Desert Hot Springs City Council
February 4, 2025

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City of Desert Hot Springs
AGENDA

REGULAR MEETING OF THE CITY COUNCIL
and the City Council Serving as the Successor Agency to the Former Redevelopment Agency Board
Tuesday, February 4, 2025
4:30 PM - Closed Session
5:30 PM - Presentations
6:00 PM - Regular Session
Council Chambers/City Hall
11-999 Palm Drive
Desert Hot Springs, California, 92240

Page
CLOSED SESSION - 4:30 P.M.

CALL TO ORDER

ROLL CALL

PUBLIC COMMENTS
At this time, item(s) on the Closed Session agenda may be discussed during Public Comments. PLEASE STATE YOUR NAME FOR THE RECORD.

CLOSED SESSION:

1. CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION Gov. Code Section 54956.9 (d)(2) and (e)(1) – Number of cases: 1

2. PUBLIC EMPLOYEE PERFORMANCE EVALUATION:

Pursuant to Government Code Section 54957(b): City Manager RECESS
PRESENTATIONS - 5:30 P.M.

Recognition of the 2024 Photo Contest Winner - Jaime Lopez Black History Month Presentation
REGULAR SESSION - 6:00 P.M.

CALL TO ORDER

ROLL CALL

INVOCATION

PLEDGE OF ALLEGIANCE

CITY ATTORNEY REPORT ON CLOSED SESSION

APPROVAL OF AGENDA
At this time the City Council may amend the order of the agenda, approve the Consent Calendar, remove items from the Consent Calendar for separate discussion and action, and add Urgency Items.

Urgency Items ("Added Starters"): The Brown Act, which governs public meetings, permits the City Council to take action on any item that does not appear on the agenda only if 2/3 of the City Council (if all are present) or all members of the City Council (if fewer than all members are present) determine there is a need to take immediate action on the item, and the need to take immediate action came to the City Council's attention after the agenda was posted.

PUBLIC COMMENTS
At this time, pursuant to the Brown Act, any person may comment on matters of general interest within the subject matter jurisdiction of the City Council, NOT listed on the agenda. Under the Brown Act, the City Council should not take action on or discuss matters raised during Public Comment portion of the agenda that are not listed on the agenda.

Comments are limited to the first ten (10) speakers at three (3) minutes per speaker. Speakers may not yield their time to others without consent of the Mayor. All comments are to be directed to the City Council and shall be devoid of any personal attacks. Members of the public are expected to maintain a professional, courteous decorum during public comments.

Please complete and submit a "speaker card" to the City Clerk. You will be asked to STATE YOUR NAME AND CITY OF RESIDENCE FOR THE RECORD.

CITY MANAGER REPORT

MAYOR AND COUNCIL MEMBER REPORTS
PUBLIC HEARINGS:

3. Abatement Cost Report Appeal Fee
Christina Newsom, Compliance Director
Recommendation:
1) Staff Report;
2) Entertain questions of Staff from the City Council;
3) Open the Public Hearing;
4) Take public testimony for those in favor;
5) Take public testimony for those opposed;
6) Take public testimony for those in a neutral position; 7) Close the Public Hearing;
8) City Council discussion and questions to Staff; and
9) Adopt a Resolution of the City Council of the City of Desert Hot Springs, California, adopting amended fees related to Cannabis Regulatory Permits and the Nexus Study prepared therefor.

Staff Report - SR-25-006 - Pdf
7 - 13

4. Little League Fees
Doria Wilms, Deputy City Manager
Recommendation:
1) Staff Report;
2) Entertain questions of Staff from the City Council;
3) Open the Public Hearing;
4) Take public testimony for those in favor;
5) Take public testimony for those opposed;
6) Take public testimony for those in a neutral position; 7) Close the Public Hearing;
8) City Council discussion and questions to Staff; and
9) Adopt Little League Program Fees as follows:
• $75.00 - Early Registration Per Player (First Month of Registration) • $95.00 - Regular Registration Per Player
• $125.00 - Late Registration
Staff Report - SR-25-024 - Pdf
15 - 17
ADMINISTRATIVE CALENDAR:

5. Audited Financial Statements for Fiscal Year 2023-2024 Geoffrey Buchheim, Administrative Services Director
Recommendation: Receive and file.

Staff Report - SR-25-018 - Pdf
19 - 217

6. Appointment of a Delegate and Alternate Delegate for the 2025 Southern California Association of Governments (SCAG) Annual General Assembly
Jerryl Soriano, City Clerk
Recommendation:

Appoint a delegate and alternate delegate for the 2025 SCAG Annual General Assembly on May 1, 2025 - May 2, 2025.

Staff Report - SR-25-023 - Pdf
219
CONSENT CALENDAR:

Matters on the "Consent Calendar" are considered routine and may be acted upon by one motion under "Approval of the Agenda." Individual items may also be removed by the City Council for separate discussion under "Approval of the Agenda." The title is deemed to be read and further reading waived on any ordinance listed on the Consent Calendar for second reading and adoption.

7. City Council Regular Meeting Minutes: January 21, 2025 Jerryl Soriano, City Clerk
Recommendation: Approve the minutes as presented; or as corrected.

Staff Report - SR-25-025 - Pdf
221 - 230

8. Reject Bids for Construction for John H. Furbee Aquatics Center Improvements
Daniel Porras, Assistant City Manager
Recommendation:
1) Reject the lowest bid from USA Construction as both nonresponsive and nonresponsible;
2) Reject all bids, and direct Staff to move forward with a re-design of the improvements to include the design and construction of the pool and the splash pad;
3) Authorize the change order increase for the re-design costs of $10,000.00, increasing the professional service agreement with Aquatic Design Group for design, from $84,000.00 to an amount not to exceed $94,000.00.

Staff Report - SR-25-019 - Pdf
231 - 499

9. Amendment to the Professional Services Agreement with David Volz Design for the Reflection Park Project.

Nicholas Haecker, Public Works Director
Recommendation:

Approve the Amendment to the Professional Services Agreement with David Volz Design in the amount of$173,682 for architectural design services for the Reflection Park Design Project.

Staff Report - SR-25-020 - Pdf
501 - 538

10. Second Reading and Adoption of an Ordinance Authorizing the Levy of Special Taxes Within Improvement Area No. 1 and Improvement Area No. 2 and in Territory Annexed to the Community Facilities District No. 2025-1 (Skyborne Village) in the Future
Jerryl Soriano, City Clerk
Recommendation:

Approve second reading, read by title only and adopt: "An Ordinance of the City Council of the City of Desert Hot Springs acting in its capacity as the legislative body of Community Facilities District No. 2025-1 (Skyborne Village) of the City of Desert Hot Springs authorizing the levy of special taxes within Improvement Area No. 1 and Improvement Area No. 2 and in territory annexed to the District in the future.

Staff Report - SR-25-021 - Pdf
539 - 547

11. Second Reading and Adoption of an Ordinance - Pierson Commercial Specific Plan
Jerryl Soriano, City Clerk
Recommendation:

Approve second reading, read by title only and adopt: "An Ordinance Adding Chapter 17.260 “Pierson Commercial Specific Plan” to Title 17 “Zoning” of the Desert Hot Springs Municipal Code to Establish Zoning Standards for the Pierson Commercial Specific Plan Area.

Staff Report - SR-25-022 - Pdf
549 - 567

PUBLIC COMMENTS
Opportunity is given to those members of the public who have NOT addressed the City Council on an item which is NOT on the agenda. Comments are limited to three (3) minutes per speaker. PLEASE STATE YOUR NAME AND CITY OF RESIDENCE FOR THE RECORD.

ADJOURN

UPCOMING MEETING DATES
*Please refer to the City website calendar at www.cityofdhs.org for meeting locations and the most up to date information.

February 11 Planning Commission 6:00 p.m.

February 13 Public Safety Commission 6:00 p.m.

February 18 City Council Regular Meeting 6:00 p.m.

March 4 City Council Regular Meeting 6:00 p.m.
________________________________________________________________________________________

NOTICES
In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the Office of the City Clerk at City Hall during normal business hours at 11999 Palm Drive, Desert Hot Springs, CA 92240.

If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda at 11999 Palm Drive, Desert Hot Springs, CA 92240.

Americans with Disabilities Act
In an effort to comply with the requirements of Title 2 of the Americans with Disabilities Act of 1990, the City of Desert Hot Springs requires that any person in need of any type of special equipment, assistance, or accommodation(s) in order to communicate at a City public meeting, must inform the City Clerk a minimum of 72 hours prior to the scheduled meeting to enable the City to make reasonable arrangements.

SR-25-006
City of Desert Hot Springs
City Council

AGENDA ITEM REPORT
To: City Council
Date: February 4, 2025
Department: Code & Cannabis Compliance
Prepared by: Christina Newsom, Compliance Director
Subject: Abatement Cost Report Appeal Fee
RECOMMENDATION:
1) Staff Report;
2) Entertain questions of Staff from the City Council;
3) Open the Public Hearing;
4) Take public testimony for those in favor;
5) Take public testimony for those opposed;
6) Take public testimony for those in a neutral position; 7) Close the Public Hearing;
8) City Council discussion and questions to Staff; and
9) Adopt a Resolution of the City Council of the City of Desert Hot Springs, California, adopting amended fees related to Cannabis Regulatory Permits and the Nexus Study prepared therefor.

BACKGROUND:

The California Constitution allows municipalities to recover reasonable costs borne from providing certain services to certain individuals. The City is permitted to charge fees based on “costs reasonably borne” by the City. However, the fees may not exceed the costs of providing the service. “Costs reasonably borne” is intended to include all appropriations by an entity for the appropriate costs for the continuation of the service over time. This includes ongoing expenses such as operating costs and an allocation for overhead and administration. The types of costs include salaries and wages; employee fringe benefits; maintenance and operations costs; overhead costs; general City and department and/or divisional overhead costs. Without corresponding user fees, these services would be funded by tax revenues. In June 2020, the City adopted its current user fee schedule based on the User Fee Study completed in April 2020.

Title 4, "Code Enforcement," of the Desert Hot Springs Municipal Code("DHSMC") establishes regulations for abatements and their cost recovery.

DISCUSSION:

The DHSMC requires that upon completion of any abatement work performed by or under the direction of the City, the Abatement Officer shall prepare an abatement cost report which provides an accounting of the cost, including incidental expenses, incurred as a result of abating the public nuisance.

Item Number: 3.

SR-25-006
Property owners served with an abatement cost report itemizing costs associated with the rehabilitation, demolition, or repair of the property, buildings, or structures have the right to appeal those costs. All appeals from any abatement cost report shall be in writing and accompanied by a filing fee established by the City Council resolution.

New fees must be added due to new regulations or as the City adds services. The following are proposed fees to be added to the user fee schedule:

FISCAL IMPACT:

The City issues approximately two Abatement Cost Report Appeals annually. The approximate revenue for new regulatory permits annually would be $27,047.60.

ATTACHMENTS:
1) Abatement Cost Report Appeal Fee
2) Abatement Cost Report Appeal Fee Resolution
Item Number: 3.

Abatement Cost Report Appeal Fee
Nexus Study
1/7/2025
Fee Types Code Compliance
Administative Assistant
Management
Analyst
Code Compliance
Officer Total
Abatement Cost Report Appeal Feel 2 1 4 $ 795.74
$ -
$ -
$ -
$ -
Updated Fully Burdened hourly rate calculated per method and percentages in the DHS Fully Allocated Hourly Rate Position Detail Report created in FY19-20 by Revenue Costs Associates $ 95.24 $ 127.93 $ 119.33 $ - $ - Fringe Benefits Maint & Oper Costs Overhead Costs
Average Hourly Rate 46.72% 18.68% 172.23% Total
(Percentages based on
Fully Allocated Hourly Rate
Detail 19-20 document.

Created from the 2020 User
Fee Study.)
Code Compliance Administrative Assistant $ 28.21 $ 13.18 $ 5.27 $ 48.58 $ 95.24 Management Analyst $ 37.89 $ 17.70 $ 7.08 $ 65.26 $ 127.93 Code Compliance Officer $ 35.34 $ 16.51 $ 6.60 $ 60.87 $ 119.33 Fees Hourly Breakdowns
Item Number: 3.

RESOLUTION NO. 2024-______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

DESERT HOT SPRINGS, COUNTY OF RIVERSIDE, STATE

OF CALIFORNIA, ADOPTING FEES RELATED TO

ABATEMENT COST REPORT APPEAL FEE AND THE

NEXUS STUDY PREPARED THEREFOR
WHEREAS, the City of Desert Hot Springs has established regulations for abatements in Title 4 “Code Enforcement” of the Desert Hot Springs Municipal Code (“DHSMC”); and WHEREAS, pursuant to Desert Hot Springs Municipal Code Sections 4.16.130 and

4.16.140, appeals of an abatement cost report must be submitted in writing, and a filing fee as established by the City Council must be paid to the City at or prior to the time of filing such an appeal; and
WHEREAS, the fees related to abatements and abatement cost reports are needed to cover the City’s costs in administering abatement regulation processes, such as conducting inspections, overseeing abatement work, and issuing the required demands for payment, reports, and notices; and
WHEREAS, the City desires to establish a methodology of recovering the costs reasonably borne from providing services as they relate to Abatement Cost Report and Abatement Cost Report Appeals and certain other special services, including but not limited to, those concerning park and recreation services, rental of City property, police and fire services, and other miscellaneous City services, of a voluntary or limited nature, such that general taxes are not diverted from general services of a broad nature and thereby utilized unfairly and inequitably for such special services (“City Services”); and WHEREAS, City Council intends to collect fees (the “Fees”) to offset the costs associated with providing the Abatement Cost Report Appeal and City Services; and WHEREAS, because some of the Fees are described in Government Code Section 66014, the City is required to hold at least one open and public meeting as well as a general description of the matter to be considered are to be mailed at least 14 days prior to the date of the meeting to those parties (if any) who have filed requests for such notifications; and WHEREAS, since no requests for such notification were filed with the City, no notices were mailed; and
WHEREAS, data indicating the amount of the estimated cost required to provide the Cannabis Regulatory Permit and City Services and the resources anticipated to fund the same were made available to the public at least 10 days prior to the date of this meeting, in accordance with Government Code Section 66016; and
WHEREAS, pursuant to Government Code Sections 66016 and 66018, the enactment or increase in any fees to be charged for services must be adopted by the City Council by ordinance or resolution, after providing notice and holding a public hearing; and Item Number: 3.

WHEREAS, pursuant to Government Code Section 66018, the City complied with all notice and hearing requirements thereof; and
WHEREAS, City staff has prepared and presented to the City Council a “Abatement Cost Report Appeal Fee” dated January 7, 2025 (the “User Fee Study”), a copy of which is attached hereto and incorporated herein by this reference as Exhibit “A”, which details the amount of cost, or estimated cost, required to provide the service for which the fee or service charge is levied and the revenue sources anticipated to provide the service, including General Fund revenues, if any; and,
WHEREAS, a duly noticed public hearing before the City Council was held on January 21, 2024, at which public testimony was received and duly considered on the proposed Fees; and
WHEREAS, the amount of the Fees does not exceed the true cost of providing the Abatement Cost Report Appeal; and
WHEREAS, the establishment of the fees as set forth in the User Fee Study is not a “project” subject to the California Environmental Quality Act because it is a funding mechanism have no physical effect on the environment.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Desert Hot Springs as follows:

Section 1. RECITALS
That the Recitals set forth above are true and correct.

Section 2. APPROVAL OF USER FEE STUDY
That the City Council hereby approve and adopt the User Fee Study and the fees and charges contained herein.

Section 3. REPEAL OF CONFLICTING PROVISIONS
That all the provisions heretofore adopted by the City Council that are in conflict with the provisions of this Resolution are hereby repealed.

Section 4. SEVERABLITY
That if any provisions of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof.

Section 5. EFFECTIVE DATE
Item Number: 3.

That this Resolution shall take effect upon its adoption and the User Fee Study and the Fees contained therein shall take effect immediately, but the fees therein shall take effect accordance with law.

Section 6. CERTIFICATION
That the City Clerk shall certify to the passage of this Resolution and enter it into the book or original resolutions.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Desert Hot Springs at a regular meeting held on this _____ day of _____ 2025 by the following vote:

AYES:

NAYES:

ABSENT:

ATTEST: APPROVED:

Jerryl Soriano, City Clerk Scott Matas, Mayor
APPROVED AS TO FORM:

Tuan -Anh Vu, City Attorney
Item Number: 3.

EXHIBIT A
Item Number: 3.

SR-25-024
City of Desert Hot Springs
City Council

AGENDA ITEM REPORT
To: City Council
Date: February 4, 2025
Department: City Manager
Prepared by: Doria Wilms, Deputy City Manager
Subject: Little League Fees
RECOMMENDATION:
1) Staff Report;
2) Entertain questions of Staff from the City Council;
3) Open the Public Hearing;
4) Take public testimony for those in favor;
5) Take public testimony for those opposed;
6) Take public testimony for those in a neutral position; 7) Close the Public Hearing;
8) City Council discussion and questions to Staff; and
9) Adopt Little Little Program Fees as follows:
 $75.00 - Early Registration Per Player (First Month of Registration)  $95.00 - Regular Registration Per Player
 $125.00 - Late Registration
BACKGROUND:

In 2022, the City of Desert Hot Springs was asked to take over the facilitation and management of the local Little League Program under the umbrella of our Recreation programming. At that time, the program had a community sponsor for the 2022 season that covered all costs associated for the program including registration and uniforms.

In 2023, the community sponsor was unable to continue with the commitment. As a way to acclimate the community back into a fee based program, registration was set at $25.00 per player for the 2023 season and $75 for the 2024, which is more in line with the fees that were in place prior to the community sponsor and the City taking on the program.

DISCUSSION:

Since taking on Little League, staff has worked closely with volunteers of the program to build a strong Volunteer Advisory Board comprised of parents, family and community members to assist with providing the best program for the youth in our community. This volunteer body works closely with our Program Specialist to provide feedback and guidance on actions that affect the Little League Item Number: 4.

SR-25-024
Program. This Advisory Board proposed raising the fees again this season to keep pace with the cost of the program.

A fee study was conducted that sets 100% of cost recovery at a level that is well above the recommendation of the Advisory Board and a rate that is unfeasible to all members of the community.

City staff recommends the following fee schedule, as proposed by the Volunteer Advisory Board, with an option for flexible payment arrangements.
$75.00 - Early Registration Per Player (First Month of Registration) $95.00 - Regular Registration Per Player
$125.00 - Late Registration
ATTACHMENTS:

Little League Fee Calculation 2025
Item Number: 4.

City Staffing labor expense
Annual
regular
hours
Fully
burdened
rate
Total
expense
regular hours
Annual
Overtime
Hours
Fully
burdened
overtime
rate
Total
expense
overtime
hours
Grand total
annual
labor
expense
Program Specialist 1880 $55.10 $103,588.00 200 $82.65 $16,530.00 $120,118.00 PW Maintenance Tech 40 $44.05 $1,762.00 4 $66.08 $264.30 $2,026.30 Total labor expense $122,144.30
Program Cost
Uniforms $28,598.78
Equipment $3,092.49
Field Maintenance $8,410.01
Field Improvements $18,000.00
Umpire Fees $14,640.00
Charter and Insurance $2,509.45
Tournament Fees $1,363.50
Utilities $3,714.67
Office supplies/software expense $2,080.84
Concession expense $8,626.18
Background checks $1,419.00
Trophies $5,189.98
Photographer $1,891.02
District Fee $1,050.00
Closing ceremony $1,302.21
Supplies $935.03
Janitorial $4,350.00
Total program cost $107,173.16
Annual Cost per Participant
Total City Staff expense $122,144.30
Total Program cost $107,173.16
Grand total $229,317.46
Average annual participants 274
Total per Participant $836.93
100% cost recuperation
Purposed Fee schedule
Early Registration $75 per player
Regular Price $95 per player
Late Registration $125 per player
Fee Calculation - Desert Hot Springs Little League Registration City of Desert Hot Springs
Item Number: 4.

SR-25-018
City of Desert Hot Springs
City Council

AGENDA ITEM REPORT
To: City Council
Date: February 4, 2025
Department: Administrative Services
Prepared by: Geoffrey Buchheim, Administrative Services Director Subject: Audited Financial Statements for Fiscal Year 2023-2024 RECOMMENDATION:

Receive and file.

DISCUSSION:

The City is required to complete an independent annual audit every year. The Fiscal Year 2023-2024 audit has been completed by the audit firm of The Pun Group, LLP.

The audited financial reports include the Audited Financial Statements for the Fiscal Year 2023-2024 for the City of Desert Hot Springs, the Compliance as the Housing Successor for the Desert Hot Springs Housing Authority for the Fiscal Year 2023-2024, Report on Applying Agreed-Upon Procedures to Utility User Tax, Report on Compliance of the U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds Program and Report on applying agreed-upon procedures to appropriations limit schedule for Fiscal Year Ended June 30, 2024.

FISCAL IMPACT:

There is no fiscal impact due to this action.

ATTACHMENTS:
1) 2024_Desert Hot Springs City of_BFS_FINAL (SECURED)
2) 2024_Desert Hot Springs, City of_Housing Compliance Report_FINAL(SECURED) 3) 2024_Desert Hot Springs, City of_UUT AUP_FINAL (SECURED) 4) 2024_Desert Hot Springs, City of_GANN_FINAL (SECURED) Item Number: 5.

City of Desert Hot Springs
Desert Hot Springs, California
Independent Auditors’ Reports and
Basic Financial Statements
For the Year Ended June 30, 2024
Item Number: 5.

Item Number: 5.

City of Desert Hot Springs
Basic Financial Statements
For the Year Ended June 30, 2024
Table of Contents
Page
Independent Auditors’ Reports on the Audit of the Financial Statements ........................................................ 1 Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ...................... 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ........................................................................................................................... 19 Statement of Activities ............................................................................................................................... 20 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet ....................................................................................................................................... 24 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ..................................................................... 27 Statement of Revenues, Expenditures, and Changes in Fund Balances ............................................... 28 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position .................................................................... 30 Proprietary Fund Financial Statements:

Statement of Net Position ..................................................................................................................... 33 Statement of Revenues, Expenses, and Changes in Net Position......................................................... 34 Statement of Cash Flows ...................................................................................................................... 35 Fiduciary Fund Financial Statements:

Statement of Fiduciary Net Position .................................................................................................... 39 Statement of Changes in Fiduciary Net Position .................................................................................. 40 Notes to the Basic Financial Statements ........................................................................................................... 45 Required Supplementary Information (Unaudited):

Budgetary Comparison Schedules:

General Fund .............................................................................................................................................. 85 Public Safety Special Revenue Fund .......................................................................................................... 86 American Rescue Act Special Revenue Fund ............................................................................................ 87 Housing Authority Special Revenue Fund ................................................................................................. 88 Notes to the Budgetary Comparison Schedules ................................................................................................ 89 Schedule of the City’s Proportionate Share of the Net Pension Liabilities and Related Ratios ............................................................................................................................................. 90 Schedule of the City’s Contributions – Pensions .............................................................................................. 92 Item Number: 5.

City of Desert Hot Springs
Basic Financial Statements
For the Year Ended June 30, 2024
Table of Contents (Continued)
Page
Supplementary Information:

Schedules of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:

Debt Service Fund ................................................................................................................................................... 97 RCTC Loan Capital Projects Fund ............................................................................................................. 98 Capital Improvement Capital Projects Fund ............................................................................................... 99 Nonmajor Governmental Funds:

Combining Balance Sheet ..................................................................................................................................... 103 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ................................ 107 Schedules of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Nonmajor Special Revenue Funds:

Special Gas Tax Special Revenue Fund ...................................................................................... 111 SB1 Road Maintenance and Rehabilitation Special Revenue Fund ............................................ 112 Municipal Lighting / Landscaping Assessment District Special Revenue Fund ......................... 113 Measure A Special Revenue Fund ............................................................................................... 114 Air Quality Control Special Revenue Fund ................................................................................. 115 Art in Public Places Special Revenue Fund ................................................................................. 116 Quimby Act Special Revenue Fund............................................................................................. 117 Drainage Assessment District Special Revenue Fund ................................................................. 118 County Service Area 152 (CSA-152) Special Revenue Fund ..................................................... 119 Cabot's Museum Special Revenue Fund ...................................................................................... 120 Supplemental Law Enforcement Service (SLESF) Special Revenue Fund ................................. 121 Abandoned Vehicle Abatement Special Revenue Fund .............................................................. 122 Community Development Block Grant (CDBG) Special Revenue Fund ................................... 123 Capital Improvement Deposits Special Revenue Fund ............................................................... 124 Department of Cannabis Control Special Revenue Fund ............................................................ 125 Assessment District 91-1 Capital Projects Fund .......................................................................... 126 Internal Service Funds:

Combining Statement of Net Position ...................................................................................................... 129 Combining Statement of Revenues, Expenses, and Changes in Net Position .......................................... 130 Combining Statement of Cash Flows ....................................................................................................... 131 Custodial Funds:

Combining Statement of Fiduciary Net Position ...................................................................................... 135 Combining Statement of Changes in Fiduciary Net Position ................................................................... 136 Item Number: 5.

