,472
Lease 872,756 872,687 69 872,687
Debt service: '
Principal 91,961 91,920 41 84,297
Interest 98,111 97,548 563 100,792
Total expenditures 1,067,109 1,065,145 1,964 1,060,248 '
Excess (deficiency) of '
revenues over (under)
expenditures 23,280 15,187 (8,093 22,762
Other financing sources (uses):
Transfers out - - 150,000 '
Total other financing
sources (uses) - - - 150,000 '
Net change in fund balances 23,280 15,187 (8,093) (127,239)
Fund balances at beginning of year 234,949 234,948 - 362,186
Fund balances at end of year $ 258,228 250,135 (8,093 234,948 '
100 '
1
EDIT C-14
CITY OF PALM SPRINGS
' Air Quality Management Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
' Year ended June 30, 2003
Variance- Prior
Positive Year
tBudget Actual (Negative) Actual
Revenues:
Investment income $ 1,000 252 (748) 327
Intergovernmental 44,100 50,209 6,109 49,691
' Total revenues 45,100 50,461 5,361 50,018
' Expenditures:
Current:
Public works 49,100 49,013 87 49,427
' Total expenditures 49,100 49,013 87 49,427
Net change in fund balances (4,000) 1,448 5,448 591
' Fund balances at beginning of year 16,758 16,758 - 16,167
Fund balances at end of year $ 12,758 18,206 5,448 16,758
1
1
' 101
1
EXHIBIT C-15 '
CITY OF PALM SPRINGS
Public Arts Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual '
Year ended June 30, 2003
Variance- Prior
Positive Year
Budget Actual (Negative) Actual
Revenues: '
Investment income $ 20,000 7,558 (12,442) 12,321
Charges for services 81,000 270,130 189,130 202,306 '
Dontations and contributions 88,525 89,525 1,000 45,400
Total revenues 189,525 367,213 177,688 260,027 '
Expenditures: ,
Current:
Public works 464,325 407,790 56,535 208,341
Total expenditures 464,325 407,790 56,535 208,341 '
Net change in fund balances (274,800) (40,577) 234,223 51,686
Fund balances at beginning of year 311,260 311,260 - 259,574 '
Fund balances at end of year $ 36,460 270,683 234,223 311,260
1
1
102
1
EXHIBIT C-16
CITY OF PALM SPRINGS
' Library Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
' Year ended June 30, 2003
' Variance- Prior
Positive Year
' Budget Actual (Negative) Actual
Revenues:
' Fines and penalties $ 40,000 38,326 (1,674) 38,511
Investment income 60,000 60,489 489 91,626
Rental income - - - 3,343
' Intergovernmental 60,000 132,922 72,922 159,160
Charges for services 56,000 115,537 59,537 54,378
' Donations and contributions 40,000 21,310 (18,690) 139,840
Miscellaneous 12,000 13,414 1,414 16,712
Total revenues 268,000 381,998 113,998 502,570
' Expenditures:
' Current:
Library 1,587,871 396,546 1,191,325 286,825
Total expenditures 1,587,871 396,546 1,191,325 286,825
Excess (deficiency) of
' revenues over (under)
expenditures (1,319,871) 14,548 1,305,323 215,745
Other financing sources (uses):
Sale of general fixed assets 297,750 297,750
Total other financing
sources (uses) - 297,750 297,750 -
Net change in fund balances (1,319,871) 283,202 1,603,073 215,745
Fund balances at beginning of year 2,123,133 2,123,133 - 1,907,388
Fund balances at end of year $ 803,262 2,406,335 1,603,073 2,123,133
' 103
1
EXHIBIT C-17 '
CITY OF PALM SPRINGS
Low and Moderate Housing Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual '
Year ended June 30, 2003 '
Variance- Prior '
Positive Year
Budget Actual (Negative) Actual '
Revenues:
Taxes $ 1,139,421 1,141,056 1,635 1,135,087
Investment income 75,000 102,630 27,630 113,008 ,
Rental income 41,928 33,570 (8,358) 47,099
Miscellaneous 1,000 15,110 14,110 19,000 '
Total revenues 1,257,349 1,292,366 351017 1,314,194
Expenditures: '
Current:
General government 242,434 185,309 57,125 259,504
Public works 1,307,241 240,918 1,066,323 1,630,381 '
Debt service:
Principal 195,000 190,000 5,000 -
Interest 274,605 274,725 (120) 356,862
Payment to bond escrow - - - 852,418
Total expenditures 2,019,280 890,952 1,128,328 3,099,165
Excess (deficiency) of
revenues over (under) '
expenditures (761,931) 401,414 1,163,345 (1,784,971)
Other financing sources (uses): '
Sale of general fixed assets - 533,508 533,508 -
Proceeds of bonds - - - 5,805,000 '
Payment to bond escrow - - - (5,106,225)
Total other financing '
sources (uses) - 533,508 533,508 698,775
Net change in fund balances (761,931) 934,922 1,696,853 (1,086,196) '
Fund balances at beginning
of year 5,243,335 5,243,335 - 6,329,531
Fund balances at end of year $ 4,481,404 6,178,257 1,696,853 5,243,335
104 '
1
1 MAJOR AND NON-MAJOR DEBT SERVICE FUNDS
' Debt Service Funds are used to account for the accumulation of resources for, and the payment
of, general long-term debt principal and interest.
The City of Palm Springs has the following Major Debt Service Fund:
Special Assessments Fund - To account for the payment of principal and interest on 1915 Act
Assessment District bond issues.
' The City also has the following Non-Major Debt Service Fimds:
' General Debt Service Fund - To account for the payment of principal and interest on the City's
general debt issues.
Community Redevelopment Agency Fund - To account for the payment of principal and interest
' on general long-term debt of the Commmity Redevelopment Agency.