City of Desert Hot Springs
Basic Financial Statements
For the Year Ended June 30, 2024
Table of Contents (Continued)
Page
Statistical Section (Unaudited):

Statistical Section Overview ....................................................................................................................................... 139 Financial Trends:

Net Position By Component - Last Ten Fiscal Years ..................................................................................... 140 Changes in Net Position - Last Ten Fiscal Years ............................................................................................ 142 Fund Balances of Governmental Funds - Last Ten Fiscal Years .................................................................... 146 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years ................................................. 148 Revenue Capacity:

Assessed Value and Estimated Actual Value of Property Tax - Last Ten Fiscal Years ................................. 150 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years ............................................................. 152 Principal Property Taxpayers - Current Year and Nine Years Ago ................................................................ 154 Taxable Sales by Category - Last Ten Calendar Years ................................................................................... 155 Top 25 Sales Tax Producers - Current Year and Nine Years Ago .................................................................. 157 Debt Capacity:

Ratios of Outstanding Debt by Type - Last Ten Fiscal Years ......................................................................... 158 Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years ............................................................. 160 Legal Debt Margin Information - Last Ten Fiscal Years ................................................................................ 162 Pledged Revenue Coverage - Last Ten Fiscal Years....................................................................................... 164 Demographic and Economic Information:

Demographic and Economic Statistics - Last Ten Calendar Years ................................................................. 166 Operating Information:

Full-Time Equivalent City Government Employees By Function - Last Ten Fiscal Years ............................ 168 Operating Indicators by Function - Last Ten Fiscal Years .............................................................................. 169 Capital Assets Statistics By Function - Last Ten Fiscal Years ....................................................................... 170 Item Number: 5.

This page intentionally left blank.

Item Number: 5.

200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and the Members of the City Council of the City of Desert Hot Springs
Desert Hot Springs, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Desert Hot Springs, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2024, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“GAAS”) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (“Government Auditing Standards”). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Item Number: 5.

To the Honorable Mayor and the Members of the City Council of the City of Desert Hot Springs
Desert Hot Springs, California

2 Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
 exercise professional judgment and maintain professional skepticism throughout the audit.  identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the Budgetary Comparison Schedules, the Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios, and the Schedules of Contributions – Pensions be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the Required Supplementary Information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Item Number: 5.

To the Honorable Mayor and the Members of the City Council of the City of Desert Hot Springs
Desert Hot Springs, California

3 Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Combining and Individual Fund Financial Statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the Combining and Individual Fund Financial Statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the Statistical Sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 27, 2025 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Santa Ana, California
January 27, 2025
Item Number: 5.

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Item Number: 5.

5 Management’s Discussion and Analysis
(Unaudited)
The City of Desert Hot Springs is offering a narrative, overview and analysis of the financial activities for the fiscal year end June 30, 2024.

Overview of the Financial Statements
The City Executive Team of the City of Desert Hot Springs (the “City”) offers readers of the City’s financial statements this narrative overview and analysis of the City’s financial activities for the fiscal year ended June 30, 2024. It has been designed in accordance with standards established by the Governmental Accounting Standards Board. Please read this overview in conjunction with the accompanying financial statements.

1. The Government-wide Financial Statements provide information about the overall financial condition of the City. The Statement of Net Position and the Statement of Activities and Changes in Net Position statements include all assets, deferred outflow and liabilities, deferred inflows of the City using the accrual basis of accounting, which is like the accounting used by most private sector companies.

2. The Fund Financial Statements provide additional information about the City’s major funds, how services were financed in the short term and fund balances available for financing future projects.

3. The Notes to the Financial Statements provide additional detail that is essential to a full understanding of the information provided in the government-wide and fund financial statements.

In addition to the basic financial statements and accompanying notes, this report also presents certain required and other supplementary information, including budgetary comparison information on the City’s General fund, which is intended to furnish additional detail to support the basic financial statements themselves.

Fiscal Year 2023-2024 Highlights
 The City’s total net position was $71,463,272 as of June 30, 2024;  Consolidated General Fund (including Public Safety Fund) Revenue totaled $32,490,834;  Consolidated General Fund Expenses totaled $32,963,966;  The fund balance in the Consolidated General Fund decreased by $1,437,789 for a total of $7,606,396;  The decrease in the fund balance of the Consolidated General Fund was due a City Council action to use fund balance for one-time expenses to start the operations of the City’s new homeless services center. In subsequent fiscal years, the operating costs on the center will be included in the annua budget and not rely on fund balance reserves.
 The City has an Emergency Reserve in place for economic contingency which is funded by 25% of cannabis tax revenues with a 17% cap of the Consolidated General Fund annual appropriations; and 20% reserve in place for the General Fund of which 15% is for natural or fiscal emergencies and 5% is for future operations and capital use for a total of $3,994,602 in reserves;
 The City’s Tax revenue received in 2023-2024 (not including cannabis related taxes) was up 11% over the prior fiscal year due to significant increases in Property Taxes;  Marijuana related taxes decreased by $32,732 from FY 2022-2023 to FY 2023-2024; o The retail tax decreased by$264,711 from the prior year, which is a 15% decrease. This is due to lower cannabis prices and more retail facilities opening up throughout the valley; o The cultivation tax increased by $231,979 from the prior year, which is an 8% increase. The City has lowered its cultivation tax amount in order to assist cultivation facilities during this time of low cannabis prices.
 In order to assist the unhoused population, the City purchased and renovated a building and created the HUB program operated by SWAG;
 The City is installing electric vehicle chargers in its public parking lots for the use of its residents and visitors;  The City’s Recreation Department has expanded its recreation programs to meet the evolving needs and interests of the community;
 In January, the Humane Society of the Desert transferred ownership of the animal hospital on Palm Drive in Desert Hot Springs and its animal sanctuary on Indian Canyon in North Palm Springs to the City of Desert Hot Springs. The City is using the animal sanctuary to expand its animal control program and is searching for a veterinary company to operate the animal hospital. Currently there isn’t any veterinary services available in the City;
Item Number: 5.

6  The City has constructed new restrooms in Tedesco Park which are easier to maintain and less susceptible to vandalism;
 In order to ease the burden of over 5,500 calls each year for Fire Station 37, the City has started construction on the new Fire Station 98. This station will house the City’s new medical unit as well as a new Quint fire truck;  The City has been awarded two significant grants for the Hacienda Avenue street improvements and the construction of the Corp Yard Park which will contain the City’s first sports complex.  In August 2023, Tropical Storm Hillary caused significant damage to roads within the City, including damage to the Pierson Bridge and the closure of 3 roads that are major arteries for the City. City staff worked diligently to clear the block roads, repair the Pierson Bridge, and, with the assistance of a loan from the Riverside County Transportation Commission, repair the closed roads and have them reopened by May 2024. City staff also worked diligently to follow procedures for the submittal of the reimbursement packages for the repairs. The City is expecting full reimbursement for the cost of cleanup and repairs from FEMA, CalOES, and FHWA.  For its work on road repairs, the City received an award from the American Public Works Association in Transportation for completing the repairs to the damaged roads and bridge from Tropical Storm Hillary within 270 days of the disaster date.
 The City also received an award from the American Public Works Association in Creativity & Innovation for the City’s Civics Academy program. This program is a six-week course available to residents of the City to learn about the operations of the City.

Government-wide Financial Statements and Financial Analysis The Government-wide Financial Statements provide a broad overview of the City's activities and are comprised of the Statement of Net Position and the Statement of Activities.

The Statement of Net Position presents information about the financial position of the City on the accrual basis, like that used in the private sector. It shows the City’s assets, deferred outflow of resources, liabilities and deferred inflows of resources with the difference reported as net position. Over time, increases or decreases in the City’s net position are among indicators used to assess whether the financial condition of the City is improving or deteriorating. It is also important to consider other non-financial factors, such as changes in the City’s property tax values and sales tax outlets and the condition of the City’s infrastructure (i.e. parks and streets) to accurately assess the overall health of the City.

The Statement of Activities presents information about the City’s revenues and all its expenses, also on the accrual basis, and explains in detail the change in net position for the year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.

Both government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include General Government, Public Safety, Public Works, Economic Development and Culture and Leisure.

The government-wide financial statements can be found on pages 19-20 of this report.

Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other State and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds.

Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements.

Item Number: 5.

7 Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains seven (7) major individual governmental funds; the General Fund (which is consolidated with the Health and Wellness Facility and the Marijuana Reserve Fund), Public Safety Special Revenue Fund, American Rescue Act Special Revenue Fund, Housing Authority Special Revenue Fund, Debt Service Fund, RCTC Loan Capital Projects Fund, and Capital Improvement Capital Projects Fund. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund. Data from the other 16 non-major governmental funds are combined into a single, aggregate presentation.

Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in the report.

The following funds are included to make up the nonmajor governmental funds:

Special Revenue Funds: Special Gas Tax Fund, SB1 Road Maintenance and Rehabilitation, Municipal Lighting/Landscaping Assessment Districts Funds (20), Measure A Fund, Air Quality Control Fund, Art in Public Places Fund, Quimby Act Fund, Drainage Assessment Districts Funds (17), County Service Area 152 (CSA-152) Fund, Cabot’s Museum Fund, Supplement Law Enforcement Services Account Fund (SLESA), Abandoned Vehicle Abatement Fund, Community Development Block Grant Fund (CDBG), the Capital Improvements Deposits Fund (8), and Department of Cannabis Control Fund.

Capital Projects Funds: Assessment District 91-1 Fund.

The basic governmental fund financial statements can be found on pages 24-30 of this report.

Proprietary Funds
Proprietary funds can be broken down into two different types. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for the City’s risk management and equipment replacement activities associated with City vehicles. Because the vehicle services primarily benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

Internal service funds are used to allocate costs among the City’s various functions. The City has (3) internal service funds: equipment replacement, workers compensation insurance and general liability insurance.

The basic proprietary fund financial statements can be found on pages 33-35 of this report and the internal service funds can be found on pages 129-131 of this report.

Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of these funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.

Currently the City has two separate Fiduciary Funds reporting financial inflows and outflows for the Successor Agency, which is a private purpose trust fund, and Custodial Funds. The Custodial Funds include various funding (Community Services Agency Funds and the Community Facilities District Skyborne Agency Funds) which are controlled primarily through legal agreements and applicable State and Federal laws.

Item Number: 5.

8 The basic fiduciary fund financial statements can be found on pages 39-40 of this report.

Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the governmentwide and fund financial statements. The notes to the basic financial statements can be found on pages 45-81 of this report.

Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning budgetary comparisons for the general fund. Required supplementary information can be found on pages 85-93 of this report.

The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the required supplementary information. Combining and individual fund statements and budgetary schedules can be found on pages 104-125 of this report.

Government-wide Financial Analysis
Tourism in the City continued to increase over the past year and the cannabis industry continued to struggle in FY2023- 2024. In the Spring of 2024, the City Council permanently reduced the cannabis cultivation tax to $5.75 per square foot and amended some of its cannabis regulations in order to assist the cannabis facilities. However, in the latter part of the fiscal year, the City experienced an increase in development. Construction of a new Amazon warehouse has begun as well as several new housing developments, including the continuation of the Skyborne Residential Development with Lennar.

Other major revenue changes occurred during fiscal year 2023-2024 in the following areas;  Property Taxes increased from $2,270,974 in FY 2022-2023 to $2,834,690 in FY 2023-2024 approximately a 25% increase in tax revenue over the prior year. The increase was partially due to higher assessed property values from the development of vacant land in the City for industrial facilities, houses, cannabis facilities, and other economic development. The increase was also due to the payoff of the former Redevelopment Agency’s Series 2008 Tax Allocation Bonds, making more of the tax increment funds in the County trust available for the local taxing agencies.
 Transient Occupancy Taxes increased from $4,253,943 in FY 2022-2023 to $4,406,302 in FY 2023-2024 approximately a 3% increase from the prior year.
 Cannabis taxes decreased from $4,442,762 in FY 2022-2023 to $4,410,030 in FY 2023-2024.  Franchise Fees increased from $2,350,450 in FY 2022-2023 to $2,594,460 in FY 2023-2024 approximately an 10% increase over the prior year.
 Utility User Taxes increased from $4,630,368 in FY 2022-2023 to $4,904,387 in FY 2023-2024 approximately a 6% increase from the prior year.

The County has adopted the Alternative Method of Distribution of the Tax Levies and Collections and of the Tax Sale Proceeds (the “Teeter Plan”), as approved for in Section 4701 and following of the California Revenue and Taxation Code. Under the Teeter Plan, each participating local agency levying property taxes in the County, including the City, received the amount of uncollected taxes credited to its fund, in the same manner as of the account due from the taxpayers have been collected.

Over the past year, considerable development has been occurring in the City:
 Construction of the first Maverick gas station in the Coachella Valley has begun and with an expected opening timeframe of October/November 2024;
 Construction of an over 600,000 square foot Amazon logistics center has begun with a completion date in late 2025;
 The City is home to a new PODS warehouse facility;
Item Number: 5.

9  Currently the City has 63 cannabis facilities that employ 5,067 people. There is 506,322 square feet of cannabis cultivation space with 14,858 additional square feet being developed;  Tourism is expected to grow in the City with the expansions of the Aqua Soleil and Azure Palms resorts. The are currently 282 permitted short-term vacation rentals in the City;  The City is also experiencing growth in the residential sector:
o 141 new homes were built by Lennar in the Skyborne development with another 286 new homes under construction;
o Construction of 76 new home have begun in the Rancho Descanso development; o There are 34 new homes under construction in the Aventura Palms development o There are also 1,100 new homes in the pipeline to be developed The City continues to monitor the unfunded liability for CALPERS and pays all current contributions and unfunded liability contributions timely.

Net Position
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $71,463,272 as of June 30, 2024, in the Governmental activities.

The largest portion of the City's net position, $52,424,852, is its investment in capital assets (e.g., land, street infrastructure, buildings, machinery and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens. Consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt will be provided from future revenues and the remaining net position, since the capital assets themselves cannot be used to liquidate these liabilities.

Table 1
City of Desert Hot Springs
Net Position
June 30, 2024
2024 2023 2024 2023
Current and other assets $ 66,100,763 $ 55,447,599 $ 66,100,763 $ 55,447,599 Capital assets 80,720,159 71,777,018 80,720,159 71,777,018 Total assets $ 146,820,922 $ 127,224,617 $ 146,820,922 $ 127,224,617 Deferred outflow of resources $ 7,772,217 $ 6,507,580 $ 7,772,217 $ 6,507,580 Total deferred outflow of resources $ 7,772,217 $ 6,507,580 $ 7,772,217 $ 6,507,580 Current liabilities $ 19,886,650 $ 13,744,491 $ 19,886,650 $ 13,744,491 Long-term liabilities 60,103,953 56,427,459 60,103,953 56,427,459 Total liabilities $ 79,990,603 $ 70,171,950 $ 79,990,603 $ 70,171,950 Deferred inflow of resources $ 3,139,264 $ 3,449,022 $ 3,139,264 $ 3,449,022 Total deferred inflow of resources $ 3,139,264 $ 3,449,022 $ 3,139,264 $ 3,449,022 Net position
Invested in capital assets $ 52,424,852 $ 45,460,615 $ 52,424,852 $ 45,460,615 Restricted 32,454,887 21,911,482 32,454,887 21,911,482
Unrestricted (13,416,467) (7,260,882) (13,416,467) (7,260,882) Total net position $ 71,463,272 $ 60,111,215 $ 71,463,272 $ 60,111,215 Governmental activities Total
An additional portion of the City’s net position, $32,454,887, represents resources that are subject to external restrictions on how they may be used. The unrestricted portion of the net position is negative $13,416,467.

Item Number: 5.

10 TABLE 2
City of Desert Hot Springs
Changes in Net Position
June 30, 2024
2024 2023 2024 2023
Revenues
Program revenues:

Charges for services $ 5,345,097 $ 6,141,761 $ 5,345,097 $ 6,141,761 Operating grants and contributions 14,922,019 10,482,045 14,922,019 10,482,045 Capital grants and contributions 13,520,919 8,313,701 13,520,919 8,313,701 General revenues
Property taxes 2,834,690 2,270,974 2,834,690 2,270,974
Sales taxes 5,991,148 5,422,375 5,991,148 5,422,375
Transient occupancy taxes 4,406,302 4,253,943 4,406,302 4,253,943 Other taxes 7,044,768 6,826,596 7,044,768 6,826,596
Investment income 1,081,167 618,222 1,081,167 618,222
Miscellaneous 964,884 567,334 964,884 567,334
Total revenues 56,110,994 44,896,951 56,110,994 44,896,951 Program expenses
General government 10,836,693 13,061,873 10,836,693 13,061,873 Public safety 19,598,305 18,736,283 19,598,305 18,736,283 Public works 6,698,339 6,567,896 6,698,339 6,567,896
Economic development 3,198,429 3,359,964 3,198,429 3,359,964 Culture and leisure 3,012,296 2,764,883 3,012,296 2,764,883 Interest and fiscal charges 1,414,875 1,417,255 1,414,875 1,417,255 Total expenses 44,758,937 45,908,154 44,758,937 45,908,154 Change in net position 11,352,057 (1,011,203) 11,352,057 (1,011,203) Net position – beginning of year 60,111,215 61,122,418 60,111,215 61,122,418 Net position – end of year $ 71,463,272 $ 60,111,215 $ 71,463,272 $ 60,111,215 Governmental activities Total
The City’s governmental activities total revenues were over $56.1 million, while the total cost of all programs and services were approximately $44.8 million. Operating grants and contributions were the largest revenue source at $14,922,019 (27% of the total revenue of the governmental activities). Capital grants and contributions were the second largest resource at $13,520,919 (24% of the total revenue of the governmental activities). Other taxes were the third largest revenue source at $7,044,768 (13% of the total revenue of the governmental activities).

Governmental Activities
Public Safety expenses of $19,598,305 comprise the largest component of government activities (44% of the total cost of governmental activities).

General Government expenses of $10,836,693 (includes City Council, City Manager, City Attorney, City Clerk, Finance, Information Systems and Non-Departmental) were the second largest governmental activities (24% of the total cost of governmental activities).

Public Works expenses of $6,698,339 were the third largest governmental activities (15% of the total cost of governmental activities).

Economic Development expenses of $3,198,429 were the fourth largest governmental activities (7% of the total cost of governmental activities).

Item Number: 5.

11 Business-Type activities
With the unwinding the New Market Tax Credit financing and the dissolution of the Health & Wellness Foundation in FY2019-2020, the City does not have any Business-Type activities.

Financial Analysis of the City's Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds
The General Fund is the City’s chief operating fund. At the end of 2023-2024, the total fund balance was $7,498,561.

The General Fund balance decreased by $1,459,767 in 2023-2024. The key factor was City Council approving a onetime use of fund balance reserves for the start-up operation costs for the City’s new homeless services center in the amount of $1.5 million.

Public Safety Special Revenue Fund
The Public Safety Fund accounts for the community safety activities of the City including Police, Code Compliance, Dispatch, Fire and Animal Control. The major outside revenue sources for this fund are parcel taxes and utility user taxes. These taxes were enacted specifically for the support of public safety within the City. The single largest revenue source is an interfund transfer from the General Fund. The transfer from the General Fund is to support the operating expenses that exceed the revenues earned in taxes, fines, fees, and other revenue items. Since this fund has a majority of its support from the General Fund, fund balance is kept at a minimum.

American Recovery Act Special Revenue Fund
This fund was established to account for the State and Local Agency Coronavirus Relief Funds provided to the City from the American Recovery Act. For FY2023-2024, the City used this funding for business assistance and public safety equipment.

Housing Authority Special Revenue Fund
This fund is to account for the assets of the former Redevelopment Agency Low to Moderate Income Housing Fund that was transferred to City. The assets consist of over $2.6 million in cash, $3.3 million in loans for housing developments and single-family houses throughout the City, and vacant residential property to be used to develop lowincome housing. During FY2023-2024, the Housing Authority Fund spent over $400,000 for housing assistance. As of June 30, 2024, the fund balance is $6,051,763.

Debt Service Fund
This fund is to account for the debt service payments on the City’s Lease Revenue Bonds and Certificates of Participation. The debt service obligations are paid twice annually. The debt service obligations are funded by a utility user tax and transfers from other funds. For this fiscal year, $1,000,000 was paid for the required principal payment and $1,393,392 was paid out in interest expense. This fund also includes the proceeds and related expenses for the Series 2021 Bonds that were issued in January 2022 for $15,000,000 for the construction of a new fire station, police annex building, and improvements to the existing fire station and police department building. The fund balance at June 30, 2024 was $17,752,431.

Item Number: 5.

12 RCTC Loan Capital Projects Fund
This fund was create to track the $7.5 million loan provided from the Riverside County Transportation Commission for the repair of three roads damaged by Tropical Storm Hillary in August 2023. The City spent over $9 million to repair the roads to have them reopened by the 270 day deadline as required by reimbursement from FHWA and CalOES. The City has submitted all required documentation and will be receiving a full reimbursement for the cost of the repairs. As the City receives the reimbursement, it will repay the RCTC loan. Any additional funding for the cost of repairs over the $7.5 million loan is covered by other funds.

Capital Improvement Capital Projects Fund
This fund contains the expenses for all capital improvement projects that are not supported by restricted funds and has the expenses for the facilities improvements funded by the Series 2021 Bond proceeds. During FY2023-2024, the City spent $3,299,237 on capital projects. The fund ended the fiscal year with a negative balance which will be offset by a withdrawal of the Series 2021 Bond proceeds held by the fiscal agent and grant proceeds.

Capital Assets
At the end of FY 2023-2024, the City has invested over $80.7 million in a broad range of capital assets, net of depreciation. The investment in capital assets includes land, right of way, buildings and improvements, machinery and equipment, streets and bridges and construction in progress. During FY2022-2023, the City implemented GASB 87 Accounting for Leases and GASB 96 Subscription-Based Information Technology Arrangements.

Table 3
City of Desert Hot Springs
Capital Assets
As of June 30, 2024
2024 2023 2024 2023
Land $ 2,958,094 $ 2,958,094 $ 2,958,094 $ 2,958,094
Construction in progress 18,521,974 13,393,933 18,521,974 13,393,933 Depreciable assets, net of depreciation
Building and improvements, net of depreciation 31,921,660 30,782,252 31,921,660 30,782,252 Machinery and equipment, net of depreciation 3,748,332 4,195,492 3,748,332 4,195,492 Vehicles, net of depreciation 921,641 1,072,507 921,641 1,072,507 Infrastructure, net of depreciation 22,057,132 18,833,724 22,057,132 18,833,724 Intangible assets, net of ammortization
Right of use - leased vehicles 342,743 115,334 342,743 115,334 Right of use - subscription asset 248,583 425,682 248,583 425,682 Total $ 80,720,159 $ 71,777,018 $ 80,720,159 $ 71,777,018 Governmental activities Total
For more information on capital asset activity, please see Note (5) Capital Assets page 62 and page 63.

Long-Term Debt
As of June 30, 2024, the City had total long-term liabilities outstanding of $46,310,997 in Certificates of Participation debt, Lease Revenue Bonds debt, a loan from the Riverside County Transportation Commission, capital leases, subscription liabilities, claims and judgments payable debt, compensated absences and Pension-related debt for the CalPERS Side Fund. For more detailed information on each long-term debt liability, please see Note (6) Long-Term Liabilities on pages 63-70.

Item Number: 5.

13 Table 4
City of Desert Hot Springs
Long-Term Liabilities
As of June 30, 2024
2024 2023 2024 2023
2020 Certificates of Participation $ 4,440,000 $ 4,640,000 $ 4,440,000 $ 4,640,000 Lease Revenue Bonds Series 2017A 12,890,000 13,220,000 12,890,000 13,220,000 Lease Revenue Bonds Series 2018 6,180,000 6,320,000 6,180,000 6,320,000 Lease Revenue Bonds Series 2021A 13,700,000 13,935,000 13,700,000 13,935,000 Taxable Lease Revenue Bonds Series 2021A-T 1,040,000 1,135,000 1,040,000 1,135,000 Bond premium - 2017A 136,512 142,717 136,512 142,717
Bond premium - 2018 237,252 247,472 237,252 247,472
Bond premium - 2021A 217,658 225,688 217,658 225,688
Capital lease payment 215,225 394,332 215,225 394,332
RCTC Loan 3,750,000 - 3,750,000 -
Lease liabilities 355,385 116,922 355,385 116,922
Subscription liabilities 120,608 238,361 120,608 238,361 Claims and judgments payable 636,696 369,882 636,696 369,882 Compensated absences 1,595,052 1,522,175 1,595,052 1,522,175 Pension-related debt 796,609 1,024,923 796,609 1,024,923 Total 46,310,997 $ 43,532,472 $ 46,310,997 $ 43,532,472 $ Governmental activities Total
Cannabis Dispensary and Cultivation Revenues
The City collects taxes for the dispensary and cultivation of marijuana and marijuana products. In the past seven years the City has seen a steady increase in dispensary and cultivation tax revenues for the fiscal years 2015 through 2022, however in 2023, the City experienced a decline in cannabis taxes. The issues with the cannabis industry seems to be leveling off as the City received only $32,732 less in cannabis dispensary and cultivation tax revenues over 2023-2024 from FY2022-2023.

Table 5
City of Desert Hot springs
Marijuana Revenues
As of June 30, 2024
Dispensary Cultivation Dispensary Cultivation Total Total 2024 2024 2023 2023 2024 2023
Marijuana Dispensary Revenue 1,502,108 $ - $ 1,766,819 $ - $ 1,502,108 $ 1,766,819 $ Marijuana Cultivation Revenue - 2,907,922 - 2,675,943 2,907,922 2,675,943 Total $ 2,907,922 1,502,108 $ 1,766,819 $ 2,675,943 $ 4,410,030 $ 4,442,762 $ Economic Factors
 Development activity had several increases due to additional commercial projects and housing developments within the City as discussed previously;
 For FY 2023-2024, Transient Occupancy Tax and Property Tax revenues continue to grow due to increased development and tourism.
 The City is still experiencing a steady growth in population and is considered the “Fastest Growing City in the Coachella Valley” with a population over 32,000 as of January 2024 and a growth rate of 16% since 2014;  There has been significant growth in assessed values in the City with a 120% assessed value growth rate since 2014 and a 9% average annual growth rate.

Item Number: 5.

14  Home prices have grown nearly 200% since 2011, however, with the increase in interest rates, home prices have started to decline in the City. The average home sales price had a slight increase of 1% between 6/30/2023 and 6/30/2024.
 The average home value in the City is $396,000 as of June 2024 and the City is one of the more affordable housing options in the Coachella Valley;
 The City has reserves of 15% of annual general fund appropriations for natural and fiscal emergencies and 5% for future operational and capital uses. Additionally, there is an emergency reserve set up for financial and economic uncertainty funded by 25% of the cannabis tax revenues to a cap of 17% of General Fund appropriations. The balance of the Emergency Reserve at June 30, 2024 was $1,102,507.

Request for Information
This financial report is designed to provide a general overview of the City of Desert Hot Springs’ finances for all of those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Desert Hot Springs, Geoffrey Buchheim, Administrative Services Director, 11999 Palm Drive, Desert Hot Springs, CA 92240 or by telephone at 760- 329-6411 Ext 227.

Item Number: 5.

BASIC FINANCIAL STATEMENTS
15 Item Number: 5.

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16 Item Number: 5.

GOVERNMENT-WIDE

FINANCIAL STATEMENTS
17 Item Number: 5.

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18 Item Number: 5.

Primary Government
Governmental
Activities
ASSETS
Current assets:

Cash and cash equivalents $ 21,929,559
Receivables, net 26,977,216
Prepaid items 80,029
Deposits 5,112
Property held for resale 85,090
Total current assets 49,077,006
Noncurrent assets:

Restricted cash and investments in escrow 17,023,757
Capital assets:

Capital assets, not being depreciated 21,480,068
Capital assets, being depreciated, net 58,648,765
Intangible capital assets, being amortized, net 591,326 Total capital assets 80,720,159
Total noncurrent assets 97,743,916
Total assets 146,820,922

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 317,038
Pension related 7,455,179
Total deferred outflows of resources 7,772,217

LIABILITIES
Current liabilities:

Accounts payable and other liabilities 5,306,298
Deposits 3,407,882
Interest payable 416,983
Unearned revenue 8,263,863
Long-term debt - due within one year 2,491,624
Total current liabilities 19,886,650
Noncurrent liabilities:

Long-term debt - due in more than one year 43,819,373
Net pension liability 16,284,580
Total noncurrent liabilities 60,103,953
Total liabilities 79,990,603

DEFERRED INFLOWS OF RESOURCES
Pension related 3,139,264
Total deferred inflows of resources 3,139,264

NET POSITION
Net investment in capital assets 52,424,852
Restricted for:

Public safety 1,394,339
Street maintenance and capital improvement 3,323,547
Housing authority 6,058,258
Debt service 17,752,431
Lighting/Landscaping/Drainage 1,458,344
Park development and improvement 1,686,714
Assessment District 91-1 125,376
Other 655,878
Total restricted 32,454,887
Unrestricted (deficit) (13,416,467)
Total net position $ 71,463,272
City of Desert Hot Springs
Statement of Net Position
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 19 Item Number: 5.

Net (Expense)
Operating Capital Total Revenue amd
Charges for Grants and Grants and Program Change in
Functions/Programs Expenses Services Contributions Contributions Revenues Net Position Governmental activities:

General government 10,836,693 $ 271,758 $ 25,000 $ 826,476 $ 1,123,234 $ (9,713,459) $ Public safety 19,598,305 1,356,227 8,934,332 412,880 10,703,439 (8,894,866) Public works 6,698,339 801,441 4,908,516 12,281,563 17,991,520 11,293,181 Economic development 3,198,429 471,058 999,905 - 1,470,963 (1,727,466) Culture and leisure 3,012,296 2,444,613 54,266 - 2,498,879 (513,417) Interest and fiscal charges 1,414,875 - - - - (1,414,875) Total primary government $ 5,345,097 44,758,937 $ 14,922,019 $ 13,520,919 $ 33,788,035 $ (10,970,902) General Revenues:

Taxes:

Property taxes 2,834,690
Sales and use taxes 5,991,148
Dispensary taxes 1,502,108
Cultivator taxes 2,907,922
Motor vehicle in-lieu taxes 40,278
Franchise taxes 2,594,460
Transient occupancy taxes 4,406,302
Total taxes 20,276,908
Investment income 1,081,167
Other revenue 964,884
Total general and other revenues 22,322,959
Change in net position 11,352,057
Net position, beginning of year 60,111,215
Net position, end of year $ 71,463,272
Program Revenues
City of Desert Hot Springs
Statement of Activities
For the Year Ended June 30, 2024
Primary Government
Governmental Activities
See accompanying Notes to the Basic Financial Statements. 20 Item Number: 5.

FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
21 Item Number: 5.

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22 Item Number: 5.

GOVERNMENTAL FUND

FINANCIAL STATEMENTS
General Fund - As the City's primary operating fund, it accounts for and reports all financial resources of the City, except those required to be accounted for and reported in another fund.

Debt Service Fund - To account for the debt service payments on the City's Lease Revenue Bonds and Certificate of Participation twice annually.

Capital Improvement Capital Projects Fund - To account for and report expenditures related to various capital projects identified in the City's 5-year CIP plan.

Housing Authority Special Revenue Fund - To account for and report funds set aside for development and improvements of the City’s housing activity and operations.

Public Safety Special Revenue Fund - To account for and report special taxes and grants for community safety expenditures including Police, Fire and Animal Control.

RCTC Loan Capital Projects Fund - To account for a loan received from the Riverside County Transportation Commission ("RCTC") and grants from the Federal Emergency Management Agency ("FEMA") and Caltrans. Expenditures are restricted to construction, improvement, and maintenance activities related to storm damage repairs from Tropical Storm Hilary.

American Recovery Act Special Revenue Fund - To account for the State and Local Agency Coronavirus Relief Funds provided to the City from the American Recovery Act.
23 Item Number: 5.

General Public American Housing Debt Service
Fund Safety Rescue Act Authority Fund
ASSETS
Cash and investments 3,137,086 $ 9,095 $ 1,722,105 $ 2,624,889 $ 1,394,993 $ Cash and investments with fiscal agents - - - - 17,023,757 Receivables:

Accounts 5,129,142 5,707,272 - - -
Interest 9,794 - 6,728 7,868 10,154
Notes - - - 3,334,172 -
Prepaid items 80,029 - - - -
Deposits 5,112 - - - -
Due from other funds 4,662,493 - 2,000,000 - 935,145
Property held for resale - - - 85,090 -
Total assets $ 5,716,367 13,023,656 $ 3,728,833 $ 6,052,019 $ 19,364,049 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 2,680,351 $ 362,712 $ 144 $ 256 $ - $ Deposits payable 1,926,000 63,894 - - -
Due to other funds - 1,779,053 - - 1,611,618
Unearned revenue 477,633 32,500 3,603,081 - -
Total liabilities 2,238,159 5,083,984 3,603,225 256 1,611,618 Deferred inflows of resources:

Unavailable revenue 441,111 3,370,373 - - -
Total deferred inflows of resources 441,111 3,370,373 - - - Fund balances:

Nonspendable 85,141 - - - -
Restricted 455,254 107,835 125,608 6,051,763 17,752,431 Committed 3,994,602 - - - -
Assigned 570,848 - - - -
Unassigned 2,392,716 - - - -
Total fund balances 7,498,561 107,835 125,608 6,051,763 17,752,431 Total liabilities, deferred inflows of
resources, and fund balances $ 13,023,656 $ 5,716,367 $ 3,728,833 $ 6,052,019 $ 19,364,049 (Continued)
Special Revenue Funds
City of Desert Hot Springs
Balance Sheet
Governmental Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 24 Item Number: 5.

Nonmajor Total
Capital Governmental Governmental
RCTC Loan Improvement Funds Funds
ASSETS
Cash and investments - $ 274,429 $ 12,008,156 $ 21,170,753 $ Cash and investments with fiscal agents - - - 17,023,757 Receivables:

Accounts 9,054,402 2,060,578 1,627,290 23,578,684
Interest - - 29,816 64,360
Notes - - - 3,334,172
Prepaid items - - - 80,029
Deposits - - - 5,112
Due from other funds - 1,611,618 - 9,209,256
Property held for resale - - - 85,090
Total assets $ 3,946,625 9,054,402 $ 13,665,262 $ 74,551,213 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 556,468 $ 1,132,186 $ 558,544 $ 5,290,661 $ Deposits payable - 1,417,988 - 3,407,882
Due to other funds 4,747,934 935,145 135,506 9,209,256
Unearned revenue - 400,000 3,750,649 8,263,863
Total liabilities 3,885,319 5,304,402 4,444,699 26,171,662 Deferred inflows of resources:

Unavailable revenue 6,668,682 1,720,432 872,963 13,073,561 Total deferred inflows of resources 1,720,432 6,668,682 872,963 13,073,561 Fund balances:

Nonspendable - - - 85,141
Restricted - 7,886,980 - 32,379,871
Committed - 455,969 - 4,450,571
Assigned - - 10,369 581,217
Unassigned (2,918,682) (1,659,126) (5,718) (2,190,810)
Total fund balances (2,918,682) (1,659,126) 8,347,600 35,305,990 Total liabilities, deferred inflows of
resources, and fund balances $ 9,054,402 $ 3,946,625 $ 13,665,262 $ 74,551,213 (Concluded)
City of Desert Hot Springs
Balance Sheet (Continued)
Governmental Funds
June 30, 2024
Capital Projects Funds
See accompanying Notes to the Basic Financial Statements. 25 Item Number: 5.

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26 Item Number: 5.

Total Fund Balances - Total Governmental Funds $ 35,305,990 Amounts reported for governmental activities in the statement of net position are different because:

Nondepreciable assets $ 21,480,068
Depreciable assets, net of $339,080 reported in Internal Service Funds 58,309,684 Intangible assets, net of $342,743 reported in Internal Service Funds 248,583 80,038,335 (416,983)
317,038
(42,917,217)
(591,422)
(1,595,052) (44,786,653)
7,455,179
(16,284,580)
(3,139,264) (11,968,665)
13,073,561
217,687
$ 71,463,272
Compensated absences
Unamortized deferred loss on refunding
Unamortized bond premium
Net position of governmental activities
Revenue reported as unavailable revenue in the governmental funds when it is not received soon enough after year-end to be considered available. The availability criteria does not apply to the Government-Wide Financial Statements and, therefore, the revenue is recognized when eligibility requirements are met and earned.

City of Desert Hot Springs
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
Capital assets used in governmental activities are not financial resources and are not reported in the funds:

Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and, accordingly are not reported as fund liabilities. All liabilities, both current and long-term are reported in the Statement of Net Position.

Accrued interest payable for the current portion of interest due on long-term debt has not been reported in the governmental funds.

Amount reported in government-wide statement of position:

Long-term debt, net of $570,610 reported in Internal Service Funds Internal service funds are used by management to charge the costs of general liability, workers' compensation and equipment replacement to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the Government-Wide Statement of Net Position.

Net pension liability and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

Pension related deferred outflows of resources
Net pension liability
Pension related deferred inflows of resources
See accompanying Notes to the Basic Financial Statements. 27 Item Number: 5.

General Public American Housing Debt Service
Fund Safety Rescue Act Authority Fund
REVENUES:

Taxes $ 6,277,436 20,083,191 $ - $ - $ 1,751,356 $
Permits and fees 994,047 2,673,228 - - -
Intergovernmental 206,303 314,822 765,437 503,552 -
Licenses 16,005 253,507 - - -
Investment earning - 229,975 104,905 48,275 851,373
Miscellaneous 673,222 769,098 - - -
Total revenues 8,167,013 24,323,821 870,342 551,827 2,602,729 EXPENDITURES:

Current:

General government - 8,143,041 92,567 - 8,000
Public safety 17,138,465 1,121,669 658,819 - -
Public works - 884,091 - - -
Economic development - 2,781,913 - 410,519 -
Culture and leisure - 2,111,476 - - -
Capital outlay 132,114 527,665 14,050 - -
Debt service:

Principal retirement - 117,753 - - 1,000,000
Interest and fiscal charges 5,779 - - 1,393,392 -
Total expenditures 15,693,387 17,270,579 765,436 410,519 2,401,392

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 8,630,434 (9,103,566) 104,906 141,308 201,337 OTHER FINANCING SOURCES (USES):

Transfers in 100,000 9,125,544 - 322,793 -
Transfers out (10,190,201) - - (1,611,618) -
Issuance of debt - - - - -
Total other financing sources (uses) (10,090,201) 9,125,544 - (1,288,825) - NET CHANGES IN FUND BALANCES (1,459,767) 21,978 104,906 141,308 (1,087,488) FUND BALANCES:

Beginning of year 8,958,328 85,857 20,702 5,910,455 18,839,919 End of year $ 7,498,561 $ 107,835 $ 125,608 $ 6,051,763 $ 17,752,431 (Continued)
Special Revenue Funds
City of Desert Hot Springs
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 28 Item Number: 5.

Nonmajor Total
Capital Governmental Governmental
RCTC Loan Improvement Funds Funds
REVENUES:

Taxes $ - - $ 1,162,551 $ 29,274,534 $
Permits and fees - - 1,144,644 4,811,919
Intergovernmental 899,715 2,385,719 3,373,803 8,449,351 Licenses - - 148,135 417,647
Investment earning - - 107,228 1,341,756
Miscellaneous - - - 1,442,320
Total revenues 899,715 2,385,719 5,936,361 45,737,527
EXPENDITURES:

Current:

General government - - 240,871 8,484,479
Public safety - - 35,493 18,954,446
Public works 1,070,227 506,303 3,377,439 5,838,060
Economic development - - - 3,192,432
Culture and leisure - - 211,384 2,322,860
Capital outlay 2,229,010 8,548,098 2,452,693 13,903,630 Debt service:

Principal retirement - - - 1,117,753
Interest and fiscal charges - - - 1,399,171
Total expenditures 3,299,237 9,054,401 6,317,880 55,212,831

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (6,668,682) (2,399,522) (381,519) (9,475,304) OTHER FINANCING SOURCES (USES):

Transfers in 1,611,618 - 1,250,432 12,410,387
Transfers out - (608,568) - (12,410,387)
Issuance of debt 3,750,000 - 3,750,000 -
Total other financing sources (uses) 3,750,000 1,611,618 641,864 3,750,000 NET CHANGES IN FUND BALANCES (2,918,682) (787,904) 260,345 (5,725,304) FUND BALANCES:

Beginning of year (871,222) - 8,087,255 41,031,294
End of year $ (2,918,682) $ (1,659,126) $ 8,347,600 $ 35,305,990 (Concluded)
City of Desert Hot Springs
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2024
Capital Projects Funds
See accompanying Notes to the Basic Financial Statements. 29 Item Number: 5.

Net Change in Fund Balances - Total Governmental Funds: $ (5,725,304) Amounts reported for governmental activities in the Statement of Activities are different because:
13,903,630
(5,029,680)
(72,877)
1,346,067
(3,750,000)
(2,385,888) 18,045
24,455
(3,292) (27,747)
444,672
10,145,153
75,643
Change in net position of governmental activities $ 11,352,057 Depreciation expense on capital assets, net of internal service fund depreciation expense of $206,869 was reported in the Government-Wide Statement of Activities, but they did not require the use of current financial resources. Therefore, depreciation expense was not reported as an expenditure in the governmental funds. reported as an expenditure in the governmental funds.

Long-term compensated absences expense was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. Therefore, the decrease in long-term compensated absences was not reported as an expenditure in the governmental funds.

Repayment of bond principal was an expenditure in the governmental funds, but the repayment reduced longterm liabilities in the Government-Wide Statement of Net Position.

Accrued interest for long-term debt
Amortization expense was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. Therefore, amortization expense was not reported as an expenditure in the governmental funds.

Capital outlay, net of $216,704 reported in Internal Service Funds City of Desert Hot Springs
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position For the Year Ended June 30, 2023
Acquisition of capital assets was reported as expenditures in the governmental funds. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over the estimated useful lives as depreciation expense. The following was the amount of capital assets recorded in the current period:

Amortization of premium/discount
Amortization of deferred charges on refunding
Principal repayments of long-term debt, net of $216,704 reported in Internal Service Funds Issuance of long-term debt, net of $276,060 reported in Internal Service Funds Internal service funds were used by management to charge the costs of certain activities, such as insurance to individual funds. The net loss of the internal service funds was report with governmental activities.

Unavailable revenue is not recognized as revenue in the governmental funds since the revenue is not available to fund expenditures of the current year.

Certain pension expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds, net of $2,368,903 pension contribution made after measurement date.

See accompanying Notes to the Basic Financial Statements. 30 Item Number: 5.

PROPRIETARY FUND

FINANCIAL STATEMENTS
Internal Service Funds - To account for the City's risk management and equipment replacement activities, which are goods and services provided to other Funds of the City.
31 Item Number: 5.

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32 Item Number: 5.

Governmental
Activities
Internal
Service Funds
ASSETS
Current assets:

Cash and investments $ 758,806
Total current assets 758,806
Noncurrent assets:

Capital assets, being depreciated, net 339,081
Intangible capital assets, being amortized, net 342,743 Total capital assets 681,824
Total noncurrent assets 681,824
Total assets 1,440,630

LIABILITIES
Current liabilities:

Accounts payable 15,637
Claims payable - due within one year 344,611
Financing purchase payable - due within one year 184,058 Lease liabilities - due within one year 69,784
Total current liabilities 614,090
Noncurrent liabilities:

Claims payable - due in more than one year 292,085
Financing purchase payable - due in more than one year 31,167 Lease liabilities - due in more than one year 285,601
Total noncurrent liabilities 608,853
Total liabilities 1,222,943

NET POSITION (DEFICIT)
Net investment in capital assets 111,214
Unrestricted 106,473
Total net position (deficit) $ 217,687
City of Desert Hot Springs
Statement of Net Position
Proprietary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 33 Item Number: 5.

Governmental
Activities
Internal
Service Funds
OPERATING REVENUES:

Charges for services $ 892,654
Insurance recovery 79,942
Total operating revenues 972,596
OPERATING EXPENSES:

Insurance claims 639,306
Depreciation and amortization 206,869
Other expense 20,321
Total operating expenses 866,496
OPERATING INCOME 106,100
NONOPERATING REVENUES (EXPENSES):

Interest expense (30,457)
Total nonoperating revenues (expenses) (30,457)
Change in net position 75,643
NET POSITION (DEFICIT):

Beginning of year 142,044
End of year $ 217,687
City of Desert Hot Springs
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 34 Item Number: 5.

Governmental
Activities
Internal
Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from use departments $ 892,851
Receipts from insurance recovery 79,942
Payments for vendor for goods and services (23,041)
Payments for insurance claims (422,897)
Net cash provided by operating activities 526,855

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Principal paid on long-term liabilities (216,704)
Interest paid on long-term liabilities (30,457)
Net cash (used in) capital and
related financing activities (247,161)
Net increase in cash and investments 279,694
CASH AND CASH EQUIVALENTS:

Beginning of year 479,112
End of year $ 758,806

RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:

Operating income $ 106,100
Adjustments to reconcile operating income to
net cash provided by provided by operating activities:

Amortization and depreciation expenses 206,869
Changes in assets and liabilities:
(Increase)/decrease in accounts receivables 197
Increase/(decrease) in accounts payable (53,125)
Increase/(decrease) in claims payable 266,814
Total adjustments 213,886
Net cash provided by operating activities $ 526,855

NONCASH ITEM FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Issuance of lease $ 276,060
Assets leased $ (276,060)
City of Desert Hot Springs
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 35 Item Number: 5.

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36 Item Number: 5.

FIDUCIARY FUND

FINANCIAL STATEMENTS
Successor Agency Private-Purpose Trust Fund - To account for the balances and transactions of the Successor Agency to the former Redevelopment Agency of the City of Desert Hot Springs.

Custodial Funds - To account for assets held by the City in the capacity of agent for individuals. Custodial Fund spending is controlled primarily through legal agreements and applicable State and Federal laws. 37 Item Number: 5.

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38 Item Number: 5.

Successor
Agency Private -
Purpose Trust Custodial
Fund Funds
ASSETS
Current assets:

Cash and investments $ 3,136,199 1,941,930 $
Accounts receivable - 294,651
Interest receivable 2,832 8,705
Total current assets 1,944,762 3,439,555
Noncurrent assets:

Investments with fiscal agents - 116,379
Notes receivable 16,294 -
Total noncurrent assets 16,294 116,379
Total assets 1,961,056 3,555,934

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refundings 1,018,051 -
Total deferred outflows of resources 1,018,051 -

LIABILITIES
Current liabilities:

Accounts payable 381 57,761
Due to other governments - 49,252
Deposits payable - 229,641
Interest payable 222,704 -
Bonds payable - due within one year 1,021,360 -
Total current liabilities 1,244,445 336,654
Noncurrent liabilities:

Bonds payable - due in more than one year 16,034,872 -
Total noncurrent liabilities 16,034,872 -
Total liabilities 17,279,317 336,654

NET POSITION (DEFICIT)
Restricted for:

Successor Agency (14,300,210) -
Individuals, organization, and other governments - 3,219,280 Total net position (deficit) $ (14,300,210) $ 3,219,280 City of Desert Hot Springs
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 39 Item Number: 5.

Successor
Agency Private -
Purpose Trust Custodial
Fund Funds
ADDITIONS:

Redevelopment Property Tax Trust Fund $ 2,114,492 $ -
Assessment revenue collected - 667,404
Use of money and property 30,178 86,916
Micellaneous - 192,500
Total additions 2,144,670 946,820
DEDUCTIONS:

Interest expense 677,794 240,945
Administration 253,299 42,741
Recognized obligation payments to City of Desert Hot Springs 503,552 - Payment of special assessment district expenses - 146,302 Payment of other organization expenses - 2,709
Total deductions 1,434,645 432,697
Change in net position 710,025 514,123
NET POSITION (DEFICIT):

Beginning of year (15,010,235) 2,705,157
End of year $ (14,300,210) $ 3,219,280
City of Desert Hot Springs
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 40 Item Number: 5.

41 NOTES TO THE BASIC

FINANCIAL STATEMENTS
Item Number: 5.

42 This page intentionally left blank.

Item Number: 5.

City of Desert Hot Springs
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
43 Page
Note 1 – Summary of Significant Accounting Policies ........................................................................................... 45 A. Financial Reporting Entity ............................................................................................................................. 45 B. Basis of Accounting and Measurement Focus .............................................................................................. 46 C. Cash, Cash Equivalents and Investments ....................................................................................................... 49 D. Cash and Investments with Fiscal Agents ...................................................................................................... 49 E. Fair Value Measurements ............................................................................................................................... 49 F. Prepaid Items .................................................................................................................................................. 50 G. Interfund Transactions .................................................................................................................................... 50 H. Property Held for Resale ................................................................................................................................ 50 I. Capital Assets ................................................................................................................................................. 50 J. Interest Payable .............................................................................................................................................. 51 K. Unearned Revenue ......................................................................................................................................... 51 L. Compensated Absences .................................................................................................................................. 51 M. Pension ........................................................................................................................................................... 51 N. Deferred Outflows/Inflows of Resources ....................................................................................................... 52 O. Long-Term Debt ............................................................................................................................................. 52 P. Lease Liabilities ............................................................................................................................................. 52 Q. Subscription Liabilities................................................................................................................................... 53 R. Claims and Judgments .................................................................................................................................... 53 S. Property Taxes ................................................................................................................................................ 53 T. Net Position .................................................................................................................................................... 54 U. Fund Balances ................................................................................................................................................ 54 V. Use of Estimates ............................................................................................................................................. 55 W. Implementation of New GASB Pronouncement ............................................................................................ 55 Note 2 – Cash and Investments ................................................................................................................................ 56 A. Demand Deposits ........................................................................................................................................... 56 B. Investments ..................................................................................................................................................... 57 C. Fair Value Measurements ............................................................................................................................... 58 D. Risk Disclosures ............................................................................................................................................. 59 E. Investments in Local Agency Investment Fund ............................................................................................. 60 Note 3 – Notes Receivable ......................................................................................................................................... 60 Note 4 – Interfund Transactions .............................................................................................................................. 61 A. Due From/To Other Funds ............................................................................................................................. 61 B. Transfers In/Out ............................................................................................................................................. 61 Note 5 – Capital Assets .............................................................................................................................................. 62 Item Number: 5.

City of Desert Hot Springs
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024
44 Page
Note 6 – Long-Term Liabilities ................................................................................................................................ 63 A. Governmental Activities................................................................................................................................. 63 B. Fiduciary Activities ........................................................................................................................................ 69 Note 7 – Non-City Obligation Debt .......................................................................................................................... 70 Note 8 – Risk Management ....................................................................................................................................... 71 A. Coverage ......................................................................................................................................................... 71 B. Claims Activity .............................................................................................................................................. 72 C. Adequacy of Protection .................................................................................................................................. 72 Note 9 – Defined Benefit Pension Plan .................................................................................................................... 72 A. General Information about the Pension Plan .................................................................................................. 72 B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions .................................................................................................... 74 Note 10 – Jointly Governed Organization ............................................................................................................... 79 Note 11 – Classification of Fund Balances .............................................................................................................. 79 Note 12 – Net Investments in Capital Assets ........................................................................................................... 80 Note 13 – Contingencies and Commitments ........................................................................................................... 81 A. Lawsuits ......................................................................................................................................................... 81 B. Federal and State Grant Programs .................................................................................................................. 81 Note 14 – Individual Fund Disclosure ..................................................................................................................... 81 Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
45 Note 1 – Summary of Significant Accounting Policies
The basic financial statements of the City of Desert Hot Springs, California (the “City”) have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the significant accounting policies:

A. Financial Reporting Entity
The City was incorporated on September 17, 1963 as a charter city under the laws of the State of California and enjoys all the rights and privileges allowed by its charter. The City is governed by an elected five-member council.