1
1
' 105
1
EXHIBIT D-1 '
CITY OF PALM SPRINGS
Debt Service Funds '
Combining Balance Sheet
June 30, 2003 ,
Community
General Redevelopment Totals
Debt Service Agency 2003 2002 '
Assets
Cash and investments $ - 2,030,307 2,030,307 2,250,284 '
Restricted assets:
Cash and investments '
with fiscal agents 3,861,437 2,399,632 6,261,069 6,237,110
Receivables:
Accrued interest 3,012 41,044 44,056 44,702
Due from other governments - 46,684 46,684 -
Total assets $ 3,864,449 4,517,667 8,382,116 8,532,096 '
Liabilities and Fund Balances '
Liabilities: '
Accrued interest payable $ - - - 977
Due to other funds 76,479 - 76,479 5,415 '
Pass-through payable - 826,446 826,446 684,911
Advances from other funds - 2,079,639 2,079,639 2,035,079
Total liabilities 76,479 2,906,085 2,982,564 2,726,382
Fund balances: '
Reserved for:
Debt service requirements 3,787,970 1,611,582 5,399,552 5,805,714 '
Total fund balances 3,787,970 1,611,582 5,399,552 5,805,714
Total liabilities
and fund balances $ 3,864,449 4,517,667 8,382,116 8,532,096 '
106
' CITY OF PALM SPRINGS EXHIBIT D-2
' Debt Service Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
' Year ended June 30, 2003
Community
General Redevelopment Totals
Debt Service Agency 2003 2002
Revenues:
Taxes $ 4,780,293 4,790,293 4,784,888
Investment income 235,682 122,962 358,644 440,054
Total revenues 235,682 4,903,255 5,138,937 5,224,942
' Expenditures:
Current:
General government - 65,038 65,038 8,025
Lease 348,695 - 348,695 348,695
Debt service:
Principal 1,791,742 540,000 2,331,742 1,127,741
Interest 2,141,503 1,376,629 3,518,132 3,328,622
Pass-through payments 1,910,074 1,910,074 1,843,956
Payment to bond escrow - - - 3,285,993
Total expenditures 4,281,940 3,891,741 8,173,681 9,943,032
Excess (deficiency) of
revenues over (under)
expenditures (4,046,258) 1,011,514 (3,034,744) (4,718,090)
Other financing sources (uses):
Transfers in 3,975,857 - 3,975,857 3,743,385
Transfers out - (1,347,275) (1,347,275) (990,052)
Issuance of bonds 28,540,000
Payment to bond escrow - - (26,883,287)
Total other financing
sources (uses) 3,975,857 (1,347,275 2,628,582 4,410,046
Net change in fund balances (70,401) (335,761) (406,162) (308,044)
Fund balances at beginning
of year 3,858,371 1,947,343 5,805,714 6,113,758
Fund balances at end of year $ 3,787,970 1,611,582 5,399,552 5,805,714
107
CITY OF PALM SPRINGS EXEIIBIT D-3
Special Assessment Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003 ,
Variance- Prior
Positive Year
Budget Actual (Negative) Actual
Revenues: ,
Investment income $ 31,100 23,626 (7,474) 37,085
Special assessments 508,025 766,388 258,363 721,063 '
Miscellaneous 115,400 115,400 - 115,400
Total revenues 654,525 905,414 250,889 873,548 '
Expenditures:
Current:
General government 6,100 3,368 2,732 12,397
Debt service:
Principal 735,000 735,000 - 2,665,000
Interest 303,213 305,681 2,468 533,170
Total expenditures 1,044,313 1,044,049 264 3,210,567 '
Excess (deficiency) of
revenues over(under)
expenditures (389,788) 138,635 251,153 2,337,019
Other financing sources (uses):
Transfers out - - - (300,160)
Issuance of bonds 2,345,000
Total other financing
sources (uses) - - 2,044,840
Net change in fund balances (389,788) (138,635) 251,153 (292,179)
Fund balances at beginning of year 1,719,055 1,719,055 - 2,011,234
Fund balances at end of year $ 1,329,267 1,580,420 251,153 1,719,055
108
' CITY OF PALM SPRINGS EXIIIBIT D-4
General Debt Service Fluid
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003
Variance- Prior
Positive Year
Budget Actual (Negative) Actual
' Revenues:
' Investment income $ 302,000 235,682 (66,318) 307,462
Total revenues 302,000 235,682 66,318 307,462
' Expenditures:
Current:
General government 1,000 - 1,000 8,025
' Lease 348,695 348,695 - 348,695
Debt service:
t Principal 1,802,481 1,791,742 10,739 617,741
Interest 2,133,717 2,141,503 (7,786) 1,935,788
Payment to bond escrow - - - 3,285,993
Total expenditures 4,285,893 4,281,940 3,953 6,196,242
Excess (deficiency) of
' revenues over (under)
expenditures (3,983,893) (4,046,258) 62,365 (5,888,780)
' Other financing sources (uses):
Transfers in 3,855,674 3,975,857 120,183 3,743,385
' Issuance of bonds - _ - 28,540,000
Payment to bond escrow (26,883,287)
Total other financing
' sources (uses) 3,855,674 3,975,857 120,183 5,400,098
' Net change in fund balances (128,219) (70,401) 57,818 (488,682)
Fund balances at beginning of year 3,858,371 3,958,371 - 4,347,053
' Fund balances at end of year $ 3,730,152 3,787,970 57,818 3,858,371
' 109
'CITY OF PALM SPRINGS EXFIIBIT D-5
Community Redevelopment Agency Fund '
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003 '
Variance- Prior
Positive Year
Budget Actual (Negative) Actual
Revenues:
Taxes $ 4,824,817 4,780,293 (44,524) 4,784,888 '
Investment income 101,000 122,962 21,962 132,592
Total revenues 4,925,817 4,903,255 (22,562) 4,917,480 '
Expenditures:
Current: '
General government 92,294 65,038 27,256 -
Debt service:
Principal 540,000 540,000 - 510,000 '
Interest 1,395,724 1,376,629 19,095 1,392,934
Pass-through payments 2,183,066 1,910,074 272,992 1,843,956
Total expenditures 4,211,084 3,891,741 319,343 3,746,790
Excess (deficiency) of
revenues over (under) '
expenditures 714,733 1,011,514 296,781 1,170,690
Other financing sources (uses): t
Transfers out - 1,347,275 (1,347,275) 990,052
Total other financing ,
sources (uses) - (1,347,275) (1,347,275) 990,052
Net change in fund balances 714,733 (335,761) (1,050,494) 180,638 ,
Fund balances at beginning of year 1,947,343 1,947,343 - 1,766,705 ,
Fund balances at end of year $ 2,662,076 1,611,582 (1,OSQ494 1,947,343
110 '
1
' NON-MAJOR CAPITAL PROJECTS FUNDS
1
' Capital Projects Funds are used to account for the purchase or construction of major capital
facilities which are not financed by Proprietary Funds or Trust Funds. Capital Projects Funds are
ordinarily not used to account for the acquisition of furniture, fixtures, machinery, equipment and
other relatively minor or comparatively short-lived capital assets.
' The City of Palm Springs has the following Major Capital Projects Fund:
' Capital Projects Fund - To account for the acquisition and construction of major capital facilities
other than those financed by proprietary funds and trust funds.
The City also has the following Non-Major Capital Projects Funds:
1 Parking Projects Fund — To account for payments into the Fund from In Lieu parking fee
charges, and to account for the Capital expenditures for parking improvements.
' Community Redevelopment Agency Fund - To account for the economic revitalization and
redevelopment of the City through acquisition and development of City property determined to
tbe in a declining condition.