In evaluating how to define the City for financial reporting purposes, management has considered all potential component units. The primary criteria for including a potential component unit within the reporting entity are the governing body’s financial accountability and a financial benefit or burden relationship and whether it is misleading to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship, if it appoints a voting majority of an organization’s governing body and it is able to impose its will on the organization, or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government. A primary government may also be financially accountable if an organization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government.

Blended Component Units:

Management determined that the following entities should be reported as blended component units based on the criteria above. Although the following is legally separate from the City, it has been “blended” as though it is part of the City because the component unit’s governing body is substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component unit; and/or the component unit provides services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services directly to it.

City of Desert Hot Springs Financing Corporation (the “Corporation”) – The Corporation is a nonprofit public benefit corporation formed for the purpose of providing public facility financing to the City. The Corporation’s Board of Directors is composed of the five elected City Council members. The Corporation may acquire, construct, rehabilitate, remodel, improve, install and finance or lease various facilities, land and equipment for the benefit of the City. The Corporation holds title to various parcels of land as security for the Certificates of Participation issued in its name. The City makes lease payments to the Corporation in an amount equal to the periodic principal and interest payments due on the Certificates.

The Corporation does not issue separate financial statements.

Desert Hot Springs Public Financing Authority (the “Authority”) – the Public Financing Authority was established pursuant to a Joint Exercise of Powers Agreement, dated May 1, 1993, between the City and the Redevelopment Agency of the City which has been succeeded by the Successor Agency of the City.

The Authority is governed by the Board of Directors. The Chairperson, Vice-Chairperson, Executive Director, and Secretary of the Authority consist of the Mayor, Mayor Pro Tem, City Manager, and City Clerk of the City, respectively. The Authority does not issue separate financial statements.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
46 Note 1 – Summary of Significant Accounting Policies (Continued) A. Financial Reporting Entity (Continued)
Blended Component Units (Continued):

Desert Hot Springs Housing Authority (the “Housing Authority”) – The Housing Authority was formed on January 18, 2011 and operates as a public authority whose primary goal is to provide decent, safe and sanitary housing in a suitable living environment for families that cannot afford private housing that comply with housing quality standards. The Housing Authority does not issue separate financial statements.

These component units are included in the primary government because of the significance of their financial and operational relationship and due to the governing bodies being appointed by the City Council or the same as City Council.

The City has no discretely presented component units.

B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. City 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.

Government-Wide Financial Statements
The Government-Wide Financial Statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. Fiduciary activities of the City are not included in these statements.

Certain types of transactions are reported as program revenues for the City in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the statement of net position have been eliminated, except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the statement of activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
47 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Government-Wide Financial Statements (Continued)
The following interfund activities have been eliminated:
 Due from/to other funds
 Transfers in/out
Governmental Fund Financial Statements
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets, current liabilities, and deferred inflows of resources, are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balances. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

An accompanying schedule is presented to reconcile and explain the differences in fund balances as presented in these statements to the net position presented in the government-wide financial statements.

Revenues are recognized as soon as they are both “measurable” and “available”. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For these purposes, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.

The primary revenue sources, which have been treated as susceptible to accrual by the City, are property taxes, sales taxes, citations, intergovernmental revenues, other taxes and abatement receivables. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

The City reports the following major governmental funds:

General Fund – This fund is the City’s primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund.

Public Safety Special Revenue Fund – This fund was established to account for special taxes and grants for public safety expenditures.

American Recovery Act Special Revenue Fund – To account for the State and Local Agency Coronavirus Relief Funds provided to the City from the American Recovery Act.

Housing Authority Special Revenue Fund – To account for and report funds set aside for development and improvements of the City’s housing activity and operations.

Debt Service Fund – This fund was established to account for the debt service payments of the City.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
48 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Governmental Fund Financial Statements (Continued)
RCTC Loan Capital Project Fund – To account for a loan received from the Riverside County Transportation Commission ("RCTC") and grants from the Federal Emergency Management Agency ("FEMA") and Caltrans. Expenditures are restricted to construction, improvement, and maintenance activities related to storm damage repairs from Tropical Storm Hilary.

Capital Improvement Capital Projects Fund – To account for and report expenditures related to various capital projects identified in the City's 5-year CIP plan.

Proprietary Fund Financial Statements
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the statement of net position. The statement of revenues, expenses and changes in net position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the proprietary funds are charges to customers for sales and services. Operating expenses for the proprietary funds include the costs of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

The internal service funds are presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the government-wide financial statements. The City’s internal service funds include two individual funds which provide services directly to other City funds, which include risk management (combining general liability and workers’ compensation activities) and equipment replacement.

Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds represent custodial funds and private purpose trust funds. Both custodial funds and the private purpose trust funds are accounted for using the "economic resources" measurement focus and the full accrual basis of accounting where the assets associated with the activity are controlled by the City and the assets are not derived 1) solely from the government’s own-source revenues or 2) from government-mandated nonexchange transactions or voluntary nonexchange transactions.

Fiduciary fund types are accounted for according to the nature of the fund. The City’s private purpose trust fund is a fiduciary fund type used by the City to report assets, liabilities and activities of the Successor Agency to the former Redevelopment Agency of the City of Desert Hot Springs. The City’s custodial funds are used to account for assets for the benefit of organizations or other governments that are not part of the City. In addition, the assets are not derived from the City’s provisions of goods or services to those individuals, organizations, or other governments. These funds are used to account for money and property held by the City as trustee or custodian.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
49 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Fiduciary Fund Financial Statements (Continued)
They are also used to account for various assessment districts for which the City acts as an agent for debt service activities or as agent for other foundations. The results of fiduciary fund type operations are presented in the Statement of Changes of Fiduciary Net Position.

C. Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as cash and investments.

Certain disclosure requirements for Deposits and Investment Risks were made in the following areas:
 Interest Rate Risk
 Credit Risk
 Overall
 Custodial Credit Risk
Concentrations of Credit Risk In addition, other disclosures are specified, including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end, and other disclosures.

Highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value.

D. Cash and Investments with Fiscal Agents
Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects.

E. Fair Value Measurements
Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

The three levels of the fair value measurement hierarchy are described below:
 Level 1 – Inputs are unadjusted, quoted prices for identical assets and liabilities in active markets at the measurement date.
 Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets and liabilities through corroboration with market data at the measurement date.  Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the assets and liabilities at the measurement date.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
50 Note 1 – Summary of Significant Accounting Policies (Continued) F. Prepaid Items
Certain payments to vendors applicable to future accounting periods are recorded as prepaid items. Prepaid items do not reflect current appropriable resources and, thus, an equivalent portion of fund balance is nonspendable.

G. Interfund Transactions
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due from/to other funds” (i.e., current portion of interfund loans) and are eliminated in the government-wide financial statements as “interfund balances.” H. Property Held for Resale
Property held for resale is carried at the lower of cost or net realized value, but not greater than the estimated net realizable value.

I. Capital Assets
Capital assets are valued at historical cost or estimated historical cost if actual historical cost was not available.

Donated capital assets are valued at their acquisition value on the date donated. City policy has set the capitalization threshold for reporting capital assets at $5,000 (including infrastructure assets).

The City established a threshold to recognize a right-to-use including lease asset or subscription-based information technology arrangements (“SBITA”) asset (“subscription assets”) in the government-wide financial statements and proprietary fund financial statements right-to-use asset over $5,000.

Lease assets are recorded at the amount of the initial measurement of the lease liabilities and adjusted by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. Lease assets are amortized using the straight-line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

Subscription assets are recorded at the amount of the initial measurement of the SBITA liabilities (“subscription liabilities”) and adjusted by any subscription payments to the SBITA vendor at or before the commencement of the subscription term, less any incentives received from the SBITA vendor at or before the commencement of the subscription term along with subscription implementation costs. Subscription assets are amortized over the shorter of the subscription term or the useful life of the underlying IT assets.

All other capital assets used in operations are depreciated over their estimated useful using the straight-line method. The lives used for depreciation purposes are as follows:

Building and improvements 30 years
Vehicles, machinery and equipment 3-10 years
Infrastructure 20 years
Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
51 Note 1 – Summary of Significant Accounting Policies (Continued) I. Capital Assets (Continued)
The City defines infrastructure as the basic physical assets that allow the City to function. The assets include the streets, parks and recreation, lands and improvement system, storm water conveyance system, and buildings combined with the site amenities, such as parking and landscaped areas used by the City in the conduct of its business. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices (signs, signals and pavement markings), landscaping and land.

These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.

J. Interest Payable
In the government-wide financial statements, interest payable on long-term debt is recognized, as the liability is incurred, for governmental activities. In the fund financial statements, only proprietary fund and private-purpose trust fund types recognize the interest payable when the liability is incurred.

K. Unearned Revenue
Unearned revenue is reported for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues are prepaid charges for services or advance grant with eligibility requirement.

L. Compensated Absences
Permanent City employees earn vacation and sick leave hours per pay period with rates depending on their length of employment. Upon separation from employment, the employees are paid for any unused vacation leave accrual balance. The City allows employees to accrue up to a maximum of 300 hours of vacation leave. There is no maximum on the number of sick leave hours that can be accrued. The compensated absences at June 30 is accrued when incurred in the government-wide financial statements. Compensated absences are primarily liquidated by the General Fund.

M. Pension
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

The following timeframes are used for pension reporting:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023
Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
52 Note 1 – Summary of Significant Accounting Policies (Continued) M. Pension (Continued)
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

N. Deferred Outflows/Inflows of Resources
The Statement of Net Position and Balance Sheet report separate sections for deferred outflows of resources, and deferred inflows of resources, when applicable.

Deferred Outflows of Resources represent a consumption of net assets that applies to future periods.

Deferred Inflows of Resources represent an acquisition of net assets that applies to future periods.

O. Long-Term Debt
In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the appropriate activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed when incurred.

In the fund financial statements, with the exception of advances from other funds, the governmental fund financial statements do not present long-term liabilities. Consequently, long term debt is shown as a reconciling item in the reconciliation of the governmental funds balance sheet to the government-wide statement of net position.

P. Lease Liabilities
The City recognizes lease liabilities with an initial, individual value of $5,000 or more with a lease term greater than one year in the government-wide and proprietary fund financial statements. Variable payments based on future performance of the lessee or usage of the underlying asset are not included in the measurement of the lease liability.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.  The City uses incremental borrowing rate provided by the financial institution or the current rate at the time a new lease is executed.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
53 Note 1 – Summary of Significant Accounting Policies (Continued) P. Lease Liabilities (Continued)
 The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.
 Lease payments included in the measurement of the lease payable is composed of fixed payments to the lessor.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Q. Subscription Liabilities
The City recognizes subscription liabilities with an initial, individual value of $5,000 or more with a subscription term greater than one year in the government-wide and proprietary fund financial statements. Variable payments based on future performance of the City, usage of the underlying IT assets, or number of user seats are not included in the measurement of the subscription liability.

At the commencement of a subscription, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made.

Key estimates and judgments related to subscription liabilities include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.
 The City uses incremental borrowing rate provided by the financial institution at July 1, 2022 for existing subscription or the current rate at the time a new subscription is executed.  The subscription term includes the noncancellable period of the SBITA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments.

The City monitors changes in circumstances that would require a remeasurement of its SBITA and will remeasure any subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

R. Claims and Judgments
When it is probable that a claim or judgment liability has been incurred at year-end, and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage. The City is selfinsured and has insurance coverage in excess of the self-insured amounts as a member of the Public Entity Risk Management Authority (“PERMA”).

S. Property Taxes
Property taxes are levied on July 1 and are payable in two installments: November 1 and February 1 of each year.

Property taxes become delinquent on December 10 and April 10, for the first and second installments, respectively. The lien date is January 1. The County of Riverside, California (“County”) bills and collects property taxes and remits them to the City according to a payment schedule established by the County.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
54 Note 1 – Summary of Significant Accounting Policies (Continued) S. Property Taxes (Continued)
Property tax revenue is recognized in the fiscal year for which the taxes have been levied, provided the taxes are received within 60 days after the end of the fiscal year. Property taxes received after this date are not considered available as a resource that can be used to finance the current year operations of the City and, therefore, are not recorded as revenue until collected. No allowance for doubtful accounts was considered necessary.

T. Net Position
In the government-wide financial statements and proprietary fund financial statements, net position is classified as follows:

Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those assets, net of unspent debt proceeds, and the capital debt related deferred outflows and inflows of resources.

Restricted – This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

Unrestricted – This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

When expenses are incurred for purposes for which both restricted and unrestricted components of net position are available, the City’s policy is to apply the restricted component of net position first, then the unrestricted component of net position as needed.

U. Fund Balances
In the governmental fund financial statements, fund balances are classified as follows:

Nonspendable – Nonspendable fund balances are items that cannot be spent because they are not in spendable form, such as prepaid items and inventories, or items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.

Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.

Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally the governing body, and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City. Adoption of a resolution by the City Council is required to commit resources or to rescind the commitment.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
55 Note 1 – Summary of Significant Accounting Policies (Continued) U. Fund Balances (Continued)
Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has authorized the City Manager or designee for that purpose.

Unassigned – This amount is for any portion of the fund balances that do not fall into one of the above categories. The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

When expenditures are incurred for purposes for which both restricted and unrestricted fund balances are available, the City’s policy is to apply restricted fund balances first, then unrestricted fund balances as needed.

When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses the unrestricted resources in the following order, except for instances wherein an ordinance specifies the fund balance:
 Committed
 Assigned
 Unassigned
V. Use of Estimates
The preparation of the basic financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

W. Implementation of New GASB Pronouncement
During fiscal year ended June 30, 2024, the City has implemented the following new GASB Pronouncement:

GASB Statement No. 100 – In June 2022, GASB issued Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
56 Note 2 – Cash and Investments
The following is a summary of pooled cash and investments, including cash and investments with fiscal agents at June 30, 2024:

Government-Wide Statement of
Statement of Fiduciary
Net Position Net Position Total
Cash and investments 21,929,559 $ 5,078,129 $ 27,007,688 $ Restricted cash and investment
with fiscal agent 17,023,757 116,379 17,140,136
Total cash and investments 38,953,316 $ 5,194,508 $ 44,147,824 $ Cash and investments consisted of the following at June 30, 2024:

Cash and Investments:

Petty cash 8,000 $
Demand deposits 11,468,972
Restricted cash 455,254
Investments 32,215,598
Total cash and investments 44,147,824 $
A. Demand Deposits
The carrying amounts of the City’s demand deposits were $11,468,972 at June 30, 2024. Bank balances at that date were $11,683,572, the total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City’s name as discussed below. The difference between the carrying amount and bank balances represents outstanding checks, deposits in transit, and other reconciling items.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name.

The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City’s deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”).

The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
57 Note 2 – Cash and Investments (Continued)
B. Investments
Investments Authorized by the City’s Investment Policy
The City annually adopts an investment policy to provide guidelines for the deposit and investment of public monies. The investment policy was consistent with the terms and provisions of California Government Code Section 53600 et seq.

Maximum Maximum
Authorized Investment Type Maturity Portfolio* One Issuer* U.S. Treasury securities 5 years 80% None
U.S. agency and U.S. government sponsored
enterprise securities 5 years 80% None
Bankers' acceptance 180 days 40% 30%
Commercial paper 270 days 25% 10%
Negotiable certificate of deposit 5 years 30% None
Medium term notes 5 years 30% 5%
Money market mutual funds None 20% 10%
Local Agency Investment Fund (LAIF) None 100% 50 Million/account N/A - Not Applicable
* Excluding amounts held by bond trustees that are not subject to California Government Code restrictions.

Investments Authorized by Debt Agreement
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. Authorized investments held by bond trustee are the same as those authorized by the City’s investment policy identified above.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
58 Note 2 – Cash and Investments (Continued)
C. Fair Value Measurements
At June 30, 2024, investments are reported at fair value. The following table presents the fair value measurement of investments on a recurring basis and the levels within the fair value hierarchy in which the fair value measurements fall at June 30, 2024:

Quoted Prices in
Active Markets for Significant Other
Identical Assets Observable Inputs
Investment Type Value (Level 1) (Level 2)
Investments:

U.S. Treasury bonds/notes 1,397,331 $ 1,397,331 $ - $
U.S. government sponsored - -
enterprise securities 3,247,076 - 3,247,076
Corporate notes and asset back securities 1,207,198 - 1,207,198 Negotiable certificates of deposit 1,759,007 - 1,759,007 Foreign notes 89,502 - 89,502
Municipal Bonds 498,847 - 498,847
Investments held with fiscal agents:

U.S. government agency bonds 941,240 - 941,240
Total investments subject to fair value measurement 9,140,201 1,397,331 $ 7,742,870 $ Investments measured at amortized cost:

Local Agency Investment Fund (LAIF) 6,701,832
Money market funds 177,081
Investments held with fiscal agents:

Money market funds 16,196,484
Total investments 32,215,598 $
Fair Value Measurement
Level 2 investments are valued based on institutional bond quotes or matrix pricing.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
59 Note 2 – Cash and Investments (Continued)
D. Risk Disclosures
Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rates, the City’s investment policy provides that, final maturities of securities cannot exceed five years. Specific maturities of investments depend on liquidity needs. At June 30, 2024, the City’s investments had the following maturities:

Investment Type Amount Less than 1 1 to 2 2 to 3 3 to 4 4 to 5 Investments:

U.S. Treasury bonds/notes $ 1,397,331 $ 385,036 $ 369,155 $ 286,218 $ 171,854 $ 185,068 U.S. government sponsored
enterprise securities 3,247,076 904,424 750,016 1,065,420 395,379 131,837 Money market funds 177,081 177,081 - - - -
Corporate notes and asset back securities 1,207,198 351,015 97,525 429,916 228,707 100,035 Negotiable certificates of deposit 1,759,007 786,846 226,495 300,147 445,519 - Municipal Bonds 498,847 - 389,363 - 109,484 -
Foreign notes 89,502 74,609 - 14,893 - -
LAIF 6,701,832 6,701,832 - - - -
Investments with Fiscal Agent:

Money market funds 16,196,484 16,196,484 - - - -
U.S. government agency bonds 941,240 257,883 - 447,645 235,712 - Total investments $ 32,215,598 $ 25,577,327 $ 1,701,074 $ 2,933,602 $ 905,424 $ 1,098,171 Investment Maturities (in Years)
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. To be eligible to receive City money, a bank, savings association, federal association, or federally insured industrial loan company shall have received an overall rating of not less than "satisfactory" in its most recent evaluation by the appropriate federal financial supervisory agency of its record of meeting the credit needs of California's communities, including low-and-moderate income neighborhoods.

The City’s investments are rated by the nationally recognized statistical rating organizations as follows:

Percentage of
Investments
Minimum Legal with Credit
Investment Type Fair Value Credit Rating Credit Rating Rate Risk Investments:

U.S. Treasury bonds/notes $ 1,397,331 None Aaa 9%
U.S. government sponsored
enterprise securities 3,247,076 None Aaa 22%
Money market funds 177,081 Aaa Aaa N/A
Corporate notes and asset back securities 1,207,198 AA Aaa/Aa/A 8% Negotiable certificates of deposit 1,759,007 None A1 12% Municipal Bonds 498,847 None A2 3%
Foreign notes 89,502 AA Aaa 1%
LAIF 6,701,832 None Not Rated 45%
Investments with Fiscal Agent:

Money market funds 16,196,484 N/A Aaa N/A
U.S. government agency bonds 941,240 N/A Aaa N/A
Total investments $ 32,215,598
Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
60 Note 2 – Cash and Investments (Continued)
D. Risk Disclosures (Continued)
Custodial Credit Risk
Custodial credit risk is the risk that, in the event of the failure of the counter party (e.g. broker-dealer) to a transaction, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investments in securities through these of mutual funds or government investment pools (such as LAIF).

E. Investments in Local Agency Investment Fund
The City is a participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. The City valued its investments in LAIF as of June 30, 2024 at amortized cost, which approximates fair value.

Note 3 – Notes Receivable
Notes receivable, which amounted to $3,334,172, is reported in the Housing Authority Special Revenue Fund as follows:

Housing Rehabilitation Loan Program $ 384,172
Owner Participation and Loan Agreement:

Low Income Housing Project 500,000
Low and Moderate Income Housing Units 750,000
Multifamily Residential Housing 1,700,000
Total 3,334,172 $
The former Redevelopment Agency of the City of Desert Hot Springs (“Redevelopment Agency”) operated a housing rehabilitation loan program, which provides loans to borrowers who meet certain qualifications for the purpose of rehabilitating their homes. The loans are secured by a deed of trust and are normally repaid when the home changes ownership. The outstanding balance of the loan at June 30, 2024 was $400,466.

On June 7, 2006, the former Redevelopment Agency entered into an Owner Participation and Loan Agreement in the amount of $500,000 with a developer to provide funding for development of 34 low-income housing units. On October 6, 2009, the former Redevelopment Agency entered into another Owner Participation and Loan Agreement for $750,000 with a developer to provide funding for development of 60 low to moderate income housing units. On March 16, 2010, the former Redevelopment Agency entered into the third Owner Participation and Grant Agreement in the amount of $1,700,000 with a developer to provide funding for development of a 62-unit multifamily residential housing project. The term of these agreements is 55 years.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
61 Note 4 – Interfund Transactions
A. Due From/To Other Funds
At June 30, 2024, the City had the following short-term interfund receivable/payable:

American Capital
Rescue Act Improvement
Special Revenue Debt Service Capital Projects
Due To Other Funds General Fund Fund Fund Fund Total
Public Safety Special Revenue Fund $ 1,779,053 $ - $ - $ 1,779,053 - $ Debt Service Fund - - 1,611,618 - 1,611,618
RCTC Loan Capital Projects Fund 2,747,934 2,000,000 - 4,747,934 - Capital Improvement Capital Projects Fund - 935,145 - 935,145 - Nonmajor Governmental Funds 135,506 - - 135,506 -
Total $ 4,662,493 $ 2,000,000 $ 935,145 $ 1,611,618 $ 9,209,256 Due From Other Funds
The interfund balances resulted from temporary reclassifications made at June 30, 2024 to cover cash shortfalls.

B. Transfers In/Out
For the year ended June 30, 2024, the City had the following transfers in/out which arise in the normal course of operations:

Capital
Public Safety Improvement
General Special Revenue Debt Service Capital Projects Nonmajor Transfers Out Fund Fund Fund Fund Governmental Total
General Fund - $ 8,939,144 $ 625 $ $ 1,250,432 - $ $ 10,190,201 Debt Service Fund - - 1,611,618 - 1,611,618 -
Nonmajor Governmental Funds 100,000 186,400 322,168 - 608,568 - Total $ 100,000 $ 9,125,544 $ 322,793 $ 1,611,618 $ 1,250,432 $ 12,410,387 Transfers In
The transfer of $8,939,144 from General Fund to the Public Safety Special Revenue Fund was to fund public safety expenditures during the year in which there were insufficient revenues to cover. The transfers of $625 to the Debt Service Fund was to fund debt service payments. The transfers of $1,250,430 from General Fund to the Nonmajor Governmental Funds were budgeted transfers to provide funding for the operational expenditures of nonmajor special revenue funds.

The transfers of $1,611,618 from the Debt Service Fund to the Capital Improvements Fund was to fund capital projects.

The transfer of $100,000 from the Nonmajor Governmental Funds to the General Fund was a payment for the City Council adopted interfund loan agreement with the General Fund for the reimbursement of expenses related to the construction of the new City Hall.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
62 Note 4 – Interfund Transactions
B. Transfers In/Out (Continued)
The transfers of $186,400 from the Nonmajor Governmental Funds to the Public Safety Special Revenue Fund relates to assistance in funding public safety expenditures.

The transfers of $322,168 from the Nonmajor Government Funds to the Debt Service Fund was to fund debt service payments.

Note 5 – Capital Assets
A summary of changes in the capital assets for the governmental activities for the year ended June 30, 2024 is as follows:

Balance Balance
July 1, 2023 Additions Deletions Transfers June 30, 2024 Nondepreciable assets:

Land $ 2,958,094 $ - $ - $ 2,958,094 - $
Construction in progress 13,393,933 12,246,458 (7,118,417) - 18,521,974 Total nondepreciable assets 16,352,027 12,246,458 (7,118,417) - 21,480,068 Depreciable assets:

Building and improvements 46,563,113 972,821 1,680,054 - 49,215,988 Machinery and equipment 14,525,216 295,117 - 14,820,333 - Vehicles 4,010,271 270,641 - 4,280,912 -
Infrastructure 44,825,230 118,593 5,438,363 - 50,382,186 Total capital assets, being depreciated 109,923,830 1,657,172 7,118,417 - 118,699,419 Less accumulated depreciation:

Building and improvements (15,780,861) (1,513,467) - (17,294,328) - Machinery and equipment (10,329,724) (742,277) - (11,072,001) - Vehicles (2,937,764) (421,507) - (3,359,271) -
Infrastructure (25,991,506) (2,333,548) - (28,325,054) - Total accumulated depreciation (55,039,855) (5,010,799) - (60,050,654) - Total depreciable assets, net 54,883,975 (3,353,627) 7,118,417 - 58,648,765 Intangible assets:

Right of use - leased vehicles 123,938 276,060 - - 399,998 Right to use - subscription asset 552,166 - (19,128) - 533,038 Total intangible assets, being amortized 676,104 276,060 (19,128) - 933,036 Less accumulated amortization:

Right of use - leased vehicles (8,604) (48,651) - - (57,255) Right to use - subscription asset (126,484) (177,099) 19,128 - (284,455) Total accumulated amortization (135,088) (225,750) 19,128 - (341,710) Total amortizable assets, net 541,016 50,310 - - 591,326 Governmental activities capital assets, net $ 71,777,018 $ 8,943,141 $ - $ 80,720,159 - $ Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
63 Note 5 – Capital Assets (Continued)
Depreciation and amortization expense was charged to functions/programs of governmental activities for the year ended June 30, 2024 as follows:

General government $ 2,999,168
Public safety 418,189
Public works 685,072
Culture and leisure 927,251
Internal service fund 206,869
Total depreciation expense $ 5,236,549
Note 6 – Long-Term Liabilities
A. Governmental Activities
A summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2024 is as follows:

Balance Balance Due within Due in more
July 1, 2023 Additions Deletions June 30, 2024 One Year One Year 2020 Certificates of Participation $ 4,640,000 $ - $ (200,000) $ 4,440,000 $ 205,000 $ 4,235,000 Lease Revenue Bonds Series 2017A 13,220,000 - (330,000) 12,890,000 345,000 12,545,000 Lease Revenue Bonds Series 2018 6,320,000 - (140,000) 6,180,000 145,000 6,035,000 Lease Revenue Bonds Series 2021A 13,935,000 - (235,000) 13,700,000 240,000 13,460,000 Taxable Lease Revenue Bonds
Series 2021A-T 1,135,000 - (95,000) 1,040,000 100,000 940,000 Subtotal 39,250,000 (1,000,000) - 38,250,000 1,035,000 37,215,000 Add/(less) deferred amounts:

Bond premium - 2017A 142,717 - (6,205) 136,512 6,205 130,307 Bond premium - 2018 247,472 - (10,220) 237,252 10,220 227,032 Bond premium - 2021A 225,688 - (8,030) 217,658 8,030 209,628 Total bonds payable 39,865,877 (1,024,455) - 38,841,422 1,059,455 37,781,967 Santander finance purchase 394,332 - (179,107) 215,225 184,058 31,167 RCTC Loan - 3,750,000 - 3,750,000 - 3,750,000
Lease liabilities 116,922 276,060 (37,597) 355,385 69,784 285,601 Subscription liabilities 238,361 - (117,753) 120,608 120,608 - Claims and judgments payable 369,882 617,411 (350,597) 636,696 344,611 292,085 Compensated absences 1,522,175 838,683 (765,806) 1,595,052 478,516 1,116,536 Pension-related debt 1,024,923 - (228,314) 796,609 234,592 562,017 Total $ 43,532,472 $ 5,482,154 $ (2,703,629) $ 46,310,997 $ 2,491,624 $ 43,819,373 California Communities Transportation Revenue (Installment Sale) Certificates of Participation, Series 2020 (T.R.I.P. – Total Road Improvement Program) – Original Issue $5,310,000 In October 2020, the City entered into a trust agreement with the California Statewide Communities Development Authority (the “Authority”), and issued the Certificates of Participation, Series 2020 (the “2020 Certificates”) in the amount of $5,310,000. The purpose of the Certificates was to: 1) defeased the 2012A Certificates, and 2) pay the costs incurred in connection with the execution, sale, and delivery of the Certificates. The City makes installment sale payments to the Authority, which are payable from Gas Tax revenues and Measure A receipts.

The outstanding balance of the defeased 2012A Certificates at June 30, 2024 was $4,440,000.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
64 Note 6 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
California Communities Transportation Revenue (Installment Sale) Certificates of Participation, Series 2020 (T.R.I.P. – Total Road Improvement Program) – Original Issue $5,310,000 (Continued) The 2020 Certificates accrue interest at rates between 0.435% and 3.238%, payable semiannually on June 1 and December 1, and mature through June 1, 2042.

At June 30, 2024, the outstanding balance of the 2020 Certificates was $4,440,000. The annual debt service requirements on the 2020 Certificates are as follows:

Year Ending June 30, Principal Interest Total
2025 $ 205,000 $ 115,844 $ 320,844
2026 210,000 113,669 323,669
2027 210,000 110,724 320,724
2028 210,000 107,360 317,360
2029 220,000 103,330 323,330
2030-2034 1,160,000 442,846 1,602,846
2035-2039 1,325,000 275,838 1,600,838
2040-2042 900,000 58,932 958,932
Total $ 4,440,000 $ 1,328,543 $ 5,768,543
Lease Revenue Bonds, Series 2017A
In March 2017, the Desert Hot Springs Public Financing Authority (the “Authority”) issued the Lease Revenue Bonds, Series 2017A (the “Tax-Exempt Bonds”) in amount of $13,895,000. The purpose of the bonds is to (i) current refund the Certificates of Participation (Interim Cash Flow Financing) and Judgment Obligation Bonds, (ii) finance a new City Hall, (iii) make a deposit into a debt service reserve fund and (iv) pay the costs of issuing the Bonds.

The Bonds accrue interest at rates between 2.000% and 3.750%, payable semiannually on March 1 and September 1, commencing September 1, 2017 and the principals are due annually on March 1.

The Tax-Exempt Bonds maturing on or before March 1, 2027 are not subject to optional redemption prior to their stated maturity. The Tax-Exempt Bonds maturing on or after March 1, 2028 are subject to redemption, as a whole or in part at a redemption price equal to 100% of the principal amount of Tax-Exempt Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
65 Note 6 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
Lease Revenue Bonds, Series 2017A (Continued)
At June 30, 2024, the outstanding balance of the Tax-Exempt Bonds was $12,890,000. The annual debt service requirements on the Bonds are as follows:

Tax Exempt Bonds
Year Ending June 30, Principal Interest Total
2025 $ 345,000 $ 518,931 $ 863,931
2026 360,000 503,406 863,406
2027 375,000 487,206 862,206
2028 395,000 470,331 865,331
2029 415,000 448,606 863,606
2030-2034 2,355,000 1,964,781 4,319,781
2035-2039 2,830,000 1,502,725 4,332,725
2040-2044 3,415,000 900,400 4,315,400
2045-2047 2,400,000 194,400 2,594,400
Total $ 12,890,000 $ 6,990,786 $ 19,880,786
Lease Revenue Bonds, Series 2018
In October 2018 the Authority issued the Lease Revenue Bonds, Series 2018 (the “2018 bonds”) in the amount of $6,850,000. The purpose of the bonds is to (i) finance a portion of the New City Hall being constructed by the City (ii) make a deposit into a debt service reserve fund for the Bonds, and (iii) pay the costs of issuing the bonds.

The bonds accrue interest at rates between 3.0% and 5.0%, payable semiannually on March 1 and September 1, commencing March 1, 2019. Principals are due annually commencing March 1, 2019 through March 1, 2048.

At June 30, 2024, the outstanding balance of the 2018 bonds were $6,180,000. The annual debt service requirements on the 2018 bonds are as follows:

Year Ending June 30, Principal Interest Total
2025 $ 145,000 $ 269,606 $ 414,606
2026 150,000 262,356 412,356
2027 160,000 254,856 414,856
2028 165,000 246,856 411,856
2029 175,000 238,606 413,606
2030-2034 1,025,000 1,051,781 2,076,781
2035-2039 1,280,000 789,450 2,069,450
2040-2044 1,570,000 495,400 2,065,400
2045-2048 1,510,000 154,000 1,664,000
Total $ 6,180,000 $ 3,762,911 $ 9,942,911
Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
66 Note 6 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
Lease Revenue Bonds, Series 2021A and the Taxable Lease Revenue Bonds, Series 2021A-T In August 2021, the Desert Hot Springs Public Financing Authority (the “Authority”) issued the Lease Revenue Bonds, Series 2021A (the “Tax-Exempt Bonds”) and the Taxable Lease Revenue Bonds, Series 2021A-T (the “Taxable Bonds” in amount of $14,835,000 and $1,135,000, respectively. The purpose of the bonds is to (i) finance the acquisition and construction of a new police facility and fire station and, as to the taxable bonds, to provide funds for capital improvement projects within the City, (ii) make a deposit into a debt service reserve fund and (iii) pay the costs of issuing the Bonds.

The bonds accrue interest at rates between 3.0% and 4.0%, payable annually on March 1, commencing March 1, 2022. Principal payments for the Tax-Exempt Bonds and the Taxable Bonds due annually on March 1, commencing March 1, 2022 and March 1, 2024 through March 1, 2051 and March 1, 2033, respectively.

The Tax-Exempt Bonds maturing on or before March 1, 2031 are not subject to optional redemption prior to their stated maturity. The Tax-Exempt Bonds maturing on or after March 1, 2032 are subject to redemption, as a whole or in part at a redemption price equal to 100% of the principal amount of Tax-Exempt Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The Taxable Bonds maturing on or after March 1, 2023 are subject to redemption, as a whole or in part at a redemption price equal to 100% of the principal amount of Taxable Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.

At June 30, 2024, the outstanding balance of the Tax-Exempt Bonds and the Taxable Bonds were $13,700,000 and $1,135,000, respectively. The annual debt service requirements on the Bonds are as follows:

Tax Exempt Bonds Taxable Bonds Total
Year Ending June 30, Principal Interest Principal Interest Interest 2025 $ 240,000 $ 416,113 $ 100,000 $ 36,400 $ 452,513
2026 250,000 406,513 105,000 32,900 439,413
2027 265,000 396,513 105,000 29,225 425,738
2028 275,000 385,913 110,000 25,550 411,463
2029 280,000 374,913 115,000 21,700 396,613
2030-2034 1,720,000 1,697,163 505,000 44,800 1,741,963
2035-2039 2,650,000 1,318,469 - - 1,318,469
2040-2045 3,685,000 1,073,263 - - 1,073,263
2046-2049 2,810,000 363,413 - - 363,413
2050-2051 1,525,000 63,250 - - 63,250
Total $ 13,700,000 $ 6,495,523 $ 1,040,000 $ 190,575 $ 6,686,098 Santander Purchase Financing Agreement
On February 10, 2021, the City entered into a purchase financing agreement with Lease Servicing Center, Inc. dba NCL Government Capital for the Police Department vehicles. Interest on the vehicles is 2.73% monthly for a period of 4 years commencing on August 30, 2021.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
67 Note 6 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
Santander Purchase Financing Agreement (Continued)
In the event of default, the lender may, at its option, exercise any of one or more of the following remedies: (1) by written notice to the City, declare all amounts then due under the lease, (2) by written notice require the City to promptly return the equipment to the lender at the City’s expense, (3) exercise any other right, remedy or privilege which may be available to it under applicable laws of the State of California.

At June 30, 2024, the outstanding balance of the purchase financing agreement were $215,225. The annual debt service requirements on the purchase financing agreement are as follows:

Year Ending June 30, Principal Interest Total
2025 $ 184,058 $ 3,584 $ 187,642
2026 31,167 106 31,273
Total $ 215,225 $ 3,690 $ 218,915
RCTC Loan
On August 20, 2023, Tropical Storm Hilary hit the Coachella Valley and City suffered major impacts from flood damaged to one bridge and three major arterials in the city. On November 9, 2023, the Federal Highway Administration approved Emergency Relief Program funding to the City to repair the damaged facilities.

As of February 12, 2024, the City of Desert Hot Springs entered into a loan agreement with the Riverside County Transportation Commission (“RCTC”) for the Storm Damaged Road Repairs Project. The City shall receive two disbursements of $3,750,000 from the RCTC, the sum not to exceed $7,500,000. The loan is payable over a period of 2 years at an interest rate of 4%. This loan is to be repaid by the City immediately upon reimbursement of the Federal Highway Administration’s payment to the City. The amount outstanding at June 30, 2024 was $3,750,000.

Lease Liabilities
On October 20, 2022, the City entered into a 61-month lease agreement with Enterprise Fleet Management for 4 vehicles. The City added 5 additional leased vehicles during the fiscal year 2023-2024, for a total of 8 vehicles.

Total monthly lease payment in the amount of $8,343. Lease payments are due on the 1st of each month. Interest accrues at rates ranging from 2.82 percent to 3.45 percent annum. In the event of default, the lease shall be deemed terminated. Outstanding lease liabilities at June 30, 2024 was in the amount of $355,385.

Future lease payments under the lease payable are as follows:

Year Ending June 30, Principal Interest Total
2025 $ 69,784 $ 30,329 $ 100,113
2026 76,754 23,359 100,113
2027 84,444 15,670 100,114
2028 82,829 7,346 90,175
2029 41,574 1,452 43,026
Total $ 355,385 $ 78,156 $ 433,541
Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
68 Note 6 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
Subscription Liabilities
As of June 30, 2024, the City had three active subscriptions. The subscriptions have payments that range from $58,532 to $65,000 and interest rates that range from 2.19 percent to 2.50 percent. At June 30, 2024, the total combined value of the subscription liability was $120,608, with a combined value of the right to use asset of $533,038 and accumulated amortization of $284,455.

The future subscription payments are as follows:

Year Ending June 30, Principal Interest Total
2025 $ 120,608 $ 2,924 $ 123,532
Claims and Judgments Payable
The claims and judgments payable at June 30, 2024 was in the amount of $636,696. The Risk Management Internal Service Fund has been used to liquidate the liability for claims and judgments payable. See Note 8 for details.

Compensated Absences
The City’s liability for vested and unpaid compensated absences (accrued vacation and sick pay) in the governmental activities was in the amount of $1,595,052 at June 30, 2024. The General Fund has been used to liquidate the majority of the liability for compensated absences.

Pension-Related Debt
As of June 30, 2003, the California Public Employees’ Retirement System (“CalPERS”) implemented a risk pool for the City’s multiple-employer public employee defined benefit pension plan. The City’s Miscellaneous and Safety Plans converted from agent multiple-employer plans to cost-sharing multiple employer plans. In addition to the actuarially determined contributions (see Note 9), the City is also required to make annual payments on a Side Fund, which was created when the City entered the risk pool to account for the difference between the funded status of the pool and the funded status of the City’s plans. The responsibility for funding the Side Fund is specific to the City and is not shared by all employers in the risk pool.

The annual payments on the Side Fund represent principal and interest payments on the pension-related debt, which are included in the retirement expenditures in the City’s various functions.

The amount of pension-related debt outstanding at June 30, 2024 totaled $795,609 for the Safety Plan. The future payment requirements are as follows:

Year Ending June 30, Safety Total
2025 $ 234,592 $ 234,592
2026 241,043 241,043
2027 247,672 247,672
2028 73,303 73,303
Total $ 796,610 $ 796,610
Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
69 Note 6 – Long-Term Liabilities (Continued)
B. Fiduciary Activities
A summary of changes in long-term liabilities for the fiduciary fund for the year ended June 30, 2024 is as follows:

Balance Balance Due within Due in more
July 1, 2023 Additions Deletions June 30, 2024 One Year One Year 2008 Tax Allocation Bonds A-1 $ 2,050,000 $ (2,050,000) - $ $ - $ - $ - 2017 Tax Allocation Refunding Bonds 16,475,000 - (880,000) 15,595,000 925,000 14,670,000 Subtotal 18,525,000 (2,930,000) - 15,595,000 925,000 14,670,000 Add/(less) deferred amounts:

Bond discount - 2008 TAB A-1 (11,163) - 11,163 - - -
Bond premium - 2017 Tax
Allocation Refunding Bonds 1,557,592 - (96,360) 1,461,232 96,360 1,364,872 Total bonds payable 1,546,429 - (85,197) 1,461,232 96,360 1,364,872 Total $ 20,071,429 $ (3,015,197) - $ $ 17,056,232 $ 1,021,360 $ 16,034,872 Tax Allocation Bonds Series 2008A-1 (Taxable) – Original Issue $19,965,000 In April 2008, the former Redevelopment Agency issued Tax Allocation Bonds, Series 2008A-1 (Taxable) (the “Series 2008A-1 Bonds”) in the amount of $19,965,000. The purpose of the Series 2008A-1 Bonds was to: 1) provide funds to finance redevelopment activities including, without limitation, the acquisition of property for the benefit of the Merged Project Area, 2) to fund the reserve account, and 3) to pay certain costs of issuance of the Series 2008A-1 Bonds.

The Series 2008A-1 Bonds are 7% term bonds due September 1, 2023, with interest payable semiannually on September 1 and March 1 of each year. The 2008A-1 Bonds are subject to optional redemption, on any date prior to their maturity, in whole or in part, with maturities to be designated by the Successor Agency, at a redemption price equal to 100 percent of the principal amount of such 2008A-1 Bonds plus the Make-Whole Premium, if any, plus the accrued interest, if any, thereon to the redemption date.

The Series 2008A-1 Bonds maturing on September 1, 2023 are also subject to redemption prior to their stated maturity, in part, pro rata, from sinking account installments deposited in the sinking account on September 1 of each year commencing September 1, 2009, at the principal amount thereof and interest accrued thereon to the date fixed for redemption, without premium.

The Series 2008A-1 Bonds agreement requires the Successor Agency to pledge its annual tax revenues in an amount equal to at least 135% of the annual debt service requirement each fiscal year, through final maturity of the Series 2008A-1 Bonds on September 1, 2023 or early retirement of the Series 2008A-1 Bonds, whichever occurs first. Revenues received by the Successor Agency from the RPTTF have been pledged for the payment of principal and interest on these bonds. Principal and interest paid for the current year amounted to $2,121,750 and total net revenue reported by the Successor Agency was $2,114,492. The ratio of net revenues to the debt service payments due during the year ended June 30, 2024 was 0.99%. The Successor Agency only receives revenue to cover the 2017 Bonds, SERAF loan repayment and other obligations. In September 2023, the 2008A bonds were paid off using the debt reserve cash held by fiscal agent.

During the year ended June 30, 2024, the bonds were fully paid off.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
70 Note 6 – Long-Term Liabilities (Continued)
B. Fiduciary Activities (Continued)
Tax Allocation Refunding Bonds, Series 2017 – Original Issue $20,020,000 In May 2017, the Successor Agency issued 2017 Subordinate Tax Allocation Refunding Bonds in the amount of $20,020,000. The purpose of the bonds was to current refund 2006 Tax Allocation Refunding Bonds, 2008 Tax Allocation Bonds A-2, and 2009 Tax Allocation Bonds, and to fund the reserve account by purchasing the reserve policy and to pay the costs of issuing the 2017 Bonds. The aggregate difference in debt service as result of the refinancing were $7,728,181 and economic gain on the refinancing were $3,736,520. The 2017 Bonds are secured by a pledge of, security interest in and lien on all of the Tax, including all of the Tax Revenues in the Redevelopment Obligation Retirement Fund.

The Bonds accrue interest at rates between 2.000% and 5.000%, payable semiannually on March 1 and September 1, commencing September 1, 2017 and the principals are due annually on September 1. The 2017 Bonds are subject to optional redemption and mandatory sinking account redemption prior to maturity.

The outstanding balance of the 2017 Bonds at June 30, 2024 was $15,595,000. The annual debt service requirements on these bonds are as follows:

Year Ending June 30, Principal Interest Total
2025 $ 925,000 $ 644,988 $ 1,569,988
2026 970,000 607,312 1,577,312
2027 1,000,000 567,763 1,567,763
2028 1,050,000 516,513 1,566,513
2029 1,105,000 462,638 1,567,638
2030-2034 5,945,000 1,424,750 7,369,750
2035-2039 4,415,000 404,256 4,819,256
2040 185,000 3,238 188,238
Total $ 15,595,000 $ 4,631,458 $ 20,226,458
Note 7 – Non-City Obligation Debt
Community Facilities District No. 2006-1 Tax Refunding Bonds, Series 2020 – Original Issue $2,600,000 The City of Desert Hot Springs Community Facilities District No. 2006-1 (the “District”) issued Improvement Area 1 Special Tax Bonds, Series 2008A on October 16, 2008 in the amount of $1,995,206. The bond proceeds, in conjunction with special tax collections, will be used to finance certain public facilities and fees within the City necessary for the development of property within Improvement Area 1 of the District. The bonds do not constitute a debt or liability of the City as they are secured by the special tax revenues levied by the District on real property within the boundaries of the Improvement Area 1. In August 2010, the District issued $2,285,000 Improvement Area 1 Special Tax Refunding Bonds, Series 2010 and redeemed the Improvement Area 1 Special Tax Bonds, Series 2008A. In February 2020 the District issued the Area 1 Special Tax Refunding Bonds, Series 2020 and redeemed the Series 2010 bonds. The outstanding balance for the Improvement Area 1 Special Tax Refunding Bonds, Series 2020, at June 30, 2024 was $1,687,857.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
71 Note 7 – Non-City Obligation Debt (Continued)
Community Facilities District No. 2006-1 Tax Refunding Bonds, Series 2023 – Original Issue $1,970,000 As of December 1, 2023, the City of Desert Hot Springs issued Community Facilities District No. 2006-1 Improvement Area 1 Special Tax Bonds, Series 2023 in the amount $1,970,000 of with respect to Improvement Area 1 of the City of Desert Hot Springs Community Facilities District No. 2006-1. The Bonds will be used to (i) finance certain public improvements to be owned by the City; (ii) fund a reserve account for the Bonds; and (iii) pay costs of issuance for the Bonds. The Bonds are secured by Special Tax Revenues consisting primarily of a certain annual Special Tax to be levied according to a rate and method of apportionment approved by the City Council of the City on taxable parcels within Improvement Area 1 of the District and from certain other funds pledged under the Fiscal Agent Agreement. The outstanding balance for Improvement Area 1 Special Tax Bonds, Series 2023, at June 30, 2024 was $1,970,000.

Note 8 – Risk Management
A. Coverage
The City retains a level of risk for both general liability and workers’ compensation. The insurance coverage in excess of the self-insured amount is provided by the Public Entity Risk Management Authority (“PERMA”), a public entity risk pool consisting of cities and other public agencies in Southern California established under the provisions of California Government Code Section 65000 et seq. Costs are shared amongst the members based upon deposit premium contributions. PERMA publishes its own annual financial reports, which can be obtained from PERMA at 72-811 Highway 111 #1014, Palm Desert, CA 92260.

General Liability
The City is self-insured for the first $10,000 on each general liability claim against the City. The City pays an annual premium to PERMA for its excess general liability insurance coverage of $50,000,000, including errors and omissions and auto liability.

Workers’ Compensation and Employers’ Liability
The City is self-insured for the first $50,000 of each occurrence. The insurance coverage in excess of the selfinsured amount is provided by PERMA. As a member of PERMA, all participating members share any losses in excess of the City’s self-insured amount up to statutory limits for workers’ compensation and $5,000,000 per accident for employers’ liability.

Other Coverage
The City also has coverage for other risks of loss, including property insurance, auto physical damage insurance, crime coverage and employment practices liability. The City’s property insurance has a $100,000,000 limit of coverage, including $2,500,000 for flood, with a $5,000 deductible per occurrence, except for $100,000 for flood.

The City’s auto physical damage insurance has a $100,000,000 limit of coverage, with a $5,000 deductible for all vehicles, except for $10,000 for fire trucks valued over $200,000. The City’s crime coverage has limits of coverage of $5,000,000 with a $2,500 deductible. The City’s cyber liability has a $2,000,000 limit of coverage, including $250,000 for privacy notification costs, with a $50,000 deductible per claim. The City is self-insured for the first $25,000 of each occurrence for employment practices liability, with excess insurance coverage up to a $1,000,000 limit.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
72 Note 8 – Risk Management
B. Claims Activity
Claims expenses and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. At June 30, 2024, the amount of these liabilities was $369,882 and was the City’s best estimate based on available information.

A summary of the changes in claims liabilities for the past three fiscal years is as follows:

Year Claims Incurred
Ended Beginning during the Claims Ending
June 30, Balance Fiscal Year Payments Balance
2022 $ 781,579 $ 76,419 $ (276,618) $ 581,380
2023 581,380 39,484 (250,982) 369,882
2024 369,882 617,411 (350,597) 636,696
C. Adequacy of Protection
During the past three fiscal (claims) years, none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year.

Note 9 – Defined Benefit Pension Plan
A. General Information about the Pension Plan
Plan Description
The City contributes to CalPERS, a cost-sharing multiple-employer defined benefit pension plan, for its miscellaneous and safety employees. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. CalPERS 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 CalPERS’ annual financial report may be obtained from its website at https://www.calpers.ca.gov/page/forms-publications.

Employees Covered by Benefit Terms
At valuation date of June 30, 2022, the following employees were covered by the benefit terms:
1st Tier 2nd Tier PEPRA 1st Tier 2nd Tier PEPRA
Active employees 12 8 54 2 3 22
Transferred and terminated employees 19 2 11 21 5 6
Separated 31 4 18 9 - 8
Retired Employees and Beneficiaries 61 2 5 70 1 3
Total 123 16 88 102 9 39
Miscellaneous Plans Safety Police Plans
Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
73 Note 9 – Defined Benefit Pension Plan (Continued)
A. General Information about the Pension Plan (Continued) Benefit Provided
CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. A classic CalPERS member becomes eligible for Service Retirement upon attainment of age 55 with at least 5 years of credited service. Public Employee Pension Reform Act (PEPRA) miscellaneous members become eligible for service retirement upon attainment of age 62 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation.

Following are the benefit provisions for each plan:
 Miscellaneous First Tier: 2.0% or 2.7% (at age 55) of the highest paid consecutive 12 months’ compensation
 Miscellaneous Second Tier: 2.0% (at age 60) of the highest paid consecutive 36 months’ compensation  Miscellaneous PEPRA: 2.0% (at age 62) of the highest paid consecutive 36 months’ compensation  Safety Police First Tier: 3.0% (at age 50) of the highest paid consecutive 12 months’ compensation  Safety Police Second Tier: 3.0% (at age 55) of the highest paid consecutive 36 months’ compensation  Safety PEPRA: 2.7% (at age 57) of the highest paid consecutive 36 months’ compensation Participant is eligible for non-industrial disability retirement if becomes disabled and has at least 5 years of credited service. There is no special age requirement. The standard non-industrial disability retirement benefit is a monthly allowance equal to 1.8% of final compensation, multiplied by service. Industrial disability benefits are not offered to miscellaneous employees.

An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where interest is currently credited at 6 percent per year, plus a lump sum in the amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death.

Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated survivor(s), or to the retiree's estate.