1
1
' 111
1
EXIIIBIT E-1
CITY OF PALM SPRINGS
Capital Projects Funds
Combining Balance Sheet '
June 30, 2003
Community '
Parking Redevelopment Totals
Projects Agency 2003 2002
Assets '
Cash and investments $ 422,071 1,095,338 1,517,409 3,936,435
Restricted assets: ,
Cash and investments
with fiscal agents 591,288 - 591,288 -
Deposits - - 751,900 '
Receivales:
Accounts - - - 300
Accrued interest - 18,019 18,019 24,050 '
Due from other governments - - - 447,874
Property held for resale - 6,290,882 6,290,882 6,290,882
Total assets $ 1,013,359 7,404,239 8,417,598 11,451,441 '
Liabilities and Fund Balances
Liabilities: '
Accounts payable $ 6,609 241,553 248,162 766,652
Accrued wages payable 711 192 903 - '
Due to other funds - - - 1,677,003
Deposits payable - 500 500 500
Deferred revenue - - - 213,289 ,
Advances from other funds - 3,337,211 3,337,211 4,104,863
Total liabilities 7,320 3,579,456 3,586,776 6,762,307 '
Fund balances:
Reserved for:
Encumbrances 9,285 - 9,285 2,607,421 '
Deposits - - - 751,900
Property held for resale - 6,290,882 6,290,882 6,290,882
Unreserved: '
Designated for:
Continuing appropriatio 599,539 - 599,539 8,171,187
Capital projects 397,215 397,215 - '
Undesignated 2,466,099 (2,466,099) (13,132,256)
Total fund balances '
(deficit) 1,006,039 3,824,783 4,830,822 4,689,134
Total liabilities and '
fund balances $ 1,013,359 7,404,239 8,417,598 11,451,441
112 '
' CITY OF PALM SPRINGS EXHIBIT E-2
Capital Projects Finds
Combining Statement of Revenues,Expenditures and Changes in Find Balances
Year ended June 30,2003
1 Community
Parking Redevelopment Totals
' Projects Agency 2003 2002
Revenues:
' Taxes $ - - - 684,517
Investment income 23,850 62,829 86,679 122,143
Rental income - 144,468 144,468 140,832
' Intergovernmental - - - 799,859
Charges for services 446,900 446,900 36,000
Donations and contributions - - - 178,000
' Miscellaneous - 34,000 34,000 271,974
Total revenues 470,750 241,297 712,047 2,232,325
Expenditures:
Current:
General government - 620,325 620,325 274,444
' Cultural and convention center - - 390,497
Public safety 531,699
Public works 189,454 580,470 769,924 3,873,435
' Parks and recreation - - - 789,867
Capital outlay 4,842,939 485,225 5,328,164
Debt service:
' Interest 119,238 - 119,238
Bond issuance costs 342,195 342,195 -
' Total expenditures 5,493,826 1,686,020 7,179,846 5,859,942
Excess (deficiency)of revenues
over(wider)expenditures (5,023,076) (1,444,723) (6,467,799) (3,627,617)
Other financing sources (uses):
Transfers in 1,077,092 1,077,092 2,843,535
' Transfers out - - - (670,523)
Issuance of bonds 8,000,000 8,000,000
Issuance of loans - 183,763
' Total other financing
sources(uses) 8,000,000 1,077,092 9,077,092 2,356,775
Net change in find balances 2,976,924 (367,631) 2,609,293 (1,270,842)
Fund balances (deficit) at
' beginning of year (1,970,885) 4,192,414 2,221,529 5,959,976
Fund balances at end of year $ 1,006,039 3,824,783 4,830,822 4,689,134
' 113
'
CITY OF PALM SPRINGS EXHIBIT E-3
Capital Projects Fund '
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003
Variance- Prior '
Favorable Year
Budget Actual (Unfavorable) Actual
Revenues: '
Taxes $ 732,000 704,176 (27,824) 684,517
Investment income - 33,154 33,154 15,360
Intergovernmental 1,540,656 737,315 (803,341) 798,859 '
Charges for services - - - 2,000
Donations and contributions 178,495 190,085 11,590 178,000 '
Miscellaneous 2,001 4,194 2,193 244,818
Total revenues 2,453,152 1,668,924 784,228 1,923,554 '
Expenditures:
Current:
General government 440,300 85,622 354,678 143,707 ,
Cultural and convention center 5,675,375 4,379,085 1,296,290 -
Public safety 1,147,990 304,027 843,863 531,699
Public works 2,870,794 1,042,924 1,827,870 1,040631 '
Parks and recreation 2,260,373 469,012 1,791,361 789:867
Total expenditures 12,394,732 6,280,670 6,114,062 2,505,904 '
Excess (deficiency) of revenues
over (under) expenditures (9,941,580) 4,611,746 5,329,834 582,350
Other financing sources (uses): '
Transfers in 21130,000 2,130,000 1,6251483
Transfers out - - - (670,523) '
Sale of general fixed assets 750 50,750 50,000 -
Proceeds of loans - - - 183,763
Total other financing
sources (uses) 2,130,750 2,180,750 50,000 1,138,723
Net change in fund balances (7,810,830) (2,430,996) 5,379,834 556,373
Fund balances at beginning of year 2,467,605 2,467,605 - 1,911,232
Fund balances at end of year $ (5,343,225) 36,609 5,379,834 2,467,605 '
114 '
1
' EXHIBIT E-4
CITY OF PALM SPRINGS
' Parking Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003
' Variance- Prior
Positive Year
Budget Actual (Negative) Actual
' Revenues:
Investment income $ 7,964 23,850 15,886
Charges for services 30,000 446,900 416,900 34,000
' Total revenues 37,964 470,750 432,786 34,000
Expenditures:
' Current:
Public works 198,674 189,454 9,220 2,254,885
Capital outlay 5,191,948 4,842,939 349,009 -
Debt service:
Interest 380,004 119,238 260,766
Bond issuance costs 342,195 342,195 - -
Total expenditures 6,112,821 5,493,826 618,995 2,254,885
Excess (deficiency) of revenues
over (under) expenditures (6,074,857) (5,023,076) 1,051,781 2,220,885
' Other financing sources (uses):
Transfers in - - 250,000
' Issuance of bonds 8,000,000 8,000,000 -
Total other financing
sources (uses) 8,000,000 8,000,000 250,000
Net change in fund balances (6,074,857) 2,976,924 9,051,781 (1,970,885)
Fund balances (deficit) at
beginning of year (1,970,885) (1,970,885) - -
' Fund balances (deficit) at end of year $ 8,045,742 1,006,039 9,051,781 1,970,885
115
1
EXiIIBIT E-5 '
CITY OF PALM SPRINGS
Community Redevelopment Agency Fund '
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2003 '
Variance- Prior ,
Positive Year
Budget Actual (Negative) Actual
Revenues: '
Investment income $ 55,000 62,829 7,829 106,783
Rental income 140,000 144,468 4,468 140,832 '
Miscellaneous 34,000 34,000 - 27,156
Total revenues 229,000 241,297 12,297 274,771 '
Expenditures:
Current:
General government 570,528 620,325 (49,797) 130,737 '
Cultural and convention center - - - 390,497
Public works 847,765 580,470 267,295 577,919 '
Capital outlay 576,294 485,225 91,069 -
Total expenditures 1,994,587 1,686,020 308,567 1,099,153
Excess (deficiency) of revenues ,
over (under) expenditures (1,765,587) (1,444,723) 320,864 824,382
Other financing sources (uses): '
Transfers in - 1,077,092 1,077,092 968,052
Total other financing ,
sources (uses) 1,077,092 1,077,092 968,052
Net change in fund balances (1,765,587) (367,631) 1,397,956 143,670 '
Fund balances at beginning of year 4,192,414 4,192,414 4,048,744
Fund balances at end of year $ 2,426,827 3,824,783 1,397,956 4,192,414 ,
1
116 '
INTERNAL SERVICE FUNDS
' Internal Service Funds are used to account for the financing of goods or services provided by one
department or agency of a government to other departments or agencies on a cost reimbursement
basis.
tThe City of Palm Springs has the following Internal Service Funds:
Motor Vehicle Replacement Fund - To account for costs related to operations of the central
' garage and fleet maintenance system, which provides vehicles for most of the City departments.
Costs are recovered through a monthly user fee charged to City departments.
' Facilities Maintenance Fund - To account for costs related to operation and maintenance of City
facilities. Costs are recovered through a monthly user fee charged to City departments using the
service.
' Employee Benefits Fund - To account for costs and liabilities related to public employees'
retirement system and federal taxes. Costs are recovered through a monthly employee benefit
charge based upon gross payroll.
' Risk Management Fund - To account for costs and liabilities related to health, life, dental,
disability, and public liability insurance coverage paid by the City on behalf of City employees
and the City operating funds. Costs are recovered via monthly charges based upon gross payroll
and benefits derived fiom insurance coverage.
Cogeneration Plant Fund - To account for costs of the two cogeneration plants located in the
City. Costs are recovered through a user fee based upon electrical consumption. These fees are
charged to each department on a monthly basis.