Benefit terms provide for annual cost-of-living adjustments to each employee’s retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by 2%.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
74 Note 9 – Defined Benefit Pension Plan (Continued)
A. General Information about the Pension Plan (Continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The Public agency cost-sharing plans covered by the miscellaneous risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the measurement period ended June 30, 2023, the contribution rates were as follows:

Required employee Required employer
contribution rates contribution rates
Miscellaneous Plan Rate 7.00% 14.03%
Miscellaneous Plan Rate 2nd Tier 7.00% 8.63%
PEPRA Miscellaneous Plan Rate 6.75% 7.47%
Safety Plan Rate 9.00% 27.14%
Safety Plan Rate 2nd Tier 9.00% 24.22%
PERPA Safety Plan Rate 15.00% 14.77%
Cost-sharing Rate Plans
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ended June 30, 2023 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2022 total pension liability. The June 30, 2023 total pension liability was based on the following actuarial methods and assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases
Mortality Rate Table1
Post Retirement Benefit Increase Contract COLA up to 2.3% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.3% thereafter
Entry age normal in accordance with requirements of GASB 68 Varies by Entry Age and Service
Derived using CalPERS’ Membership Data for all Funds
1 The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

Change of Assumption
In 2023, there were no changes in assumptions.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
75 Note 9 – Defined Benefit Pension Plan (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 6.90 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rated, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all period of projected benefit payments to determine the total pension liability.

Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 basis points. The expected real rates of return by asset class are as follows:

Assumed Asset
Asset Class1 Allocation Real Return1,2
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.80%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
100.00%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
76 Note 9 – Defined Benefit Pension Plan (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Sensitivity of the City’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.90%, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate:

Discount Rate Current Discount Discount Rate
- 1% (5.90%) Rate (6.90%) + 1% (7.90%)
Miscellaneous $ 4,639,875 7,346,579 $ 2,412,025 $
Safety $ 11,644,705 17,180,158 $ 7,119,078 $
Plan's Net Pension Liability/(Asset)
Pension Plan Fiduciary Net Position
Detail information about the plan’s fiduciary net position is available in the separately issued CalPERS financial report and can be obtained from CalPERS’ website under Forms and Publications.

Proportionate Share of Net Pension Liability and Pension Expense The following table shows the plan’s proportionate share of the risk pool collective net pension liability over the measurement period:

Plan Total Plan Fiduciary Net Pension
Pension Liability Net Position Liability/(Asset)
Miscellaneous
Balance at: 6/30/22 (Valuation date) $ 18,236,704 $ 14,011,896 $ 4,224,808 Balance at: 6/30/23 (Measurement date) 20,013,232 15,373,357 4,639,875 Net Changes during 2022-2023 1,776,528 1,361,461 415,067 Safety
Balance at: 6/30/22 (Valuation date) $ 38,610,221 $ 27,707,919 $ 10,902,302 Balance at: 6/30/23 (Measurement date) 40,351,099 28,706,394 11,644,705 Net Changes during 2022-2023 1,740,878 998,475 742,403
Increase (Decrease)
The following is the approach established by the plan actuary to allocate the net pension liability and pension expense to the individual employers within the risk pool. (1) In determining a cost-sharing plan’s proportionate share, total amounts of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2022). The risk pool’s fiduciary net position (“FNP”) subtracted from its total pension liability (“TPL”) determines the net pension liability (“NPL”) at the valuation date.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
77 Note 9 – Defined Benefit Pension Plan (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Proportionate Share of Net Pension Liability and Pension Expense (Continued) (2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2023). Risk pool FNP at the measurement date is then subtracted from this number to compute the NPL for the risk pool at the measurement date. For purposes of FNP in this step and any later reference thereto, the risk pool’s FNP at the measurement date denotes the aggregate risk pool’s FNP at June 30, 2023 less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the measurement period (2022-2023).
(3) The individual plan’s TPL, FNP and NPL are also calculated at the valuation date. TPL is allocated based on the rate plan’s share of the actuarial accrued liability. FNP is allocated based on the rate plan’s share of the market value assets.
(4) Two ratios are created by dividing the plan’s individual TPL and FNP as of the valuation date from (3) by the amounts in step (1), the risk pool’s total TPL and FNP, respectively. (5) The plan’s TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the TPL ratio generated in (4). The plan’s FNP as of the Measurement Date is equal to the FNP generated in (2) multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions made by the employer on behalf of the plan during the measurement period. (6) The plan’s NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).

Deferred outflows of resources, deferred inflows of resources, and pension expense is allocate based on the City’s share of net pension liability at the measurement date.

The City’s proportionate share of the net pension liability was as follows:

Miscellaneous Safety
June 30, 2022 0.03658% 0.09439%
June 30, 2023 0.03719% 0.09334%
Change - Increase (Decrease) 0.00062% -0.00105%
For the year ended June 30, 2024, the City recognized pension credit for the miscellaneous plan in the amount of $68,443 credit and pension expense for the safety plan in the amount of $1,992,674.

The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the beginning of the measurement period.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
78 Note 9 – Defined Benefit Pension Plan (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Proportionate Share of Net Pension Liability and Pension Expense (Continued) The expected average remaining service lifetime (“EARSL”) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the risk pool. The EARSL for risk pool for the 2022-2023 measurement period is 3.8 years, which was obtained by dividing the total service years of 600,538 (the sum of remaining service lifetimes of the active employees) by 160,073 (the total number of participants: active, inactive, and retired).

At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred outflows Deferred inflows Deferred outflows Deferred inflows of Resources of Resources of Resources of Resources
Contribution after measurement date $ 735,063 $ - $ 1,633,840 $ - Changes of assumptions 280,131 - 679,599 -
Difference between expected and actual
experience 237,032 (36,769) 854,934 (73,191)
Difference between projected and actual
earning on pension plan investments 751,241 - 1,593,569 - Differences in proportions - (2,667,065) 125,631 (66,494) Difference between City contributions and
proportionate share of contributions 302,397 - 261,742 (295,745) Total $ (2,703,834) 2,305,864 $ 5,149,315 $ (435,430) $ Miscellaneous Safety
Deferred outflows of resources related to pensions resulting from the City’s contributions made subsequent to the measurement date will be recognized as a reduction of the collective net pension liability in the year ending June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Measurement Period
Ended June 30, Miscellaneous Safety
2024 $ (693,138) $ 989,774
2025 (651,212) 712,860
2026 189,760 1,332,933
2027 21,557 44,478
2028 - -
Thereafter - -
$ (1,133,033) $ 3,080,045
Deferred Outflows/ (Inflows) of Resources
Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
79 Note 10 – Jointly Governed Organization
Eastern Riverside County Interoperable Communications Authority The City is a member of the Eastern Riverside County Interoperable Communications Authority (“ERICA”), a Joint Powers Authority, created to establish and operate a consolidated communications system which provides emergency call receiving and dispatching services. Other members of ERICA include the Cities of Beaumont, Cathedral City, Indio, and Palm Springs. The members, including the City, are responsible for funding the operations of ERICA through annual assessments. The annual assessments are based on percentages calculated for each member. The City contributed $124,789 during the year ended June 30, 2024. The audited financial statements of ERICA can be obtained at 100 Civic Center Mall, Indio, CA 92201.

On April 10, 2009, ERICA and three member agencies, including Indio, Palm Springs, and the City, entered into a reimbursement agreement relating to a municipal financing purchase agreement with Motorola, Inc., in the aggregate principal amount of $5,557,603. The agreement obligates the three member agencies to pay 33.3% of the annual financing payments, as set forth in the municipal lease purchase agreement with Motorola, Inc. ERICA also entered into a reimbursement agreement with all member agencies, which obligates each member agency to pay 20% of the annual financing payments for a master logging recorder, in the aggregate principal amount of $202,489. The City made payments of $134,334 and $4,059 for the Motorola and Master Logging Recorder respectively during the year ended June 30, 2024.

During the year ended June 30, 2024, the leases were fully paid off.

Note 11 – Classification of Fund Balances
On August 21, 2018 the City Council approved the Comprehensive Financial Management Policies which included a Reserve for Natural or Fiscal Emergencies. The designated reserve is 15% of General Fund budgeted operational appropriations with the purpose of providing funding for natural or fiscal emergencies. The City Council also designated a reserve for future capital use of 5% of General Fund budgeted operational appropriations.

The City Council adopted resolution No. 2015-050 to commit 25% of cannabis tax revenue for the emergency reserve capped at 17% of the Consolidated General Fund’s annual appropriation. The funds can only be used when the City is unable to pay for its general obligations within the next 60 days and that such condition jeopardizes the health, safety, or well-being of the residents of the City.

The assigned fund balance totaling $570,848 is being held in the General Fund to fund the operations of the City for the fiscal year ending 2023 -2024. Assigned fund balances encompass the portion of the net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for the purpose. The City Council has authorized the City Manager or designee for that purpose.

Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
80 Note 11 – Classification of Fund Balances (Continued) At June 30, 2024, fund balances are classified as follows:

Nonmajor
General Public American Housing Debt Service Governmental Fund Safety Rescue Act Authority Fund RCTC Loan Capital Projects Funds Total Nonspendable:

Prepaid items 85,141 $ - $ - $ - $ - $ - $ - $ - $ 85,141 $ Total restricted 85,141 - - - - - - - 85,141
Restricted:

Furbee settlement 455,254 - - - - - - - 455,254
Housing and economic
development - - - 6,051,763 - - - 6,495 6,058,258
Public safety - 107,835 125,608 - - - - 213,122 446,565 Public works/projects - - - - - - - 4,396,929 4,396,929 Culture and leisure - - - - - - - 1,686,714 1,686,714
Debt service - - - - 17,752,431 - - - 17,752,431
Lighting/Landscaping/
Drainage - - - - - - - 1,458,344 1,458,344
Assessment District 91-1 - - - - - - 125,376 - 125,376
Total restricted 455,254 107,835 125,608 6,051,763 17,752,431 - 7,886,980 - 32,379,871 Committed:

Natural or Fiscal Emergency 2,169,071 - - - - - - 2,169,071 - Reserve for Future Capital Use 723,024 - - - - - - 723,024 - Art in public places - - - - - - 391,322 - 391,322
Cabot's Museum - - - - - - 64,647 - 64,647
Emergency Reserve 1,102,507 - - - - - - 1,102,507 -
Total committed 3,994,602 - - - - - 455,969 - 4,450,571 Assigned:

Operations 570,848 - - - - - - 570,848 -
Canibus Control - - - - - - 10,369 - 10,369
Total assigned 570,848 - - - - - 10,369 - 581,217
Unassigned (deficit) 2,392,716 - - - (2,918,682) - (1,659,126) (2,190,810) (5,718) Total fund balances $ 7,498,561 $ 107,835 $ 125,608 $ 6,051,763 $ (2,918,682) 17,752,431 $ $ (1,659,126) $ 8,347,600 $ 35,305,990 Special Revenue Funds Capital Improvement Funds
Note 12 – Net Investments in Capital Assets
The net investment in capital assets for governmental activities is calculation as follows:

Governmental
Activities
Total capital assets, net $ 80,720,159
Unspent capital debt proceed 14,670,295
Deferred loss on refunding debt 317,038
Capital related debt (43,282,640)
Net investment in capital assets $ 52,424,852
Item Number: 5.

City of Desert Hot Springs
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
81 Note 13 – Contingencies and Commitments
A. Lawsuits
The City is presently involved in certain matters of litigation that have arisen in the normal course of conducting City business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate, are not expected to result in a material adverse financial impact on the City. Additionally, City management believes that the City’s insurance programs are sufficient to cover any potential losses should an unfavorable outcome materialize.

B. Federal and State Grant Programs
The City participates in Federal and State grant programs. These programs were audited in accordance with the provisions of the Uniform Guidance and applicable State requirements. No cost disallowance is expected as a result of these audits; however, these programs are subject to further examination by the grantors. Expenditures which may be disallowed, if any, by the granting agencies, cannot be determined at this time. The City expects such amounts, if any, to be immaterial.

Note 14 – Individual Fund Disclosure
Fund with deficit fund balances at June 30, 2024 are as follows:

Deficit
RCTC Loan Special Revenue Fund $ (2,918,682)
Capital Improvement Capital Projects Fund (1,659,126)
Nonmajor Governmental Funds:

County Service Area 152 Special Revenue Fund (5,718)
The City plans to eliminate the deficit fund balances with future grant receipts billed but not yet received.

The following funds exceeded appropriation amounts for the year ended June 30, 2024.

Expenditures
in Excess of
Appropriations Expenditures Appropriations
General Fund 14,460,476 $ 15,693,387 $ (1,232,911) $
Nonmajor Governmental Funds:

Special Gas Tax Special Revenue Fund 604,562 743,965 (139,403) Air Quality Control Special Revenue Fund 35,000 41,208 (6,208)

Item Number: 5.

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Item Number: 5.

REQUIRED SUPPLEMENTARY

INFORMATION (UNAUDITED)
83 Item Number: 5.

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84 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 20,454,631 21,990,579 $ 20,083,191 $ (371,440) $ Permits and fees 2,984,500 2,874,500 2,673,228 (311,272) Intergovernmental 803,442 113,141 314,822 (488,620)
Licenses 250,000 250,000 253,507 3,507
Investment earning 180,000 100,000 229,975 49,975
Miscellaneous 727,348 537,082 769,098 41,750
Total revenues 25,399,921 25,865,302 24,323,821 (1,076,100) EXPENDITURES:

Current:

General government 6,474,597 6,474,649 8,143,041 (1,668,444) Public safety 1,179,073 1,161,133 1,121,669 57,404
Public works 810,690 747,667 884,091 (73,401)
Economic development 3,001,244 2,284,396 2,781,913 219,331 Culture and leisure 2,342,783 1,597,856 2,111,476 231,307 Capital outlay 528,557 100,000 527,665 892
Debt service:

Principal retirement 117,753 117,753 117,753 -
Interest and fiscal charges 5,779 5,779 5,779 -
Total expenditures 14,460,476 12,489,233 15,693,387 (1,232,911)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 10,939,445 13,376,069 8,630,434 (2,309,011) OTHER FINANCING SOURCES (USES):

Transfers in 100,000 100,000 100,000 -
Transfers out (1,468,057) (1,866,057) (10,190,201) (8,722,144) Total other financing sources (uses) (1,368,057) (1,766,057) (10,090,201) (8,722,144) NET CHANGES IN FUND BALANCE $ 9,571,388 11,610,012 $ (1,459,767) (11,031,155) $ FUND BALANCE:

Beginning of year 8,958,328
End of year $ 7,498,561
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Fund
City of Desert Hot Springs
For the Year Ended June 30, 2024
85 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 6,243,566 6,043,566 $ 6,277,436 $ 33,870 $
Permits and fees 485,100 468,100 994,047 508,947
Intergovernmental 317,166 208,000 206,303 (110,863)
Licenses 16,000 16,000 16,005 5
Miscellaneous 325,443 310,000 673,222 347,779
Total revenues 7,387,275 7,045,666 8,167,013 779,738
EXPENDITURES:

Current:

Public safety 18,413,810 18,576,721 17,138,465 1,275,345 Capital outlay 132,114 - 132,114 -
Total expenditures 18,545,924 18,576,721 17,270,579 1,275,345

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (11,158,649) (11,531,055) (9,103,566) 2,055,083 OTHER FINANCING SOURCES (USES):

Transfers in 150,100 150,000 9,125,544 8,975,444
Transfers out (193,348) (193,348) - 193,348
Total other financing sources (uses) (43,248) (43,348) 9,125,544 9,168,792 NET CHANGES IN FUND BALANCE $ (11,201,897) (11,574,403) $ 21,978 11,223,875 $ FUND BALANCE:

Beginning of year 85,857
End of year $ 107,835
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Public Safety Special Revenue Fund
For the Year Ended June 30, 2024
86 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ - - $ 765,437 $ 765,437 $
Investment earning - - 104,905 104,905
Total revenues - - 870,342 870,342
EXPENDITURES:

Current:

General government 270,950 285,000 92,567 178,383
Public safety 764,214 - 658,819 105,395
Capital outlay 4,547,149 4,000,000 14,050 4,533,099
Total expenditures 5,582,313 4,285,000 765,436 4,816,877 NET CHANGES IN FUND BALANCE $ (5,582,313) (4,285,000) $ 104,906 5,687,219 $ FUND BALANCE:

Beginning of year 20,702
End of year $ 125,608
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual American Rescue Act Special Revenue Fund
For the Year Ended June 30, 2024
87 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 503,552 503,552 $ 503,552 $ - $
Investment earning - - 48,275 48,275
Total revenues 503,552 503,552 551,827 48,275
EXPENDITURES:

Current:

Economic development 574,602 350,983 410,519 164,083
Total expenditures 574,602 350,983 410,519 164,083
NET CHANGES IN FUND BALANCE $ (71,050) 152,569 $ 141,308 212,358 $ FUND BALANCE:

Beginning of year 5,910,455
End of year $ 6,051,763
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Housing Authority Special Revenue Fund
For the Year Ended June 30, 2024
88 Item Number: 5.

On June 20, 2023, the City Council approved and adopted the budget for fiscal year 2023-2024.

C. Encumbrances
Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, special revenue, and similar governmental funds.

Encumbrances outstanding at year-end represent the estimated amount of the expenditure ultimately to result if unperformed contracts in-process at year-end are completed. They do not constitute expenditures or estimated liabilities.

B. Continuing Appropriations
At fiscal year-end, all unencumbered appropriations lapse, however, certain unexpended capital funds are carried over into the next fiscal year’s budget.

A. General Budget Policies
The City adopts an annual budget prepared on the modified accrual basis for all of its governmental funds. Budgets are developed in accordance with U.S. GAAP. The City Council approves each year’s budget, submitted by the City Manager, prior to the beginning of the new fiscal year. Public hearings are conducted prior to its adoption by the City Council. Budgeted amounts transferred between accounts are approved by the Administrative Services Director.

Budgeted amounts transferred between departments are approved by the City Manager. Supplemental appropriations, where required during the period, are approved by the City Council. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the fund level. At fiscal yearend, all unencumbered operating budget appropriations lapse, with the exception of continuing appropriations. All adopted budgets are presented for the year ended June 30, 2024. In fiscal year 2023-2024, no budget was adopted for the RCTC Loan Special Revenue Fund and Assessment District 91-1 Capital Projects Fund.

City of Desert Hot Springs
Required Supplementary Information (Unaudited)
Notes to the Budgetary Comparison Schedules
For the Year Ended June 30, 2024
Budgetary Information
89 Item Number: 5.

Measurement Date June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 City's Proportion of the Net Pension Liability 0.03719% 0.03658% 0.03479% 0.03390% 0.03394% City's Proportionate Share of the Net Pension Liability 4,639,875 $ 4,224,808 $ 1,881,356 $ 3,688,124 $ 3,477,949 $ City's Covered Payroll 5,075,657 $ 4,937,410 $ 4,127,066 $ 3,761,101 $ 2,959,267 $ City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 91.41% 85.57% 45.59% 98.06% 117.53% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 76.82% 76.83% 88.46% 75.03% 74.42% Measurement Date June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 City's Proportion of the Net Pension Liability 0.09334% 0.09439% 0.10628% 0.08801% 0.08634% City's Proportionate Share of the Net Pension Liability 11,644,705 $ 10,902,302 $ 5,747,900 $ 9,575,470 $ 8,847,411 $ City's Covered Payroll 3,036,740 $ 2,954,027 $ 2,680,518 $ 2,589,732 $ 2,336,427 $ City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 383.46% 369.07% 214.43% 369.75% 378.67% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 71.14% 71.76% 84.05% 71.79% 72.27% California Public Employees' Retirement System ("CalPERS") Miscellaneous Plan California Public Employees' Retirement System ("CalPERS") Safety Plan City of Desert Hot Springs
Required Supplementary Information (Unaudited)
Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios For the Year Ended June 30, 2024
Last Ten Fiscal Years
90 Item Number: 5.

Measurement Date June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 City's Proportion of the Net Pension Liability 0.03393% 0.03493% 0.03497% 0.03782% 0.03582% City's Proportionate Share of the Net Pension Liability 3,269,715 $ 3,401,088 $ 3,025,986 $ 2,595,635 $ 2,228,699 $ City's Covered Payroll 2,388,548 $ 2,120,646 $ 1,539,232 $ 1,377,634 $ 1,617,185 $ City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 136.89% 160.38% 196.59% 188.41% 137.81% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 73.33% 69.89% 70.33% 73.82% 76.24% Measurement Date June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 City's Proportion of the Net Pension Liability 0.08605% 0.08372% 0.08489% 0.09036% 0.09008% City's Proportionate Share of the Net Pension Liability 8,292,081 $ 8,302,607 $ 7,345,645 $ 6,202,312 $ 5,642,660 $ City's Covered Payroll 2,107,816 $ 1,834,204 $ 1,749,649 $ 1,523,928 $ 1,772,829 $ City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 393.40% 452.65% 419.84% 407.00% 318.29% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 72.00% 69.58% 69.57% 73.79% 73.76% California Public Employees' Retirement System ("CalPERS") Miscellaneous Plan California Public Employees' Retirement System ("CalPERS") Safety Plan City of Desert Hot Springs
Required Supplementary Information (Unaudited)
Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2024
Last Ten Fiscal Years
91 Item Number: 5.

Fiscal year 2023-24 2022-23 2021-22 2020-21 2019-20
Actuarially Determined Contribution 735,063 $ 978,819 $ 793,811 $ 692,622 $ 611,957 $ Contribution in Relation to the
Actuarially Determined Contribution (735,063) (978,819) (793,811) (692,622) (611,957) Contribution Deficiency (Excess) - $ - $ - $ - $ - $
Covered Payroll1 $ 5,075,657 5,217,775 $ 4,937,410 $ 4,127,066 $ 3,761,101 $ Contributions as a Percentage
of Covered Payroll 14.09% 19.28% 16.08% 16.78% 16.27%
Fiscal year 2023-24 2022-23 2021-22 2020-21 2019-20
Actuarially Determined Contribution 1,633,840 $ 1,502,631 $ 1,348,612 $ 1,269,835 $ 1,093,535 $ Contribution in Relation to the
Actuarially Determined Contribution (1,633,840) (1,502,631) (1,348,612) (1,269,835) (1,093,535) Contribution Deficiency (Excess) - $ - $ - $ - $ - $
Covered Payroll1 $ 3,036,740 3,121,769 $ 2,954,027 $ 2,680,518 $ 2,589,732 $ Contributions as a Percentage
of Covered Payroll 52.34% 49.48% 45.65% 47.37% 42.23%
California Public Employees' Retirement System ("CalPERS") Miscellaneous Plan City of Desert Hot Springs
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pensions
For the Year Ended June 30, 2024
Last Ten Fiscal Years
California Public Employees' Retirement System ("CalPERS") Safety Plan Changes of Assumptions: In 2023, there were no changes. In 2022, the acounting discount rate reduced from 7.15 percent to 6.90 percent. In 2021, 2020, and 2019, there were no changes. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate.

Benefit Changes: There were no changes to benefit terms. 1 Includes one year’s payroll growth using 2.80 percent payroll assumption for fiscal year 2023-24.

Notes to Schedule:
92 Item Number: 5.

Fiscal year 2018-19 2017-18 2016-17 2015-16 2014-15
Actuarially Determined Contribution 496,387 $ 423,598 $ 355,494 $ 313,565 $ 217,165 $ Contribution in Relation to the
Actuarially Determined Contribution (496,387) (423,598) (355,494) (313,565) (217,165) Contribution Deficiency (Excess) - $ - $ - $ - $ - $
Covered Payroll 2,959,267 $ 2,388,548 $ 2,120,646 $ 1,539,232 $ 1,377,634 $ Contributions as a Percentage
of Covered Payroll 16.77% 17.73% 16.76% 20.37% 15.76%
Fiscal year 2018-19 2017-18 2016-17 2015-16 2014-15
Actuarially Determined Contribution 911,294 $ 769,408 $ 688,645 $ 639,246 $ 380,758 $ Contribution in Relation to the
Actuarially Determined Contribution (911,294) (769,408) (688,645) (639,246) (380,758) Contribution Deficiency (Excess) - $ - $ - $ - $ - $
Covered Payroll 2,336,427 $ 2,107,816 $ 1,834,204 $ 1,749,649 $ 1,523,928 $ Contributions as a Percentage
of Covered Payroll 39.00% 36.50% 37.54% 36.54% 24.99%
California Public Employees' Retirement System ("CalPERS") Miscellaneous Plan Benefit Changes: There were no changes to benefit terms.

City of Desert Hot Springs
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 2024
Last Ten Fiscal Years
Schedule of Contributions - Pensions (Continued)
California Public Employees' Retirement System ("CalPERS") Safety Plan Changes of Assumptions: In 2023, there were no changes. In 2022, the acounting discount rate reduced from 7.15 percent to 6.90 percent. In 2021, 2020, and 2019, there were no changes. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate.

Notes to Schedule:
93 Item Number: 5.

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94 Item Number: 5.

SUPPLEMENTARY INFORMATION
95 Item Number: 5.