1
117
1
'CITY OF PALM SPRINGS I XI1113IT F-1
Internal Service Funds
Combining Statement of Net Assets '
June 30,2003
Motor '
Vehicle Facilities Employee Risk Cogeneration
Replacement Maintenance Benefits Management Plant Total '
Assets
Current assets '
Cash and investments $ 1,402,137 407,770 296,815 3,086,415 5,193,137
Deposits - - - 5,000 - 5,000
Receivables: '
Accounts 34,566 - - 463,232 30,007 527,905
Accrued interest 8,558 - 293,150 16,527 7,259 325,494
Due from other governments 14,494 - - - 8,575 23,069 '
Inventories 87,269 87,269
Total current assets 1,547,024 407,770 589,965 3,571,174 45,841 6,161,774
Restricted assets: '
Cash and investments
with fiscal agents - - - - 398,972 398,972 '
Properly,plant and equipment:
Buildings 959,276 7,482,859 8,442,135 ,
Improvements other
than buildings 206,242 - - 29,961 236,203
Machinery and equipment 541,440 39,423 76,126 - 656,989
Motor vehicles 9,932,616 - - 9,932,616
Accumulated depreciation (7,857,871) (24,797) (76,124) (4,270,238) (12,229,030)
Net property,plant '
and equipment 3,791,703 14,626 2 3,242,582 7,038,913
Other assets: '
Advances to other funds - - 1,430,000 - 1,430,000
Unatnortized debt
issuance costs - - - - 174,398 174,398 '
Total other assets - - 1,430,000 - 174,398 1,604,398
Total assets 5,328,727 422,396 2,019,965 3,571,176 3,861,793 15,204,057 '
(Continued) '
1
118 '
1
' EXIMIT F-1
(Continued)
CITY OF PALM SPRINGS
' hrtemal Service Funds
Combining Statement of Net Assets
(Continued)
Motor
Vehicle Facilities Employee Risk Cogeneration
t Replacement Maintenance Benefits Management Plant Total
Liabilities:
Current liabilities:
Accounts payable 123,042 88,951 171,991 56,096 161,899 601,979
Accrued wages payable 11,447 15,310 9,457 36,214
Accrued interest payable 13,649 - - - 72,223 85,872
Due to other funds - - 640,009 640,009
t Deferred revenue - 43,234 - 43,234
Obligations under capital
leases-current portion 495,690 - - - - 495,690
' Certificates of participation-
current portion 185,000 185,000
' Total current liabilities 641,821 104,261 171,911 101,717 1,059,111 2,087,998
Long-term liabilities:
Compensated absences
' payable 59,907 70,790 - 18,935 - 149,632
Claims and judgments
payable - - - 3,200,251 - 3,200,251
Obligation under capital
leases-long-term portion 1,271,183 1,271,193
Certificates of participation-
long-tern portion - - - - 4,785,603 4,785,603
Total long-term
liabilities 1,331,090 70,790 - 3,219,186 4,785,603 9,406,669
' Total liabilities 1,974,918 175,051 171,991 3,327,973 5,844,734 11,494,667
' Net assets:
Invested in capital assets,
net of related debt 2,014,830 14,626 2 (1,154,651) 874,807
Unrestricted 1,338,979 232,719 1,847,974 243,201 (828,290) 2,834,583
' Total net assets $ 3,353,909 247,345 1,847,974 243,203 (1,982,941) 3,709,390
1
119
1
EXHIBIT F-2 ,
CITY OF PALM SPRINGS
Internal Service Funds
Combining Statement of Revenues,Expenses and Changes in Net Assets '
Year ended June 30,2003
Motor '
Vehicle Facilities Employee Risk Cogeneration
Replacement Maintenance Benefits Management Plant Total
Operating revenues: '
Charges for services $ 2,512,887 2,563,508 2,399,756 7,814,276 1,947,055 17,237,482
Sale of electricity - - - - 146,014 146,014
Miscellaneous 21,511 2,091 - 23,602
Total operating '
revenues 2,534,398 2,563,508 2,399,756 7,816,367 2,093,069 17,407,098
Operating expenses: '
Other charges and services 9,387 - 351 - - 9,738
Administration 60,530 64,282 - 1,877,412 2,208 2,004,432
Cogeneration project costs - - - - 2,017,745 2,017,745
Retirement 1,532,450 - - 1,5321450
Medical,life and health
insurance - - 4,301,497 - 4,301,497
Facilities maintenance - 2,375,757 - - 2,375,757
Maintenance shop '
operations 1,698,158 - - - - 1,698,158
Worker's compensation - - - 629,697 - 629,697
Other claims and insurance 28,387 37,880 - 631,742 20,957 718,966 '
Depreciation 959,281 1,761 - 9,473 124,714 1,095,229
Total operating
expenses 2,755,743 2,479,680 1,532,801 7,449,821 2,165,624 16,383,669
Operating income
(loss) (221,345) 83,828 866,955 366,546 (72,555) 1,023,429
Nonoperating revenues
(expenses):
Investment income 41,801 - - 80,997 28,384 151,182
Interest expense (110,261) - (315,517) (425,778) t
Gain(loss)on sale of assets 78,199 - 78,199
Total nonoperating
revenues(expenses) 9,739 - 80,997 (287,133) (196,397) '
Income(loss)before
transfers and capital
contributions (211,606) 83,828 866,955 447,543 (359,688) 827,032
Transfers out - - (850,000) (400,000) (1,250,000)
Capital contributions:
Capital grants 50,000 50,000 '
Assets contributed from
other finds 99,690 99,690
Change in net assets (61,916) 83,828 16,955 47,543 (359,688) (273,278) '
Net assets at beginning
of year, as restated 3,415,725 163,517 1,831,019 195,660 (1,623,253) 3,982,668
Net assets at end of year $ 3,353,809 247,345 1,847,974 243,203 (1,982,941) 3,709,390
120 ,
EXIIIBIT F-3
CITY OF PALM SPRINGS
Internal Service Funds
' Combining Statement of Cash Flows
Year ended June 30,2003
Motor
Vehicle Facilities Employee Risk Cogeneration
Replacement Maintenance Benefits Management plant Total
Cash flows from operating activities:
Cash received from user
departments S 2,513,277 2,563,508 2,399,756 7,403,565 2,089,781 16,969,897
Cash payments to suppliers
for goods and services (1,252,096) (1,574,009) (1,414,947) (7,595,049) (2,120,079) (13,956,180)
Cash payments to employees
for services (673,575) (985,335) (414,032) (1,972,942)
Net cash provided by(used for)
operating activities 587,606 104,164 984,809 (605,516 (30,298) 1,040,765
Cash flows from noncapital
financing activities:
Cash received from other funds - - - - 437,182 437,182
Cash paid to other funds - - (850,000) (400,000) - (1,250,000)
Net cash provided by(used for)
noncapital financing activities - - (850,000) (400,000) 437,182 (812,818)
' Cash flows from capital and
related financing activities
Cash paid for acquisition
' of capital assets (516,013) (10,900) - - - (526,913)
Proceeds from sale of
capital assets 78,199 - - - - 78,199
Capital contributions received 149,691 = _ _ - 149,690
Principal paid on debt (160,381) (160,381)
Interest paid on debt (118,993) (310,478) (429,471)
Repayment on obligation
under capital lease (741,498) - - - (741,498)
Net cash proved by(used
For)capital and related
financing activities (1,148,615) (10,900) - - (470,859) (1,630,374)
Cash flows from investing activities:
Proceeds from sale and maturities
' of investments - - _ - 35,591 35,591
Interest received on investments 46,290 90,659 28,384 165,333
Net cash provided by(used for)
investing activities 46,290 - - 90,659 63,975 200,924
Net increase(decrease)in cash
and cash equivalents (514,719) 93,264 134,809 (914,857) - (1,201,503)
Cash and cash equivalents at
beginning of year 1,916,856 314,506 162,006 4,001,272 6,394,640
Cash and cash equivalents
at end ofyear $ 1,402,137 407,770 296,815 3,086,415 - 5,193,137
(Continued)
' 121
EXHIBIT F-3
(Continued)
CITY OF PALM SPRINGS
Internal Service Funds
Combining Statement of Cash Flows
(Continued)
Motor
Vehicle Facilities Employee Risk Cogeneration '
Replacement Maintenance Benefits Management Plant Totals
Reconciliation of cash and cash
equivalents to amounts reported
on the Statement of Net Assets:
Reported on Statement of Net Assets:
Cash and investments $ 1,402,137 407,770 296,815 3,086,415 - 5,193,137
Cash and investments
with fiscal agent - - - - 398,972 398,972
Cash and investments reported
on Statement of Net Assets 1,402,137 407,770 296,815 3,086,415 399,972 5,592,109
Less non-cash equivalents - - - - (398,972) (399,972)
Cash and cash equivalents
at end of year $ 1,402,137 407,770 296,815 3,086,415 5,193,137
Reconciliation of operating income
(loss)to net cash provided by
(used for)operating activities:
Operating income(loss) S (221,345) 83,929 866,955 366,546 (72,555) 1,023,429
Adjustments to reconcile operating
income(loss)to net cash provided
by(used for)operating activities: '
Depreciation 959,281 1,761 - 9,473 124,714 1,095,229
(Increase)decrease in
accounts receivable (7,921) - - (412,802) (3,360) (423,983)
(Increase)decrease in due '
from other governments (13,300) - - - 72 (13,228)
(Increase)decrease in inventory 2,822 - - - - 2,822
Increase(decrease)in '
accounts payable (103,934) 11,363 117,854 (212,005) (79,169) (263,791)
Increase(decrease)in accrued
wages payable 1,723 3,009 - 3,692 - 9,424
Increase(decrease)in
compensated absences (29,920) 4,203 - (36,861) - (62,578)
Increase(decrease)in claims
and judgements payable - - - (323,559) - (323,559)
Total adjustments 808,951 20,336 117,854 (972,062) 42,257 17,336
Net cash provided by(used for)
operating activities $ 587,606 104,164 984,809 (605,516) (30,298) 1,040,765
Noncash capital,financing
and investing activities:
Fixed assets contributed '
by other funds $ 99,960 - - - - 99,960
Change in fair
value of investments (1,588) - - 1,865 - 277
Total noncash capital,financing
and investing activities $ 98,372 - - 1,865 - 100,237
122 '
AGENCY FUNDS
Agency Funds are used to account for assets held by a government in a trustee capacity or as an
agent for individuals,private organizations, other governments, and/or other funds.
The City of Palm Springs has one Agency Fund:
Special Deposits Agency Fund - To account for monies held in trust by the City for various
purposes ranging from bid bonds to donations for animal shelter activities.
1
1
1
t
123
1
EXI-IIBIT G-1
CITY OF PALM SPRINGS
Agency Fund '
Statement of Changes in Assets and Liabilities
Year ended June 30, 2003 '
Balance at Balance at '
July 1, 2002 Additions Deletions June 30, 2003
SPECIAL DEPOSITS AGENCY FUND '
Assets
Cash and investments $ 763,299 1,079,365 681,071 1,161,593
Liabilities '
Deposits payable $ 763,299 1,079,365 (681,071 1,161,593
1
1
124
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(This page intentionally left blank.)
t
1
' 125
1
CITY OF PALM SPRINGS
General Governmental Expenditures by Function t
Governmental Funds ,
Last Ten Fiscal Years
Cultural and Parks
Fiscal General Convention Public Public and '
Year Goverrnnent Center Safety Works Recreation
1994 $ 9,609,250 1,680,256 15,484,938 9,742,029 2,795,621 ,
1995 9,619,029 1,613,888 14,403,966 9,241,884 2,993,001 '
1996 9,058,499 1,895,489 15,269,858 9,749,131 2,888,608
1997 8,924,565 1,794,146 16,367,984 14,170,134 3,001,343 1
1998 9,350,088 1,798,890 17,392,868 14,821,033 3,264,149 '
1999 8,786,101 1,619,624 18,451,229 9,747,236 3,707,569
2000 9,160,246 1,475,203 20,122,517 10,165,471 4,052,217 t
2001 9,252,934 633,742 20,747,085 12,890,695 4,523,705 '
2002 10,071,905 2,141,092 22,983,352 13,746,718 5,207,980
2003 9,931,145 5,715,514 23,053,352 11,415,396 5,196,953
(1) Includes$4,252,245 for Convention Center debt service previously reported as an enterprise fun
(2) Includes$2,275,000 for early pay down on Convention Center debt and$8,130,000 pay off of
1987 Redevelopment Bonds '
(3) Includes$582,800 for library expansion
(4) Includes$5,880,000 for refinancing A.D. 155 Bonds
(5) Includes$4,138,411 of payment to bond escrow for refinancing '
Source: City of Palm Springs ,
126
1
TABLE 1
1
1
' Cost of
Lease/ Property
' Debt ERAF Sold/Capital
Library Service Pass-thru Ouflay Total
' 1,696,728 10,740,519 (1) 1,493,020 53,242,361
' 1,737,537 24,220,858 (2) 1,320,429 524,643 65,675,235
' 2,279,555 (3) 10,546,098 1,224,795 1,441,655 54,353,688
1,839,639 10,293,194 1,088,333 366,228 57,845,566
' 2,105,923 15,411,590 (4) 1,008,214 2,143,798 67,296,553
' 1,998,072 11,759,291 1,161,161 - 57,229,283
2,335,579 9,058,198 1,149,013 - 57,518,444
' 2,237,410 8,847,188 1,445,349 - 60,578,108
2,313,712 13,556,277 (5) 1,843,956 - 71,864,982
2,479,866 9,227,563 1,910,074 6,011,842 74,941,705
1
1 127
TABLE 2 1
CITY OF PALM SPRINGS
General Governmental Revenues by Source '
Last Teri Fiscal Years ,
Fiscal Yew Licenses Charges Fines '
Ending and for and Investment amid Special
June 30 Taxes Permits Intergovernmental Services Penalties Rental Income Assessments Miscellaneous Total
1994 $32,597,424 1,549,349 4,304,114 4,474,518 330,478 1,851,979 1,295,605 1,859,448 48,262,915 '
1995 32,589,968 1,695,926 3,289,630 4,274,260 294,523 2,164,827 1,600,105 2,566,174(1) 48,475,413
1996 33,276,549 1,663,251 6,154,844(3) 4,370,671 350,898 2,158,943 1,810,753 3,904,963(2) 53,690,872 '
1997 34,549,429 1,541,113 10,146,616(4) 4,655,433(5) 359,580 2,363,409 2,201,651(6) 2,726,187 58,543,418 ,
1998 35,021,390 1,716,689 11,086,767(8) 4,849,132 309,428 2,147,883 1,529,433 5,811,835(7) 62,472,557
1999 36,866,645 1,810,230 5,526,097 5,349,351 400,270 2,065,544 1,292,155 2,553,046 55,863,338 t
2000 39,745,361 2,129,693 7,143,870 5,979,223 583,181 2,123,309 1,173,894 2,457,096 61,335,627
2001 42,018,263 2,189,014 8,705,435 4,332,370 627,357 3,029,140 1,112,079 2,868,220 64,881,878
2002 45,741,315 2,146,073 6,005,046 4,498,177 711,256 2,157,846 1,045,821 2,406,969 64,712,503 '
2003 47,779,601 2,782,782 5,629,915 4,483,641 659,795 1,736,210 1,029,461 2,586,918 66,688,323
(1) Includes $549,005 from sale of property. '
(2) Includes $796,310 from sale of property, $446,500 donation from developer and $348,800 donation for '
electrical municipalization.
(3) Includes $1,951,487 from CVAG for Mid Valley Parkway Project.
(4) Includes $5,501,657 from CVAG for Mid Valley Parkway Project. '
(5) Includes increase of$552,955 from Recycling Surcharge.