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96 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 1,500,000 1,500,000 $ 1,751,356 $ 251,356 $
Investment earning 25,000 25,000 851,373 826,373
Total revenues 1,525,000 1,525,000 2,602,729 1,077,729
EXPENDITURES:

Current:

General government 9,500 5,000 8,000 1,500
Debt service:

Principal retirement 1,000,000 1,000,000 1,000,000 -
Interest and fiscal charges 1,393,390 1,393,390 1,393,392 (2) Total expenditures 2,402,890 2,398,390 2,401,392 1,498

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (877,890) (873,390) 201,337 1,079,227 OTHER FINANCING SOURCES (USES):

Transfers in 322,793 877,793 322,793 -
Transfers out (14,631,637) (14,631,637) (1,611,618) 13,020,019 Total other financing sources (uses) (14,308,844) (13,753,844) (1,288,825) 13,020,019 NET CHANGES IN FUND BALANCE $ (15,186,734) (14,627,234) $ (1,087,488) 14,099,246 $ FUND BALANCE:

Beginning of year 18,839,919
End of year $ 17,752,431
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Debt Service Fund
For the Year Ended June 30, 2024
97 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ - - $ 2,385,719 $ 2,385,719 $
Total revenues - - 2,385,719 2,385,719
EXPENDITURES:

Current:

Public works $ 615,543 - $ 506,303 $ 109,240 $
Capital outlay 8,645,217 - 8,548,098 97,119
Total expenditures 9,260,760 - 9,054,401 206,359

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (9,260,760) - (6,668,682) 2,592,078 OTHER FINANCING SOURCES:

Issuance of debt - - 3,750,000 3,750,000
Total other financing sources - - 3,750,000 3,750,000
NET CHANGES IN FUND BALANCE $ (9,260,760) - $ (2,918,682) 6,342,078 $ FUND BALANCE (DEFICIT):

Beginning of year -
End of year $ (2,918,682)
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual RCTC Loan Capital Projects Fund
For the Year Ended June 30, 2024
98 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 15,457,963 14,683,632 $ 899,715 $ (14,558,248) $ Total revenues 15,457,963 14,683,632 899,715 (14,558,248) EXPENDITURES:

Current:

Public works 3,317,339 3,238,267 1,070,227 2,247,112
Capital outlay 27,006,095 26,077,002 2,229,010 24,777,085 Total expenditures 30,323,434 29,315,269 3,299,237 27,024,197

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (14,865,471) (14,631,637) (2,399,522) 12,465,949 OTHER FINANCING SOURCES:

Transfers in 14,631,637 14,631,637 1,611,618 13,020,019 Total other financing sources 14,631,637 14,631,637 1,611,618 13,020,019 NET CHANGES IN FUND BALANCE $ (233,834) - $ (787,904) (554,070) $ FUND BALANCE (DEFICIT):

Beginning of year (871,222)
End of year (1,659,126)
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Capital Improvement Capital Projects Fund
For the Year Ended June 30, 2024
99 Item Number: 5.

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100 Item Number: 5.

NONMAJOR

GOVERNMENTAL FUNDS
Art in Public Places Special Revenue Fund - To account for development fees paid in lieu of acquisition and installation of approved artworks in a development with expenditures restricted to acquisition, installation, maintenance and repair or artworks at approved sites.

Quimby Act Special Revenue Fund - To account for the accumulation of developer fees received under the provision of the Quimby Act for park development and improvements.

SB1 Road Maintenance and Rehabilitation Special Revenue Fund - To account for revenue received from the State under the Road Repair and Accountability Act of 2017. The funding is used for street maintenance and rehabilitation needs.

Air Quality Control Special Revenue Fund - To account for resources designated by South Coast Air Quality Management District through the collection of motor vehicle registration fees in accordance with the California Assembly Bill 2766 (AB2766). These funds can be used for equipment, street sweeping and purchase of vehicles as related to the reduction of air pollution.

Cabot's Museum Special Revenue Fund - To account for various fees and operational costs associated with a museum that was gifted to the City.

Measure A Special Revenue Fund - To account for one-half cent sales tax collected in Riverside County and distributed to local agencies. Funds are restricted and can only be used for street maintenance and the construction of new streets.

Municipal Lighting / Landscaping Assessment District Special Revenue Fund - To account for street lighting activity and landscaping maintenance. Financing is provided by special assessments taxes against all parcels of real property within the City and landscape assessment district. Expenditures provide for street and palm tree lights citywide, maintenance of park buildings and equipment, and maintenance of all city parkland as designated.

Special Gas Tax Special Revenue Fund - To account for street maintenance activity. The source of funds is the State gasoline tax and related sales tax under the Streets and Highways Code of the State of California. Expenditures are restricted to construction, improvement and maintenance of public streets.

SPECIAL REVENUE FUNDS:

County Service Area 152 (CSA-152) Special Revenue Fund - To account for funding received through the collection of property tax collected on parcels within the assessment district. Expenditures relate to the EPA requirements for storm water monitoring and the protection of the underground water for all cities in the County of Riverside.

Drainage Assessment District Special Revenue Fund - To account for taxes assessed on property owners within the drainage assessment districts for the maintenance of the drainage systems.

Supplemental Law Enforcement Service (SLESF) Special Revenue Fund - To account for funds received in connection with the Citizens Option for Public Safety Program (COPS), which supplements expenditures for "front line municipal police services." Abandoned Vehicle Abatement Special Revenue Fund - To account for a portion of DMV registration fees that the City receives from the Riverside County Abandoned Vehicle Abatement Service Authority as reimbursement to the City for costs incurred for the administration, removal, and abatement of nuisance vehicles within city limits.

Community Development Block Grant (CDBG) Special Revenue Fund - To account for resources that are restricted for a wide variety of unique community development needs.

Capital Improvement Deposits Special Revenue Fund - To account for accumulated resources to be used to purchase the protection equipment and facilities, traffic signals, and parks. Financing is provided through a development fee on all new commercial and residential construction.

Department of Cannabis Control Special Revenue Fund - To account for State grant funds to help cannabis facilities fulfill the obligations to transition from State provisional cannabis permits to permanent cannabis permits. 101 Item Number: 5.

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102 Item Number: 5.

Municipal
SB1 Road Lighting /
Maintenance Landscaping
Special and Assessment Air Quality
Gas Tax Rehabilitation District Measure A Control
ASSETS
Cash and investments 631 $ 960,857 $ 815,357 $ 988,589 $ 9,731 $ Receivables:

Accounts 77,426 712,083 437,594 106,420 10,970
Interest - 2,584 2,111 2,833 7
Due from other funds - - - - -
Total assets $ 1,675,524 78,057 $ 1,255,062 $ 1,097,842 $ 20,708 $

LIABILITIES,

DEFERRED INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 44,195 $ 126,062 $ 177,189 $ 24,460 $ 17,553 $ Due to other funds - - 135,506 - -
Unearned revenue - - - - -
Total liabilities 126,062 44,195 312,695 24,460 17,553
Deferred Inflows of Resources:

Unavailable revenue - 647,866 53,389 - -
Total deferred inflows of resources 647,866 - 53,389 - - Fund Balances:

Restricted 33,862 901,596 888,978 1,073,382 3,155
Committed - - - - -
Assigned - - - - -
Unassigned (deficit) - - - - -
Total fund balances 901,596 33,862 888,978 1,073,382 3,155 Total liabilities, deferred inflows
of resources, and fund balances $ 1,675,524 78,057 $ 1,255,062 $ 1,097,842 $ 20,708 $ (Continued)
Special Revenue Funds
City of Desert Hot Springs
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
103 Item Number: 5.

Art in Drainage County
Public Quimby Assessment Service Cabot's
Places Act District Area 152 Museum
ASSETS
Cash and investments 578,003 $ 1,728,067 $ 481,336 $ 2,800 $ 69,849 $ Receivables:

Accounts - - 103,074 127,177 -
Interest 1,230 9,886 1,856 - -
Due from other funds - - - - -
Total assets $ 1,737,953 579,233 $ 586,266 $ 129,977 $ 69,849 $

LIABILITIES,

DEFERRED INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities - $ 51,239 $ 16,900 $ 8,518 $ 5,202 $ Due to other funds - - - - -
Unearned revenue 187,911 - - - -
Total liabilities 51,239 187,911 16,900 8,518 5,202
Deferred Inflows of Resources:

Unavailable revenue - - - 127,177 -
Total deferred inflows of resources - - - 127,177 -
Fund Balances:

Restricted - 1,686,714 569,366 - -
Committed 391,322 - - - 64,647
Assigned - - - - -
Unassigned (deficit) - - - (5,718) -
Total fund balances 1,686,714 391,322 569,366 (5,718) 64,647 Total liabilities, deferred inflows
of resources, and fund balances $ 1,737,953 579,233 $ 586,266 $ 129,977 $ 69,849 $ (Continued)
Special Revenue Funds
City of Desert Hot Springs
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
104 Item Number: 5.

Supplemental
Law
Enforcement Abandoned Community Capital Department of
Service Vehicle Development Improvement Cannabis
Fund Abatement Block Grant Deposits Control
ASSETS
Cash and investments - $ 210,018 $ 6,495 $ 5,588,315 $ 443,108 $ Receivables:

Accounts - 30,695 - 21,851 -
Interest 95 - - 7,402 1,436
Due from other funds - - - - -
Total assets $ 240,713 95 $ 6,495 $ 5,617,568 $ 444,544 $

LIABILITIES,

DEFERRED INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities - $ 4,001 $ - $ 65,792 $ 17,433 $ Due to other funds - - - - -
Unearned revenue - - - 3,145,996 416,742
Total liabilities 4,001 - - 3,211,788 434,175
Deferred Inflows of Resources:

Unavailable revenue - 23,685 - 20,846 -
Total deferred inflows of resources 23,685 - - 20,846 - Fund Balances:

Restricted 95 213,027 6,495 2,384,934 -
Committed - - - - -
Assigned - - - - 10,369
Unassigned (deficit) - - - - -
Total fund balances 213,027 95 6,495 2,384,934 10,369
Total liabilities, deferred inflows
of resources, and fund balances $ 240,713 95 $ 6,495 $ 5,617,568 $ 444,544 $ (Continued)
Special Revenue Funds
City of Desert Hot Springs
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
105 Item Number: 5.

Capital
Projects Funds
Assessment
District
91-1 Total
ASSETS
Cash and investments $ 12,008,156 125,000 $
Receivables:

Accounts 1,627,290 -
Interest 29,816 376
Due from other funds - -
Total assets $ 13,665,262 125,376 $

LIABILITIES,

DEFERRED INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ 558,544 - $
Due to other funds 135,506 -
Unearned revenue 3,750,649 -
Total liabilities 4,444,699 -
Deferred Inflows of Resources:

Unavailable revenue 872,963 -
Total deferred inflows of resources 872,963 -
Fund Balances:

Restricted 7,886,980 125,376
Committed 455,969 -
Assigned 10,369 -
Unassigned (deficit) (5,718) -
Total fund balances 8,347,600 125,376
Total liabilities, deferred inflows
of resources, and fund balances $ 13,665,262 125,376 $
(Concluded)
City of Desert Hot Springs
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
106 Item Number: 5.

Municipal
SB1 Road Lighting /
Maintenance Landscaping
Special and Assessment Air Quality
Gas Tax Rehabilitation District Measure A Control
REVENUES:

Taxes - $ - $ 901,568 $ - $ 43,862 $
Permits and fees - - - - -
Intergovernmental 898,194 821,183 - 593,021 -
Licenses - - - - -
Investment earning 67 10,308 8,531 9,853 7
Total revenues 831,491 898,261 910,099 602,874 43,869
EXPENDITURES:

Current:

General government - - - - -
Public safety - - - - -
Public works 743,965 129,226 1,712,060 46,629 41,208
Culture and leisure - - - - -
Capital outlay - 706,961 42,477 64,793 -
Total expenditures 836,187 743,965 1,754,537 111,422 41,208

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (4,696) 154,296 (844,438) 491,452 2,661 OTHER FINANCING SOURCES (USES):

Transfers in - - 1,113,432 - -
Transfers out (161,084) - - (161,084) -
Total other financing sources (uses) - (161,084) 1,113,432 (161,084) - NET CHANGES IN FUND BALANCES (4,696) (6,788) 268,994 330,368 2,661 FUND BALANCES (DEFICIT):

Beginning of year 40,650 906,292 619,984 743,014 494
End of year 33,862 $ 901,596 $ 888,978 $ 1,073,382 $ 3,155 $ (Continued)
City of Desert Hot Springs
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Special Revenue Funds
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
107 Item Number: 5.

Art in Drainage County
Public Quimby Assessment Service Cabot's
Places Act District Area 152 Museum
REVENUES:

Taxes - $ - $ 217,121 $ - $ - $
Permits and fees 125,633 - - - -
Intergovernmental - - - 152,112 -
Licenses - 148,135 - - -
Investment earning 3,852 24,844 7,369 - -
Total revenues 172,979 129,485 224,490 152,112 -
EXPENDITURES:

Current:

General government - - - - -
Public safety - - - - -
Public works - 162,818 204,929 31,264 -
Culture and leisure 6,744 - - - 141,205
Capital outlay - - - - -
Total expenditures 162,818 6,744 204,929 31,264 141,205

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 10,161 122,741 19,561 120,848 (141,205) OTHER FINANCING SOURCES (USES):

Transfers in - - - - 137,000
Transfers out - - - - -
Total other financing sources (uses) - - - - 137,000
NET CHANGES IN FUND BALANCES 10,161 122,741 19,561 120,848 (4,205) FUND BALANCES (DEFICIT):

Beginning of year 268,581 1,676,553 549,805 (126,566) 68,852 End of year 391,322 $ 1,686,714 $ 569,366 $ (5,718) $ 64,647 $ (Continued)
City of Desert Hot Springs
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Special Revenue Funds
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
108 Item Number: 5.

Supplemental
Law
Enforcement Abandoned Community Capital Department of
Service Vehicle Development Improvement Cannabis
Fund Abatement Block Grant Deposits Control
REVENUES:

Taxes - $ - $ - $ - $ - $
Permits and fees - - - 1,019,011 -
Intergovernmental 186,159 109,220 373,043 - 240,871
Licenses - - - - -
Investment earning 311 - - 34,024 6,566
Total revenues 109,220 186,470 373,043 1,053,035 247,437 EXPENDITURES:

Current:

General government - - - - 240,871
Public safety - 35,493 - - -
Public works - - - 305,340 -
Culture and leisure - - - 63,435 -
Capital outlay - - 373,043 1,265,419 -
Total expenditures 35,493 - 373,043 1,634,194 240,871

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 73,727 186,470 - (581,159) 6,566
OTHER FINANCING SOURCES (USES):

Transfers in - - - - -
Transfers out (186,400) - - (100,000) -
Total other financing sources (uses) - (186,400) - (100,000) - NET CHANGES IN FUND BALANCES 73,727 70 - (681,159) 6,566 FUND BALANCES (DEFICIT):

Beginning of year 25 139,300 6,495 3,066,093 3,803
End of year 95 $ 213,027 $ 6,495 $ 2,384,934 $ 10,369 $ (Continued)
City of Desert Hot Springs
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Special Revenue Funds
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
109 Item Number: 5.

Capital
Projects Funds
Assessment
District
91-1 Total
REVENUES:

Taxes $ 1,162,551 - $
Permits and fees 1,144,644 -
Intergovernmental 3,373,803 -
Licenses 148,135 -
Investment earning 107,228 1,496
Total revenues 5,936,361 1,496
EXPENDITURES:

Current:

General government 240,871 -
Public safety 35,493 -
Public works 3,377,439 -
Culture and leisure 211,384 -
Capital outlay 2,452,693 -
Total expenditures 6,317,880 -

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (381,519) 1,496
OTHER FINANCING SOURCES (USES):

Transfers in 1,250,432 -
Transfers out (608,568) -
Total other financing sources (uses) 641,864 -
NET CHANGES IN FUND BALANCES 260,345 1,496
FUND BALANCES (DEFICIT):

Beginning of year 8,087,255 123,880
End of year $ 8,347,600 125,376 $
(Concluded)
City of Desert Hot Springs
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) For the Year Ended June 30, 2024
Nonmajor Governmental Funds
110 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 650,000 650,000 $ 898,194 $ 248,194 $ Investment earning - - 67 67
Total revenues 650,000 650,000 898,261 248,261
EXPENDITURES:

Current:

Public works 604,562 604,562 743,965 (139,403)
Total expenditures 604,562 604,562 743,965 (139,403)

EXCESS OF REVENUES OVER
EXPENDITURES 45,438 45,438 154,296 108,858
OTHER FINANCING USES:

Transfers out (161,084) (161,084) (161,084) -
Total other financing uses (161,084) (161,084) (161,084) - NET CHANGES IN FUND BALANCE $ (115,646) (115,646) $ (6,788) 108,858 $ FUND BALANCE:

Beginning of year 40,650
End of year $ 33,862
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Special Gas Tax Special Revenue Fund
For the Year Ended June 30, 2024
111 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 700,000 700,000 $ 821,183 $ 121,183 $ Investment earning - - 10,308 10,308
Total revenues 700,000 700,000 831,491 131,491
EXPENDITURES:

Current:

Public works 133,969 30,000 129,226 4,743
Capital outlay 1,097,782 162,840 706,961 390,821
Total expenditures 1,231,751 192,840 836,187 395,564
NET CHANGES IN FUND BALANCE $ (531,751) 507,160 $ (4,696) 527,055 $ FUND BALANCE:

Beginning of year 906,292
End of year $ 901,596
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual SB1 Road Maintenance and Rehabilitation Special Revenue Fund For the Year Ended June 30, 2024
112 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 895,101 895,101 $ 901,568 $ 6,467 $
Investment earning 3,500 3,500 8,531 5,031
Total revenues 898,601 898,601 910,099 11,498
EXPENDITURES:

Current:

Public works 2,572,809 2,467,286 1,712,060 860,749
Capital outlay 42,477 - 42,477 -
Total expenditures 2,615,286 2,467,286 1,754,537 860,749

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (1,716,685) (1,568,685) (844,438) 872,247 OTHER FINANCING SOURCES:

Transfers in 1,270,432 1,113,432 1,113,432 157,000
Total other financing sources 1,270,432 1,113,432 1,113,432 157,000 NET CHANGES IN FUND BALANCE $ (446,253) (455,253) $ 268,994 715,247 $ FUND BALANCE:

Beginning of year 619,984
End of year $ 888,978
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Municipal Lighting / Landscaping Assessment District Special Revenue Fund For the Year Ended June 30, 2024
113 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 630,000 630,000 $ 593,021 $ (36,979) $ Investment earning - - 9,853 9,853
Total revenues 630,000 630,000 602,874 (27,126)
EXPENDITURES:

Current:

Public works 169,593 193,375 46,629 122,964
Capital outlay 589,152 565,370 64,793 524,359
Total expenditures 758,745 758,745 111,422 647,323

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (128,745) (128,745) 491,452 620,197 OTHER FINANCING USES:

Transfers out (161,084) (161,084) (161,084) -
Total other financing uses (161,084) (161,084) (161,084) - NET CHANGES IN FUND BALANCE $ (289,829) (289,829) $ 330,368 620,197 $ FUND BALANCE:

Beginning of year 743,014
End of year $ 1,073,382
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Measure A Special Revenue Fund
For the Year Ended June 30, 2024
114 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 38,500 38,500 $ 43,862 $ 5,362 $
Investment earning - - 7 7
Total revenues 38,500 38,500 43,869 5,369
EXPENDITURES:

Current:

Public works 35,000 35,000 41,208 (6,208)
Total expenditures 35,000 35,000 41,208 (6,208)
NET CHANGES IN FUND BALANCE $ 3,500 3,500 $ 2,661 (839) $ FUND BALANCE:

Beginning of year 494
End of year $ 3,155
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Air Quality Control Special Revenue Fund
For the Year Ended June 30, 2024
115 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Permits and fees $ 80,000 80,000 $ 125,633 $ 45,633 $
Intergovernmental 14,070 14,070 - (14,070)
Investment earning - - 3,852 3,852
Total revenues 94,070 94,070 129,485 35,415
EXPENDITURES:

Current:

Culture and leisure 78,141 78,141 6,744 71,397
Total expenditures 78,141 78,141 6,744 71,397
NET CHANGES IN FUND BALANCE $ 15,929 15,929 $ 122,741 106,812 $ FUND BALANCE:

Beginning of year 268,581
End of year $ 391,322
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Art in Public Places Special Revenue Fund
For the Year Ended June 30, 2024
116 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Licenses $ 600,000 600,000 $ 148,135 $ (451,865) $
Investment earning - - 24,844 24,844
Total revenues 600,000 600,000 172,979 (427,021)
EXPENDITURES:

Current:

Public works - 356,636 162,818 193,818
Total expenditures 356,636 - 162,818 193,818
NET CHANGES IN FUND BALANCE $ 243,364 600,000 $ 10,161 (233,203) $ FUND BALANCE:

Beginning of year 1,676,553
End of year $ 1,686,714
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Quimby Act Special Revenue Fund
For the Year Ended June 30, 2024
117 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 220,755 220,755 $ 217,121 $ (3,634) $
Investment earning 3,700 3,700 7,369 3,669
Total revenues 224,455 224,455 224,490 35
EXPENDITURES:

Current:

Public works 688,682 688,682 204,929 483,753
Total expenditures 688,682 688,682 204,929 483,753
NET CHANGES IN FUND BALANCE $ (464,227) (464,227) $ 19,561 483,788 $ FUND BALANCE:

Beginning of year 549,805
End of year $ 569,366
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Drainage Assessment District Special Revenue Fund
For the Year Ended June 30, 2024
118 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 177,890 177,890 $ 152,112 $ (25,778) $ Total revenues 177,890 177,890 152,112 (25,778)
EXPENDITURES:

Current:

Public works 177,890 177,890 31,264 146,626
Total expenditures 177,890 177,890 31,264 146,626
NET CHANGES IN FUND BALANCE $ - - $ 120,848 120,848 $
FUND BALANCE (DEFICIT):

Beginning of year (126,566)
End of year $ (5,718)
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual County Service Area 152 (CSA-152) Special Revenue Fund
For the Year Ended June 30, 2024
119 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
EXPENDITURES:

Current:

General government $ 130 500 $ - $ 130 $
Culture and leisure 142,808 136,247 141,205 1,603
Total expenditures 142,938 136,747 141,205 1,733

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (142,938) (136,747) (141,205) 1,733 OTHER FINANCING SOURCES:

Transfers in 137,000 137,000 137,000 -
Total other financing sources 137,000 137,000 137,000 - NET CHANGES IN FUND BALANCE $ (5,938) 253 $ (4,205) 1,733 $ FUND BALANCE:

Beginning of year 68,852
End of year $ 64,647
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Cabot's Museum Special Revenue Fund
For the Year Ended June 30, 2024
120 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 150,000 150,000 $ 186,159 $ 36,159 $ Investment earning 100 100 311 211
Total revenues 150,100 150,100 186,470 36,370

EXCESS OF REVENUES OVER
EXPENDITURES 150,100 150,100 186,470 36,370
OTHER FINANCING USES:

Transfers out (150,100) (150,100) (186,400) (36,300)
Total other financing uses (150,100) (150,100) (186,400) (36,300) NET CHANGES IN FUND BALANCE $ - - $ 70 70 $
FUND BALANCE:

Beginning of year 25
End of year $ 95
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Supplemental Law Enforcement Service (SLESF) Special Revenue Fund For the Year Ended June 30, 2024
121 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 51,050 51,050 $ 109,220 $ 58,170 $
Total revenues 51,050 51,050 109,220 58,170
EXPENDITURES:

Current:

Public safety 51,050 51,050 35,493 15,557
Total expenditures 51,050 51,050 35,493 15,557
NET CHANGES IN FUND BALANCE $ - - $ 73,727 73,727 $
FUND BALANCE:

Beginning of year 139,300
End of year $ 213,027
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Abandoned Vehicle Abatement Special Revenue Fund
For the Year Ended June 30, 2024
122 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 671,257 837,935 $ 373,043 $ (298,214) $ Total revenues 671,257 837,935 373,043 (298,214)
EXPENDITURES:

Capital outlay 671,257 837,935 373,043 298,214
Total expenditures 671,257 837,935 373,043 298,214
NET CHANGES IN FUND BALANCE $ - - $ - - $
FUND BALANCE:

Beginning of year 6,495
End of year $ 6,495
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Community Development Block Grant (CDBG) Special Revenue Fund For the Year Ended June 30, 2024
123 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Permits and fees $ 1,005,000 1,005,000 $ 1,019,011 $ 14,011 $ Investment earning - - 34,024 34,024
Total revenues 1,005,000 1,005,000 1,053,035 48,035
EXPENDITURES:

Current:

Public works 603,388 507,069 305,340 298,048
Culture and leisure 121,343 3,370 63,435 57,908
Capital outlay 2,411,272 1,271,720 1,265,419 1,145,853
Total expenditures 3,136,003 1,782,159 1,634,194 1,501,809

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (2,131,003) (777,159) (581,159) 1,549,844 OTHER FINANCING USES:

Transfers out (100,000) (100,000) (100,000) -
Total other financing uses (100,000) (100,000) (100,000) - NET CHANGES IN FUND BALANCE $ (2,231,003) (877,159) $ (681,159) 1,549,844 $ FUND BALANCE:

Beginning of year 3,066,093
End of year $ 2,384,934
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Capital Improvement Deposits Special Revenue Fund
For the Year Ended June 30, 2024
124 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ - - $ 240,871 $ 240,871 $
Investment earning - - 6,566 6,566
Total revenues - - 247,437 247,437
EXPENDITURES:

Current:

General government 650,000 650,000 240,871 409,129
Total expenditures 650,000 650,000 240,871 409,129
NET CHANGES IN FUND BALANCE $ (650,000) (650,000) $ 6,566 656,566 $ FUND BALANCE:

Beginning of year 3,803
End of year $ 10,369
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Department of Cannabis Control Special Revenue Fund
For the Year Ended June 30, 2024
125 Item Number: 5.

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Investment earning $ - - $ 1,496 $ 1,496 $
Total revenues - - 1,496 1,496
NET CHANGES IN FUND BALANCE $ - - $ 1,496 1,496 $
FUND BALANCE:

Beginning of year 123,880
End of year $ 125,376
City of Desert Hot Springs
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Assessment District 91-1 Capital Projects Fund
For the Year Ended June 30, 2024
126 Item Number: 5.

INTERNAL SERVICE FUNDS
The Internal Service Fund accounts for financing of goods and services provided by one department to other departments of the City on a cost-reimbursement basis.

Risk Management Fund - To account for payment of the City's different types of insurance for general liability, workers' compensation, property, automobile, and earthquake coverage.