(6) Includes increase of$370,000 for prior years delinquent assessments. '
(7) Includes sale of land for $2,698,878.
(8) Includes $6,382,154 from CVAG for Mid Valley Parkway Project. ,
Source: City of Palm Springs
1
1
128
' TABLE 2A
CITY OF PALM SPRINGS
General Governmental Tax Revenues by Source
' Last Ten Fiscal Years
1 Fiscal Year Trausient Documentary New Utility
Ending Occupancy Stamp Development Users
' June 30 Property Tax Sales Tax Franchise Tax Tax Tax Tax Tax Total
1994 $15,565,543 5,482,278 1,708,581 7,084,292 116,731 96,351 2,543,648(1) 32,597,424
' 1995 12,725,734 5,724,616 1,962,378 7,647,683 108,985 152,817 4,267,855 32,589,968
1996 12,454,225 6,012,081 1,823,831 8,342,036 148,732 170,322 4,325,322 33,276,549
1997 12,633,368 6,224,328 1,852,826 9,093,167 162,053 113,688 4,469,999 34,549,429
1998 12,087,375 6,679,333 1,938,728 9,676,062 215,568 133,848 4,290,476 35,021,390
1999 12,424,642 7,211,872 1,932,118 10,901,809 293,130 152,085 3,950,989(2) 36,866,645
2000 13,108,229 8,141,890 2,057,129 11,822,423 322,467 319,714 3,973,509(3) 39,745,361
2001 13,786,074 8,740,416 2,206,391 11,728,029 370,678 332,498 4,854,177 42,018,263
' 2002 16,293,149 8,619,555 2,456,645 12,095,019 350,469 242,513 5,683,965 45,741,315
t2003 17,098,633 9,179,359 2,537,910 12,421,094 411,399 366,827 5,764,379 47,779,601
(1) First year of tax imposed at 5%rate.
(2) Tax allocation rate reduced to 4.5%
' (3) Tax allocation rate increased to 5.0%
Source: City of Palm Springs
' 129
1
TABLE 3
CITY OF PALM SPRINGS
Property Tax Levies and Collections i
Last Ten Fiscal Years
Fiscal Year Total City City Current Percent of Levy '
Ending June 30 Tax Rate Tax Rate Taxes Levied Collection(1) Collected
1994 .0109066 - - -
1995 .0109196 - - 2,832 '
1996 .0111414 - - 2,969
1997 .0112041 - - - - '
1998 .0113110 - - - -
1999 .011362 - - - - '
2000 .011305 - - - -
2001 .0112609 - - - -
2002 .0113192 - - - -
2003 .0113002 - - - -
(1) Delinquent tax collection are included in current collection. '
Source: County of Riverside ,
Note: The Total Tax Rate is comprised of the statutory 1% rate plus the debt service override
rates approved by the votes for water and school bond meastunes.
130 '
1
TABLE 4
CITY OF PALM SPRINGS
' Schedule of Assessed Valuation
' Last Ten Fiscal Years
' Fiscal Year Less Net
Ending Secured Unsecured Property Homeowner's Taxable
' June 30 Property Property Exemptions Total Exemption Value
1994 $3,996,771,254 255,146,703 117,689,959 4,134,227,998 57,531,138 4,076,696,860
' 1995 3,948,018,523 228,944,234 135,608,374 4,041,354,383 58,780,663 3,982,573,720
1996 3,986,962,679 203,074,016 130,370,949 4,059,165,746 59,229,952 3,999,935,794
1997 3,959,292,566 326,052,171 153,838,121 4,131,506,616 59,442,092 4,072,064,524
1998 3,915,130,408 306,614,276 170,118,280 4,051,626,404 59,858,896 3,991,767,508
1999 3,785,884,254 346,639,341 89,166,450 4,043,357,145 59,962,721 3,983,394,424
' 2000 3,924,812,414 359,445,300 49,781,470 4,234,476,244 59,290,951 4,175,185,293
2001 4,261,469,866 454,672,215 93,437,453 4,622,704,628 59,801,407 4,562,903,221
' 2002 4,722,211,022 449,759,661 75,996,320 5,095,974,363 60,436,168 5,035,538,195
' 2003 5,059,415,432 458,041,213 116,541,098 5,400,915,547 61,894,883 5,339,020,664
1 Source: County of Riverside
1
1
' 131
1
TABLE 5
CITY OF PALM SPRINGS
Property Tax Rates -Direct and Overlapping Governments '
Last Ten Fiscal Years '
(Rate per$100 of assessed valuation)
County of Coachella '
Fiscal Year Riverside County of City of Palm Springs Valley Desert
Ending General Riverside Palm Springs Unified School Community Desert Water
June 30 Purpose Debt Service Debt Service District College Hospital AgeneV Totals '
1994 $1.000 - - .00620 - .00066 .09000 1.09686
1995 1.000 - - .01196 - - .08000 1.09196 '
1996 1.000 - - .03414 - - .08000 1.11414
1997 1.000 - - .04041 - - .08000 1.12041 '
1998 1.000 - - .05110 - - .08000 1.13110
1999 1.000 - - .05620 - - .07700 1.1332 '
2000 1.000 - - .06050 - - .07000 1.13050 '
2001 1.000 - - .05609 - - .07000 1.12609
2002 1.000 - - .06192 - - .07000 1.13192 '
2003 1.000 - - .06002 - - .07000 1.13002
1
Source: County of Riverside t
1
132
' TABLE 6
CITY OF PALM SPRINGS
' Principal Taxpayers
' June 30, 2003
Taxpayer Type of Activity
' Walter Hotel Corp. (Hilton) Hotel and Retail
Palm Springs Marquis Hotel Hotel and Retail
' AP APH Palm Springs (Wyndham Hotel) Hotel and Retail
Desert Regional Medical Center- Tenet Corp. Medical Services
Desert Sun Publishing Co. Newspaper
PHS Holdings (Hyatt) Hotel and Retail
Wessman Development Retail Development
Pacific Monarch Resorts, Inc. Hotel and Retail
RPS Resort Corp. Hotel and Retail
San Gorgonio Westwinds II Inc. Energy (Windmills)
Lowe's Hardware, Inc. Retail
i
Source: City of Palm Springs
133
TABLE 7
CITY OF PALM SPRINGS
Special Assessment Billings and Collections '
Last Ten Fiscal Years
Fiscal Year Special Assessment Special Assessment
Ended June 30 Billings Collected
1994 $5,220,412 4,951,413 i
1995 5,744,158 5,161,874 '
1996 5,694,025 5,531,295
1997 5,959,096 6,173,885
1998 5,630,693 5,729,511
1999 5,563,065 5,795,613
2000 4,775,117 5,013,573
2001 5,525,936 5,988,923
2002 5,455,898 6,160,496
2003 5,354,669 5,602,891
Source: County of Riverside '
134
' TABLE 8
CITY OF PALM SPRINGS
' Computation of Legal Debt Margin
' June 30, 2003
' Assessed Valuations (1):
Assessed Value $1,350,228,887
' Add back: exempt real property 29,135,275
Total assessed value $1,379,364,162
' Legal Debt Margin:
Debt limitation - 15 percent of total assessed value $ 206,904,624
Amount of debt applicable to debt limitation -
' Legal debt margin $ 206,904,624
' (1) Assessed valuations from Table 4 are divided by 4 for purposes of this computation.
tSource: City of Palm Springs
t
135
1
TABLE 9
CITY OF PALM SPRINGS
Ratio of Net General Obligation Bonded Debt to Assessed Value '
and Net General Obligation Bonded Debt Per Capita
Last Ten Fiscal Years '
Debt Payable
Fiscal Year Gross Less Debt from Net Ratio of Net Not Bonded '
Ending Assessed Bonded Service Enterprise Bonded Bonded Debt to Debt
June 30 Population Value 1 Debt 2 Fund 3 Revenues(4) Debt Assessed Value Per Capita
1994 42,450 4,134,227,998 1,300,000 50,020 - 1,249,980 .03 29 ,
1995 42,473 4,014,354,383 1,000,000 18,207 - 981,793 .02 23
1996 41,702 4,059,165,746 675,000 - - 675,000 .02 16 t
1997 41,275 4,131,506,616 350,000 - - 350,000 .01 8 '
1998 42,638 4,051,626,404 - - - - - -
1999 42,876 4,043,357,145
2000 43,494 4,234,476,244 - - - - - -
2001 43,819 4,622,704,628 - -
2002 43,715 5,095,974,363 - - - - - -
2003 43,997 5,400,915,547 - -
(1) From Table 4.