Equipment Replacement Fund - To account for equipment purchases. 127 Item Number: 5.

This page intentionally left blank.
128 Item Number: 5.

Risk Equipment
Management Replacement Total
ASSETS
Current assets:

Cash and investments $ 122,110 636,696 $ 758,806 $
Total current assets 122,110 636,696 758,806
Noncurrent assets:

Capital assets, being depreciated, net 339,081 - 339,081 Intangible capital assets, being amortized, net 342,743 - 342,743 Total capital assets 681,824 - 681,824
Total noncurrent assets 681,824 - 681,824
Total assets 803,934 636,696 1,440,630

LIABILITIES
Current liabilities:

Accounts payable 15,637 - 15,637
Claims payable - due within one year - 344,611 344,611
Financing purchase payable - due within one year 184,058 - 184,058 Lease liabilities - due within one year 69,784 - 69,784 Total current liabilities 269,479 344,611 614,090
Noncurrent liabilities:

Claims payable - due in more than one year - 292,085 292,085 Financing purchase payable - due in more than one year 31,167 - 31,167 Lease liabilities - due in more than one year 285,601 - 285,601 Total noncurrent liabilities 316,768 292,085 608,853
Total liabilities 586,247 636,696 1,222,943

NET POSITION
Net investment in capital assets 111,214 - 111,214
Unrestricted 106,473 - 106,473
Total net position $ 217,687 - $ 217,687 $
City of Desert Hot Springs
Combining Statement of Net Position
Internal Service Funds
June 30, 2024
129 Item Number: 5.

Risk Equipment
Management Replacement Total
OPERATING REVENUES:

Charges for services $ 253,348 639,306 $ 892,654 $
Insurance recovery 79,942 - 79,942
Total operating revenues 333,290 639,306 972,596
OPERATING EXPENSES:

Insurance and claims - 639,306 639,306
Depreciation and amortization 206,869 - 206,869
Other expense 20,321 - 20,321
Total operating expenses 227,190 639,306 866,496
OPERATING INCOME 106,100 - 106,100
NONOPERATING EXPENSES:

Interest expense (30,457) - (30,457)
Total nonoperating expenses (30,457) - (30,457)
Changes in net position 75,643 - 75,643
NET POSITION:

Beginning of year 142,044 - 142,044
End of year $ 217,687 - $ 217,687 $
City of Desert Hot Springs
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
June 30, 2024
130 Item Number: 5.

Risk Equipment
Management Replacement Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from use departments 639,503 $ 253,348 $ 892,851 $ Receipts from insurance recovery - 79,942 79,942
Payments for vendor for goods and services - (23,041) (23,041) Payments for insurance claims (422,897) - (422,897)
Net cash provided by operating activities 310,249 216,606 526,855

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Principal paid on long-term liabilities (216,704) - (216,704) Interest paid on long-term liabilities (30,457) - (30,457) Net cash (used in) capital and
related financing activities (247,161) - (247,161)
Net increase in cash and cash equivalents 63,088 216,606 279,694 CASH AND CASH EQUIVALENTS:

Beginning of year 420,090 59,022 479,112
End of year $ 122,110 636,696 $ 758,806 $

RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:

Operating income $ 106,100 - $ 106,100 $
Adjustments to reconcile operating income to
net cash provided by provided by operating activities:

Amortization and depreciation expenses - 206,869 206,869 Changes in assets and liabilities:
(Increase)/decrease in accounts receivables - 197 197
Increase/(decrease) in accounts payable (2,720) (50,405) (53,125) Increase/(decrease) in claims payable 266,814 - 266,814 Total adjustments 216,606 204,149 420,755
Net cash provided by operating activities $ 310,249 216,606 $ 526,855 $

NONCASH ITEM FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Issuance of lease $ 276,060 - $ 276,060 $
Assets leased $ (276,060) - $ (276,060) $
City of Desert Hot Springs
Combining Statement of Cash Flows
Internal Service Funds
June 30, 2024
131 Item Number: 5.

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132 Item Number: 5.

CUSTODIAL FUNDS
Community Services Fund - this fund was established to account for the Transportation Uniform Mitigation Fee & Multiple Species Habitat Conservation Plan pass-through deposits for permits. The City holding funds for permits per developer agreements and for cash payments in lieu of bonds for permit work and the deposits are returned to the developers upon issuance of the permits.

Community Facilities District Skyborne Fund - this fund was established to account for payments of principal and interest for the Community Facilities District municipal bonds related to the Skyborne area of the City.

Community Facilities District Fund - these funds are established to account for special tax funding that allows for the financing of the installation, operation and maintenance of public improvements. There are a total of 31 zones.

Gang Task Force Fund - this fund was established to account for all revenues and expenses received from various agencies supporting the Gang Task Force. The City is only working with the task force to manage their funding for a period of time. The asset are accumulated for the benefit of he Gang Task Force and the Gang Task Force is not part of the City. 133 Item Number: 5.

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134 Item Number: 5.

Community
Community Facilities Community
Services District Facilities Gang Task
Fund Skyborne Fund District Fund Force Fund Total
ASSETS
Cash and investments $ 600,314 261,889 $ 2,196,859 $ 77,137 $ 3,136,199 $ Cash with fiscal agent 116,379 - - - 116,379
Accounts receivable 149,324 - 145,327 - 294,651
Interest receivable 1,789 - 6,682 234 8,705
Total assets 867,806 261,889 2,348,868 77,371 3,555,934

LIABILITIES
Accounts payable 3,500 52,066 2,195 - 57,761
Due to other governments - 49,252 - - 49,252
Deposits payable 112,892 97,876 18,873 - 229,641
Total liabilities 116,392 199,194 21,068 - 336,654

NET POSITION
Restricted for:

Individuals, organization and
other governments $ 751,414 62,695 $ 2,327,800 $ 77,371 $ 3,219,280 $ City of Desert Hot Springs
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2024
135 Item Number: 5.

Community
Community Facilities Community
Services District Facilities Gang Task
Fund Skyborne Fund District Fund Force Fund Total
ADDITIONS:

Assessment revenue collected $ 325,870 - $ 341,534 $ - $ 667,404 $ Use of money and property - 60,404 25,566 946 86,916
Micellaneous 192,500 - - - 192,500
Total additions 518,370 60,404 367,100 946 946,820
DEDUCTIONS:

Interest expenses 240,945 - - - 240,945
Administration 29,954 - 12,770 17 42,741
Payment of special assessment
district expenses 85,366 - 60,936 - 146,302
Payment of other organization
expense - - - 2,709 2,709
Total deductions 356,265 - 73,706 2,726 432,697
Change in net position 162,105 60,404 293,394 (1,780) 514,123 NET POSITION:

Beginning of year 589,309 2,291 2,034,406 79,151 2,705,157 End of year 62,695 $ 751,414 $ 2,327,800 $ 77,371 $ 3,219,280 $ City of Desert Hot Springs
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
For the Year Ended June 30, 2024
136 Item Number: 5.

STATISTICAL SECTION
(Unaudited)
137 Item Number: 5.

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138 Item Number: 5.

Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the government's financial performance and well being have changed over time. 140-149 Revenue Capacity
These schedules contain information to help the reader assess one of the government's most significant local revenue sources - property tax. 150-157
Debt Capacity
These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. 158-165 Demographic and Economic Information
This schedule offers demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. 166 Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. 168-170
City of Desert Hot Springs
Statistical Section Overview
(Unaudited)
139 Item Number: 5.

2015 2016 2017 2018 2019
Government activities
Net investment in capital assets $ 36,135,385 37,044,552 $ 37,242,301 $ 38,562,083 $ 35,790,808 $ Restricted 10,122,255 8,474,479 12,342,563 14,118,710 15,137,323 Unrestricted (13,751,977) (16,812,375) (14,319,812) (16,184,795) (10,270,708) Total governmental activities net position 28,706,656 $ 32,505,663 $ 35,265,052 $ 36,495,998 $ 40,657,423 $ Business-type activities
Net investment in capital assets $ (6,159,096) (4,787,519) $ (6,749,020) $ (7,338,943) $ (7,093,589) $ Restricted 639,085 781,653 - - -
Unrestricted 15,075,402 14,317,202 15,553,249 15,391,813 14,394,793 Total business-type activities net position 10,311,336 $ 9,555,391 $ 8,804,229 $ 8,052,870 $ 7,301,204 $ Primary Government
Net investment in capital assets $ 29,976,289 32,257,033 $ 30,493,281 $ 31,223,140 $ 28,697,219 $ Restricted 10,761,340 9,256,132 12,342,563 14,118,710 15,137,323 Unrestricted 1,323,425 (2,495,173) 1,233,437 (792,982) 4,124,085 Total primary government net position 39,017,992 $ 42,061,054 $ 44,069,281 $ 44,548,868 $ 47,958,627 $ Source: Finance Department, City of Desert Hot Springs.

City of Desert Hot Springs
Net Position by Component
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Year
140 Item Number: 5.

2020 2021 2022 2023 2024
Government activities
Net investment in capital assets $ 52,003,583 54,530,992 $ 41,699,430 $ 45,460,615 $ 52,424,852 $ Restricted 16,316,652 14,071,069 33,322,986 21,911,482 32,454,887 Unrestricted (10,988,385) (13,566,685) (14,086,008) (7,260,882) (13,416,467) Total governmental activities net position 55,035,376 $ 57,331,850 $ 60,936,408 $ 60,111,215 $ 71,463,272 $ Business-type activities
Net investment in capital assets $ - - $ - $ - $ - $
Restricted - - - - -
Unrestricted - - - - -
Total business-type activities net position - $ - $ - $ - $ - $ Primary Government
Net investment in capital assets $ 52,003,583 54,530,992 $ 41,699,430 $ 45,460,615 $ 52,424,852 $ Restricted 16,316,652 14,071,069 33,322,986 21,911,482 32,454,887 Unrestricted (10,988,385) (13,566,685) (14,086,008) (7,260,882) (13,416,467) Total primary government net position 55,035,376 $ 57,331,850 $ 60,936,408 $ 60,111,215 $ 71,463,272 $ Source: Finance Department, City of Desert Hot Springs.

City of Desert Hot Springs
Net Position by Component (Continued)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Year
141 Item Number: 5.

2015 2016 2017 2018 2019
Expenses
Governmental Activites
General Government $ 4,040,041 5,131,148 $ 4,896,860 $ 6,084,434 $ 7,391,029 $ Public Safety 8,302,724 7,884,162 8,022,985 9,969,636 10,390,958 Public Works 1,499,351 2,267,153 2,165,174 3,228,778 2,555,909 Economic Development 1,460,708 1,606,891 1,492,956 2,001,519 2,025,941 Culture and leisure 552,608 631,731 1,478,245 1,405,176 1,035,644 Interest and fiscal charges 872,203 855,380 1,354,754 872,857 1,289,925 Total governmental activities expenses 17,139,175 17,964,925 19,410,974 23,562,400 24,689,406 Business-type activities
Health and Wellness Foundation 855,224 860,605 855,320 855,596 855,903 Total business-type activites expenses 860,605 855,224 855,320 855,596 855,903 Total primary government expenses $ 17,994,399 18,825,530 $ 20,266,294 $ 24,417,996 $ 25,545,309 $ Program revenues
Governmental activities
Charges for services
General Government $ 207,217 273,384 $ 232,272 $ 260,063 $ 235,203 $ Public Safety 540,557 535,183 707,430 839,885 800,181
Public Works 73,613 120,410 445,821 965,272 1,057,960
Economic Development 951,930 866,881 1,880,922 3,002,793 2,089,109 Culture and leisure 137,572 167,561 272,156 254,282 134,871 Operating grants and contributions 896,288 2,800,934 3,607,194 4,455,191 4,355,634 Capital grants and contributions 2,130,915 3,049,472 6,097,322 4,863,198 5,933,447 Total governmental activities program revenues 7,832,707 4,919,210 13,243,117 14,640,684 14,606,405 Business-type activities
Health and Wellness Foundation 104,000 104,000 104,000 104,000 104,000 Capital grants and contributions - - - - -
Total business-type activities program revenues 104,000 104,000 104,000 104,000 104,000 Total primary government program revenues $ 7,936,707 5,023,210 $ 13,347,117 $ 14,744,684 $ 14,710,405 $ Net (expense) revenue
Governmental activities (13,045,715) $ (9,306,468) $ (6,167,857) $ (8,921,716) $ (10,083,001) $ Business-type activities (756,605) (751,224) (751,320) (751,596) (751,903) Total primary government net expense $ (10,057,692) (13,802,320) $ (6,919,177) $ (9,673,312) $ (10,834,904) $ Source: Finance Department, City of Desert Hot Springs.

Fiscal Year
City of Desert Hot Springs
Changes in Net Position
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
142 Item Number: 5.

2020 2021 2022 2023 2024
Expenses
Governmental Activites
General Government $ 9,371,053 8,605,994 $ 8,735,474 $ 13,061,873 $ 10,836,693 $ Public Safety 13,004,444 13,259,926 15,570,620 18,736,283 19,598,305 Public Works 2,980,027 3,709,489 4,214,584 6,567,896 6,698,339 Economic Development 1,988,944 2,209,565 2,683,300 3,359,964 3,198,429 Culture and leisure 1,159,686 1,903,404 2,104,395 2,764,883 3,012,296 Interest and fiscal charges 1,155,101 1,301,428 1,469,995 1,417,255 1,414,875 Total governmental activities expenses 31,534,244 29,114,817 34,778,368 45,908,154 44,758,937 Business-type activities
Health and Wellness Foundation - 679,333 - - -
Total business-type activites expenses 679,333 - - - -
Total primary government expenses $ 31,534,244 29,794,150 $ 34,778,368 $ 45,908,154 $ 44,758,937 $ Program revenues
Governmental activities
Charges for services
General Government $ 509,550 383,514 $ 244,237 $ 272,459 $ $271,758 Public Safety 401,802 308,329 532,533 1,375,952 1,356,227 Public Works 885,340 342,466 926,993 782,869 801,441
Economic Development 2,353,043 2,193,800 2,564,973 2,480,144 471,058 Culture and leisure 642,089 1,081,061 1,677,152 1,230,337 2,444,613 Operating grants and contributions 8,023,591 8,154,403 8,023,631 10,482,045 14,922,019 Capital grants and contributions 4,363,207 4,510,888 5,420,583 8,313,701 13,520,919 Total governmental activities program revenues 17,259,740 16,893,343 19,390,102 24,937,507 33,788,035 Business-type activities
Health and Wellness Foundation - 52,000 - - -
Capital grants and contributions 5,570,406 - - - -
Total business-type activities program revenues - 5,622,406 - - - Total primary government program revenues $ 17,259,740 22,515,749 $ 19,390,102 $ 24,937,507 $ 33,788,035 $ Net (expense) revenue
Governmental activities (12,221,474) $ (14,274,504) $ (15,388,266) $ (20,970,647) $ (10,970,902) $ Business-type activities 4,943,073 - - - -
Total primary government net expense $ (14,274,504) (7,278,401) $ (15,388,266) $ (20,970,647) $ (10,970,902) $ Source: Finance Department, City of Desert Hot Springs.

Fiscal Year
City of Desert Hot Springs
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
143 Item Number: 5.

2015 2016 2017 2018 2019
General revenues and other changes in net position
Governmental activities
Property taxes 3,211,768 $ 3,385,512 $ 1,161,775 $ 1,299,147 $ 1,878,375 $ Sales taxes 3,154,925 3,326,655 3,270,340 3,623,448 4,043,988 Cannabis taxes - - - - 3,248,905
Vehicle in-lieu taxes 11,475 11,352 13,013 15,324 14,276 Utility users taxes 2,897,370 2,831,543 37,355 35,377 79,502 Franchise taxes 2,161,774 1,306,860 1,393,460 1,505,206 1,667,796 Transient occupancy taxes 1,351,756 1,504,813 1,768,552 2,169,988 2,235,629 Total taxes 12,789,068 12,366,735 7,644,495 8,648,490 13,168,471 Investment income 11,130 9,792 95,935 96,835 207,242
Miscellaneous 819,083 647,261 1,111,341 914,674 793,313 Gain on sale of property - - - - -
Transfers 148,551 80,349 75,475 75,400 75,400
Total governmental activities 13,766,494 13,105,475 8,927,246 9,735,399 14,244,426 Business-type activities
Investment income 75,628 75,642 75,633 75,637 75,637
Transfers (148,551) (80,349) (75,475) (75,400) (75,400) Total business-type activities (72,909) (4,721) 158 237 237 Total primary government $ 13,100,754 13,693,585 $ 8,927,404 $ 9,735,636 $ 14,244,663 $ Changes in net position
Governmental activities 720,779 3,799,007 2,759,389 813,683 4,161,425 Business-type activities (829,514) (755,945) (751,162) (751,359) (751,666) Total primary government $ 3,043,062 (108,735) $ 2,008,227 $ 62,324 $ 3,409,759 $ Source: Finance Department, City of Desert Hot Springs.

City of Desert Hot Springs
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Year
144 Item Number: 5.

2020 2021 2022 2023 2024
General revenues and other changes in net position
Governmental activities
Property taxes 1,016,736 $ 1,532,922 $ 1,898,981 $ 2,270,974 $ 2,834,690 $ Sales taxes 4,069,069 4,828,708 5,262,718 5,422,375 5,991,148 Cannabis taxes 4,246,042 5,224,889 5,309,489 4,442,762 4,410,030 Vehicle in-lieu taxes 23,151 21,754 34,757 33,384 40,278 Utility users taxes - - - - -
Franchise taxes 1,768,939 2,037,301 2,184,708 2,350,450 2,594,460 Transient occupancy taxes 1,855,521 2,490,646 3,779,227 4,253,943 4,406,302 Total taxes 12,979,458 16,136,220 18,469,880 18,773,888 20,276,908 Investment income 56,140 441,897 (220,735) 618,222 1,081,167 Miscellaneous 930,780 377,918 728,394 567,334 964,884
Gain on sale of property - - 15,285 - -
Transfers 12,247,992 - - - -
Total governmental activities 26,600,127 16,570,278 18,992,824 19,959,444 22,322,959 Business-type activities
Investment income - 3,715 - - -
Transfers (12,247,992) - - - -
Total business-type activities (12,244,277) - - - -
Total primary government $ 16,570,278 14,355,850 $ 18,992,824 $ 19,959,444 $ 22,322,959 $ Changes in net position
Governmental activities 14,378,653 2,295,774 3,604,558 (1,011,203) 11,352,057 Business-type activities (7,301,204) - - - -
Total primary government $ 2,295,774 7,077,449 $ 3,604,558 $ (1,011,203) $ 11,352,057 $ Source: Finance Department, City of Desert Hot Springs.

Fiscal Year
City of Desert Hot Springs
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
145 Item Number: 5.

2015 2016 2017 2018 2019
General Fund
Nonspendable 66,471 $ 61,277 $ 55,262 $ 69,374 $ 126,571 $ Restricted - - - - -
Committed - - - - 1,384,266
Assigned 3,860,965 6,175,598 8,455,432 8,898,679 9,913,360 Unassigned (deficit) - - - - -
Total General Fund 3,927,436 6,236,875 8,510,694 8,968,053 11,424,197 Nonspendable 207,454 - - - 5,963
Restricted 6,026,695 5,731,785 12,006,098 13,896,708 20,107,918 Committed 1,078,455 1,630,272 2,422,313 164,741 125,868 Assigned - - - - -
Unassigned (deficit) (5,820) (46,679) (341,671) (54,597) (32,248) Total all other governmental funds 7,306,784 7,315,378 14,086,740 14,006,852 20,207,501 Total all funds 11,234,220 $ 13,552,253 $ 22,597,434 $ 22,974,905 $ 31,631,698 $ Source: Finance Department, City of Desert Hot Springs.

Fiscal Year
City of Desert Hot Springs
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
146 Item Number: 5.

2020 2021 2022 2023 2024
General Fund
Nonspendable 42,549 $ 100,717 $ 62,312 $ 51,125 $ 85,141 $ Restricted - 455,254 455,254 455,254 455,254
Committed 7,290,175 9,861,960 11,171,624 8,103,848 3,994,602 Assigned 4,368,623 2,532,125 1,779,705 348,101 570,848
Unassigned (deficit) - - - - 2,392,716
Total General Fund 11,701,347 12,950,056 13,468,895 8,958,328 7,498,561 Nonspendable - - - 13,954,304 -
Restricted 12,080,834 14,092,104 31,171,585 18,775,214 31,924,617 Committed 55,044 155,097 435,180 337,433 455,969
Assigned - - 244 3,803 10,369
Unassigned (deficit) (1,820,571) (96,245) (282,559) (997,788) (4,583,526) Total all other governmental funds 10,315,307 14,150,956 31,324,450 32,072,966 27,807,429 Total all funds 22,016,654 $ 27,101,012 $ 44,793,345 $ 41,031,294 $ 35,305,990 $ Source: Finance Department, City of Desert Hot Springs.

City of Desert Hot Springs
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Year
147 Item Number: 5.

2015 2016 2017 2018 2019
Revenues
Taxes 13,567,735 $ 13,150,324 $ 14,408,011 $ 16,817,430 $ 19,178,990 $ Permits and fees 1,721,742 1,737,979 3,279,268 4,144,817 4,049,059 Intergovernmental 1,981,150 3,303,590 2,452,252 2,083,507 2,853,867 Licenses 192,938 187,082 204,362 213,827 232,037
Investment earnings 9,620 11,127 95,936 96,836 244,103
Miscellaneous 819,084 994,719 1,620,664 1,204,322 1,510,106 Total revenues 18,292,269 19,384,821 22,060,493 24,560,739 28,068,162 Expenditures
Current:

General government 2,973,741 2,581,835 3,373,040 3,965,735 5,103,292 Public safety 7,189,857 7,491,836 7,979,192 9,180,731 9,729,119 Public works 1,366,978 1,553,538 1,084,330 3,010,855 2,092,452 Economic development 941,549 787,615 1,479,441 2,011,766 2,019,270 Culture and leisure 557,052 629,805 837,710 772,430 719,577 Capital outlay 109,001 2,651,306 4,654,799 4,598,302 5,307,042 Debt service:

Principal retirement 290,000 300,000 11,240,000 425,000 450,000 Interest and fiscal charges 860,333 849,260 1,394,208 810,745 1,191,483 Total expenditures 14,288,511 16,845,195 32,042,720 24,775,564 26,612,235 Excess of revenues over (under) expenditures 4,003,758 2,539,626 (9,982,227) (214,825) 1,455,927 Other financing sources (uses);
Issuance of Debt - - 15,000,000 - 6,850,000
Defeasance of debt - - - - -
Issuance premium - - 181,211 - 295,100
Issuance discount - - (1,809) - -
Proceeds for sale of assets - - - - -
Transfers in 3,749,490 4,864,060 4,564,360 7,779,030 9,484,625 Transfers out (4,062,797) (5,085,653) (4,439,222) (7,603,997) (9,428,859) Total other financing sources (uses) (313,307) (221,593) 15,304,540 175,033 7,200,866 Net change in fund balance 3,690,451 $ 2,318,033 $ 5,322,313 $ (39,792) $ 8,656,793 $ Debt service as a percentage of noncapital
expenditures 8.1% 8.1% 46.1% 6.1% 7.7%
Source: Finance Department, City of Desert Hot Springs.

Fiscal Year
City of Desert Hot Springs
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
148 Item Number: 5.

2020 2021 2022 2023 2024
Revenues
Taxes 20,658,727 $ 23,831,619 $ 26,379,433 $ 27,458,073 $ $29,274,534 Permits and fees 4,259,911 4,448,841 5,923,193 5,724,694 4,811,919 Intergovernmental 3,334,930 4,821,357 5,224,905 8,651,832 8,449,351 Licenses 197,942 223,696 242,468 268,269 417,647
Investment earnings 486,646 62,924 (335,765) 789,729 1,341,756 Miscellaneous 1,730,695 661,591 917,649 1,007,137 1,442,320 Total revenues 30,668,851 34,050,028 38,351,883 43,899,734 45,737,527 Expenditures
Current:

General government 6,154,511 6,520,234 6,293,423 7,740,698 8,484,479 Public safety 11,918,414 12,725,103 15,627,851 18,605,194 18,954,446 Public works 2,649,337 3,175,509 3,948,534 5,290,786 5,838,060 Economic development 2,160,096 1,975,479 2,686,648 3,324,568 3,192,432 Culture and leisure 826,286 716,826 1,302,155 1,806,096 2,322,860 Capital outlay 14,925,931 1,786,754 4,497,048 8,547,535 13,903,630 Debt service:

Principal retirement 535,000 685,000 1,210,000 1,092,795 1,117,753 Interest and fiscal charges 1,165,806 1,225,118 1,302,933 1,425,456 1,399,171 Total expenditures 40,335,381 28,810,023 36,868,592 47,833,128 55,212,831 Excess of revenues over (under) expenditures (9,666,530) 5,240,005 1,483,291 (3,933,394) (9,475,304) Other financing sources (uses);
Issuance of Debt - 5,310,000 15,970,000 - 3,750,000
Defeasance of debt - (5,465,647) - - -
Issuance premium - - 239,042 - -
Issuance discount - - - - -
Proceeds for sale of assets - - - 171,343 -
Transfers in 14,197,832 9,296,356 13,060,803 14,340,003 12,410,387 Transfers out (14,146,346) (9,296,356) (13,060,803) (14,340,003) (12,410,387) Total other financing sources (uses) 51,486 (155,647) 16,209,042 171,343 3,750,000 Net change in fund balance (9,615,044) $ 5,084,358 $ 17,692,333 $ (3,762,051) $ (5,725,304) $ Debt service as a percentage of noncapital
expenditures 6.7% 7.1% 7.8% 6.4% 6.1%
Source: Finance Department, City of Desert Hot Springs.

City of Desert Hot Springs
Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
149 Item Number: 5.