(2) Amount does not include special assessment bonds.
(3) Amount available for repayment of general obligation bonds. '
(4) These amounts include general obligation bonds that are being repaid from the airport
and golf course revenues. '
Source: County of Riverside
City of Palm Springs '
136
TABLE 10
CITY OF PALM SPRINGS
' Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt
To Total General Govenunental Expenditures
' Last Ten Fiscal Years
1
Ratio of
' Total Debt Service
Fiscal Year Total General To General
Ending Debt Governmental Governmental
' June 30 Principal Interest 1 Service Expenditures (2) Expenditures
1994 $275,000 79,650 354,650 9,609,250 3.7%
' 1995 300,000 65,625 365,625 9,619,029 3.8%
1996 325,000 50,325 375,325 9,058,499 4.1%
' 1997 325,000 33,750 359,750 8,924,565 4.0%
' 1998 350,000 17,500 367,500 9,350,588 3.9%
1999 8,786,101
' 2000 - - - 9,160,246 -
2001 - - - 9,252,984 -
' 2002 - - - 10,071,905 -
2003 - - - 9,931,145 -
1
' (1) Excludes bond issuance and other costs.
' (2) Includes general, special revenue, debt service and capital projects funds.
' Source: City of Palm Springs
' 137
1
TABLE I '
CITY OF PALM SPRINGS
Computation of Direct and Overlapping Bonded Debt '
June 30, 2003
1
2002-03 Assessed Valuation: $5,402,257,865 '
Redevelopment Incremental Valuation: 564,275,479
Adjusted Assessed Valuation: $4,83Z982,386 '
OVERLAPPING TAX AND ASSESSMENT DEBT: %Applicable Debt 6/30/03
Riverside County Flood Control and Water Conservation District,Zone No. 6 78.519% $ 730,227
Banning Unified School District 0.447 35,759 '
Palm Springs Unified School District 60.198 73,086,392
City of Patin Springs 1915 Act Bonds 100. 5,460,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $79.312,378 '
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
Riverside County General Fund Obligations 5.992% $ 38,074,786 '
Riverside County Board of Education Certificates of Participation 5.982 865,032
Mt. San Jacinto Community College General Fund Obligations 0.012 960
City of Palm Springs General Fund Obligations 100. 74,007,000
San Gorgonio Hospital District Authority 0.164 3,403 '
Coachella Valley County Water District Storm Water Unit Certificates of Participation 0.423 48,222
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $112,999,403
Less: Riverside County Administrative Center Project Authority(100%self-supporting '
from tax increment revenues) 1,712,352
City of Palm Springs wastewater certificates of participation(100%self-supporting) 652,638 ,
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $11 6634,413
GROSS COMBINED TOTAL DEBT $192,311,781 (1)
NET COMBINED TOTAL DEBT $189,946,791 '
(1) Excludes tax revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-
bonded capital lease obligations. '
Ratios to 2002-03 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1 A7%
Ratios to Adjusted Assessed Valuation: '
Gross Combined Direct Debt($74,007,000) 1.53%
Net Combined Direct Debt($73,354,632) 1.52% '
Gross Combined Total Debt 3.98%
Net Combined Total Debt 3.93%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/03: $0 ,
Source: California Municipal Statistics,Inc. '
138 ,
1
1
TABLE 12
' CITY OF PALM SPRINGS
Revenue Bond Coverage-Airport
' Last Ten Fiscal Years
Net Revenue
' Fiscal Gross Operating Available for Debt Service Requirements (3)
Year Revenue (1) Expenses (2) Debt Service Principal Interest Total Coverage
' 1994 $7,648,040 5,257,334 2,390,706 - 943,810 943,810 2.53
1995 7,922,783 5,573,025 2,349,758 260,000 943,810 1,203,810 1.95
' 1996 8,680,372 5,646,465 3,033,907 270,000 933,150 1,203,150 2.52
1997 8,980,298 6,050,056 2,930,242 285,000 921,270 1,206,270 2.43
' 1998 10,087,218 6,452,595 3,634,623 295,000 907,875 1,202,875 3.02
1999 10,393,872 6,286,436 4,107,436 455,000 1,521,226 1,976,226 2.07
2000 10,949,832 7,789,078 3,160,754 525,000 1,947,787 2,472,787 1.28
2001 11,997,329 8,507,580 3,489,749 695,000 1,922,711 2,617,711 1.33
2002 11,869,797 8,584,936 3,284,861 730,000 1,889,897 2,619,897 1.25
' 2003 13,124,344 9,464,848 3,659,496 765,000 1,855,072 2,620,072 1.40
(1) Total revenues (including interest).
(2) Total operating expenses exclusive of depreciation.
' (3) Includes principal and interest of revenue bonds only.
' Source: City of Palm Springs
' 139
1
TABLE 13 '
CITY OF PALM SPRINGS
Major Employers '
June 30, 2003
Employer Employees Activity ,
Hotels 2,352 Lodging/Restaurants '
Desert Regional Medical Center 1,492 Medical Facility
Palm Springs Unified School District 2,089 Public School System t
Agua Caliente Gaming Casino 803 Casino
City of Palm Springs 487 Municipal Government t
Bird Corporation 395 Medical Supplies and Equipment '
Desert Sun Publishing 358 Newspaper
13 Banks and Savings and Loans 181 Financial Services '
County of Riverside 187 Municipal Government
Source: City of Palm Springs '
1
1
1
140 '
1
' TABLE 14
CITY OF PALM SPRINGS
Demographic Statistics
1
% Change From Student % Change From
' Year Square Miles Population Previous Year Enrollment Previous Year
1994 81.11 42,450 (.1) 16,612 1.2
' 1995 96.2 42,473 .05 17,456 5.1
' 1996 96.2 41,702 (1.8) 18,295 4.8
1997 96.2 41,275 (1.0) 18,619 1.8
' 1998 96.2 42,638 3.3 19,302 3.7
1999 96.2 42,876 0.6 19,201 (0.5)
' 2000 96.2 43,494 1.4 19,354 0.8
' 2001 96.2 43,819 0.7 20,667 6.4
2002 96.2 43,715 (0.2) 21,175 2.5
' 2003 96.2 43,997 0.6 21,598 1.02
' Source: City of Palm Springs
Palm Springs Unified School District
California Department of Finance
t
1
1
' 141
1
TABLE 15 '
CITY OF PALM SPRINGS
Property Value, Construction and Business Activity
Last Ten Fiscal Years
1
Commercial Residential Business '
Year Ended Properly Construction Construction Licenses
June 30 Value 1 Units 2 Value Units 2 Value Issued '
1994 $4,134,227,998 109 6,082,775 1,856 26,210,118 601,744
1995 4,041,354,383 92 10,693,609 1,053 10,977,095 620,889 '
1996 4,059,165,746 175 13,307,294 1,628 16,075,604 631,491
1997 4,131,506,616 367 12,794,545 1,609 21,777,032 599,856 '
1998 4,051,626,404 168 21,894,998 2,048 25,688,470 637,515 '
1999 4,043,357,145 188 10,373,824 1,909 28,432,046 641,281
2000 4,234,476,244 139 16,509,407 2,240 60,146,973 685,170 '
2001 4,622,704,628 141 15,033,824 2,586 53,128,217 675,230
2002 5,095,974,363 112 16,516,939 2,506 50,491,869 733,164 ,
2003 5,400,915,547 132 21,200,894 2,624 52,622,786 770,442
(1) Estimated assessed value from Table 4. '
(2) Total building permits.
Source: City of Palm Springs '
1
142 t
TABLE 16
CITY OF PALM SPRINGS
Schedule of Insurance in Force
June 30,2003
tEffective Expiration
ComnanyName Policy No. Coverage Limits Date Date Premium
Independent Cities Risk 4700-2909 Excess Comprehensive $20,000,000 excess 7/1/2002 6/30/2003 $ 278,006
Management Authority General and Auto Liability per of$300,000 SIR
Special Public Entity Form
Hartford Fire Insurance 57BPEAY0831 Crime Shield See policy 7/1/2002 6/30/2003 3,971
Fidelity and Deposit Co. 8081962 City Clerk $1,000 7/1/2001 6/30/2002 100
MD
' Fidelity and Deposit Co. POB503268810 Treasurer's Bond $10,000 1/6/2003 1/6/2004 100
MD
Travelers BMG-809 X5389 Boiler and machinery- $40,000,000 per 7/1/2002 6/30/2003 28,283
Property occurrence
Employers Reinsurance 619654 Worker's Compensation W.C. Statutory 7/1/2002 6/30/2003 59,546
Liability:
$25,000,000
Employer's
Liability:
$5,000,000
Affiliated FM TE050 All Risk Property $189,000,000 7/1/2002 6/30/2003 126,111
Affiliated FM TE050 Earthquake/Flood DIC $2,500,000 7/1/2002 6/30/2003 126,036
Primary Layer
' Great American CPP906266 Earthquake and Flood DIC $10,000,000Excess ll/1/2002 11/20/2003 95,000
Assurance Co. Layer 1 Excess of$2,500,000 per
occurrence
Clarendon American 300898cQl Earthquake and Flood DIC $40,000,000 excess 11/21/2002 11/20/2003 103,715
Insurance Layer 2 Excess of$12,5000,000
per occurrence
Excess Insurance Co. ESPW 1756 Earthquake and Flood DIC $15,000,000 excess 11/21/2002 11/20/2003 18,585
Westchester Fire Sharing Layer 3 Excess of$52,500,000
Insurance
Westchester Fire 120638679 Earthquake and Flood DIC $15,000,000excess 11/21/2002 11/20/2003 18,585
Insurance Excess Sharing Layer 4 Excess of$67,500,000 per
Insurance Co. occurrence
Essex Insurance Co. 3CG1468 Commercial General Liability $1,000,000 per 12/1/2002 11/30/2003 paid by
offeredto consultants and occurrence contractor
contractors $2,000,000
aggregate
(Continued)
143
i
TABLE 16
CITY OF PALM SPRINGS 1
Schedule of Insurance in Force
(Continued) 1
Effective Expiration
Company Name Policy No. Coverage Limits Date Date Premium
ACE USA/Westchester ACL 670474 Police Aero Squadron $5,000,000 BI and 7/1/2002 6/30/2003 5,545
Fire BI/Property/All Risk Ground property damage,
and Flight Hull/Medical $5,000,000
Payments liability,$1,000 i
medical expenses
per person,$4,000
per occurrence ,
ACEUSA/Westchester AAPN00034265 Airport Liability $50,000,OOOBIand 7/1/2002 6/30/2003 42,649
Fire property damage
CSL each aircraft/
occurrence
Royal Surplus Lines Ins. K2HR800761 Multi Media Professional $1,000,000 each 11/9/2002 11/8/2003 6,309 i
Co. Liability wrongful act
K&K Insurance Group 96CTLO000059102 VillageFest Liability $5,000,000 8/12/2002 8/11/2003 10,884 i
7600 Prods/Completed
Ops $1,000,000
personal/advertisin i
g $1,000,000 each
occurrence $5,000
medical payments
$300,000 fire i
damage/legal
Royal Insurance Co. PTS464149 Auto Physical Damage $5,388,350 7/l/2002 6/30/2003 25,487 i
(CaLease Coverage) including Comp.And schedule
Collision per schedule
St.Paul Fire and Marine GLO4501017 TULIP(Tenant's/User's $1,000,000 per 5/1/2002 4/30/2003 Paid by
Insurance Co. Liability)Class I,IL III occurrence tenant
(Continued)
i
i
i
i
1
144 1
TABLE 16
CITY OF PALM SPRINGS
' Schedule of Insurance in Force
(Continued)
' Effective Expiration
Company Name Policy No. Coverage Limits Date Date Premium
' VIS-Volunteer VIS THCZ915286 Accident insurance/personal $25,000 accident 7/l/2002 6/30/2003 1,799
Insurance Services 30011 liability/excess auto $1,000,000
' personal each
occurrence
$3,000,000 annual
aggregate
' - $500,000 auto CSL
Travelers QT6601420 BuildersRisk-Convention $3,000,000at 1/2/2003 1/l/2004 3,440
' 4913TIL02 Center Phase I jobsite,$100,000 at
temp.jobsite,
$100,000 in transit
' Kemper 3 AM697339-00 Airport Modular Units(4)- $67,000 10/8/2002 10/7/2002 850
Property Coverage replacement cost
t
t
' 145
TABLE 17 '
CITY OF PALM SPRINGS '
Miscellaneous Statistics
June 30, 2003
Year of Incorporation 1938 '
Form of Government Council/Manager ,
Number of employees (excluding police and fire):
Classified 230
Exempt 89 '
Area in square miles 96.2
Name of Government facilities and services:
Lane miles of streets 800
Culture and Recreation:
Community Centers 2 ,
Parks 8
Park acreage 154.5
Golf courses 2
Swimming pools 1 '
Tennis Courts 12
Fire Protection:
Number of stations 5 ,
Number of fire personnel and officers 56
Number of calls answered 6,263
Number of inspections conducted 3,783
Police Protection: '
Number of stations 1
Number of police personnel and officers 112
Number of patrol units 45 '
Number of law violations:
Physical arrests 3,031
Traffic violations 7,763 '
Parking violations 6,726
Sewer System:
Feet of sanitary sewers 1,372,800
Miles of storm drains .66 '
Number of treatment plants 1
Number of service connections 36,426
Daily average treatment in gallons 8,800,000 '
Maximum daily capacity of treatment plant in gallons 10,900,000
Airport:
Runway length in feet 14,952 ,
Aircraft operations 102,545
Annual passengers 1,180,452
Air Carriers:
Major 4
Commuters 7
Convention Center:
Square feet under roof 135,000
Meeting rooms 13
Square feet of outdoor function area 20,000
Source: City of Palm Springs ,
146 '
' TABLE 18
CITY OF PALM SPRINGS
' Schedule of Credits
' June 30, 2003
' Name Area of Contribution
' Thomas M. Kanarr, Director of Finance and Treasurer General Overview
Management's Discussion and
Analysis
' Letter of Transmittal
Notes to Financial Statements
' Nancy E. Klukan,Accounting Manager Combined Statements
Fiscal Year Closing
Combining Statements
' Statistical Tables
' Rita K. Gustafson, Senior Accountant Fiscal Year Closing
Statistical Tables
' Kimberly A. Hardeastle, Accountant Statistical Tables
Source: City of Palm Springs
1
1
1
1
' 147